Taking care of the last part of an employee’s tenure may not seem as important as other stages of employment, but regardless of the reason for the person’s exit or how long they’ve been with you, it’s better for everyone if it is done smoothly.
These days, the practice of managing an employee’s exit is called offboarding, and it encompasses the process of closing the employment of a departing employee, from the time the call is made to end the employment relationship to the person’s last day (and sometimes beyond it).
In this article, we take a look at offboarding, what it is, why it’s important, how to make a successful transition, and steps to take to ensure your business and team are set up for future success.
What is offboarding?
Offboarding is typically defined as the process of supporting transitioning employees out of a business or organisation.
The exact steps and duration of the offboarding process will depend on the reason the person is leaving - whether that’s due to resignation, redundancy, or because they have been dismissed - and the provisions contained in their employment agreement.
The process includes formal procedures like notice period requirements, returning any company equipment, handing over responsibilities and transferring knowledge, exit interviews and final payment, as well as more informal activities such as any farewell events.
Obviously, offboarding is the opposite of onboarding (or induction).
Why offboarding matters
The offboarding process helps complete the employee lifecycle in a planned and structured way, keeping the end of the relationship as cooperative and productive as possible.
In smaller businesses where everyone is flat-tack, offboarding can be overlooked, but it’s worth taking the time to ensure it’s well organised and implemented.
A few key reasons include:
- Meeting your legal obligations around terminating employment, so you minimise the risk of disputes, personal grievance claims, or acts of retaliation.
- Ensuring any sensitive information is protected (this includes any restraint of trade or non-solicitation provisions) and employee access to your building, company systems etc. is cancelled.
- Making sure any institutional or learned knowledge is retained and properly handed over to new or existing team members.
- You get company-owned tools or equipment returned.
- Ensuring a positive employee experience so people feel valued right up until they leave.
What should offboarding cover
Once you’ve taken care of the basics and accepted that the person is leaving, let’s take a look at what you should do from there.
We will focus on dealing with employees who chose to resign. The process might be different if you are terminating their employment, especially in the case of a summary dismissal (dismissal without notice) because of proven serious misconduct.
In all cases, make sure you check the termination clause in the person’s employment agreement to confirm what you’re required to do.
Offboarding checklist
- Resignation received - your employment agreements should require this to be done in writing, but even if it isn’t you should still get the employee to put it in writing to avoid confusion.
- We recommend acknowledgement of the employee’s resignation via letter or email and using this to outline expectations post employment (e.g. reminding them of non-solicitation clauses).
- Last day of work confirmed - this will depend on the notice period.
- Payroll informed.
- Exit interview offered (and booked)
- Company property collected, this could include:
- Swipe card.
- Laptop or tools.
- Company keys.
- Uniform.
- Team announcement made and farewell booked (if appropriate and the person wants it).
- Key projects identified and re-assigned.
- Key meetings identified and new attendees assigned.
- Exit interview completed and results collated.
- Personal notes collated and transcribed into a handover document.
- Desk cleared of personal items.
- Farewell for the person at the end of their last day.
What about offboarding problematic employees?
Winding up the employment of a person who you’ve had to dismiss because of misconduct or stubborn poor performance can be tricky.
Such a termination should come at the end of a series of disciplinary actions, where you made it clear to the person their employment was at risk, established points of improvement, and gave them time and support to improve.
Once you’ve reached the point of dismissal, you have a few options that could simplify the final period of employment:
- Put the person on “gardening leave” - this means they’re still an employee and will be getting paid until the last day of their notice period, but they aren’t required to come to work.
- Pay them out in lieu of having them work the rest of their notice period - this means their employment ends as soon as possible (make sure you agree to the last day), and you’ll pay them for the remaining time instead of having them work it.
Either of these options can only be done if it’s in the person’s employment agreement or is agreed to by the employer and the employee. If you decide on something that deviates from what’s in the employment agreement, make sure you document it in writing and get both parties to sign it.
Find out more about your options during notice periods.
Redundancies
In the case of restructuring that ends in an employee being made redundant, there can be a lot of emotion involved. To ease the end of employment, you may choose to pay the person in lieu of notice or put them on gardening leave.
Any redundancy should always come after the restructuring process, which requires that you explore redeployment options into other roles within the organisation. It may be reasonable in some circumstances, e.g. when there are multiple employees involved, to consider voluntary redundancies, because considering the employee’s preference will make their exit smoother and more dignified.
You may also want to offer the person outplacement support or skills training before they leave.
Important offboarding principles
Offboarding works best when it is cooperative, collaborative, and respectful. The aim is to end up on the best possible terms with the person who is leaving, for many reasons.
Recognition and respect
Just about anyone who’s worked for you has contributed, in large or small ways, to the team and organisation, and it’s good to recognise these contributions. This means that you end the relationship on a positive note, and demonstrate to remaining staff (and potential new ones) that you take recognising and valuing what people do seriously.
It’s all part of being good humans – treat leavers with as much respect and care as new starters.
Keeping a departure civil also helps protect the organisation from potential retaliation, legal action, or data breaches, while also maintaining a positive, long-lasting relationship that keeps the former employee as a potential network connection, customer, or brand champion.
Communication
It may be uncomfortable to tell the wider team about an employee’s departure, but it’s better to do it sooner rather than later. In the absence of concrete news, people might gossip or make up the details themselves, and you might find yourself having to convince people a resignation was not a dismissal.
Open communication is a key part of a strong organisational culture, and people appreciate honesty, especially if you are willing to admit when management has made mistakes and can demonstrate steps you’re taking to fix them.
Also publicly congratulating an employee and thanking them for their efforts sends the person off respectfully and demonstrates integrity to your remaining employees.
Reflection and improvement
Often a person leaves because of a combination of factors and each departing employee will have a unique perspective of the role, the business, and what it offers and has to offer potential employees.
Gathering this feedback about their experience through formal exit interviews and informal conversations is crucial to being a good employer and a successful business.
You want to understand a person’s reasons for leaving, so that you can reflect on the good and the bad, and make any necessary changes to your work processes and people practices.
Find out more about conducting exit interviews.
Realignment
Offboarding is also an excellent opportunity for you to evaluate the job your departing employee was doing, and make sure it still fits with the design of the team and the organisation’s goals.
Has this position achieved what you wanted it to achieve? Are there tasks the person was doing that should be done by another role, team, or outside agency? Is there anything you should add to the role?
Answering these questions means you can make the most of the opportunity to reshape or realign the position, so you’re setting the next person, and the organisation, up for success.
We always recommend starting at the top with your vision and strategy and how the role aligns with it, then look at the work itself and whether you need to add or remove tasks that are no longer helping you achieve your goals.
Then think about the person in the role. What skills and competencies do they need? Are there any qualifications that would support their success? Were there strengths or skill gaps that could be filled this time around?
Take these learnings into your recruitment process, whether that’s internal or external.
Final payment
Payroll will process the person’s final pay on the day that they leave (or on the pay day for their final period of employment, at the latest), which will include:
- Wages or salary for all the hours worked.
- Any annual leave entitlement or accrual (sick leave and other forms of leave like family violence or bereavement are not paid out).
- Any alternative days (previously “days in lieu”) for public holidays worked.
Notice periods
As mentioned, if the employee works the notice period you pay them for all the hours they work. If they don’t want to work their notice, you can agree to pay them in lieu of working.
If the employee refuses to work or says they’re not going to work their notice, you do not have to pay the notice period.
Calculating final pay can be a bit tricky, so if there are any questions, check with MyHR or your payroll provider.
Learn more about recovering costs from employees.
Finding a replacement
If it’s a typical resignation, there’s no “cooling off” period – you can start the process to recruit for their replacement immediately.
Find out more about effective recruitment.
Keeping in touch
If the employment relationship is strained or damaged beyond repair, then you probably won’t care too much about staying in touch (and it’s doubtful the employee will either). However, if the person is leaving on good terms, staying in touch is a great way to show good will and appreciation for their efforts.
It also helps leave the door open for future collaboration or return at some point, or if they have gone to work for one of your organisation’s clients, contractors or competitors, you want to remain on good terms. You want the person to speak highly of the company to others, as well, which will help with recruitment and your overall reputation.
