Offboarding & Employee Exit Process

Jan 15

An offboarding process primer for curious, action-oriented leaders

When it comes to managing human resources, organizations often invest significant time and effort into onboarding new employees, but they may overlook the importance of a well-structured offboarding process.

What’s in this knowledge article?

What is Offboarding?

Why Create an Offboarding Process

How to Improve Your Alotten Score

Resources

What is Offboarding?

Employee offboarding (often known as the exit process) is the formal process an organization follows when an employee departs from the company, whether due to resignation, retirement, termination, or any other reason. It is the counterpart to onboarding, ensuring a smooth transition for both the departing employee and the organization. It can be helpful to create an offboarding checklist to outline the tasks involved in the exit process, such as:

Exit Interviews: Exit interviews gather valuable feedback from departing employees and provide insights into the employee experience.
Returning Company Assets: Employees must return any company property, such as laptops, access badges, and uniforms, during the offboarding process.
Knowledge Transfer: Transferring knowledge and responsibilities to other team members ensures that critical tasks are not disrupted by the exit.
Benefits and Final Payments: Calculating and disbursing final payments, including accrued vacation days and benefits, is an essential part of offboarding.

Why Create an Offboarding Process

A well-designed offboarding process offers several advantages to organizations. It provides a streamlined and consistent process that saves time and money while mitigating the risks introduced by inconsistent exit practices.

Compliance and decisions that lower legal risk. Standard offboarding processes and policies ensure your terminations are decided and processed in a consistent and legally defensible manner. This consistency is what allows you to avoid legal issues related to termination and resignations while having the evidence you need to counter claims of discrimination should they occur despite fair practices.

Preserving Institutional Knowledge. When employees leave, they take their knowledge with them! Creating transition plans for managers and employees allows remaining employees to inherit the institutional knowledge of those exiting. This level of planning can be fairly light, but it allows you to continue a smooth operational cadence despite attrition.

Employer Brand and Culture. Offboarding, when done professionally and respectfully, shows that the organization cares about its employees, even when they are leaving. A clear and structured process can help maintain a positive relationship with departing employees and the remaining team members, protecting your employer brand (think: Glassdoor reviews!) and the engagement of your remaining employees.

Eventual Automation. Once you have strong documentation and resources for employees, you can automate many of the processes during your offboarding process as routine- saving your managers and HR teams time and money, and minimizing risk through standard practices and limited human error.

When & How to Create an Offboarding Process

When to implement an offboarding process

A proactive approach ensures the organization is well-prepared to handle departures efficiently.

What you need to create an offboarding process

Current Exit Process Audit: Review how exits currently occur and identify any areas for improvement. Bring in other stakeholders, like your HR team, legal counsel, IT partners, and managers. Use this process to cultivate buy-in for the robust and standardized exit practices you create.
Policies, Checklists, and Documentation: Create a detailed offboarding checklist to ensure nothing is overlooked when employees exit. Document all necessary procedures as well as exceptions to your process. Where possible, create holistic policies and resources that managers and employee can easily access.
Exit Interviews: Conduct exit interviews to gather feedback from departing employees and use this information to continually improve your employee experience.
Knowledge transfer: Develop a plan for transferring knowledge and responsibilities from the departing employee to their team.

How to implement an offboarding process

The graphic below illustrates how an offboarding process may differ by maturity phase. On the next page, we provide step-by-step instructions for creating your offboarding process.

Offboarding process: Step-by-step

Review your current process and collect feedback from managers. Organize your exit process into a timeline using these milestones:
a. Pre-offboarding is the time between when an employee hands in their resignation and their last day with the company. During this time, you typically create a transition plan and communicate the exit to other employees as needed.
b. The termination date is the employee’s last day with the company. Things that usually happen on the termination date include returning equipment and cutting access to organizational systems (though there may be times this happens before the termination date).
c. Post-termination refers to anything occurring after the employee’s last day. For example, the manager may begin recruiting for the employee’s backfill at this time.
Use your timeline to define the exit process for different types of exits.: Map how offboarding may change for each type of exit:
a. Voluntary exits: employees who hand in their resignation without prompts from a manager or organizational leader. These can be regrettable or non-regrettable.
b. Involuntarily exits: employees who are asked to leave due to performance, a role elimination, conduct, or other reason. Each of these subcategories may have their own exit process. Managers should engage HR and legal counsel long before any termination decision to ensure involuntary exits are fair and legal. Many, but not all, involuntary exits are non-regrettable.
c. Regrettable exits: employees whose exit greatly impacts the company given their above average performance, unique skill set, criticality, or immense, positive impact.
d. Non-regrettable exits: employees whose exit may cause organizational pain points, but whose performance or attitude may have been average or even harmful.
Create an employee checklist, a manager checklist, and an HR checklist. Outline the tasks each stakeholder must complete before the termination date for each type of exit.
a. Employee checklists often include helping the manager plan the employee’s transition, documenting responsibilities, providing input on how to message their exit to peers, and working with co-workers to share knowledge and access before their last day.
b. Manager checklists often include things like creating the offboarding plan using a template or guide alongside the employee, informing HR of the resignation or exit date, communicating the exit to the employee’s team and peers, and planning for backfilling the role.
c. HR checklists can include things like removing access to company files, ensuring final pay is processed, and communicating how the employee’s pay and benefits will cease.
Ask any HR, Legal, IT, or other administrative stakeholders to review the checklists and automate any processes. Legal review of exit processes for involuntary terminations is especially important, as these exits can typically be more complex and require some pre-work before any exit decisions are made. Work with HR or IT to automate the termination of pay, benefits, or system access or to create a smooth process for ensuring termination on the employee’s last day.
Share the processes with managers. Tell managers what resources are available to them and how everyone will work together to exit employees consistently, fairly, and respectfully. Train managers on how to report voluntary resignations, create transition plans, and craft considerate exit announcements. Train managers on discussing performance concerns as soon as they are witnessed.
Use your offboarding to make strategic, legally-defensible decisions which support your policies and cultural vision. This applies especially in your exceptional cases, such as when someone is leaving to work for your competition and you need to protect company information, or when you have a repeated no call, no show. These can be quite routine decisions, if you’ve taken the time to document a policy on how these should be handled, versus scrambling to make a decision in the moment.