Employee Offboarding Best Practices

Staff turnover is an integral part of every business lifecycle. Especially during the last years and in the tech industry, we've seen often companies frequently take on new hires as the company expands, and offboards employees that choose to resign or whose contracts are terminated for other reasons.

Yet most businesses prioritise the former; organisations are keen to perfect their onboarding process to attract the top talent. In contrast, employee offboarding is considered a less crucial part of business.

However, companies should handle the offboarding process with the same degree of importance as bringing on new talent. Here we uncover the best practices for your employee offboarding approach to improve communication, preserve company reputation, and ensure staff leave the company on a high.

What is Employee Offboarding?

Employee offboarding refers to the process followed when a relationship between an employee and their employer is terminated. It signifies the end of the professional relationship and ensures a smooth transition out of the company.

Various situations could lead to the termination of a work contract. This could be because an employee secured a new job at another organisation, has chosen to retire, or is leaving the workplace for personal reasons. Redundancy and dismissal of employees also require businesses to go through the offboarding process.

Importance of Having an Employee Offboarding Process

Employee offboarding is frequently deemed less important than employee onboarding, with businesses spending more time and money at the beginning of the employee lifecycle. Yet investing in employee offboarding software and outlining a set process for transition out of a company carries many benefits.

1. Improves Employee Management Insights

A successful offboarding process provides valuable insights into why employees choose to leave your company. These could be entirely unrelated to your business practices; perhaps employees are switching careers, entering retirement, or needing to relocate.

However, many employees leave their roles because they lack something from their current workplace. Perhaps they were offered a better salary for their position, improved training opportunities, a greater chance for a promotion, or the option to work remotely. Keeping data on all departing employees gives you valuable insights into peoples' reasons for leaving.

A large part of successful employee management is gaining insight into what staff deem significant within the workplace. Good employee insight ensures companies can provide the best employee experience. In turn, this improves satisfaction, retention, and productivity. Therefore, using these insights as assets brings many benefits to your business.

2. Keeps Employee Records Up-to-Date

Every time an employee leaves an organisation, records must be updated by the HR department and reflected in many other areas company-wide. The outgoing employees need to be removed from the employee portal and the organisational structure updated, informing staff these people are no longer working here. This helps to improve communication between teams, which is especially useful in highly collaborative settings.

Updated employee records are also vital from a security standpoint. It helps ensure account information is deleted or permissions revoked so former employees cannot access private information. This means company information remains private and secure, mitigating the risk of confidentiality breaches.

3. Improves Employer Reputation

Employee departures dramatically impact your employees' final opinions of your organisation. Smooth processes ensure a better overall impression, whereas rushed and careless staff dismissals leave a sour taste. Word spreads quickly, and improper offboarding may damage your reputation within the industry. However, a defined exit process ensures your company is viewed from a positive outlook.

Moreover, the offboarding process does not necessarily mean the end of a professional relationship forever. Many HR teams are willing to rehire former staff. In fact, employee engagement, productivity, and performance are improved for returning employees. Ending staff contracts positively enhances the chance of rehiring old employees and reaping these rewards.

Best Practices of Employee Offboarding

We've established that an employee offboarding process is as crucial as a clearly defined employee onboarding process. But, what should an employee offboarding process look like?

Below are the key stages of successful offboarding workflows every business should use. Integrate these ideas into your HR practices to streamline your offboarding process and improve compliance.

1. Create an Employee Offboarding Checklist

The first step is to create an employee offboarding checklist. This list acts as a step-by-step process that all outgoing employees pass through. Businesses should ideally write this checklist when hiring their first new employee to prepare them for their first resignation. It makes transitioning a person out of the organisation more manageable and efficient.

You might wish to draft multiple checklists depending on the reason for offboarding. However, here are the essential elements all offboarding workflows should contain:

• Completing necessary offboarding paperwork
• Updating the employee portal and organisation structure
• Agreeing on the final date of work and final payment
• Conducting exit interviews with all departing employees
• Collecting company equipment and property from the person leaving
• Removing access to company accounts and software
• Retaining valuable knowledge and finding a replacement to take over their role
• Organising a farewell party for when the employee leaves

The best way to complete this first task is using features like Workflows.
This will help you to:

• Save time on the manual tasks
• Involving all the people just mentioned (Direct Manager, Finance, HR..)
• Being sure to have all the tasks listed

2. Communicate Employee Termination

Once you have developed your initial checklist, your next step is communicating the termination to all necessary people and departments. Of course, the first team to notify is Human Resources.

Your HR department is responsible for managing staff contracts and initiating the offboarding processes. However, advising them of the change is just the beginning!

Other teams that need notifying include:

• IT Department: To remove employees from IT systems and collect and reallocate business assets such as laptops, key cards, and other equipment.
• Finance: To process the final paycheck and any additional holiday pay and remove the employee from future payroll.
• Recruitment: To prepare for the recruitment of new hires to backfill the position and initiate the employee onboarding process.
• Leadership: To provide transparency to more senior teams and make them aware of changes happening in the organisation.

3. Provide Employee with Offboarding Timeline

Once HR and other relevant departments have been informed, you must advise the employee of the offboarding process and timeline. Although they are leaving the company, they must still meet certain obligations within their final few weeks of employment. Below are some of the items to consider including in the timeline:

• Details on final paychecks
• The official end date of employment
• Handover requirements in preparation for new staff
• Requirements and dates for exit interviews
• Processes for returning business assets

4. Help Develop a Transition Plan

When done incorrectly, losing an employee can significantly impact the functioning of their team and the broader company. Therefore, transferring knowledge to other staff and relevant team members is crucial for a smooth transition out of the business. It ensures no vital information is lost so that operations can continue effectively, even after the staff member has left your organisation.

How you choose to hand work over to other staff members and facilitate the transfer of knowledge is down to you. Below are some suggestions:

• Scheduling a meeting with the outgoing employee and their manager to discuss the process of current projects and the next steps required.
• Ensuring access to IT systems and protected documents have been transferred to appropriate staff members.
• Transferring all customers and vendors to another employee and notifying them of their new point of contact within the organisation.
• Writing down processes and knowledge not documented elsewhere for others to continue the work of the leaving employee.

5. Conduct Exit Interviews

Exit interviews are a critical part of the employee offboarding procedure. They provide a way for companies to get genuine and direct employee feedback. Organisations can use this to define areas of improvement for the business, reducing staff turnover and boosting employee engagement, productivity, and satisfaction.

The HR team should always arrange the exit interview directly. It is also worthwhile handing out an employee exit survey for employees to complete before the interview. This form captures the main reasons for the employee's resignation, helping to structure the meeting and ensure all points are covered when speaking face to face.

6. Recover Business Assets & Terminate Access

After interviews are completed, a company needs to recover their business assets from the employee. Assets often include hardware such as laptops, computer accessories, and software tools. The IT department's role is to check the functionality of the returned equipment and redistribute it to other staff members.

You must also take keys or badges to prevent the employee from gaining access to your business premises after finishing their employment contract. Limiting IT access is equally as crucial. Ensure the employee’s access to internal files, company software, or private documents is removed or disabled. This helps mitigate the risk of confidentiality breaches.

Ensure these business assets and physical and digital access rights aren’t terminated until the last day of employment. Premature termination can make it impossible for the employee to continue to carry out their role effectively and can lead to avoidable frustration.

7. Show Thanks for Employee Contribution

Finally, remember to give the employee a proper farewell. Many companies choose to show thanks by arranging a farewell party or organising a collection to purchase a departing gift. How you decide to end your employee onboarding process is up to you. You need to thank them for their contributions to the company and wish them good luck wherever they are heading next.

This helps to maintain a good relationship despite the termination of employment and generates good faith for the employee. In addition, ex-employees are brand ambassadors for your organisation, so supplying effort until the end lines you up for better referrals and top talent further down the line.

Using HRIS to Improve Processes

As you can see, there is much more to a successful offboarding process than initially envisioned. Thankfully, HRIS software can simplify employee exits and terminations. It helps to streamline the transition of employees from their roles by automating many of the administrative duties involved and coordinating effortlessly between teams.

Here is a look at some of the tasks an HRIS can take control of in term sof offboarding employees and the benefits these bring to your business.

1. Automated Workflow

HRIS can automate many offboarding tasks. For example, employee exit questionnaires can be sent automatically, along with automated reminders of the exit interview date and time. Access to business systems can also be terminated on a set date, while employee information and organisation structure are routinely amended.

Only 5% of organisations have fully automated offboarding processes, but it significantly improves offboarding success. The automation of these processes gives your HR department valuable time back into their day to spend on non-automated tasks. Errors are also minimised through automation, making for a frictionless offboarding experience for all.

2. Information Storage and Tracking

Offboarding software acts as a storage space for essential employee information. For example, our employee database stores key dates throughout the offboarding timeline. This includes contract termination, final paycheck, and dates of exit interviews.

Storing this information online means your HR team can conveniently track the stage of the employee transition at any time. The systems are updated automatically, so the information available is always up to date. Using an employee database also removes the need for paper documents, reducing the risk of lost paperwork and helping save money on printing and filing.

3. Document Storage

Offboarding requires the completion of new paperwork; however, you also need to access staff contracts, share option agreements, and other documents detailing the commitments between the employee and the employer. These are used to help formulate terms of the termination or resignation that align with both parties' obligations.

Offboarding software can help with this, too. Take our online document storage function, for example. You can store all these essential documents on our system for easy access when required. These can be pulled whenever necessary, making it equally as useful at the end of the employee lifecycle as it is throughout the duration of employment.

4. Employee and Company Insights

Employee offboarding software can provide businesses with invaluable insights. One example is insights into the compensation allowance of each employee. This information accounts for their salary, overtime, insurance, and other expenses, which removes the complexities of calculating final paychecks for departing staff members.

Our insights function additionally provides comprehensive views on turnover trends without any manual work. Your HR team can monitor and compare these trend with previous months or years. You can use this information to gain insight into your business strategy, helping you make informed decisions to improve employee experience and reduce turnover rates.

Final Thoughts on Employee Offboarding

Employee onboarding is vital for ensuring company success, maintaining brand reputation, and producing a positive employee experience. It also helps mitigate security risks and streamlines the uptake of new talent. However, businesses continually fail to invest as heavily into this stage of the employee lifecycle.

Creating an offboarding checklist is crucial for ensuring necessary steps are taken. Always record employee resignations, communicate with the relevant departments, and create a transition plan to streamline the process.

You also need to ensure exit interviews are carried out and all businesses assets are returned. Meanwhile, the fair treatment of employees is imperative to maintaining a good relationship after they leave your company.

Investing in an HRIS with offboarding capabilities like Humaans is a valuable tool for all businesses that need help with their employee transitioning.

Book a demo to learn how we can streamline your offboarding operations.

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