Why Employee Offboarding Matters In 2024

How you say goodbye to an employee who's leaving your company is just as important as how you welcome them to their new job. Yet, for many companies, employee offboarding gets less attention than onboarding. In fact, 71% of organizations have no formal employee offboarding process.

The stakes for getting your employee offboarding process right couldn't be higher, as workers have left their jobs in record numbers.

In January 2022, 4.3 million people quit their jobs, and 44% of employees were active job seekers. This signals remnants of the Great Resignation aren’t letting up anytime soon. So employee offboarding is a crucial component of learning and development that can’t be overlooked.

With a proper employee offboarding process in place, your organization can manage employee turnover more efficiently, keep your top talent around, retain institutional knowledge, and create a smooth transition for both your existing and your departing employees.

What is employee offboarding?

The employee offboarding process formally terminates the working relationship between an employer and an employee who has resigned, retired, been fired, or been laid off. 

Employee offboarding should be efficient, thorough, and cover any necessary legal requirements. But it should also be respectful and dignified and close the relationship on a positive note for all parties involved. Some of the key elements of an employee offboarding process include:

• Notifying co-workers when an employee leaves
• Transferring the employee's duties to a replacement
• Returning company equipment
• Transferring knowledge
• Deactivating or revoking access to employee accounts
• Conducting employee exit interviews

Onboarding vs offboarding

Onboarding is like a welcome party for new employees. It's about helping them fit in and setting them up for success in their new role.

Offboarding is about ending things well. The purpose of employee offboarding is to protect the interests of both the employer and the exiting employee, while ensuring the relationship ends smoothly and on good terms.

Both onboarding and offboarding are important stages in the employee lifecycle. Doing both well shows the company cares and is organized. It keeps your company running smoothly and keeps everyone happy.

5 benefits of employee offboarding

The final stage of an employee's journey with your company is one of the most important times to be supportive and uphold your cultural values. But without a way to assess the relationship and provide a transition for your remaining team, you risk losing more employees in the long run. 

According to Aberdeen Research, companies with an employee offboarding policy retain 71% of their employees, while companies that don't have an employee offboarding process retain only 57%. In addition, companies with an employee offboarding process have 11% more employee engagement than companies that don't.

With a well-planned employee offboarding process, HR can create a smooth exit that benefits both the departing employee and the organization in the following ways.

1. A positive final impression drives brand advocacy

Happy employees are your best brand advocates. When employees rave about their experience at your organization, they raise its profile, which in turn attracts great prospective talent. But while many companies focus on creating brand advocates out of current employees, some forget that the opinions and reviews of ex-employees hold considerable weight.

84% of job candidates read company reviews before applying, and 65% read at least five reviews before forming an opinion of a company. People also tend to trust negative online reviews more than positive ones. So if the employee offboarding process is subpar or even acrimonious, this can damage the relationship with an outgoing employee and sour their view of the organization. They may even paint a bad picture of the company to potential hires. 

Your existing employees also see how you treat employees who are on their way out, which can influence their perception of your organization and even their level of engagement. 

Therefore, the more your organization does to create a positive last impression for departing employees by offering an excellent employee offboarding process, the more likely they'll leave as brand advocates instead of critics.

2. Valuable employee feedback improves your company

Departing employees are more likely to provide genuine feedback about their work experience and the company culture. Feedback from exit interviews—both good and bad—can help you identify your organization's strengths, weaknesses, and areas where there is room for improvement. 

For example, consistently poor feedback about a company's lack of diversity or poor cultural sensitivity could lead to the creation of a diversity and inclusion training program. In addition, exit interviews can uncover any unfavorable issues that have arisen during an employee's time at the company (such as workplace harassment, bullying, racism, or sexism), which can be addressed before they lead to legal action or bad publicity. 

If you take the necessary steps to incorporate this feedback into actionable improvements, you’ll show both previous and current employees your company's commitment to creating a positive employee experience and company culture.

3. Employee offboarding mitigates security risks

Consistent and systematic employee offboarding mitigates security and legal risks and protects the organization from compliance-related issues. 

As part of the onboarding process, you must ensure that all outgoing employees hand back company assets, such as laptops and mobile phones, and revoke their access to accounts and software. This part of the onboarding process is especially important when you consider that one in four employees still have access to accounts from their previous jobs. 

If you skip this part of the employee offboarding process, you leave the company and your clients or customers at risk of security and data breaches. This happened to the mobile payment service Cash App in December 2021. An ex-employee who still had access to his account downloaded reports that contained customer details. This led to a data breach that impacted more than 8 million users and could have been avoided if the company had simply deactivated the former employee's account.

4. Collaboration preserves institutional knowledge

One of the essential aspects of offboarding is documenting all important knowledge, information, and processes critical to the departing employee's role. Long-tenured or highly skilled employees, in particular, carry unique expertise and an understanding of their day-to-day roles that can be difficult to replace. In fact, 81% of employees report that knowledge obtained from hands-on experience is the hardest to replace.

Over time, the cumulative effect of knowledge loss from departing employees can snowball in one of the following ways:

• Onboarding and training new hires become more challenging due to lost knowledge.
• Less efficient processes can lead to a decrease in the company's performance.
• Communication and information silos are created.
• Relevant information becomes harder to find. 
• Reduced productivity can significantly impact the company's bottom line.
• Customer or client relationships can be damaged.

5. Employee offboarding keeps the door open

About one in five people who quit during the pandemic have returned to their old jobs, and 41% of those who have not yet returned say they would consider it as an option. Therefore, don't treat your employee offboarding process like it's goodbye; it's see you later." This means ending the termination on a positive note that makes departing employees feel comfortable enough to return to the company in the future if they so desire.

An added bonus of leaving the door open for reconnection in the future is that rehires may also return with new skills, knowledge, and experience. A study has shown that these types of employees also show better commitment to a company than other staff. And because they're already familiar with your company culture and processes, rehires require less time to get up to speed. As a result, they can start off strongly compared to a new hire needing more training to reach maximum productivity.

6. Employee offboarding reduces compliance risks

In fields like healthcare or finance, there can be strict rules about jobs and how to handle employee exits. Take healthcare, for example. There are strict guidelines regarding patient confidentiality and data handling. When an employee leaves, making sure they understand and adhere to these confidentiality requirements even after departure is a part of compliance. Proper offboarding processes help the organization to reinforce these regulations, reducing the risk of post-employment breaches. This not only helps in maintaining compliance with industry regulations, but also safeguards the company's reputation.

What is the employee offboarding process?

An ideal employee offboarding process might vary from company to company, but there are some common practices to follow.

Tell your team about the departing employee

Let your team know when a colleague is leaving. For example, send an email or hold a brief meeting to announce the departure. This keeps everyone informed and helps the team prepare for any changes in their workload or team dynamics.

Help with successful knowledge transfer

A key element of the employee offboarding process is making sure that the departing employee's valuable internal knowledge is shared with colleagues. This prevents knowledge gaps that could create obstacles in the team or department’s usual operations. It's essential to document the critical knowledge, information, and processes that are integral to their role. Particularly with long-serving or highly skilled employees, their unique expertise and deep understanding of their daily responsibilities are vital assets that can be challenging to replace.

To facilitate this, it's important to understand the tasks the employee routinely handles, the tools they use, their team dynamics, and their most frequent interactions. Such insights not only prepare the successor more effectively for their new role but also ensure continuity and stability within the team and organization.

One way you can do this is by asking the departing employee to document what a typical week looks like for them. At 360Learning, we advocate for peer learning, where employees can learn from one another. Using an LMS that supports collaborative learning with AI-powered authoring tools makes it easy for your departing employee to create a course to help train their replacement.

Handing over work responsibilities

Assign the departing employee's tasks to another team member or a new hire. For instance, if the employee was handling client accounts, ensure these are smoothly transitioned to another point of contact. It's important for ongoing projects and client relations to continue without disruption.

Exit interview

Ending the professional relationship on good terms is very important. That's what exit interviews are meant for. You gain important insights into the company's work culture. During an employee offboarding exit interview, you might ask questions like these:

• How would you describe your experience working with our company?
• Did you receive the support you expected from the organization?
• Would you say you have a good relationship with your colleagues?
• Could we have done anything to retain you?
• What is the biggest issue you think our organization has that we can improve on?
• Would you consider returning to the company anytime in the future?

Incorporate the questions listed above into your offboarding checklist to ensure a smooth and respectful departure for the employee. Feel free to add any additional questions you find relevant. The goal is to create a comfortable and trustworthy environment for the employees to share their honest feedback, regardless of whether it is positive or negative. Most importantly, listen attentively to their responses. If their feedback calls for action on your part, don't hesitate to take the necessary steps.

Secure property and revoke system access

Data breaches by ex-employees are unfortunately a common occurrence with one out of every four employees reporting still having access to accounts from past jobs. Therefore, it's crucial to ensure your company's security before an employee departs. Make sure to safeguard your company's assets and promptly remove the departing employee's access to all systems, both online and offline.

Settle final payments and employee benefits

Some companies forget to take the name of the employee out of their payroll. Cross-check the final payment that needs to be paid to the departing employee. Have all the details like notice period, last working day, paid leaves, or any other matter of importance. Make sure that you settle all the payments of the employee and when applicable, let them know when any employee benefits will expire. If you have any document to be signed by the employee, get it ready. Give them the required documents on their last working day.

Stay in touch after offboarding

Although it is not mandatory, staying in touch is a great idea if you are parting ways on amicable terms. As we’ve mentioned, you never know what might happen in the future. Some companies even go the extra mile of setting up communities on platforms like Slack or Facebook for ex-employees. This creates a valuable network for future opportunities and maintains positive, ongoing relationships that benefit both the company and its former employees.

What are the common employee offboarding mistakes to avoid?

Let's talk about common mistakes in employee offboarding. Avoiding these errors can make the process smoother for everyone involved.

Not planning ahead

You should build your employee offboarding process now, before your next employee leaves. Create a detailed checklist that includes all the necessary tasks, like paperwork and asset return. This helps ensure you don't miss any crucial steps and makes the transition smoother. Start implementing the employee offboarding process as soon as you know an employee is leaving.

Pro tip: If your company uses project management software, you should create a template of your employee offboarding process as a task or project that you can easily duplicate and use whenever someone leaves.

Poor Communication

Clear communication is key during offboarding. Inform your team about the employee's departure and how their role will be handled moving forward. This prevents misunderstandings and keeps everyone on the same page.

Not Revoking Access

It's vital to promptly revoke the departing employee's access to company systems and accounts. This step is critical for maintaining security and protecting sensitive company data. Check and double-check that all access points are closed.

Skipping Farewells

Organize a proper farewell for the departing employee. This can be a simple team meeting or a small event. A proper send-off shows respect and appreciation for their contributions, and it can leave a lasting positive impression.

By paying attention to these areas, you can make the offboarding process respectful and effective, reducing potential disruptions and maintaining a positive company culture.

Build your company culture from the first to the last day

A company's core values and purpose influence almost every aspect of the employee's journey and experience—good and bad.

Your employee's onboarding experience should reflect your organization's commitment to engaging new employees and setting them up for success. Your training and learning programs should reveal your investment in your employee's growth through collaborative learning and knowledge-sharing opportunities. And the offboarding experience is the final opportunity to show respect and empathy to the departing employee and emphasize their value and contribution to the company.

360Learning's collaborative learning platform makes it possible to provide your employees with onboarding and training opportunities that will support their growth and development throughout the entire employee lifecycle.

Interested in learning more? Book a demo today.