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Offboarding: 10 Steps For a Smooth Employee Exit [+ Free Checklist]

8 min read
an employee shaking hands with their former employer after leaving the company

It’s not uncommon for organisations to focus on the onboarding process when they have a new employee join their business, and forget about the team members that leave. But the offboarding process is just as important as onboarding – and can have a serious effect on your employer brand.

So let’s dive into what offboarding is, the benefits of an effective offboarding process and how to offboard departing employees effectively. Plus, take advantage of Factorial’s free employee offboarding checklist so you can hit the ground running with your offboarding process.

What is Offboarding?

Offboarding is the separation process between your organisation and a departing employee. An offboarding process should be used when team members leave voluntarily and if they are made redundant. Think of it as tying up the loose ends between an individual and the company once an employee resigns, so there’s a smooth transition for other employees, human resources and the leaving employee.

Organisations tend to forget about offboarding and just focus on onboarding their new team members, but both onboarding and offboarding are important for improving morale among current staff and for maintaining good relationships with former employees. In fact, research by Wiley Edge found that 71% of businesses don’t have an offboarding process that enables good relationships with departing employees, which could lead to issues like legal threats and compensation disputes if the outgoing employee hasn’t had a chance to voice any problems before they leave.

So, we can see that offboarding sounds like a good thing – but why is offboarding important? Let’s take a look at the benefits.

Benefits of Offboarding

Helps with knowledge transfer

One of the best things about having an effective employee offboarding process is that it gives you the opportunity to harness the leaving employee’s knowledge. Use an exit interview to find out about all the systems and critical processes that your outgoing team member knows about, and ensure that there are other individuals that can take on the most important tasks from the former employee’s role until you rehire.

Maintains a positive relationship with the leaving employee

Offboarding employees in a respectful manner helps you maintain a good relationship with them. If they have a positive offboarding experience, they’re more likely to become boomerang job applicants – where a former employee applies for another job with your company soon after leaving. Since the pandemic, 20% of workers who left their job have returned to their old employer, and 28% of all external hires are boomerangs who had previously resigned within the last 36 months.

Boomerang employees are great for organisations. When they come back they have fewer training needs as they’ll remember some of your processes, and you already know that they’re great to have on your team. Plus, they’ll probably come back as a more experienced team member, so you benefit from another employer training them for you!

A successful offboarding process can help you take advantage of boomerang employees who could be very valuable to your organisation.

Improve morale and retention

It might seem odd to think of offboarding as improving morale and retention. Surely it’s your onboarding process that would improve your company culture! But when current team members see their organisation treating an exiting employee with respect and fairness, they’re more likely to feel valued.

Research by Aberdeen found that businesses with a well-structured offboarding process retained 71% of their employees, and 44% of employees are rated ‘highly engaged’. Organisations with no offboarding process retained 57% of their employees and just 33% of them were highly engaged, so it shows how a good offboarding process can improve morale and retention, and therefore improve your employer brand.

Prevent security risks

If you don’t have a good offboarding process in place, you could pose risks to company property and data. Ensuring that you revoke access to your employee’s accounts when they leave stops any data leaks, whether accidental or deliberate.

Following an offboarding process also ensures that you recover company equipment, which can be difficult if your team works remotely and you don’t have a process in place. Over time, your departing employee might have acquired company assets like laptops, mobile phones, key passes and company credit cards, so it’s worth having a process in place to ensure you get them back.

employee's access to platforms like Google Analytics should be revoked

Mitigate risks of legal issues

Conducting exit interviews and following an offboarding procedure can help reduce legal threats on an employee’s departure. It helps you treat all individuals fairly and gives you the opportunity to address any issues that the outgoing team member has before they progress any further.

Following specific offboarding procedures will ensure that you fill out all the paperwork required, such as tax documents and final pay summaries, so the employee can go into their new job knowing that everything has been wrapped up and their final payroll has been submitted to ensure they get paid correctly.

How to Carry Out Offboarding Effectively

It might sound like there’s a lot at stake with employee offboarding, but it’s actually pretty simple when you break it down into steps. Here are our top tips for carrying out the employee offboarding process effectively:

1. Collect initial information and documentation

Firstly, make sure that your departing team member has given you a formal letter of resignation. This needs to be signed and dated, and include when their last working day is.

Once you have that, your HR department can review all the documents that your employee has read and signed during their time with your organisation, and check the employee’s contract to ensure that you and the individual have met all of their obligations.

2. Inform the accounts department

This step in the resignation process is crucial. Inform your accounting team so they can prepare the relevant paperwork, including tax documents like a P45 and calculate holiday pay entitlement. They will make sure that your resigning team member’s final pay is correct.

3. Announce your team member’s departure

Try to get ahead of any gossip around the office by informing other employees about the individual’s departure as soon as possible. You should tell the team member’s direct reports and anyone else that will be majorly impacted by the departure first, then let the rest of your company know after that.

It’s a good idea to tell the team at least one and a half weeks before the employee leaves, but since most employees’ notice period will be at least 4 weeks, we’d recommend doing it sooner. This gives everyone time to process the change and also gives other employees and team members a chance to come to you with concerns about the employee leaving – for example if they’re worried that their workload will increase or that they won’t get the support they need.

The leaving team member will appreciate it if you ask them how they would like the organisation to tell everyone the news. While some might like a formal announcement made in a team meeting, others might prefer a simple email that helps keep their exit a little more on the down-low.

4. Plan handovers

Don’t leave all the knowledge transfer to the exit interview in case you run out of time in the meeting or the team member refuses to have one. Ask your leaving employee to compile a handover and plan a time to go through it with them. Make sure you invite any relevant team members that will need to take over the reins to join you.

A good handover should include:

  • Key tasks that the employee completes every day or very regularly.
  • The status of any existing projects and what can be done to complete them.
  • An idea of who could take over tasks in the interim.
  • Information for a new employee entering the role.

5. Begin collecting company equipment

Your departing employee has probably acquired a lot of company property during their time with your organisation, especially if they are a senior member of staff or have been with you for a long time. While some property like laptops and mobile phones may be needed right up until the day the employee leaves, other things like uniform or keys might be able to be returned sooner.

Reminding your team member that they have property to return is a good idea so they can start putting it all together to hand back. It’s a good idea to keep logs of company equipment that you hand out so you can give a list to the departing employee with everything they need to return.

6. Conduct an exit interview

Exit interviews are a great way to find out about your employee’s experience with your company. Ask them about the good and bad parts of working for your organisation, their opinions on the management team and whether they would consider working with you again. You can gather a great deal of information on how your business can improve from an exit interview.

Exit interviews are the final chance for you to make a good impression on soon-to-be former employees. Show that you care about improving company systems and ways of working, and your former employees could end up becoming future employees again if a suitable role comes up in the future.

7. Remove employee access to company accounts

It doesn’t matter how much you trust your former employee – make sure you ask your IT department to revoke access to all their accounts. They shouldn’t have access to company accounts, emails, the company website, social media accounts or any other databases after the employee leaves. Forgetting this crucial step could leave you open to data breaches.

8. Say goodbye

It’s a good idea to say a fond farewell to your departing team member. However you decide to do it, you should show that you’re thankful for the employee’s time at your organisation and that you value their contribution to your business’ success.

You could give the leaving team member a gift or send around a card for everyone to sign, and if you’re feeling particularly generous you could throw them a party! Showing that you value them as a person leaves a positive impression on both the leaver and the existing team.

employees toasting each other for a departing team member's leaving dinner party

9. Follow up

Keep in touch with your former employees. As we mentioned earlier, boomerang employees are becoming more and more common, so maintaining a good relationship with former team members could help you fill a skills gap later on.

Don’t hassle them – they wanted to leave your organisation after all! – but a message every now and again on LinkedIn asking how they’re getting on is sure to be appreciated.

10. Compile an offboarding checklist

There’s a lot to remember here, and it can soon become overwhelming. Compile a checklist of all the tasks you need to complete during the offboarding process so you don’t forget any crucial steps. Not got much time? Use Factorial’s free offboarding checklist to get started.

Offboarding Remotely

Offboarding remotely is tricky, and we’d always recommend doing it face-to-face if you can. But with more and more teams becoming 100% remote, we know this isn’t always possible. Here are our tips for successful offboarding in a remote environment:

  • Create an offboarding schedule so the team member knows what to expect and when
  • Send a farewell package to the employee and arrange for free shipping or pickup for any equipment they need to return
  • Use software that helps compile digital signatures and keeps documents in one place
  • Try to schedule an exit interview over a video call to make it more personal than a written survey

Remote offboarding isn’t impossible; you might just have to think more carefully about the process to ensure you don’t forget anything. That’s where a checklist can really come in handy.

Employee Offboarding Checklist

Download our free offboarding checklist to create a foolproof offboarding process. Our offboarding checklist includes:

  • All the steps you should take to offboard an employee successfully
  • Exit interview questions covering employee experience
  • A comprehensive company equipment inventory list
download free offboarding checklist

Offboarding With Factorial

Factorial makes it easier to offboard employees. Keep your company and employee documents organised and centralised, collect digital signatures from remote team members and improve communication with a bespoke employee portal.

Improve your onboarding and offboarding processes with structured taskflows to help complete tasks on time and facilitate the exchange of responsibilities between teams throughout the employee lifecycle.

Start your 14-day free trial of Factorial now.

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