Employee Lifecycle Management: The Importance of Offboarding

February 06, 2018 by Josh Hrala

When it comes to employee lifecycle management, many HR professionals pay close attention to all all of the beginning and middle steps of the process – such as interviewing, hiring, and leadership development.


However, offboarding, the final step in the employee lifecycle, is rarely discussed because many organizations think that this step is the least important.

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We’re here to tell you that this is the wrong mentality. Offboarding is just as important as onboarding. And for your brand, it might be even more important.

Let’s have a quick refresher of what employee lifecycle management is and how the last step – offboarding – can be easily handled with the right tools, saving your company’s reputation while also making sure that the exiting staff member is set up to succeed wherever they go next.

What Is Employee Lifecycle Management?

First, a quick overview.

An employee lifecycle is the overall journey a staff member will take while they work at any given company.

A typical employee lifecycle has four or five steps, though it can vary depending on what organization you’re examining.

The first step is the recruiting process, meaning that hiring the right person is super important and should be considered when evaluating your process. There are tons of articles about recruiting staff and how important it is to make sure that they have the skills needed to do the job and the personality to fit in well with the organization as a whole.

The second step is onboarding, a process that is vital if you want to retain that person you just spent weeks and/or months finding.

At this second step stage, the focus shifts from wanting to find and hire a person to retaining and engaging them so you don’t have unneeded turnover. The third and fourth steps – career development and employee recognition – hit this point home.

By continuously developing and engaging with your employee, they will become better at their jobs, more satisfied working at your organization, and more engaged with their careers.

The final step is offboarding.

Since this step is when the employee leaves your organization, many managers write it off as not as important as the other four steps. This is problematic for a few reasons.

Let’s take a look at them.

Employee Lifecycle Management: Voluntary Termination

The first thing we need to consider is what types of offboarding situations your employee can find themselves in.

Most of the time, offboarding happens when an employee chooses to take another job, voluntarily leaving your organization for another opportunity.

Now, you might be thinking that this means you can just let them leave without another word, hopefully on good terms. While yes, there’s not much your department needs to do with this type of offboarding, it’s still vitally important that you conduct an exit interview and figure out why the employee decided that this next opportunity has more to offer than the job they currently have at your organization.

Exit interviews have the power to save you billions of dollars because they allow you to quickly and easily monitor how people think of your organization, what could be wrong with it, and how you can correct it. So, the moral of this type of offboarding is to keep your eye and ears open, absorbing as much info as you can.

There are two other big forms of offboarding, too: retirement and involuntary terminations, such as layoffs and firings. These you need to pay extra close attention to.

Employee Lifecycle: Offboarding Due to Layoffs

When a layoff event is triggered – no matter if it’s to rightsize your company because of financial reasons or something else – there is a lot of pressure on HR to perform the task in a way that gets the job done while protecting your corporate brand and making sure that those let go will be able to land on their feet.

We’ve covered how to handle layoffs numerous times. The most important thing you need to have for a layoff to go smoothly is a plan on paper that goes over the employee’s severance package, what you need to collect from the them, and every other task that needs done. Most of this should be incorporated into a single script you can customize on a case-by-case basis.

Download Our Layoff Script Here!

For the employee lifecycle, offboarding because of a layoff is quite different than an offboarding due to a voluntary termination mainly because the employee is being forced to leave, which can stoke ill will towards your company.

When an employee is laid off, they can turn on your business if the layoff isn’t handled properly. This means that the public can turn on your company as well. For example, if you layoff a group of people and do not offer them support or don’t handle the layoff in a legal and ethical way, you can easily open yourself up to lawsuits and other things that can be easily avoided.

So, how can you offboard someone properly when they are laid off?

That’s actually super simple. You need to provide them outplacement support to make sure that the person knows you care about them and their next step in their career even if they will no longer be working for you.

Outplacement is a process that HR managers can outsource to professional providers who will work with your staff to get them back to work in a new, meaningful role.

We recommend having an outplacement provider on retainer so that when you need to layoff a person, you can do so quickly and efficiently. When shopping for a provider to work with, look at how they handle the process, how much they cost, and make sure that they are flexible in their approach because if they aren’t, it makes it a lot harder to find them a new role.

Outplacement takes a lot of the headache out of the layoff equation. You can learn more about it here:

Download Our Outplacement Buyer's Kit Here!

Employee Lifecycle Management: Offboarding Due to Retirement

A more fun form of offboarding is retirement.

That being said, you as an HR leader still need to handle the process properly to make sure that your organization can fill the role with new talent while also making sure that the employee – who may have worked for you for decades – is set to succeed outside of your employment.

Some individuals will find retirement an easy, happy process that they’ve been looking forward to and have been planning for over the course of their careers. However, it’s important to remember that retirement isn’t always an easy process for everyone.

You might be thinking to yourself that the retirement equation is all about money and savings plans. For the most part, retirement really does depend on how much money a person has saved over their career but there is a huge portion of potential retirees who are far more concerned with how their lifestyles will change when they make the switch.

Consider this: you’ve worked at the same organization for decades, have a nice routine in place, have friends and coworkers who you see for 8 hours every day, you have a steady income, and life is generally going along at a decent clip.

Now, you have reached retirement age and want to make the switch you’ve been financially planning for all of these years. However, losing all of those great things that come with working every day is scary and intimidating. How do you make a new daily structure? How do you still connect with all of those friends? It’s daunting.

The good news is that HR has the power to help these individuals plan for retirement on a personal level. While everyone knows that you need to save for the switch and there are countless companies out there that assist with this process, HR is unique because after an employee has gone through all of the steps of the employee lifecycle to the point where they are ready to retire, you have a good hold on how the person operates and what they need.

So, when it comes time for someone to retire, HR needs to work either internally or with an external firm to ensure that the retiree can take their next step.

HR also needs to make sure they have a strong succession plan on paper so that the business keeps running smoothly after a senior staffer decides to retire. Do people need trained? Are there leaders available to fill in the role? Would a phased retirement process be beneficial to you and your exiting staff member?

These questions need answered for both you and the retiree. If they aren’t answered, the retiree might become reluctant, refusing the retire for as long as possible, which isn’t great for your business – which, in turn, needs a healthy level of turnover in upper management. It’s also not great for the retiree who has worked all this time to retire but can’t.

Employee Lifecycle Management: The Final Say

There are many steps in the employee lifecycle. Many organizations focus solely on the first four steps – recruitment, training, and development – and ignore the final step: offboarding.

This is a problem because offboarding is a major step in the process. One that has the power – if done wrong – to impact your business’s reputation, leave you in the dark about why your turnover rates are high, and why your talent is stagnating in the upper levels.

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By examining the offboarding section of employee lifecycle management and having a team who provides outplacement and retirement services – two of the biggest hurdles – you can make your lifecycle flow better, which allows you to do better business.

Josh Hrala

Josh Hrala

Josh is an HR journalist and ghostwriter who's been covering outplacement and offboarding for over six years. Before pivoting to the HR world, he was a science journalist whose work can be found in Popular Science, ScienceAlert, The Huffington Post, Cracked, Modern Notion, and more.

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