Mastering Offboarding: Best HR Practices for a Smooth Employee Exit

July 12, 2023 by Laura Gariepy

Most HR professionals follow a strategically designed onboarding process to make new hires feel welcome, acclimate them to their new company, team, and role, and set them up for success. However, many HR practitioners, unfortunately, don’t put as much time and effort into offboarding departing employees. In this article, we’ll discuss how a well-thought-out offboarding process benefits both the exiting employee and the organization.

Here’s what we’ll cover:

  • Employee Offboarding Definition
  • What is the Purpose of Employee Offboarding?
    • Benefits to the Organization
    • Benefits to the Employee
  • What Should Offboarding Include?
    • Gather Insight from the Exiting Employee
    • Follow the IT Security and Compliance Policy
    • Help Ease the Transition for the Organization
    • Help Ease the Transition for the Departing Employee
  • What Should Offboarding Look Like?
    • How Long Should Offboarding Take?
  • Create an Offboarding Checklist
  • Offboarding Best Practices: The Takeaways

Employee Offboarding Definition

Offboarding is the process of handling departing employees and is the last phase of the employment lifecycle. When done right, employee offboarding results in a smooth transition for both the firm and the exiting professional.

What Is The Purpose Of Employee Offboarding?

Employee offboarding mitigates various legal and security threats and helps companies retain talent, attract new talent, and inspire greater engagement. Here are the many benefits of strategically ending the professional relationship with your soon-to-be former employee:

Benefits to the Organization

  • Less risk of a security breach
  • Less chance of the departing employee suing the company
  • Less risk of the departing employee bad-mouthing the company
  • Less disruption to the team and overall operation
  • Higher morale amongst remaining professionals
  • Smoother transition to the employee’s replacement
  • Invaluable insights from the departing team member
  • An amicable separation between the two parties
  • Potential employee referrals from the exiting worker
  • A higher chance of the departing employee returning in the future

Benefits to the Employee

  • An amicable separation between the two parties
  • The opportunity to share honest opinions without fear of consequences
  • A clear understanding of their final paycheck and how their benefits coverage will work
  • An opportunity to ask questions
  • A chance to announce their departure on their terms (if a layoff or voluntary separation)
  • A chance to say goodbye to their colleagues

What Should Offboarding Include?

Your offboarding program should include the following steps:

Gather Insight from the Exiting Employee

You can learn a lot about your company’s procedures after going through a formal offboarding process. This is particularly true if the outgoing employee initiated the termination of employment. For example, maybe there’s a problem within the company that you may not know exists. Therefore, you must understand the steps leading to this decision.

Understanding what led to the termination of employment will help you revise your current strategies and make adjustments to improve employee retention. A formal offboarding process makes retrieving valuable insight from exiting employees much easier. A simple termination of employment survey and exit interview will suffice in reaching valid conclusions about employee attrition.

Exit interviews and termination of employment surveys are extremely useful in the overall employee offboarding process to gain valuable insight, such as:

  • Identifying problem areas
  • Increasing employee retention rates
  • Establishing reasons for termination of employment
  • Improving work culture
  • Identifying development opportunities
  • Ensuring compliance
  • Managing turnover costs

Expert Tip:
Compile all your exit interview data in one place and regularly review the trends with senior leadership.

Follow the IT Security and Compliance Policy

Offboarding best practices extend to ensuring classified information does not leave the company and all security protocols are in check. An inapt offboarding strategy can pose a serious security risk to the organization, particularly where sensitive information is concerned. Just imagine what could happen if a former employee leaks classified data. It will wreak havoc.

Can you trust the exiting employee not to misuse their position and credentials after leaving? Even if trust levels are high, it’s better to be safe than sorry. Therefore, you should follow an IT security and compliance policy in your formal offboarding process. Here are the essential steps to establishing security and compliance during employee offboarding:

  • Maintain distribution list for employee turnover. Inform major departments within your organization about any employee turnovers happening. This way, department managers can plan how to deal with departing employees and ensure compliance.
  • Disable logins to exiting employees’ accounts. Close all accounts associated with exiting employees both on-premises and in the cloud. This is essential to ensuring security and compliance during the employee offboarding process.
  • Forward emails and phone calls. Direct emails and calls to other appropriate team members until the account is deleted. Generally, organizations should wait a set amount of time before permanently terminating accounts. This is because a particular exiting employee may have been the contact person for important clients or partners.
  • Review exiting employees’ contacts. Check to see if the exiting employee is listed as the primary contact for a project or account. Termination of employment should not mean termination of a project. So make sure to reassign all tasks accordingly.

Help Ease the Transition for the Organization

An employee’s departure can be highly disruptive to the team they worked with and the company as a whole. Suddenly, the remaining professionals must pick up the slack on projects they may not have been involved with previously. As a result, the pace of work could slow down, resulting in a loss of productivity and revenue. In addition, employees may become disgruntled by the extra work and accompanying confusion and stress.

Thankfully, your onboarding program can prevent this situation from happening. Ask the exiting worker to document everything they do in a day – including any one-off projects in progress. Then, at a minimum, the other employees will have a reference point to work from, and the replacement hire will be able to get up to speed faster.

Try to hire the departing employee’s replacement before they leave to allow for in-person knowledge transfer.

Employee Exit and Offboarding Checklist

Help Ease the Transition for the Departing Employee

Leaving a job is stressful for a professional (even if it was their idea). You can make it easier for them by being kind, supportive, and transparent.

You should let the employee know when to expect their last paycheck and carefully explain when their benefits coverage will end and how to elect COBRA. You should also allow them to announce their departure. That way, they can release the information they wish while quieting the office rumor mill.

If the exiting employee has been laid off, consider providing outplacement services. The best outplacement services offer professionals expert career coaching, networking opportunities, resume help, and more. They also have a high landing rate. That way, your former worker can get back on their feet quickly.

What Should Offboarding Look Like?

Despite the reasons for terminating employment, offboarding should be a positive experience. Therefore, you should put in the same effort as during onboarding. Organize a farewell party for the employee, acknowledge their contributions, and talk positively about their time in the company.

Whatever you do, don’t burn bridges by mistreating exiting employees. You never know who departing employees may speak with and what they might say about your organization.

Did you know employee referrals reduce the time and cost to hire? In fact, referred candidates are 55% faster to hire than those sourced through career sites.

Or perhaps, exiting employees might join your company again in the future. This is called the employee boomerang effect. You never know what will happen. That’s why it’s important to treat departing professionals with respect throughout the employee offboarding process. Employees who go through graceful offboarding might be the key to improving future employee retention rates and company reputation.

How Long Should Offboarding Take?

While every employee should go through similar steps during offboarding, the time to complete the process will vary. For example, you’ll have more to do and discuss for a departing executive than an entry-level worker. Plus, leadership is more likely to provide an extensive notice period to help recruit a replacement and conduct transfer knowledge.

Make sure your offboarding process aligns with your termination policy.

Create An Offboarding Checklist

Offboarding checklists make it easier for HR management to track IT security and compliance during employee turnovers. Specifically, offboarding checklists ensure offboarding processes are foolproof and error-free.

Here’s what you should include in your offboarding checklist to secure a seamless transition during employee turnovers:

  • Communicate changes efficiently. Notify relevant departments (HR, Accounting, and IT) about the departure. If necessary, inform them about the reason for the employee’s exit.
  • Fill in the paperwork. Get exiting employees to sign any pertinent documentation regarding their termination of employment.
  • Start knowledge transfer. Find a suitable replacement to take over the duties of the exiting employee. Prepare files, documents, and lists of information for transfer, and outline due dates for submitting final tasks.
  • Conduct an exit interview. Ask the departing employee for honest feedback about their time working in your company. Share key findings with department leaders and follow up with any complaints that may trigger future employee turnovers.
  • Recover company assets. Issue a Return of Company Property Letter requesting that all company-owned equipment and assets be returned. Get departing employees to hand in laptops, phones, uniforms, keys, and security cards.
  • Tie up loose ends. Double-check to see if the offboarding process is running smoothly. Remove the exiting employee from upcoming meetings, speak with other employees, and clean out their desk area.

Offboarding Best Practices: The Takeaway

  1. Employee offboarding is just as critical as employee onboarding.
  2. Employee offboarding protects your organization from security and legal threats. It also minimizes disruptions to the team and productivity losses.
  3. An effective offboarding process helps facilitate a smooth transition for your company and the departing employee.
  4. Adding outplacement services to your offboarding process is a great way to show the employee you care and boost company morale.
  5. An offboarding checklist can keep you organized and ensure you take all the necessary steps.

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Laura Gariepy

Laura Gariepy

Laura has been a freelance writer since 2018. Her work primarily focuses on managing your money, navigating your career, and running a successful business. Her words have been featured in the New York Post, USA Today, and many other publications. She earned her MBA and a Bachelor's in Psychology during her previous career in human resources. As an HR professional, Laura supported employees in retail, education, mental health, telecommunications, and manufacturing industries. Laura was an HR Generalist for much of her HR career, but also served as a Director for a mental health company. She held the SPHR and SHRM-SCP designations. In her free time, Laura offers resume writing and career coaching services.

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