Offboarding Procedures for Smooth Transitions in 2024

Most small business owners have heard of onboarding as the process of training a new employee and properly integrating them into your business. But what about when an employee leaves? Managing an employee’s exit with care and respect is equally important, yet only 29% of organizations have a formal offboarding process in place. With a strong offboarding process, your business can guard against security risks or damage to your reputation, get valuable feedback, and ensure a smooth transition for both your existing and departing employees.

What is Offboarding?

Offboarding is the process of transitioning a former employee out of your business. Offboarding procedures should be followed any time an employee leaves, whether they resign, retire, or they’re being terminated. The goal of offboarding is to ensure the separation process is handled professionally, and that your business and your former employee are treated with respect. The exact steps are different depending on why they employee is leaving, but the main goals of employee offboarding are:

• To fulfill all state and HR requirements related to an employee leaving
• To get honest feedback about the employee’s experience
• To ease the transition from one employee to the next
• To capture knowledge the employee gained on the job
• To minimize the impact of the employee’s departure on the rest of your business

The difference between offboarding and onboarding

Offboarding and onboarding are opposite processes, but they’re both important steps in the lifecycle of an employee. Onboarding ensures an employee is properly integrated when they start and offboarding ensures a stress-free departure. Employee onboarding occurs at the start of an employee’s lifecycle with your business. It’s the process of familiarizing a new employee with their role, responsibilities, and your organization’s culture. A well-planned onboarding process has been shown to help prevent employee burnout, reduce turnover rates, and contribute to a stronger company culture. As we touched on above, employee offboarding occurs at the end of an employee’s lifecycle. It prepares an employee to transition out of your business with minimal disruption for everyone involved.

Why do Businesses Need an Offboarding Process?

Following a clear, consistent offboarding process has many benefits for your business. First, it helps you maintain positive relationships with departing employees. Parting on good terms reduces the risk of legal disputes or a former employee sharing a negative experience. Plus, offboarding an employee with care means they’re more likely to act as brand ambassadors or become boomerang hires. Second, offboarding an employee can be a great learning opportunity. Insights gained from exit interviews can help you improve employee engagement and retention, as well as your hiring process. Finally, saying goodbye to an employee comes with a rather long to-do list. An effective offboarding procedure can help you make sure nothing falls through the cracks and that you’re staying compliant.

How Long Does Offboarding Take?

The time it takes to offboard an employee varies depending on why they’re leaving, how much notice they give, and a few other factors. Regardless of the circumstances, the offboarding process can be broken down into three stages:

• Before an employee leaves
• The day an employee leaves
• After an employee leaves

Each stage contains a number of steps that should be handled carefully and respectfully. Let’s break down the steps in each stage so you can establish a strong onboarding process for your business.

Your Employee Offboarding Process Checklist

Best practices suggest making a checklist or offboarding document to help your management team and other employees understand and complete key tasks. This offboarding process checklist will help you track all the necessary steps when an employee leaves, ensuring all your bases are covered.

Offboarding steps before an employee leaves

Issue formal notice

As a first step, you need to issue formal notice (if you’re terminating the employee) or request formal notice (if the employee chooses to leave). Formal notice is the official acknowledgement of an employee’s departure from an organization. It should be documented in written form, and note the reason for the employee’s departure, their last day, and final details about pay or benefits. Formal notice should be signed by both you and the employee.

Notify everyone affected by the offboarding process

As soon as formal notice is given, notify anyone participating in the offboarding process. For example, the employee’s manager, the people responsible for documentation and payroll, whoever manages keycards, uniforms, and other company assets, and the person conducting the exit interview.

Start the documentation process

Provide the employee with all the paperwork relating to their exit, like state-specific separation forms or requests for unused PTO. Don't forget to address any concerns about outstanding pay or the return of company assets. Complete the required business and accounting forms, and if applicable, draft an experience letter or reference.

Schedule an exit interview

Book some time on the employee’s last day to conduct an exit interview. This gives the employee time to reflect on their experience with your business and think about any issues they may want to address. You should also choose your interviewer carefully—employees may be more forthcoming with someone they don’t have a close relationship with.

Plan work handoff or coverage

Meet with the employee to discuss their current responsibilities and identify what needs to be done before they leave. If you have a replacement or coverage in mind, determine what kind of training they’ll need and begin transitioning them to their new role. This way work can continue as usual once they’re gone.

Notify other employees

No one needs gossip getting ahead of them. Notify your team of the employee’s departure and keep lines of communication open.

Begin the knowledge transfer

Ask the employee to document any knowledge they’ve gained on the job, especially if it’s not in your current training materials. If possible, have the employee help train their replacement so there’s an opportunity to share knowledge directly.

Offboarding steps on the day an employee leaves

Recover company assets

Collect any item issued to the employee during their time with you, including key cards, laptops, cell phones, name tags, uniforms, or anything else belonging to the business.

Remove personal items

Have the employee clear out their cubby, locker, or desk so they can take their belongings home.

Conduct an exit interview

Exit interviews help you gain insight into the employee’s experience and what they really think about working for your business—whether it’s good or bad. Thoughtful offboarding questions should help you discover:

• Why the employee is leaving (if they’re resigning)
• Where things went wrong (if they’ve been terminated)
• What the employee thinks about your culture and policies
• How they felt they were treated
• What they liked and disliked about their job
• What they would change about their experience
• The dynamics with their manager and colleagues

Depending on the circumstances of the employee’s departure, they may be reluctant to answer honestly. In these cases, offer them a detailed questionnaire. They can hand it in just before they leave.

Confirm the employee’s contact information

Maintaining a connection with an employee after they leave may be valuable, so it’s important to have a current phone number, email, and address. You never know when you’ll need a brand advocate or a referral.

Tie it all up with respect

At its heart, the offboarding process is about managing a relationship with another person. Show the employee that you value them and their contributions to your business. When appropriate, consider a thank you note, a parting gift, or a going away party.

Offboarding steps after an employee leaves

Deactivate access

Immediately terminate the employee’s access to the building and to company systems like email, team communication, and scheduling apps. This is the best way to protect important data and information.

Notify external contacts

If applicable, inform any vendors, clients, or other external contacts the employee had a relationship with. There’s no need to include details of their departure, this is just a courtesy to the stakeholders in your business.

Streamline your offboarding process with Homebase

A clear, well-documented offboarding process helps protect your business and ensures an easy transition when employees leave. However, getting your process organized and accessible can be a challenge. Automated tools like Homebase can make offboarding simple and efficient by keeping important information in one place and providing expert HR guidance when you need it. Get started with Homebase today.