Companies put a lot of effort into onboarding new hires, but it’s just as important to think about an employee’s experience of leaving the organization.
That’s where offboarding comes in.
What Is Offboarding?
Offboarding is the process of transitioning an employee out of an organization after a resignation, termination or retirement. It ensures a smooth exit where knowledge and responsibilities are transferred and the employee leaves with a positive impression of the organization.
What Is Offboarding?
Offboarding is the process that guides a departing employee’s transition out of a company. It is a series of actions that prepare the employee, their team and the company for the employee’s upcoming departure.
The offboarding process involves communicating the departure to other employees, arranging for the employee to share knowledge with their team, gathering the employee’s feedback through an exit interview, collecting company property, removing access to buildings and computer systems, filling out necessary paperwork and answering the employee’s questions.
Why Is Offboarding Important?
A well-designed offboarding program can benefit the company and the employee in several ways.
Establishes a Consistent Process
An offboarding program lays out a detailed protocol that eliminates any uncertainty and confusion about the process. That, in turn, improves efficiency, reduces business interruptions and prevents any items from being forgotten about.
Protects Company From Security Risks
Companies can protect themselves from legal and security risks through common offboarding steps like collecting company-owned electronic devices, deactivating office badges and removing the employee’s access to the company intranet. If a spurned employee had access to company data or buildings, they could harm the company by leaking proprietary information or compromising company computer systems.
Keeps Organization Compliant
An offboarding policy can ensure the organization complies with data privacy regulations, cybersecurity standards and the employment laws for every state in which it does business.
Helps Maintain Employee Morale
Employees notice how layoffs are conducted and how people are treated on their way out the door. If an organization treats departing employees with respect, existing employees will have a more favorable view of the organization.
“Treating an employee with that white-glove experience will take you far from an external reputation standpoint, but also internally,” Zak Consulting Group founder Nadian Zak told Built In. “The remaining team members are looking to see how you’re treating their colleague. They’re likely still in touch with their former colleague, and that stuff really carries.”
Enhances Your Reputation as an Employer
If the employee remembers the company supporting them during a job transition, they may be more likely to return to the company, recommend the company to a friend or write a positive social media post. All of these things are a boost to a company’s reputation, which will improve their recruiting efforts.
“It’s a stressful situation to leave a company,” Nadia Alaee, senior director of HR business partners at Deel, told Built In. “If we can make someone feel a tiny bit better because of how we treated them after they’ve left, that can have great returns in terms of how they speak about us to their friends, family and colleagues.”
Offboarding Checklist
These are some of the main items that are typically addressed in an offboarding checklist.
1. Establish an Offboarding Timeline
Upon learning an employee is leaving the organization, the employee’s manager contacts the HR team, which then creates a timeline to offboard the employee. HR assigns offboarding responsibilities to the employee, their manager, the finance department and the IT team so everyone knows what they need to do within the given time constraints.
2. Create a Transition Plan
The employee’s manager plans how the team will operate after the employee’s departure, decides if the position will be backfilled (and what the timeline will be for the hiring process) and determines how the employee’s workload will be distributed until a new employee is hired.
3. Announce the Departure
The employee’s manager announces the departure to the team early on, before any rumors start to develop, and provides as much information as possible, such as the employee’s last day, whether the position will be backfilled and how the employee’s absence may affect operations. They may notify people in other departments or across the entire company too (nobody likes to find out about an employee’s departure through an email bounceback).
4. Transfer Knowledge
Time is set aside for the employee to give a progress report on any projects they are working on and hand off any unfinished projects to their coworkers. They are asked to share client contact information, grant access to documents and train coworkers on any business processes. Transferring knowledge to team members can be a lengthy process, particularly for employees with long tenures, which is why teams should make a habit of documenting work processes.
“One of the most costly things about exiting employees is the institutional knowledge that they take with them,” Fernanda Anzek, managing director of HR operations at Insperity, told Built In.
5. Revoke Access to Systems
If an employee is laid off or fired, HR coordinates with the IT team to immediately deactivate the employee’s office badge and their access to company computer systems to prevent them from accessing confidential information. If an employee is resigning on good terms, though, inform them on when their email and systems access will be revoked (typically on their last day).
6. Collect Company Property
Collect any company-owned property on the employee’s last day. That includes company laptops, smartphones and office badges. If you have a distributed workforce, send employees instructions on how to ship their device back to the company.
7. Conduct an Exit Interview
If the employee is leaving voluntarily, ask if they would be willing to participate in an exit interview. By understanding why employees are leaving and any issues they encountered during their tenure, you can take steps to improve the employee experience and reduce employee turnover.
“If they’re a high performer and they’re leaving the organization, it’s really important to understand why,” Wende Smith, head of people operations at BambooHR, told Built In.
8. Prepare the Final Paycheck
Prepare the employee’s final paycheck sooner than later. Some states, like California, require companies to pay the employee their final paycheck on the employee’s last day of work. Depending on the company’s policies, an employee’s final paycheck may include compensation for unused PTO. This would also be a good time to remove the employee from the payroll system.
9. Fill Out Paperwork and Answer Questions
There are a number of documents that need to be prepared and signed during the offboarding process.
If the employee is resigning, ask them to submit a signed letter of resignation. If the employee has been terminated, ask them to sign a severance agreement that might include severance pay, continuation of health care benefits and outplacement services to find a new job. The severance agreement might also include legal protections, such as a release of claim, a non-disparagement clause, a non-solicitation agreement or a non-disclosure agreement. The employee must sign the severance agreement and agree to these provisions to receive their severance pay.
The following logistical information should also be provided:
- When the employee’s health insurance benefits will be discontinued
- How to continue health insurance coverage through COBRA
- Who to contact for employment verification
- How to apply for unemployment benefits
- When they will receive their final paycheck
- How they will receive their W-2 for tax purposes
Send all of this information to the employee's personal email address, making it clear that HR is available to answer any other questions that might come up after the employee exits the organization.
10. Wish Them Well
If an employee is leaving on good terms, consider throwing them a going-away party. You could also get them a gift and get everyone on the team to sign a greeting card recognizing their contributions and wishing them well in their next endeavor.
11. Stay in Touch
The manager of the team might want to keep in touch with the employee periodically to catch up and keep them posted about future openings in the company. Some companies even create alumni networks for employees to keep in touch, which can create a sense of company pride and strengthen the company’s employer brand.
Offboarding Best Practices
Keep these best practices in mind as you navigate the offboarding process.
Tailor Your Process to the Circumstances
The offboarding process for employees who resigned voluntarily will look different than that of employees who were involuntarily terminated.
For instance, if an employee has been fired or laid off as part of a reduction in force, an exit interview is unlikely to occur.
Security-related concerns may alter the offboarding process if an employee takes a job with a direct competitor. Typically, their access to the office and computer systems is immediately revoked to prevent them from poaching clients or accessing proprietary information.
Regardless of the reason for their departure, all outgoing employees should be treated with respect throughout offboarding.
Document the Process
Every HR team should document their offboarding process so it is not entirely dependent on one person. By documenting the process, HR teams can ensure nothing is overlooked, ensuring the company has taken all of the necessary steps to protect itself from a legal and security standpoint.
The documentation provides clarity in time-sensitive situations, like an employee resigning with less than two weeks’ notice.
“Having these operating processes documented, well-understood and aligned internally helps you be able to react in a more nimble and agile way,” Smith said.
Use Software to Track Offboarding Progress
Offboarding involves a lot of coordination between the HR team, the IT team and the IT team. There are numerous software options that can help HR teams track who is responsible for each task, the status of each checklist item and any other issues that might need to be addressed before the employee’s final day of work.
“Having a good HR solution or system in place helps you automate and do the things that you need to do so you’re not reliant upon one person, which creates a single point of failure,” Smith Said.
Keep It Positive
Remain empathetic to the employee and try to provide them with the resources they need to find health insurance coverage and utilize outplacement services for their job search.
Employees who are leaving due to a bad manager or a toxic work culture might also share negative opinions during the exit interview, but HR representatives should resist defending the company or challenging an unfair characterization.
Managers might also be peeved at an employee who might have left after a few months on the job or resigned during a busy time of the year. While they might be annoyed, these managers should set their personal emotions aside and keep a positive relationship with the employee.
“At a minimum we want them to feel like they were treated kindly as they left the company,” Alaee said.
By ending the relationship on a positive note, the employee will be more likely to endorse the company to people in their professional network or return to the company in the future.
“We want to treat them as good as we did bringing them on as we do when they’re leaving or departing the organization,” Smith said. “That alumni group is a really important potential pool of talent that you may want to have return to the organization.”
Offboarding vs. Onboarding
Onboarding and offboarding are important bookends of the employee lifecycle. While it may be more exciting to onboard a new employee to the team, it’s just as important to design a seamless offboarding process that leaves a lasting positive impression.
Onboarding
- Introduces and welcomes a new employee to the organization.
- Equips the employee with all of the information they need to access computer systems, understand policies and acclimate to the organization’s culture.
- Shapes the employee’s perception of the organization and can influence their decision to stay or leave.
Offboarding
- Guides an employee through all of the steps they need to take before they leave the organization.
- Establishes a consistent process that allows the company to gather candid feedback, preserve institutional knowledge and protect itself from legal and security risks while minimizing disruption to the business.
- Could inspire company alumni to return later in their career or refer colleagues for open positions.
“The genuine care we’re applying to someone who’s onboarding at a company, we want to also provide to someone who’s leaving a company — no matter what those circumstances are,” Alaee said. “It’s really important for us to treat that person kindly on their way out.”
Frequently Asked Questions
Is offboarding a firing?
No. Offboarding is a process that all departing employees must go through, including those who are resigning to take another job.
Why is offboarding necessary?
Offboarding is necessary to prepare the company and the employee for the employee’s departure. If done well, it can also boost the company’s reputation, preserve institutional knowledge and protect the organization against legal and security risks.
What steps are included in an offboarding process?
Offboarding generally includes announcing the employee’s departure, arranging for the employee to transfer knowledge to team members, conducting an exit interview, retrieving company devices, deactivating their computer access, filling out paperwork and wishing them well in the next chapter of their professional life.
