What is offboarding?

Have you ever thought about what happens after an employee leaves a company? While the onboarding process gets all the shine, a smooth offboarding process is just as important. Since your company will keep developing an employee brand, you don't want departing employees feeling sour about their experience.

The current job market is experiencing a period of high employee turnover, with a record number of resignations recently, as reported by the U.S. Bureau of Labor Statistics. An effective employee offboarding process is key to dealing with this trend, since it allows Human Resources to gather feedback from an employee's departure and use this data to design strategies for future employees and the present workforce. In this way, you're using the offboarding learnings to boost employee retention. Additionally, an effective offboarding process will help your company’s reputation and, thus, help you attract top talent.

This article will cover everything you need to know about employee offboarding. We'll cover what it is, why it matters, and the key steps to creating a successful offboarding program.

What Does Offboarding Mean?

Offboarding is the formal process of transitioning an employee out of a company, whether they are resigning, retiring, or their employment is terminated. It's the opposite of onboarding, which focuses on getting new hires acclimated. An effective employee offboarding program results in a swift handover of responsibilities, protects company data, and obtains valuable input to improve your company culture.

Importance of Offboarding for Company Culture

A strong company culture is the backbone of a successful organization. It promotes employee engagement, productivity, and loyalty. But what happens when employees leave? Believe it or not, employee offboarding plays a major role in building a positive company culture, with or without resignations or layoffs. Here's how:

Positive Last Impressions

Just like first impressions matter, so do the final impressions. A well-managed process makes sure offboarding employees leave feeling valued and respected. This nurtures a sense of goodwill and invites them to speak positively about your company in the future.

Employer Branding

Online reviews and word-of-mouth recommendations hold significant weight in the current hyper-connectivity era. Disgruntled former employees can damage your employer brand with negative reviews. Conversely, a positive offboarding experience can lead to positive online reviews and recommendations. It gives the market a good impression of your recruitment capabilities.

Benefits of Implementing an Offboarding Policy

As we’ve been anticipating earlier in the discussion, a well-defined offboarding policy offers a multitude of benefits for your organization. Let’s take a closer look at those offboarding benefits beyond improving your company’s culture:

• Reduced risk: Offboarding helps protect sensitive company information by deactivating access and collecting company property. It significantly minimizes the risk of data breaches or unauthorized access after an employee lifecycle finishes.
• Easy transitions: A planned offboarding process guarantees a smooth handover of responsibilities to remaining or new team members.
• Informative feedback: Exit interviews conducted during offboarding provide a special opportunity to gather feedback from departing employees. This feedback can be used to identify areas for improvement within your organization and, ultimately, reduce potential turnover.
• Potential rehires: People leave companies for various reasons, and occasionally, their career paths take them elsewhere temporarily. A hassle-free offboarding experience increases the chances they might consider returning in the future (“boomerang employees”). This can be a win-win situation, as these employees already possess substantial knowledge of your company and culture.
• Legal compliance: Following a structured offboarding process helps your company comply with various labor laws and regulations. This can protect you from potential legal issues, including wrongful termination lawsuits or disputes over unpaid wages.

The Components of a Successful Offboarding Checklist

Saying goodbye to a valued team member can be bittersweet, but a well-planned offboarding process helps to ease the bitter part.

The timing below is mainly for an employee leaving by their choice. If it were a layoff or an ousting, almost every step outlined below should be done in as little as a single business day. The pre-departure steps we're listing are impossible if the offboarding is done because of a layoff.

In this section, we’ll provide you with an offboarding checklist that will guide you through the key steps to make it a positive experience for both the departing employee and your company.

1. Pre-Departure (Optional, only possible if the employee agrees to it)
• Schedule a meeting with the departing employee (1-2 weeks before the last day): Thank the employee for their contributions and discuss their reason for leaving, if applicable. Confirm the last day of employment and notice period requirements. If it's a good fit, let them know the door is always open if they ever want to connect in the future.
• Communicate the departure to the team (1 week before the last day): Let the team know about the departure with a clear and concise message. You can even mention some of the departing employee's accomplishments to show appreciation. If there's a successor, introduce them or explain how the workload will be handled. Some companies prefer that the leaving employee comments on their leave with an email, and on certain occasions, it will work just fine.
• Plan knowledge transfer (1-2 weeks before the last day): Work together with the departing employee to document their projects and responsibilities. This makes for a smooth handover to a new team member or helps existing colleagues pick up the slack.
• Final pay prepping (2 weeks before the last day): Contact HR or payroll to confirm details like accrued vacation time and sick leave. Don't forget to collect any outstanding expense reports or timesheets!

HR reps will recognize that these steps cannot always be carried out. There are too many variables that can come into play to prevent all of this from happening. For a more universal, realistic scenario, HR teams should check the “During Departure” section that comes right next.

2. During Departure
• Securing company assets (last day of employment): This is where you collect things like laptops, phones, and badges. Don’t forget to deactivate access cards and keys. It's not the merriest measure, but you should never forget the act of revoking employee access. The best way to track a departing employee's company equipment is with an asset management platform. Some companies request former employees to return their laptops after being terminated, but there's an obvious risk.
• Exit interview: This is your chance to gather feedback on the employee's experience through a structured interview. It's a two-way street—thank them for their participation and feedback, and let them know you value their perspective.
• Finish payroll and benefits (last day of employment or soon after): Make sure the departing employee receives their final paycheck according to company policy and legal requirements. Additionally, provide information on continuing benefits, if applicable.
3. Post-Departure
• Updating the team lineup (within a week): Make sure your organizational charts and directories reflect any changes in personnel and responsibilities.
• Staying connected (optional): Consider including the former employee in a talent pool or alumni network. It's a great way to maintain a positive relationship and maybe even welcome them back someday.

Automate Offboarding With HR Tech

The traditional offboarding process can be time-consuming and prone to errors. Fortunately, HR software solutions, like TalentHR, offer a range of tools to automate the tedious parts of this process and free the HR team for more challenging tasks.

Benefits of HR Tech for Offboarding:

• Standardization: HR tech helps create a consistent offboarding process for all departing employees, regardless of department or reason for leaving.
• Improved output: Of course, automating mundane tasks like document generation and data collection will speed up the process and lower its cost.
• Improved compliance: HR tech solutions can help you comply with labor laws and regulations about final pay calculations, data security, and termination notices.

Offboarding FAQs

What are the common mistakes companies make during the offboarding process?

Skipping exit interviews, neglecting security measures, and failing to handle company property. Be cautious with these common mistakes, as they can leave a seriously negative impression and expose the organization to security risks.

How can offboarding feedback be used to improve organizational practices?

By analyzing exit interview data, companies can identify areas for improvement, such as employee morale, workload management, and communication. This feedback can help inform changes to company culture and HR strategies.

How can companies maintain a positive relationship with former employees?

Expressing gratitude, providing clear communication during offboarding, and offering opportunities to stay connected can help build a sense of community and eventually lead to future collaborations or rehires.