Employee Experience

Everything You Need to Know About Employee Offboarding

September 27, 2021
November 7, 2023
Lyssa Test
Lattice Team

As an employer, it’s your job to build an exceptional employee experience that lasts from an individual’s first day with your company to their last. But while most HR departments pour time and money into perfecting their new hire onboarding programs, very few give employee offboarding the time and energy it requires. 

Employee offboarding is the last step in the employee lifecycle, so it’s often the last impression you’ll leave with an individual. When done poorly, it can be a negative experience for employees and even push them to speak poorly about your company on Glassdoor, social media, or to prospective clients or job candidates. But when done right, offboarding can allow employees to leave feeling good about your organization and keep the door open for them to return in the future. 

There are four main reasons it’s crucial to perfect your company’s employee offboarding process:

  • To minimize legal and security risks
  • To collect honest feedback from departing talent
  • To set your remaining employees up for success
  • To leave the door open for your exiting employee to boomerang back. We’ve created this detailed offboarding checklist to help you streamline and optimize your employees’ last few days or weeks with your company. 

What Is Employee Offboarding?

Employee offboarding is the process of ending a relationship between a business and its employee. While the offboarding process may look different for each employee depending on seniority and the duration of their tenure with the company, it usually involves creating a transition plan, working to transfer the individual’s knowledge and experience to the rest of their team, discussing their reason(s) for leaving in an exit interview, returning company equipment, and signing any necessary HR, IT, and legal documents.

The reason for an employee’s departure is also important, as different types of employee exits require a different timeline of action. Here are a few different types of employee departures that can impact how your offboard individuals:

  • Voluntary Resignations: An employee voluntarily decides to leave your organization to work somewhere else, take a sabbatical, stay at home with their child, or for another reason.
  • Involuntary Terminations: Your company terminates a working relationship with an employee due to poor performance or misconduct.
  • Retirement: An employee decides to leave the workforce entirely and enjoy retirement.
  • Medical Separation: An employee steps away from work to care for their own health or the health of a loved one. 
  • Reduction-in-Force (RIF): Your company decides to permanently eliminate certain positions and lets specific employees go as a result. 
  • Furlough/Layoffs: Your company temporarily or permanently lets employees go due to budgetary constraints or poor business performance. 

Employee offboarding for involuntary terminations, furloughs, and layoffs is usually accelerated, with employees being informed of their dismissal and escorted out of the building that day. On the other hand, voluntary resignations, retirements, medical separations, and RIFs can typically have a more relaxed timeline, depending on when an employee announces their intention to leave or when their position is no longer needed. Regardless of the situation, it’s essential to ensure that your departing employees are treated with respect, your company is set up for success in their absence, and the security and safety of your business, clients, and employees is protected. 

Step-by-Step Employee Offboarding Checklist 

We’ve put together a comprehensive employee offboarding checklist to keep you organized throughout the transition when you have an employee who is ready to move on. Again, the pace at which you follow this checklist is dependent on how quickly your employee needs to be removed from their position, so follow it to the best of your ability in whatever timeline you’ve been given. 

1. Notify key stakeholders.

When your HR team learns of upcoming employee departures, you’ll need to alert and partner with certain departments to ensure the individual is offboarded successfully. Let payroll know when the employee’s final paycheck is due and have them check if that individual needs to pay back any sign-on bonuses or relocation fees, inform IT when they need to disable user accounts and collect company property, remind benefits to discontinue their coverage or walk them through COBRA, and consult legal in case any paperwork needs to be signed before the employee leaves. You’ll also need to collect their personal contact information so you know where to send their Form W-2 or other tax documents when available. This ensures every department is on the same page, so you don’t have a last-minute scramble to get everything in order on an employee’s last day.

2. Get any necessary paperwork signed.

When an employee is moving on, you need to have them sign some formal paperwork to help protect your business. To start, you’ll want to collect a signed letter of resignation or termination, clearly stating the employee's reason for departure along with their last day of employment.  These letters can keep your business safe should the employee decide to say they were wrongfully terminated or dismissed without cause and try to take action against your company. 

“​​In the case of a termination, HR teams need to be more vigilant,” said Sanya Nagpal, Head of Human Resources at Leena AI, an artificial intelligence help desk and engagement company. “More than half of employees who leave an organization take valuable information with them, so you need to make sure non-disclosure agreements and non-compete clauses are in place and signed to protect your business from compliance violations, client poaching, or secrets leaking to competitors.” 

3. Share the news with the employee’s team.

Once your HR department has officially learned an employee is leaving the company, you’ll need to announce the news to the individual’s team. Do this quickly so rumors don’t spread and employees don’t speculate. 

Whether you plan to share the news during a team meeting or over email, just be sure to keep things straightforward and factual — state that the employee will be leaving the team, when their last day will be, what the transition plan is, and who to contact with questions. For employees who are departing the company voluntarily, you may also want to include a positive note thanking them for their service, highlighting some of their key contributions to the team, and even sharing a nice memory to add a personal touch. 

4. Give the departing employee an offboarding checklist.

Once your employee announces they’re leaving, they might be wondering what comes next. To help set expectations and save yourself from having to answer the same questions over and over again, consider creating an employee offboarding checklist that your HR team can share with exiting employees. The checklist can remind them to set up a transition plan with their manager, train their team members, and have an exit interview with HR, as well as specify when and how they’ll need to turn in their company-issued belongings. Having a detailed list like this can help clear up any confusion around how the employee should spend their last days with your company and ensure all offboarding tasks are completed in a timely fashion for a smooth transition.

5. Create a transition plan.

For voluntary departures that come with advance notice, you should also ask the exiting employee to create a list of any recurring responsibilities they manage, current projects they’re working on, key contacts they correspond with, and any systems or vendor relationships they oversee. This list can give their manager a clear understanding of which tasks need to be distributed throughout the team and how best to assign them. Then, to make the most out of your exiting employee’s remaining days, have them set up time to transfer their knowledge and skills to the colleagues taking over their responsibilities and projects. 

In addition to hands-on training and job shadowing, also ask the employee to create detailed process documents explaining how to complete specific tasks and use necessary programs and applications, so their colleagues can utilize and reference these instructions even after the individual has left the company. And don’t forget to have them to list out important login information and passwords their teammates will need to access both internal and external systems or applications. 

6. Conduct an exit interview and tie up loose ends.

During your employee’s last week, schedule time with them to conduct an exit interview, or a conversation around why they’ve decided to leave and how they think you could improve the employee experience at your organization. This one-on-one conversation gives you an opportunity to collect frank feedback about how your company could improve its culture, work-life balance, or management practices, among other areas, for its current and future employees. 

This conversation shouldn’t be sprung on an employee, so be sure to put time on their calendar and send them an exit survey or share your exit interview questions in advance so they have time to prepare and formulate their thoughts. During the exit interview, listen carefully, take detailed notes, and conclude the meeting by thanking the departing employee again for their time and contributions to the company.

7. Collect company assets and shut off user accounts.

This step is often the most crucial when it comes to keeping your business secure. On an employee’s last day, collect any physical company assets they have access to, including a laptop, desktop monitor, company credit card, office badge or keys, and things of that nature. If your employee is remote, you’ll need to ensure they know how to return these items via mail, including where to ship them, what type of protective box(es) to use, how to expense the package, and who to contact should they run into any issues. For in-office employees, you’ll also need to verify that all their personal belongings have been removed from their desk and tidy up the space. 

Next, partner with IT to disable and delete the departing employee’s accounts from any internal databases and applications your business uses. “Companies often authorize employees to access their various IT systems — email, databases, CRM, etc. — in a haphazard manner. This is a serious issue when it comes time for offboarding because there's no way you can execute a complete unified de-authorization for an exiting employee,” warned Lenny Liebmann, an IT expert with nearly 40 years in the industry and founding partner at business research consultancy Morgan Armstrong. “Without proper HR-IT coordination, just about every company leaves access rights lingering somewhere for ex-employees. This is not just a security risk, it can also be a regulatory violation — especially for mandates like HIPAA.” 

As Liebmann suggested, HR and IT teams need to work in tandem to ensure the employee leaving has no access to company, client, user, and staff information after their last day. To keep all of your assets and personnel safe, you’ll need to terminate their access to internal systems and outside vendor applications, as well as remove them from any email distribution lists or company directories. For added security, especially if the circumstances surrounding an employee’s departure warrant it, you can also change any access codes or passwords the exiting employees knows, so you can ensure physical office spaces are also secure.  

8. Send them off with a smile.

In the case of a termination or layoff, remember to be professional and respectful toward the departing employee. Be direct about why the employment relationship has to come to an end, thank them for their contributions, and mention that they can use your company as a reference if you’re parting on good terms. While these types of conversations are never easy, you want your employee to leave with their dignity intact, and having had a positive experience working at your company.

In the case of a voluntary departure, try to make time to celebrate your employee as they embark on their next endeavor. Have their team sign a card, buy a cake, or host a goodbye lunch or happy hour in their honor during or after the workday. While the onus of planning the event shouldn’t fall on the departing employee, make sure you ask what they’re comfortable with and loop them into your plans so you choose something they’ll enjoy. 

9. Keep an eye on your remaining team.

Once your employee has formally left the company, the offboarding process has technically ended, but your job is far from over. In order to prevent more untimely departures, periodically check in with the employee’s former team. Oftentimes when an individual leaves, their responsibilities get passed on to their colleagues — usually without an increase in pay or a title change. This responsibility shift can often breed resentment and burnout among employees and eventually push them to look for other employment opportunities, too.

In the days, weeks, and months following an employee’s departure, keep an eye on their team and track changes in employee morale. If you are backfilling the role, sharing updates on the hiring process can help calm employees and remind them that there is an end in sight to their extra responsibilities. Or, if morale continues to drop and you’re worried other staff members are considering jumping ship, it might be a good time to reward deserving employees with a much-needed raise or new title to give the team something positive to celebrate. 

10. Act on exit interview findings.

This step should be executed simultaneously with the one before it: Once your employee has left, you need to act on any key information you learned in their exit interview. For example, if they complained about poor management, you can cross-check this claim against management satisfaction scores from your most recent employee engagement survey and consider implementing more frequent manager training classes. Employee feedback is precious and exit interviews are one of the few times you can collect frank, uncensored advice from your workers. Take advantage of these findings, verify them with stay interviews, and work quickly to introduce meaningful change that can help you retain talent and keep other top performers from walking out the door.

While it’s important to keep your remaining workforce top of mind, you shouldn’t just cast an employee aside once they announce they’re leaving. The employee experience extends from an employee’s first day at your company until their last, so orchestrating a smooth and pleasant offboarding process should remain as much a priority for your team as onboarding new hires is. 

Try to view each departing individual as not merely an open role to fill, but a potential future employee; ensuring their final days with your company are positive and professional can keep the door open for future employment with your organization. For now, all you can do is give them a smooth offboarding experience, wish them the best in their next chapter, and leverage what you learned from their feedback to build a better workplace for your remaining employees.