7 steps to take when offboarding employees

Many companies put substantial time and effort into creating a robust onboarding process for their new hires. But, with one study¹ finding that 53% of employees are actively looking for a new job, it’s just as important to develop a robust offboarding program to ensure employees leave your organization on a positive note.

Employee turnover is never easy, but a successful offboarding program can help you run a smooth transition, supply you with valuable employee feedback, and provide an opportunity to boost your company’s brand.

In this blog, we’ll discuss what offboarding is and why it’s important, and we'll give you the top seven steps to take to offboard your employees effectively.

Want to retain your employees better? Our guide to fringe benefits can help boost your compensation package

What is employee offboarding?

Employee offboarding, or exit management, involves managing the employee experience when staff members are transitioning out of a company, whether for a voluntary resignation, layoff, retirement, or termination.

The employee’s direct manager and your human resources (HR) team typically handle offboarding to ensure a smooth transition for the company, the employee, and their teammates.

You should aim to part with the employee on good terms while tying up loose ends, such as capturing critical institutional knowledge for ongoing projects, conducting an exit interview, and completing relevant HR paperwork.

To stay organized, you can design an offboarding checklist to help your HR team and other managers understand what will happen during an employee’s offboarding process.

The process you create will vary based on your company policy, organization size, the employee’s position, and why they’re leaving. Still, many of the key steps on your offboarding checklist will likely be the same regardless of these factors.

Why is having an employee offboarding program important?

Designing a positive offboarding process offers several advantages for a company. Not only does it help keep an employee’s exit as friendly and non-confrontational as possible, but it’s also a vital part of your organization’s employee experience and long-term success.

Here are five benefits of having an organized offboarding program:

1. Reinforce your company’s brand: Giving employees a positive last experience at your organization will make them more likely to recommend your company as a great place to work to potential customers and job seekers.
2. Entice boomerang workers: Roughly a third of current external hires² are boomerang workers. A successful offboarding process may help these employees feel more comfortable returning to your organization.
3. Fewer potential security risks: When someone leaves your company, it’s crucial to close security gaps by properly collecting data, documents, and company equipment. Adding this step into your offboarding program can reduce the mishandling of sensitive information.
4. Gain valuable feedback: The offboarding process is a great time to gain constructive feedback that you can use to improve your overall organization and help you fill the open position during the recruiting process.
5. Reduce legal risks: You can avoid costly wrongful termination lawsuits by ensuring you end employee contracts properly and no one leaves your company feeling like you breached any agreements or promises.

Seven steps to take when offboarding employees

Now that we’ve mentioned why an organized offboarding program is essential let’s review the seven steps you should take when offboarding workers.

1. Understand the reason for the exit

In most cases, the employee’s manager will know the employee and their reasons for exiting best. Therefore, you’ll want to work directly with the manager to find out why their employee is leaving so you can customize their offboarding process.

For example, a retiring employee may have a more straightforward offboarding process than someone you’ve terminated or laid off. Similarly, the information you can gather from a worker resigning to be a full-time parent will differ from someone leaving for reasons related to the company culture.

In all cases, ensure the employee’s manager is closely involved in the person’s entire offboarding process so they feel continued support during the days leading up to their exit.

2. Communicate the employee’s departure

While telling your staff about an employee’s departure is sometimes uncomfortable, it’s best to speak openly and honestly with your team about why their coworker is leaving—whether their departure is voluntary or involuntary.

Communicating the information once you finalize the exit prevents gossip from spreading. The longer you wait to share the news, the more likely your other employees will fill in the gaps with information that may or may not be accurate.

If an employee leaves, communicate their last day of employment and other relevant information, such as who will take over their job responsibilities, before rumors start. It’s also important to let your remaining employees know they can come to you with any questions or concerns to ensure they feel supported moving forward.

Depending on the employee’s role, you may need to notify outside parties. For example, if the employee is client-facing, you may need to inform their clients of the transition process. If the worker is in a customer-facing or public role, you may decide to share certain information with the public about their departure.

Regardless, speak about the offboarding employee with fairness and gratitude for their service at your organization. A successful departure protects you from retaliation and legal issues. It also goes a long way toward cultivating a long-lasting and positive relationship with the employee as a potential customer or business contact.

3. Complete the necessary paperwork and administrative tasks

Like the hiring process, an employee’s exit requires substantial paperwork. Your HR team can help the offboarding employee navigate any remaining administrative tasks. Still, you should consult with your HR and legal team beforehand to ensure they have all the necessary employee information to run an effective offboarding process.

Be sure you include the following paperwork and administrative tasks in your offboarding process:

• Notify IT of the employee’s last day so they can change equipment and software access.
• Meet with HR to discuss any closure information for employee benefits.
• Get all transition documents signed, such as a formal letter of resignation and non-disclosure agreement, if applicable.
• Request any applicable company property back from the employee.
• Schedule the employee’s exit interview.
• Alert your payroll department to the final paycheck date and process outstanding employee reimbursements for bonuses or paid time off (PTO).
• Review the terms of the employee’s contract with your legal team to ensure all obligations are complete.
• Work with accounting to review the employee’s compensation package and tax information.

4. Complete a knowledge transfer

Employees take their skills and knowledge of the job when they leave. If you don’t collect that valuable knowledge, you could be leaving future employees without the necessary information they could use to do their jobs effectively.

If you can’t find a replacement before the employee leaves, you should start a transfer of knowledge as soon as they give notice. You can ask them to create a document detailing helpful information, including any tips or tricks their replacement may find useful.

The following is essential information that you may want to ask your employee for:

• Their daily work routine, including how they prioritize and manage their tasks.
• Access to all the files and software the employee uses and if any files will require ownership transfer.
• Internal and external collaborators.
• If there are any systems they regularly use that will require their replacement to receive significant training before accessing them.
• Their ongoing projects and tasks that they may not complete before leaving the company.

5. Hold an exit interview

The exit interview is one of the most critical parts of the offboarding procedure. An exit interview is an excellent opportunity to gather insights into what your company is doing well, what you could improve on, and how their overall experience has been.

This feedback can give you insight into areas you haven’t noticed, like workload, company culture, and compensation. By asking the right exit interview questions, you can gain valuable insight into what your employees really feel versus how you think they feel.

If your employees are uncomfortable giving honest feedback one-on-one with their direct supervisor, you can opt for a detailed questionnaire through HR. This way, you might get more specific and honest answers.

A few sample questions to include in an exit interview process are:

• Did the job live up to your expectations? What were those expectations, and how did they live or not live up to them?
• What was your professional relationship like with your manager and your coworkers?
• What were some employee benefits you wished you had here?
• What are some ways we could improve our company and organizational culture?
• What’s great (and what could be better) about working here?

While these questions are just examples, you can customize your exit survey to include more specific questions about your company. Specific questions can help your company grow so you can target talented candidates and retain your current employees.

The exit interview is likely the last experience an employee will have at your company, so it’s essential to prioritize it. Any information you gather is valuable and important, even if you don’t like what you hear.

6. Revoke employee access

Another essential part of the offboarding experience involves securing data and revoking employee access to company systems and databases. Yet a recent survey found that nearly 47% of employees³ say they still have access to company accounts of previous employers.

Not removing your outgoing employees from all necessary company accounts leaves you open to security breaches, communication mishaps, and even delays in transferring the former employee’s system access to their replacement. You can choose to maintain access until the employee’s last day. However, you can always revoke access to company systems sooner.

The following are systems and activities you should remove an employee’s access from when they leave your company:

• Internal platforms and files: This includes any company assets, software, documents, company email accounts, password-sharing applications, company calendars and meetings, organization charts, and phone directories.
• Company equipment: This includes collecting their keys, badges, company credit cards, meal cards, uniforms, mobile phones, laptops, laptop accessories, cars, and any other company property.
• Online and offline company systems: This includes their access to any sensitive company codes and passwords like alarm and gate codes, access cards, CRM systems, company social media accounts, client information, and sales databases.

7. Develop a short-term and long-term plan for coverage

When employees leave, many of their projects and daily tasks may be put on hold. Sometimes, their teammates must cover their former coworker’s responsibilities, but this can lead to burnout and a stressful work environment—even with a successful transfer of knowledge ahead of time.

If there’s no plan to hire a new employee immediately, you’ll need to create a temporary work plan to ensure your remaining staff can meet business needs productively without the potential for burnout. Evaluate the work your departing employee manages so you can reassign prioritized tasks and remove any unnecessary work.

Be transparent with your employees so they can prepare for the changes and potentially additional workload during this temporary situation while you work with your HR team to backfill the position as soon as possible.

If you’re not planning to refill the employee’s position anytime soon, you can work with the affected team’s manager to restructure the team to redistribute the workload on a more permanent basis. This way, you can focus on finding the best person for the role on your own time—without overloading your remaining employees.

Conclusion

Offboarding is the last step in any good employer-employee work relationship. But it’s a vital part of the employee lifecycle. A well-rounded offboarding program will keep your company productive while transitioning from one employee to the next and give you valuable feedback you can use to improve your overall business operations and enhance the employee experience.

A positive offboarding experience can motivate your employees to continue advocating for your organization long after they leave. So consider your offboarding program another effective way of attracting and retaining top talent in this competitive labor market.

This article was originally published on November 16, 2022. It was last updated on December 18, 2023.

1. https://www.wtwco.com/en-US/Insights/2022/04/infographic-more-than-half-of-employees-open-to-leaving-employer

2. https://assets.ctfassets.net/lbgy40h4xfb7/2FD3xYTYoSL4hvCbuSdCMt/abf61b616ac9f450e02e9de90965695f/220705-pdf-insights-boomerang-FINAL.pdf

3. https://www.hcamag.com/us/specialization/employment-law/many-ex-employees-still-accessing-employer-accounts/443129