The Great Resignation, which saw nearly 47 million American employees leave their jobs in 2021, was expected to be a pandemic phenomenon that would abate over time. In 2024, though, more than 3 million people have left their jobs each month, according to the U.S. Bureau of Labor Statistics. Research from LinkedIn shows that 85% of professionals are considering a new job in 2024.
With numbers like those, the odds are high that your business will have employees leave in the near future. An effective offboarding process can help you stem the tide, however, giving you valuable insights about your work environment while also protecting your company.
What is offboarding?
Most employers are familiar with onboarding, the process of bringing new employees up to speed on their company’s policies and procedures, their role in particular, and the company culture. It encompasses a variety of elements, from training to the assignment of laptops, credit cards, and the like.
Onboarding is an essential part of ensuring employee engagement and setting up your employees for success, but offboarding is also a critical stage of the employee lifecycle.
Offboarding is basically the unwinding of the onboarding process when an employee leaves. It’s the process of closing out the employment, whether the employee is moving on due to termination, resignation, or retirement. And, just as onboarding typically involves both the human resources department and the new employee’s manager, both should participate in the offboarding process.
Human resources is there primarily to ensure that the established protocols (such as taking care of necessary paperwork) are satisfied and that all the loose ends are tied up. Their participation should reduce the risk of lawsuits or other problems down the road. The manager’s role is to support the employee through their final days as much as possible (if this is realistic in light of their relationship).
Why is offboarding important?
An employee’s departure, even when the employee is a star or key person, doesn’t have to be all bad. As the saying goes, every crisis brings with it opportunity.
To be clear, offboarding isn’t the chance to persuade a departing employee to stay with your business or delay their departure. Instead, it’s the opportunity to gather valuable feedback on the employee experience that you can use to improve company culture and make it more attractive to employees, boosting your recruiting and retention efforts.
A positive offboarding experience could even help recruit the employee back to your company, as what’s known as a “boomerang” employee. One study found that nearly 20% of people who quit during the pandemic have already boomeranged back to the job they left. Of those who hadn’t returned to their old job, 41% said they would consider it if it were an option. A study conducted by HR analytics firm Visier between 2019 and 2022 found that 28% of “new” hires were actually boomerang employees who returned within three years of leaving.
That’s great news for employers that handle offboarding well. Rehiring former employees is less expensive and time-consuming than recruiting and onboarding new people. Boomerang employees already have reasonable expectations on everything from benefits to culture, too—they’re unlikely to be disappointed.
But offboarding is also about protecting the company. Properly done, offboarding can ward off:
- Employment-related lawsuits,
- The loss of company assets, data breaches, and other security risks, and
- Reputational damage.
Remember that your employer brand is based on the entire employee lifecycle with your company. So ending an employee relationship on good terms makes it more likely that the former employee will be a brand ambassador rather than an antagonist. Ex-employees who leave with a sour taste in their mouth probably won’t refer future employees or customers.
It’s never good to have people out there bad-mouthing your company, especially when word can spread so easily, regardless of its truthfulness. The rise of Glassdoor and similar websites where employees rate and review their employers makes it easier than ever for disgruntled former employees to wreak havoc and more advisable to take care with offboarding.
Best practices for successful offboarding
For all of the potential upsides, ad hoc or sloppy offboarding can backfire on an employer. To avoid such a situation, adopt the following best practices:
1. Come to the process with the proper attitude
It’s understandable that an employer or manager might be hurt or offended by an employee’s departure, but you must resist the temptation to attack, criticize, or take a defensive or resentful posture during the offboarding process. This type of attitude can alienate employees, prompting security issues and brand damage. Instead, remain respectful and civil throughout, and make a point of thanking the employee for their contributions to your company.
2. Be transparent with the current employees
Word travels quickly around a workplace. Whether that word is accurate will depend in part on how soon you share the news and how forthright you are. Announce the employee’s departure and be as honest as you can be, taking into account legal and privacy limitations. Coordinate with the employee beforehand, so you don’t reveal more information than they’re comfortable revealing.
3. Cover the paperwork bases
Separation from employment typically involves extensive paperwork. It may include:
- Employee benefits information on, for example, retirement and other savings plans (flexible spending accounts, health savings accounts, etc.), COBRA, and unused paid time off,
- Severance package information,
- The final paycheck (including the termination of future direct deposits), and
- A resignation letter and nondisclosure agreement.
You should also obtain up-to-date contact information for the employee.
4. Collect company property
You need to secure all of the company property in the employee’s possession, including:
- Laptops and other devices,
- Keys,
- Badges,
- Vehicles,
- Documents,
- Uniforms, and
- Credit cards
Among other things, this helps cut the risk of intellectual property, confidential data, or sensitive information leaking or being stolen and used without authorization.
5. Revoke access
For similar reasons, you should ensure that departing employees lose all access to company property and data—not just digital access but also physical access, such as entry or alarm codes. Cast a wide net, including:
- Email,
- Internal software and systems,
- Social media accounts,
- Cloud platforms,
- Databases, and
- Intellectual property.
Make sure they’re signed out of all applications, delete their accounts, and change any passwords that they used or had access to. If an employee isn’t leaving involuntarily, it’s best to give them some notice so they can clear out any personal information.
6. Facilitate a knowledge transfer
You don’t want a departing employee’s precious and first-hand knowledge to walk out the door with them. The knowledge transfer is especially important for employees in critical roles or with long tenures and the institutional knowledge accompanying such loyalty.
For a smooth transition with minimal operational disruption, you need to know :
- Their daily and weekly tasks and routines,
- Their workflows,
- The systems, files, contacts, documents, and other resources they use,
- Who they work with internally and externally (for example, at vendors and customers), and
- Their current and upcoming projects.
Pay particularly close attention to those processes that aren’t already documented. If the employee is leaving amicably, ask them to document their duties, responsibilities, methods, and procedures in a video or guide for their successors or just the team that’s left behind.
If you’ve already hired their successor, have the departing employee provide some on-the-job training. Training might also be wise if the search for a replacement is ongoing so the remaining team knows what needs to be done.
7. Plan to fill the gaps
Even if you have a successor lined up in time to get some training for the departing employee, the replacement will probably require time to ramp up. Use the transferred knowledge to fill the gaps while they’re settling and becoming comfortable. Delegate tasks and responsibilities in advance as necessary so nothing inadvertently falls between the cracks.
8. Conduct an exit interview
This is one of the most crucial components of an effective offboarding process. An exit interview is a discussion with a departing employee shortly before they leave the company, primarily about why they’re moving on and their experience with the company. Exit interviews allow you to collect important intelligence on your company culture, management styles, processes and procedures, employer brand, and competitive position in the job market.
The interviewer should ask open-ended questions to prompt honest feedback rather than abrupt yes or no answers that shed little light—for example, “What is the best thing about working here?” The goal is to collect frank, in-depth, and actionable responses to improve employee recruitment and retention strategies and other critical areas.
Exit interviews shouldn’t be conducted on an ad hoc or improvisational basis. Instead, use a standard template of questions prepared by human resources. This makes it easier to identify patterns in the responses. It also reduces the risk of inadvertently offensive, irrelevant, or, worse, unlawful discriminatory questions.
Generally, the best approach is to have a human resources representative or someone else with authority to trigger change conduct the exit interview. In some cases, an outside consultant may be preferable. Just make sure that the interviewer is skilled in active listening.
9. Document, document, document
As noted above, one of the primary goals of offboarding is to protect the company. To that end, you should document every step of the offboarding process, including the reason for the employee’s departure and their acknowledgment of the receipt of the paperwork.
10. Keep in touch
It’s not always appropriate to keep in touch, of course. Still, it can pay to stay front of mind if the employee has moved on to a vendor or customer, or has boomerang potential down the road. Plus, you never know when their successor might need some information.
When appropriate, you can send the occasional email or put the employee on your mailing list for customers and other stakeholders. You might invite them back for some events and request career updates. These gestures show that you don’t hold a grudge.
Special considerations
You may need to tweak the steps above based on the circumstances under which an employee leaves. Different circumstances can call for different treatment.
For example, if the employee has been terminated, revoking access should be done ASAP. You should thoroughly document the reason for the firing and, while you should still communicate the departure to the staff promptly, you should exercise care not to reveal too much, as you could put the company at risk of legal action (for example, for defamation).
Your approach will be different from that of a retiring employee, too. That’s usually when you’ll have the most notice about the impending departure, and you should use that time to get a successor on board early enough to receive training. You can also use the time to publicly commemorate the retirement with, for example, a party, gift, or luncheon on or before the employee’s last day.
Another scenario to consider is the departure of a remote employee. In that case, the offboarding will be done largely, if not entirely, remotely as well, with an emphasis on data security.
Put it in writing
Perhaps the foremost best practice for an effective offboarding process is to compile an offboarding checklist outlining the essential steps. This creates an easily repeatable process rather than a hassle you’re scrambling to tackle every time an employee leaves. When assembling the checklist, you should consult with all relevant departments, including the IT, payroll, and HR teams.
Gusto can make your life easier, too, with its software for successful offboarding.
