How Does Offboarding Impact Your Organization?

The employee lifecycle consists of three major parts: onboarding, continued training and development (the overall time a worker works for you), and offboarding.

There are countless articles about how the onboarding process is vital. In order to retain newly hired talent, the onboarding process needs to go smoothly. Employees must be properly trained and introduced to their teams. If it doesn’t go well, the employee might leave quickly, causing you to have to look for new talent and start the costly process all over again.

The same can be said for the middle stage, too. There are numerous guides on leadership development and career progression that can help an organization retain their talent while also helping them improve and learn new skills.

But what about the last step: offboarding? Does this step not matter as much as the others? If it does, why is it so ignored?

In reality, offboarding is just as important as the other steps. After all, it’s likely the last thing the employee will remember about your organization and if it doesn’t go well – especially if the employee is let go by a RIF or layoff event – you organization can suffer.

Let’s take a look at why you should give a lot of thought to your offboarding efforts instead of ignoring it like most companies.

First up, we need to discuss why offboarding is ignored in the first place.

While there can be different reasons for different organizations, the main reason people seem to ignore offboarding is because it’s when an employee is leaving. Since it’s the end of this relationship, it doesn’t matter as much to them because the ROI isn’t as clear as the other steps.

This is logical to an extent. After all, the employee is no longer your concern or the concern of your business, but if the offboarding experience is bad, that employee could come back to haunt you and eventually hurt your bottom line in the same way that a poor onboarding experience can.

Just because it’s the final step in the process doesn’t mean that the policies in place to handle that step should be ignored. If you pay attention while selecting the right talent, training that talent, and retaining that talent over the long run, you should also let them go in a way that is dignified and caring, too. It just makes sense.

And if that doesn’t make sense, here are even more reasons:

In today’s world, reputations can be lost in the tap of a few keys on the internet. Sites like Glassdoor and LinkedIn allow word to travel quickly about your business. Hopefully, these tools are beneficial to you because you have policies in place that make your company amazing for workers. If you don’t, though, it wouldn’t be surprising to find that popular opinion has turned against you.

When it comes to offboarding, you need to make sure that you handle it in the best way possible so that employees do not exit your organization with a bad taste in their mouths because it is these people who will post about you online, bring down your Glassdoor score, and tell other people not to work for you. People are far more likely to go online to write a bad review than a positive one.

A person in the middle stage of the employee lifecycle is unlikely to show ill will towards your company because they still work there, but once they are out, they have no reason to hold back.

If this goes on for too long, your company’s head-earned reputation can go down the drain, which can have serious repercussions. One bad review probably will be lost unless it’s about something very serious, but a plethora of bad reviews is nearly impossible to ignore.

If your company’s reputation is tarnished, it can very well impact your onboarding efforts. Why would top talent apply for positions at your organization if they think you do not treat your employees properly?

Today’s job seekers are more informed than ever. They do job research just a like a buyer does for a product, conducting numerous searches, judging companies on their social profiles, their websites, and – most importantly – how their culture is. And to get that perspective, they go to sites like Glassdoor or message boards to hear from people who have already worked for the company.

If you have a bunch of people writing about how poorly they were let go, top talent will see this because they will be doing their homework. And now, you have a situation where offboarding is messing up onboarding, one of the most talked about parts of the employee lifecycle.

It doesn’t stop at onboarding, either.

Poor offboarding practices can also lead to talent up and leaving your organization, too. This tends to happen more when a layoff or RIF event occurs, though.

To illustrate, let’s look at an example.

If you are working hard at an organization and, for whatever reason, there is a layoff that all of a sudden downsizes the company, you are going to want to know that if that should happen to you that you will be taken care of.

If the employer simply kicks people to the curb, is that somewhere you want to spend upwards of 40 hours per week? Or would you start to look elsewhere for a company that cares more about their employees even when they are making an exit?

If you’re like most people, you’d probably start looking, which can trigger your coworkers to start looking and suddenly an event that was meant to reduce costs has now cut too deep into the organization and things are snowballing.

An employer should show that they care about exiting employees just as much as they do when they are hired or when they are trained. Employees will learn that you only care about them when you see a clear ROI (onboarding, training) and that’s not a good feeling. People need to know the place that they give all of their time to cares about them and is willing to help them.

The good news is that making a great offboarding experience isn’t all that hard. In fact, with a few tweaks you can offer your outbound staff members everything they need to succeed outside of your organization.

The first thing to do is to make sure everything is handled with care.

If a person is leaving your organization on their own, see if they want to have an exit interview. It has been estimated that companies can save a boat load of money by holding exit interviews because they can alert you to problems that you didn’t even know you had.

There’s not much you can do if a person decides to leave your organization, though you shouldn’t try to just kick them out and ignore all of things they’ve done for you over their tenure. Be courteous and hope that the employee will have fond memories and that they may even recommend the company to other workers they know.

Layoffs or RIFs are a bit trickier because they are involuntary exits and anytime someone is let go there will be emotions of all different kinds.

To help negate all of the bad ones, you should offer a great severance agreement that goes over, in detail, the exact terms and conditions of the termination. A severance agreement and severance payment should do two things: protect you from a wrongful termination lawsuit and hopefully provide the employee with enough money to hold them over to their next job.

The best thing to offer alongside a great severance package is outplacement services.

As a refresher, outplacement is a service offered to exiting staff members that allows them to get back to work faster thanks to the help of expert coaches and online tools. The best outplacement providers work with your staff members to ensure they are supported during their job hunt, keeping them on the right track to find that next role.

Outplacement not only helps your employee navigate the muddy waters of today’s job hunt, it also really shows that you care about their success. There is no law mandating that you offer outplacement services, which makes it something that your employees might not expect. Thus, providing it will show them that you want to support them in these trying times.

This also helps retain your staff, too. The example above about how employees feel when they see their coworkers let go in bad ways completely falls apart when those same workers see their friends treated fairly. It shows them that if they were the ones getting laid off, they would be in good hands and not kicked out with no support.

When it comes to offboarding, it pays to have a system in place that makes the process easy for everyone involved while also providing as much support as possible.

Exit interviews are a great way to show that you care about the opinion of those who are leaving voluntarily. They also help you find flaws in your business that no one might be talking about.

For those who you have to let go, make sure you offer a robust severance package that used a well-rounded pay structure. Coupling severance with outplacement services provides the most support possible for outbound staff members, helping them navigate the path to their new role.

By providing this level of support, you can protect your company’s reputation, which will foster better talent acquisition as well as retain layoff ‘survivors’.

The most important thing to note is that just because this is the final step in the employee lifecycle, it doesn’t mean that it is any less important. A poor offboarding experience can be detrimental to your overall business when it doesn’t have to be.

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.