- Proper employee offboarding is critical for security, compliance, company morale, and productivity.
- Offboarding steps include knowledge transfer, revoking IT access, collecting assets, payroll and benefits considerations, and an exit interview.
- An HRIS system and our employee offboarding checklist can help you track and manage your process.
While most companies invest significant time and energy into welcoming new employees, not as much attention is given to the other end of the employee lifecycle. In fact, only 29% of organizations have an official offboarding process.
But offboarding can affect the employee experience almost as much as onboarding. When done right, offboarding keeps morale high, maintains productivity, and helps employees maintain their dignity and trust in your company. Proper offboarding is also critical for legal and security reasons.
In this post, we’ll look at the importance of offboarding, and set you up with best practices and a checklist to help you successfully complete this critical business process.
What is Offboarding?
Offboarding encompasses all the steps taken to end an employee-employer relationship. It’s much more than cleaning out a desk and hosting a farewell party. Offboarding generally involves termination paperwork, a departure announcement, project handovers, an exit interview, and revoking access to company networks and files, among other company-specific requirements.
Offboarding may feel a lot different for a voluntary departure (i.e. when an employee is retiring or moving on to a new job or location) and an involuntary one (i.e. when an employee is terminated due to downsizing, redundancy, or for poor performance). But in all cases, the basic offboarding process should remain the same, and the departing employee should always be treated fairly.
Why an Offboarding Process is Critical
Proper offboarding is important for many reasons, including:
- Word of mouth. Employees who leave on good terms can be ambassadors for your company; those who do not may share negative opinions publicly.
- Boomerang employees. Past employees represent a valuable potential talent pool—in fact, 15% of employees who have left a job later returned to an employer.
- Insight. Departing employees may shed light on internal challenges that managers or HR professionals don’t see, opening the door for improvements.
- Productivity. A streamlined offboarding process prevents disruption in workflow.
- Compliance. Depending on your industry and location, you may be required to meet specific offboarding and access guidelines.
- Data security. Some 20% of businesses have reported data breaches by former employees; diligent offboarding can prevent this.
Offboarding Best Practices
As you establish or review your offboarding process, keep these best practices in mind:
Your company policies and procedures for offboarding should be set out in writing and well understood by managers and employees. It is critical that offboarding steps are followed consistently for every departing employee. This will reduce the effects of personal bias and ensure fairness. In the most serious cases, inconsistencies can lead to charges of discrimination.
Be courteous and fair
Take the high road. Offboarding meetings are often awkward, and sometimes unpleasant. Do not add to the negative energy. Be honest, straightforward, and polite. If this is an involuntary termination, inform the employee of why they are being let go.
Investigate allegations thoroughly
Before terminating and offboarding an employee due to charges of unacceptable behavior or actions, complete a full investigation. It can be easy to make a snap decision in the hopes of resolving a situation quickly. Do your due diligence, listen to all sides of a story, and make a transparent decision. Document the investigation process fully, including the complaint, names of witnesses and conversation notes, written recommendations, and a final written decision.
Communicate an upcoming departure sooner rather than later. This can halt the employee rumor mill. If it is appropriate to do so, share the general information you know as soon as possible. Knowledge transfer and project handover should also begin early on to ensure a smooth transition.
Offboarding: 7 Critical Steps
No matter your industry or the size of your business, the offboarding process generally follows these steps:
1. Acknowledge the employee
Gracefully acknowledge receipt of a resignation letter. Congratulate an employee who is moving on to another position. In the case of an involuntary termination, thank the employee for the work they have done. Communicate the news through the company, as appropriate.
2. Begin the hand-over process
Before the employee leaves, ensure you have a clear understanding of their daily routine, tasks, and contacts. Be sure you can access their files and systems. Allow time for them to hand over projects. If you are filling the vacant position, enlist the departing employee (in the case of a voluntary departure) to help train their replacement.
3. Gather company assets
Employees are often given a range of assets, from a laptop to office keys to a company car. Ask the departing employee to return each of these assets, and ensure they do so before they leave.
4. Disable accounts and revoke access
Depending on the employee’s role, this can be as simple as disabling an email account, or it may involve revoking access to multiple networks, databases, sales dashboards, social media accounts, and more. Being thorough will help avoid data leaks and breaches down the line.
5. Payroll and paperwork
Along with the final paycheck comes additional compensation considerations, which may include unused paid time off (PTO), severance pay, unpaid expense claims, or commission payouts and standard pay deductions as permitted by law (benefits premiums, for example) to the company. An all-in-one HRIS that includes talent management features can help you track and manage these offboarding payroll requirements automatically.
Other formal requirements may involve insurance benefits (either termination or continuation as permitted by law) and retirement plan options. Departing employees may also need to sign a confidentiality, non-compete, severance, or other contractual agreement.
6. Conduct an exit interview
Exit interviews may be uncomfortable, but they are a valuable opportunity to:
- Gather feedback on the employee’s experience
- Identify critical and previously unknown issues
- Clear the air on lingering issues
- Highlight areas for improvement
- Acknowledge an employee’s contribution
Particularly in the case of an involuntary offboarding, try to schedule the offboarding meeting for the end of the day, after which the employee may have more space and quiet to clean out their desk.
7. Update directories
Avoid confusion by immediately updating the company organizational chart, website, and directory.
Use this HR offboarding checklist as a jumping-off point to create your own: remove those items not applicable within your company and add others that may be specific to your needs.
- Receive signed resignation letter (voluntary departure) or provide signed termination letter (involuntary departure)
- Verify address on file is accurate, and verify/request personal email address in case future contact is required
- Determine termination date
- Schedule exit interview
- Complete exit interview
Compensation & benefits (if applicable)
- Check paid leave balance(s) and determine payout
- Discuss insurance benefits, health savings and flexible spending accounts, and retirement plan options
- Complete appropriate paperwork
- Notify your company’s providers
- Determine severance pay if applicable
- Issue final paycheck in accordance with local and state laws, which vary widely (for example, some states require an employee receive their final paycheck within 72 hours of their last day of work, or even immediately upon dismissal in some states)
Records & contracts
- Move personnel file (paper or virtual), including Form I-9, and store with files of other former employees
- Update the employee’s status in your HRIS
- Obtain signatures on contracts, non-compete, non-disclosure, and other legal documents
Communication & IT
- Disable phone extension and voicemail
- Forward email and phone calls to a manager or replacement
- Revoke computer and network access
- Change passwords on shared accounts
- Disable email account
- Remove employee from email lists and group communications and/or other communication applications (i.e. Microsoft Teams, Slack, etc.)
- Remove employee name from online and offline directories
- Disable security code
- Building and office keys, fobs, or key cards
- Laptop and other computer hardware
- Cell phone
- Close company credit card/expense account
- Initiate knowledge transfer
- Advertise for a replacement (if applicable)
- Keep in touch via LinkedIn or an employee alumni network
HRIS for Talent Management Throughout the Entire Employee Lifecycle
Offboarding can be fraught with a wide range of emotions, positive or negative, depending on the employee’s reasons for leaving. Keep the process on track by following consistent offboarding steps, no matter the reason for an employee leaving.
SentricHR can help you streamline talent management from recruitment to termination. To learn how, schedule a demo with one of our product experts today!