The Guide to Effective Employee Offboarding in 2023

Several factors impact your company's success – surprisingly (or perhaps not), an employee offboarding process is one of them.

Though it might seem the opposite of onboarding, offboarding serves the same purposes. It can make or break your employee experience, affect team morale and have a massive impact on your organization's productivity. What’s more, an offboarding program can help you prevent a corporate catastrophe and keep your internal data safe.

All these benefits don’t change the fact that creating a smooth offboarding process is a time-consuming, laborious task. We’re here to help you make sense out of it.

What is employee offboarding?

Employee offboarding is a complex process that ends an employee’s relationship with an organization. When done right, it minimizes interruptions in business processes.

It’s not enough to collect company assets and host a goodbye party (offline or virtual) before an employee leaves. Offboarding often requires action from multiple people across different departments. If you work in HR, you’ll need to coordinate with the supervisors, immediate coworkers, IT department and accountants to offboard one employee successfully. 

The offboarding process has two ultimate goals: preventing disruption in work and providing a positive experience for the entire team, including a former employee. Let’s take a look at what it takes to reach these goals.

What does employee offboarding involve?

Employee offboarding can be a lengthy process. It includes at least eight steps:

1. Resignation letter/termination notice
2. Employee departure announcement
3. Paperwork
4. Project takeover
5. Cutting off access
6. Exit survey
7. Farewell 
8. Keeping employee records

Step 1: Resignation letter/termination notice

You or a direct manager likely already discussed an employee’s departure in a one-on-one. However, it’s best practice to have a letter that endorses the verbal resignation.

The employee leaving the company should write a letter confirming their departure. Often, an employer acknowledges the release with an acceptance letter. Such a formality allows you to outline critical details of the contract termination and prevent any possible misunderstandings.

In their letter, an employee provides a statement that communicates resignation and the date of their last day of work. They might also include a short explanation for why they’re resigning, but it’s at their discretion.

From your end, you formally accept the resignation and outline further actions that need to be taken during the notice period.

Layoff or termination letters also include the reasons for dismissal and information on compensation, if any.

Step 2: Employee departure announcement

When an employee's departure is confirmed, you want to communicate it to the team as soon as possible.

Delaying an announcement could quickly create grounds for rumors and hurt employee morale. Sympathize with the teams and be as transparent as possible. 

Even if you haven’t heard of the term “turnover contagion” yet, you likely already know how one employee’s resignation can lead to mass departures. And the bad news is – this phenomenon can increase employee turnover dramatically.

Turnover Contagion: When one employee’s departure causes a domino effect, in which several employees independently submit their resignation soon after. 

How you announce employee departures heavily affects whether you’ll face this infectious set of events. 

Don’t wait for the news to make its way around the organization. Instead of responding to rumors, use an employee departure announcement – written or verbal – to take control of the situation. Stay transparent by presenting factual, logical information on what your relationship with a departing employee will look like during the notice period and how you’ll be moving forward.

Should you announce the cause of an employee's departure?

When an employee resigns, it’s a no-brainer – you’ll build a positive brand image by encouraging them to share their plans for the future and celebrating their success.

But what if it’s you who terminated the contract? 

We’ve asked our LinkedIn network to share their opinion on the subject. Surprisingly, 38 percent of respondents say there’s no need for employer discretion about a terminated employee. Thirty-six percent of people believe it depends on the context of the situation. 

Step 3: Paperwork

And so begins the official part of the process. 

Before an employee leaves, you have a limited time to complete documentation, discuss the final payment process with the finance department and make sure there’s no disagreement on the terms of termination or resignation.

At this stage, HR managers typically complete the following tasks:

• Obtain a signed resignation letter to make the process legally binding.
• Handle the employee benefits and other documentation.
• Manage the necessary agreements, e.g., a non-disclosure agreement or severance agreement in the event of termination.
• Reimburse outstanding payments. 
• Prepare the final paycheck.

Step 4: Project takeover

While you’re busy with paperwork, a departing employee starts their project handoff. 

If possible, assign a coworker to shadow the employee transferring project details, timelines, etc. Ideally, exiting employees spend their last days training a new hire. However, this is hardly ever the case. 

Most often, a company assigns an interim manager to take over the key responsibilities of their ex-colleague before a new hire joins the team. This person should have access to instructions they can carry forward to a new hire. 

Nearly 50 percent of employees fail to understand their tasks, responsibilities and processes. Without a proper plan for project handoff, you might lose another employee. Clarify your expectations to reduce the stress, confusion and demotivation that often results from losing a team member. 

Support the departing employee a project takeover by providing them with a checklist of next steps, like: 

• Notifying everyone concerned about upcoming leave and introducing an interim replacement. 
• Making a list of ongoing projects and highlighting deliverables.
• Documenting the processes and workflows the employee was involved in.
• Sharing contact details with project collaborators and stakeholders. 
• Specifying the project peculiarities and goals the employee was pursuing.
• Documenting details from closed/closing projects. **This resource will prevent your company from making costly mistakes repeatedly.
• Granting access to tools, spreadsheets and documents related to ongoing and completed work.  
• Planning a meeting with the colleague taking over the projects and answering their questions.

Knowledge transfer is one more important part of the process. Apart from delivering tangible results for a company, employees collect invaluable knowledge on how to perform tasks more effectively. If you manage to preserve this knowledge when employees leave, you reach a critical goal of the entire offboarding process.

To transmit knowledge effectively, assign a task to a departing employee to create step-by-step guides on their routine work processes. 

Automated documentation tools like Scribe allow teams to generate and maintain quality reference guides and process documentation without drafting each step. Since exiting employees are always short on time, they might miss some core details. Scribe solves the problem by auto-generating step-by-step instructions with words and screenshots as a user executes any process.

Step 5: Cutting off access

After a thorough handover, it’s time to protect your sensitive data and revoke all digital access rights.

You’ll be collaborating with the IT department on this task. In most cases, your action plan won’t be limited to disabling access to your company email. To prevent a data breach, you’ll need a lengthy security checklist:

• Reset entry codes to the office, if any.
• Deactivate all accounts associated with the employee.
• Delete authorized logins.
• Remove personal social accounts from any admin privileges.
• Update credentials for shared accounts. 
• Inform the employee of what data they aren’t permitted to take and share with third parties.
• Specify the information that the company must retain.  
• Recover company devices in the employee’s possession after archiving their files. 

Data security holes can cause too many serious problems. Yet, one in four employees claims they still have access to accounts from past jobs. 

While doing the paperwork and planning a farewell party, don’t neglect your company’s and clients’ safety. Make an effort to go through the data security checklist to ensure you’re protected. 

Step 6: Exit survey

It’s time to collect feedback. Set time on your employee’s calendar for an exit survey. An exit survey is a set of questions a departing employee answers before leaving. It should give you an idea of how you could improve. 

When an employee is about to leave, they’re more comfortable sharing an honest opinion on their experiences with your company. 

Employee exit surveys improve retention and overall employee engagement. By asking the right questions, you can identify problems in the workplace, detect areas for business process improvement and assess the overall organizational climate. The most productive exit survey questions include:

• How did your role and responsibilities match your expectations?
• What has influenced your decision to leave?
• Were you actively looking for a new job?
• Did you feel comfortable sharing your concerns with supervisors or coworkers?
• Did you see growth opportunities at our company?
• Were you equipped with enough support to do the job?
• In your opinion, what could we do to improve employee retention?
• How would you rate your workplace environment?
• In your opinion, were you treated fairly by management?
• Would you recommend your friend to work for our company? Why/Why not?
• Would you ever consider coming back to our company?

Although it’s typically advised to provide customized experiences for different individuals, we recommend using these questions in all interviews. This way, you’ll be able to detect consistent patterns and eliminate the reasons behind them.

It’s not only the survey itself but also your reaction that matters. Deb Mukherjee, Ecommerce Tech Writer, shared how an employer’s response to constructive feedback can cause a terrible offboarding experience.

 “When I left, they asked me for feedback. I thought they wanted an honest one, but when I gave my feedback, the co-founder started bashing me, calling me names and saying he has worked so hard, and I can’t say all that. I gave them unbiased, objective feedback. And they couldn’t take it.”

You’ll most likely receive some criticism from every exiting employee – if they liked everything, they wouldn’t leave. With that in mind, try to turn your exit survey into a constructive conversation where you acknowledge your weaknesses and express the will to improve. 

Why bother? Remember that your departing employees might no longer be a part of your team, but they can become your brand advocates. 

Step 7: Farewell

Giving a farewell party or a lunch in honor of an exiting employee is a great chance to end your formal relationship on a good note. This event will give a positive impression both to a former employee and the remaining team members.

There’s no need for a loud party if it’s not typical of your company culture. Having a farewell coffee with coworkers may be no less delightful than a big celebration.

In a remote setting, there’s still an opportunity to say a proper “goodbye.” You can throw a virtual farewell event on Friday evening.  Everyone will get a chance to hear about their former coworker’s future plans and express their gratitude for the time they’ve spent together.

Mind that a remote farewell event will require more thorough preparation to avoid awkward silence or overlapping chatter.

Step 8: Keeping employee records

For an HR representative, offboarding doesn’t necessarily end when a former employee is removed from a Slack group. 

At this point, you’ll need to compile all documents, including CV, receipts and termination letters, into the employee’s file. In the US, the company should keep the documentation for at least six years. 

Suppose you terminated the relationship due to performance issues. In that case, you might also want to review the projects they’ve been running, monitor communications and follow up with immediate colleagues. This allows you to adjust your recruitment criteria and develop a performance improvement plan for future hires.

Before you back up any files, familiarize yourself with the laws of your state or country – the regulations for managing employee records may vary depending on the location.

The benefits of a structured offboarding program

“Oh, that’s quite a lot of work to do.”

When you welcome a new hire to your company, you do everything that’s in your power to make them feel at ease. However, creating a positive offboarding experience might seem redundant.

The seven benefits below prove that a solid offboarding program is worth every effort. 

Ensures a seamless project takeover

A project takeover is a headache for everyone involved. But when an HR representative or direct manager has a plan, it’s less likely there will be holes in the project documentation.

A proper offboarding process involves identifying the data someone taking over the project will need for a smooth transition. Your role in this process includes creating a knowledge transfer checklist for an exiting employee to follow. Doing so ensures a seamless handoff and completes the separation process.

Moreover, a specialist might simply miss communicating critical information on routine tasks, considering it obvious or redundant. Clear instructions on what kind of knowledge their successor will require help a departing employee create comprehensive documentation.

Eliminates the chance of a data breach

Failing to disconnect former employees from internal applications causes data breaches in 20 percent of organizations. 

Improper offboarding can result in customer data leaks and cyber-attacks followed by reputational and financial losses. By implementing a formal offboarding process for everyone, you’ll keep the data safe – and get better sleep at night. 

Expands your network

Twenty-five out of 31 specialists said they kept in touch with their former employers, which would hardly be possible after a poor offboarding experience. 

Why is maintaining relationships with ex-employees important for organizations? First of all, you gain alumni that will advocate for your company, use your product or services, or come to you with partnership opportunities.

By keeping a loyal rank of ex-employees, you’ll build a wide network of brand ambassadors across various companies and niches.

Improves employee morale

Like it or not, the remaining employees will closely watch the offboarding process. Many of them will be looking for signs of negativity. 

A structured offboarding plan keeps the process unbiased and transparent. Seeing you create a positive experience for a former colleague will cultivate a more loyal and confident team. 

It prevents turnover contagion

As mentioned above, turnover contagion can lead to mass departure, often of critical employees. Create a solid offboarding plan to avoid unexpected, unmanaged turnover. 

For instance, publicly announce an employee’s departure to prevent others from thinking you’re trying to hide unpleasant truths. If you give employees a chance to invent that narrative, they might start questioning their own futures at your company. 

Simplifies recruitment

Each of your employees has a network, whether in person or on social media. In one way or another, they will announce their departure. Depending on their offboarding experience, this (very public) feedback could make or break brand perceptions.  

Your ex-employees could, and should, serve as a rich referral source that redirects new talent to your company.

Keeps the door open

Rehiring employees makes onboarding easier, reduces hiring costs and requires less training. But how do you achieve that?

When offboarding an employee, don’t burn bridges. A careful offboarding process lets you leave things on good terms and attract some boomerangs. Up to 29 percent of employees have returned to their previous employer at some point – that’s only possible when you keep the door open.

Employee offboarding best practices

While it might sound impossible, a solid offboarding program can drive gains rather than losses.

You already have step-by-step instructions for how to offboard. Now, let’s run through some best practices for offboarding gracefully.

Follow an offboarding checklist

Employee offboarding takes time. It’s easy to overlook certain aspects when the process is chaotic. And it’s sure to be chaotic if you don’t have a plan.

Create a standard offboarding checklist mapping the process step-by-step. Follow it every time you deal with employment separation, with no exceptions.

Typically, your offboarding checklist should include:

• Confirmation of an employee departure
• Employee departure announcement
• Paperwork
• Project takeover
• Data security 
• Exit survey
• Farewell
• Maintaining employee files

It’s also good to customize the checklist with details unique to every specific case, such as critical project takeover steps or close-out benefits. 

A collaborative to-do list is the best way to stay on schedule and deliver an exceptional offboarding experience without stress. To ensure everyone is on the same page, make your checklist accessible to all stakeholders. Specify the tasks allotted to the employee, an interim manager and other stakeholders.

Involve a departing employee in substitution

Depending on your resources and team capacity, you may hire new talent or find a replacement within your company. Whichever you go for, it’s best to name a substitute as soon as possible.

Involve the departing employee in this process. Ask them to suggest a coworker with enough experience to handle the tasks or engage them as a consultant when interviewing job candidates. 

In a best-case scenario, an ex-employee trains a new hire for a few weeks before departure. 

Store feedback

An exit interview isn’t just a formality. It’s a powerful tool for detecting problems causing high employee turnover.

Instead of running exit surveys only to check off an item on your list, turn them into a competitive advantage. Dive deep into employees’ responses to find gaps or pain points that your company can improve. 

While an in-person interview allows for an intimate conversation, online surveys standardize the process and capture statistics. For more useful insights, implement a solution to store and process feedback from exiting employees. By automating the process and staying consistent, you can notice repeating trends and use this knowledge to adjust your retention and hiring strategies accordingly.

Don’t ignore formalities

Even if you’re best friends with a departing employee, you can’t afford to skip exit formalities. 

Someone without any malicious intent could unknowingly become a source of trouble. Plenty of things can go wrong if you fail to consider the legal formalities. One of the most common issues is having the organization’s accounts hacked due to a malefactor using the credentials of former employees.

The employee exit process should consist of procedures, also known as exit formalities, that protect the organization’s intellectual property and departing employee’s rights. Proper documentation handling will prevent compensation disputes and reduce lawsuit risks. 

Use offboarding software

Take advantage of software to create a smooth transition process. Collaboration tools will help you work with stakeholders and simplify administrative work that can be overwhelming. The right software can streamline communication and eliminate unnecessary paperwork.  

Most importantly, offboarding tools can help you capture and analyze exit survey responses. You can set up the software to sort the data and create reports. These automated reports will deliver detailed insights into the state of company culture, employee engagement and organizational justice based on unbiased opinions of former employees. 

Don’t burn bridges

You need to pay close attention to the way you offboard employees. A team member’s final two weeks will strongly impact:

• The flow of business processes.
• Team morale and perspectives on the company.
• Whether or not other colleagues will leave. 

It’s hard to lose a key player, but a well-conceived offboarding process simplifies the transition, creates a lasting brand advocate and can even strengthen your team. Follow these key steps to create a robust program that your teams can repeatedly use. In the end, a proper goodbye opens the door for massive opportunities.