Saying goodbye is never easy. When employees leave, companies understand the importance of onboarding and a warm welcome for new staff. Unfortunately, they often stumble when it comes time to offboard employees. However, using tools like talent management systems and standardizing processes makes it easier to say “au revoir.”
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In this article, we’ll cover everything you need to know about offboarding, the importance of doing it correctly and how to bid farewell to your former employees ethically and amiably.
Covered in This Article
- What Is Offboarding?
- How to Offboard an Employee
- Best Practices
- Employee Offboarding Checklist
- Common Missteps
- Offboarding vs. Onboarding
- Offboarding Process FAQs
- Next Steps
What Is Offboarding?
Employee offboarding or exit management occurs when a staff member departs. This procedure is the last step at the end of employment or an employee’s tenure. It outlines the voluntary resignations, layoffs, expiring contracts or firing protocol.
While termination often happens because of performance issues, misconduct or redundancy, it could also result from budget-related layoffs, redundant roles or if the business goes bankrupt or is liquidated and must sell off its assets.
Importance
Despite the ongoing attempt to return to the 9-to-5 status quo, the Great Resignation isn’t quite over yet. According to a recent study, 53% of employees are at risk of finding a new job. Judging from this, two things are apparent. Employers must amp up their retention efforts and prepare for all eventualities, especially when employees voluntarily leave their positions.
Offboarding is a delicate balance of technical and interpersonal aspects. Its purpose is to smoothly transition employees from an organization, providing support even as they depart.
Winging the offboarding process is not an option. Without a consistent and well-defined process, companies can face significant consequences:
- Continued Benefit Payments: Without proper offboarding procedures, companies may inadvertently continue paying for benefits long after an employee is no longer eligible, resulting in unnecessary costs.
- Security Risks: Neglecting to update an employee’s security rights and restrictions to the company’s network can lead to costly data breaches. Verizon’s data breach investigations report uncovered that ransomware breaches spiked by 13%, more than in the last five years combined.
- Legal Vulnerability: A haphazard offboarding process leaves organizations vulnerable to wrongful dismissal lawsuits.
For instance, suppose a former staff member sues for unfair dismissal under the Family and Medical Leave Act. In that case, the defense needs an accurate and uninterrupted audit trail of events leading to the employee’s termination. By getting the proper paperwork in order and communicating properly, an organization safeguards against potential strife.
By implementing thorough offboarding procedures, including proper documentation and effective communication, organizations can mitigate risks and ensure a smoother transition for departing employees. Here are a few more insights to consider:
- Power of Advocacy: View your ex-employees as potential advocates for your company. An efficient and respectful send-off ensures that more past employees speak highly of your organization and refer others to join your company. Treat your people right, and they’ll do the same for you.
- Boomerang Employees: Not only do you want former employees to speak highly of you to other prospective recruits, but they may return at some point. You’ll require fewer resources than normal to onboard these boomerang employees since they’re already familiar with your organization, processes and, most importantly, your company values. Recent LinkedIn data shows that 4.5% of all new hires among companies using the platform were rehires.
- Destigmatized Resignations: In an SHRM article, Rebecca Zucker asserts that the first step of creating pathways for employees to return starts with the realization that resignations can mean healthy workforce career progressions and still require a bit of destigmatizing. We’ll touch more on this later on.
So, why does onboarding get all the attention when offboarding is just as important? Let’s compare them to understand this concept better.
How to Offboard an Employee
A good offboarding experience can differentiate between happy ex-employees and a damaging whistleblower. Follow these steps to ensure smooth employee exits from your organization:
Phase 1: Resignation
Acknowledge Resignation or Termination Request
When an employee drops the bombshell by handing in their resignation or a manager sends a termination request, the first step is to acknowledge the decision promptly.
In case of a voluntary resignation, acknowledge the exiting employee by sending them a heartfelt message expressing appreciation for their contributions and dedication to the company.
If a manager initiates an involuntary resignation request, it’s essential to acknowledge the situation promptly.
Notify Relevant Stakeholders
Next, it’s time to break the news to the right people. Reach out to the necessary stakeholders, such as managers, supervisors, team members and other departments affected by the departure.
Keeping everyone in the loop prevents any unexpected surprises or confusion down the line. A simple message on team communication channels will suffice. For example: “Hey folks, I’d like to give you a heads-up that [employee’s name] will be moving on to new adventures. Let’s wish them all the best and a hearty farewell.”
Notify HR and payroll of the staff member’s last day, notice period and other necessary information. Start accessing exit workflows, interview questions and checklists.
Whether a staff member quits or is fired, communicate the last day and relevant information before rumors start. Misunderstandings can breed contempt. While keeping a lid on sensitive or personal data is appropriate, you should be clear about the employee’s position and discuss who will take over their responsibilities.
Set Offboarding Timeline
Establish a clear offboarding timeline that aligns with the employee’s last working day. Collaborate with the employee to determine any critical deadlines or projects to wrap up before they leave.
During this time, take the initiative to inform the departing employee about any outstanding obligations they need to address before their departure.
These obligations include completing pending tasks, handing over important files, or transferring knowledge to their colleagues. For instance, you might say, “Before you embark on your new journey, let’s ensure we tie up any loose ends. Please prioritize completing the XYZ project and share any necessary documentation with your team.”
Communicate the timeline to all parties involved, so they know what to expect and can plan accordingly. Remember, clarity is essential here!
Inform Employee About Outstanding Obligations
When an employee is on their way out the door, you need to tie up any loose ends by addressing outstanding obligations that your company owes them, like hard-earned benefits, remaining pay, vacation days and all that good stuff.
Being considerate throughout the offboarding process creates a lasting positive impression that you have your workforce’s back until the very end, and settling these entitlements makes the process transparent and fair.
Make sure your departing employees feel valued. Source
Conduct An Exit Interview
Exit interviews are a convenient segue to interpersonal offboarding. Hand the mic over to your departing employee to get good feedback and do your due diligence. Above all, be sure to get to these individuals before they leave. They’re unlikely to help after their departure.
An employee should feel comfortable expressing themselves freely. Don’t make exit interviews a thoughtless formality. Use them to gain valuable insights about your organization. Analyze your strengths, weaknesses and areas for improvement.
This information will also help create an up-to-date job description and weigh candidates better, especially if you’ve identified potential internal hires with succession planning software.
Here are some suggestions for exit interview questions:
- What was the most rewarding thing about your job? What were the biggest challenges?
- What were your daily, weekly and annual work tasks? What was the most important thing you did? What smaller tasks do we need to pay attention to?
- Would you encourage a friend to apply to our company? Why or why not?
- What could have gone differently? Is there something that would have made you stay? Are there processes you would improve on a choice?
- Which members of the team were especially helpful during your job? Who stood out as an outstanding coworker or manager? Did your team members, leadership or others make your job more difficult?
- Did the job adequately match your expectations going in? Did you have enough support and resources to accomplish your tasks?
- What systems and technologies does your successor need to be fluent in? Is there a program, application or tool to make this role easier?
- What was the biggest priority in your job? What are the top hard and soft skills your successor needs to complete this position?
- Given your workload, did you feel your compensation and job title were fair? Would perks or changes to compensation have enticed you to stay?
- What’s the biggest thing we could do to improve?
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Phase 2: Paperwork and Compliance
You’ll need a signed and acknowledged letter of resignation or termination, nondisclosure and non-compete agreements (if required), benefits documents (i.e., an explanation of ongoing benefits, retirement plan transfer, unemployment insurance, etc.) and tax documents. Ensure this includes PTO information, sick days and other relevant financial details.
Collect Necessary Paperwork
Some essential documents include:
- Resignation Letter: A formal letter from the employee stating their intention to leave the company.
- Non-Disclosure Agreements (NDAs): Confidentiality agreements to protect sensitive company information.
- Employment Contracts: Review the terms and conditions of the employee’s contract to ensure proper compliance.
- Company Property Return: Document the return of any company-owned assets, such as laptops, access cards or uniforms. But more on that later.
Ensure Forms Completion
Complying with legal obligations often involves completing specific forms. Here are a few common forms to consider:
- Benefits Termination Forms: If applicable, terminate the employee’s benefits, such as health insurance or retirement plans.
- Final Timesheets: Ensure the accurate recording of the departing employee’s final working hours and any remaining leave balances.
- Exit Surveys: Collect feedback through surveys to gain insights into the employee’s experience and identify areas for improvement.
Collect necessary documents and ensure clearance forms, surveys and questionnaires completion.
Settle Finances
Money matters can be complex. Addressing these financial aspects promptly saves you unnecessary headaches:
- Final Paychecks: Calculate the departing employee’s final salary, including any outstanding bonuses or commissions, and process their last paycheck promptly.
- Accrued Vacation Time: Determine the amount of accrued vacation or paid time off and either compensate the employee for the unused days or adjust their final paycheck accordingly.
- Outstanding Reimbursements: Review any pending reimbursements owed to the employee, like travel expenses and ensure prompt reimbursement.
Adhere to Laws and Regulations
Lastly, knowing relevant employment laws and regulations will help you ensure a lawful transition. Ensure that contracts adhere to labor laws, including provisions on notice periods, termination clauses and post-employment restrictions.
Treat departing employees fairly and avoid any discriminatory practices during the offboarding process.
Phase 3: Company Property Recovery
Retrieve and close accounts for mobile devices, tablets, laptops, keys, ID badges, credit cards or other accounts. Keep an up-to-date master asset list with IT or HR to make this smoother. Don’t put the onus on the exiting employee.
Here’s a tip: keeping an up-to-date master asset list with some help from IT will make this process smoother.
- Retrieve Company Property: Examples include mobile devices, laptops, keys, ID badges and access cards.
- Collect Company Files: Retrieve any company physical or digital files in possession of the existing employee files that belong to your company.
- Revoke Access: Disable access to key systems, company assets, facilities and accounts to ensure cybersecurity. For large organizations, identity management software can make this easier.
- Reset Passwords: This step ensures that no one gets back in once they’re out, keeping your company and its people safe from data breaches.
Phase 4: Accounts Handoff
While it’s good to remember former staff members fondly, giving their successors a chance to grow into the role in their way is essential.
Identify Pending Tasks
This is key to preparing for a smooth handoff. The last thing you need is any tasks slipping through the cracks. Identify those key tasks to transfer those responsibilities to a capable successor seamlessly.
It’s also important to identify an interim person who can step in and take over the responsibilities temporarily. Meet with the employee’s successor and relevant team members to discuss the tasks. We don’t want any loose ends or dropped balls!
Transfer Knowledge
The knowledge and expertise gathered by employees over time are precious business assets. To ensure a seamless transition, forward all calls and emails to the interim or new employee and add the successor to the relevant systems.
A well-crafted standard operating procedure (SOP) can be a lifesaver, providing continuity and stability between the old and new.
Update Information
Now’s the time for some organizational housekeeping. Update your company’s organizational chart to reflect the changes to fill the gaps the departing employee leaves.
We want the flow of information to be as smooth as silk, without any hiccups or missteps.
Don’t forget to save those valuable exit surveys, SOPs, how-to guides or compliance documentation in a content library using a learning management system (LMS) or HR management software.
These resources will serve as a treasure trove for future reference.
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Best Practices
Now that we’ve walked through the process, it’s time to look at what separates a phenomenal experience from a living nightmare. Here’s what to consider:
Celebrate
If the parting is amicable, celebrate! Get a gift you know your worker loves, like a cake, flowers, gift cards or something more personal. Plan a party or happy hour and pay for it. Not only is this good for future networking, but it keeps morale up. Show you care about the people who work for you, and they’ll be more engaged and productive.
Keep in Touch
This applies to both friendly and nasty partings. If the break wasn’t the best, keep tabs on their LinkedIn account to ensure they aren’t trashing your company. Watch for suspicious reviews from an angry ex-employee to keep up with your reputation management.
For amicable departures, invite them to join a networking program for ex-workers or subscribe to the business newsletter. That way, they’ll still get news and job openings. This can help attract re-hires and get referrals.
Encourage Returns
Not long ago, resigning from a position at an organization was as good as burning bridges. However, the stigma around rehiring has dissipated as the increasing gig economy sees more job hopping. By ending things on acceptable terms, you encourage re-hires, also known as “boomerang employees,” to connect or work with you elsewhere.
Despite new technological developments in the recruitment software industry, the growing skill gap makes it harder to find qualified hires, making rehiring a viable and increasingly valuable alternative.
Show Gratitude and Professionalism
There’s nothing worse than feeling ignored, especially if a staff member is leaving because of a lengthy line of grievances. Take their concerns seriously, offer them the opportunity to express their opinions and provide a respectful and dignified exit process.
Regardless of the circumstances, there’s a person behind the process. Listen attentively to ensure that the parting conversation ends on a positive note.
Saying goodbye is hard, and no one enjoys change. Show compassion and empathy while maintaining a professional demeanor throughout offboarding.
Automate the Process
Make employee transition procedures a breeze by automating processes. With standardized exit interview questions and handy checklists, you can compare apples to apples and minimize errors.
Leverage your talent management software to dot your i’s and cross your t’s effortlessly. The system simplifies data collection, analysis and reporting, ensuring a smooth and organized experience. Say goodbye to tedious paperwork and hello to efficiency and ease.
Employee Offboarding Checklist
Phase 1: Resignation
- Acknowledge Resignation or Termination Request
- Notify Relevant Stakeholders
- Set Offboarding Timeline
- Inform Employee About Outstanding Obligations
- Conduct An Exit Interview
Phase 2: Paperwork and Compliance
- Collect Necessary Paperwork
- Ensure Forms Completion
- Settle Finances
- Adhere to Laws and Regulations
Phase 3: Company Property Recovery
- Retrieve Company Property
- Collect Company Files
- Revoke Access
- Reset Passwords
Phase 4: Accounts Handoff
- Identify Pending Tasks
- Transfer Knowledge
- Update Information
Common Missteps
Every heartfelt going-away party with delicious cake has an emotional meltdown and an ugly departure. Here’s what not to do during your worker’s last days:
Don’t Be Defensive or Rigid
Things can’t improve without receptive leaders. Remember, you want to know why people are leaving and give them the space to express that. Especially if you’re losing them to competitors or realize a specific gender, race, sexual orientation or gender identity consistently feels isolated or unwelcome in your workplace. There’s no sense in patching leaks if your boiler is about to explode.
Don’t Be Sloppy
In the hectic rush of offboarding, forgetting important steps is easy. Don’t forget the necessary paperwork or benefits information. This is the last impression you make on your employee. Make it special. Don’t forget to pass cards, buy a cake or arrange a party. Pay attention to any food allergies or preferences they may have. Don’t neglect them.
Don’t Lose the Big Picture
Having all the automation in the world doesn’t help if you don’t learn from your mistakes. Notice when a departing staff member is echoing widespread problems. Root out toxic coworkers, managers or other issues that drive people away. On the recruiting side, review job titles and hiring practices if you’re consistently getting employees that clash with your culture.
Remember, there are severe consequences to bad offboarding. Even less malicious employees can cause security threats if your treatment is sloppy and demeaning. This can lead to a high turnover rate, rumors spreading like wildfire, demoralization among remaining staff, compliance issues, bad reviews and reputation hits, or even a drop in productivity as you scramble to fill the position.
Onboarding vs. Offboarding
The phrase onboarding became widely used in the 1970s. Businesses are like a ship, and welcoming new employees is like guiding passengers on board. Onboarding and offboarding are two sides of the same coin; the beginning and end of the employment experience.
Trying to attract and keep top talent is hard in the corporate world. Effective training during initiation can reduce stress and make for better, happier, healthier experiences for all team members. It’s also good for avoiding the scariest word in recruiting: turnover.
Still, despite everyone’s best efforts, certain employees aren’t a good fit. However, consistent staffing problems are financially devastating. Apart from losing time and resources, plenty of other implicit recruiting costs don’t come down to dollars and cents. Recent data from an SHRM benchmark report suggests the actual cost of hiring can be as expensive as $4,683. Therefore, avoiding turnover and having invested, engaged workers is worth pursuing.
Here’s where exit strategies can help. Honestly, workers who no longer rely on you for their income are more likely. By giving them a safe place to discuss problems, you learn what to improve. Onboarding is like raising a child, while offboarding acts as a postmortem.
The biggest through-line to this process is paperwork. Onboarding and offboarding employees require forms for compliance to keep everyone’s ducks in a row. Now that we’ve covered the fundamentals, it’s time to look at the best technical and interpersonal offboarding practices.
Offboarding Process FAQs
Below, we’ll address common questions and provide helpful insights to guide you through the process when the time comes for an employee to part ways.
1. What is the purpose of employee offboarding?
Employee offboarding aims to smoothly transition and separate employees from their role and the organization. The procedure involves various processes and tasks to wrap up the employee’s tenure, address administrative matters and responsibilities handover.
2. What are the key steps involved in the offboarding process?
The following are the common steps:
- Acknowledging resignation or termination request
- Completing paperwork and ensuring compliance
- Retrieving company property
- Conducting exit interviews and collecting experience surveys
- Organizing a farewell or send-off
3. How can we ensure a positive offboarding experience for the departing employee?
Consider the following to ensure a positive offboarding experience for the departing employee:
- Transparent Communication: Communicate the offboarding process, timelines and expectations.
- Respect and Appreciation: Show gratitude for the employee’s contributions and acknowledge their achievements.
- Assistance With Transitions: Offer support in finding new opportunities, networking or providing references.
- Feedback Collection: Conduct an exit interview to allow the departing employee to share their feedback and experiences.
- Relationship Management: Encourage keeping in touch and foster a positive alum network.
4. What security measures should be taken during the offboarding process?
Some security measures that should be taken during the offboarding process include:
- Access Termination: Disable the departing employee’s access to company systems, networks and physical premises promptly.
- Data and Information Protection: Ensure all confidential and sensitive information is appropriately secured, transferred or deleted as necessary.
- Password Changes: Require password changes for any shared accounts or systems the employee had access to.
- Device and Property Retrieval: Collect all company-owned devices, keys, access cards and any other physical assets.
5. How can offboarding be used as an opportunity for knowledge transfer and improvement?
Use the following tactics to transfer knowledge transfer and enable company-wide improvements effectively:
- Documenting Processes and Procedures: Encourage departing employees to document their workflows, develop SOPs for their successors to follow and share best practices before leaving.
- Cross-Training and Shadowing: Facilitate knowledge transfer by arranging opportunities for colleagues to shadow and learn from the departing employee.
- Successor Involvement: Involve the employee’s successor to ensure a smooth transition and facilitate knowledge transfer.
- Lessons Learned: Use experience insights to identify areas for improvement within the organization, like training gaps and process inefficiencies and implement necessary changes.
Next Steps
It’s hard to find qualified people. Organizations know the importance of an attraction and retention strategy. So, when good performers leave, execute an effective offboarding strategy that reinforces your talent acquisition strategy.
Plenty more fish are in the sea, but they’re not all trained in your industry. Cultivate your offboarding process and see what you can catch.
Now all that’s left to do is use this guide as a resource and implement changes. You’ll need the right tech to match are. Referring to our comparison matrix to identify options that suit your company’s unique requirements is a great place to start!
What was the best or worst offboarding you ever experienced? What changes have improved recruiting efforts? What are the best talent management, recruiting or HR solutions you’ve encountered? Let us know below.