Training & Learning

Why Employee Offboarding Matters Now More Than Ever

How you say goodbye to an employee who's leaving your company is just as important as how you welcome them to their new job. Yet, for many companies, employee offboarding gets less attention than onboarding. In fact, "71% of organizations have no formal offboarding process."

But the stakes for getting your offboarding process right couldn't be higher—workers are leaving their jobs in record numbers.

In January 2022, 4.3 million people quit their jobs, and 44% of employees are active job seekers. This signals remnants of the Great Resignation aren’t letting up anytime soon. So offboarding is a crucial component of learning and development that can’t be overlooked.

With a proper offboarding process in place, your organization can manage employee turnover more efficiently, keep your top talent around, retain institutional knowledge, and create a smooth transition for both your existing and your departing employees.

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We surveyed over 1,000 Americans about the Great Resignation. Here's what they said.

What is employee offboarding?

The offboarding process formally terminates the working relationship between an employer and an employee who has resigned, retired, been fired, or been laid off. 

Unlike the onboarding process, which is focused on engaging new employees and setting them up for success, the purpose of offboarding is to protect the interests of both the employer and the exiting employee while ensuring the relationship ends smoothly and on good terms.

Offboarding should be efficient, thorough, and cover any necessary legal requirements. But it should also be respectful and dignified and close the relationship on a positive note for all parties involved. Some of the key elements of an offboarding process include:

  • Notifying co-workers when an employee leaves
  • Transferring the employee's duties to a replacement
  • Returning company equipment
  • Transferring knowledge
  • Deactivating or revoking access to employee accounts
  • Conducting employee exit interviews

Why employee offboarding matters

The final stage of an employee's journey with your company is one of the most important times to be supportive and uphold your cultural values. But without a way to assess the relationship and provide a transition for your remaining team, you risk losing more employees in the long run. 

According to Aberdeen Research, companies with an offboarding policy retain 71% of their employees, while companies that don't have an offboarding process retain only 57%. In addition, companies with an offboarding process have 11% more engaged employees than companies that don't.

With a well-planned offboarding process, HR can create a smooth exit that benefits both the departing employee and the organization in the following ways.

1. A positive final impression drives brand advocacy

Happy employees are your best brand advocates. When employees rave about their experience at your organization, they raise its profile, which in turn attracts great prospective talent. But while many companies focus on creating brand advocates out of current employees, some forget that the opinions and reviews of ex-employees hold considerable weight.

84% of job candidates read company reviews before applying, and 60% read at least five reviews before forming an opinion of a company. People also tend to trust negative online reviews more than positive ones. So if the offboarding process is subpar or even acrimonious, this can damage the relationship with an outgoing employee and sour their view of the organization. They may even paint a bad picture of the company to potential hires. 

Your existing employees also see how you treat employees who are on their way out, which can influence their perception of your organization and even their level of engagement. 

Therefore, the more your organization does to create a positive last impression for departing employees by offering an excellent offboarding process, the more likely they'll leave as brand advocates instead of critics.

People also tend to trust negative online reviews more than positive ones.

2. Valuable employee feedback improves your company

Departing employees are more likely to provide genuine feedback about their work experience and the company culture. Feedback from exit interviews—both good and bad—can help you identify your organization's strengths, weaknesses, and areas where there is room for improvement. 

For example, consistently poor feedback about a company's lack of diversity or poor cultural sensitivity could lead to the creation of a diversity and inclusion training program. In addition, exit interviews can uncover any unfavorable issues that have arisen during an employee's time at the company (such as workplace harassment, bullying, racism, or sexism), which can be addressed before they lead to legal action or bad publicity. 

If you take the necessary steps to incorporate this feedback into actionable improvements, you’ll show both previous and current employees your company's commitment to creating a positive employee experience and company culture.

Exit interviews can uncover any unfavorable issues that have arisen during an employee's time at the company, which can be addressed before they lead to legal action or bad publicity. 

3. The company is guarded against security risks

Consistent and systematic offboarding mitigates security and legal risks and protects the organization from compliance-related issues. 

As part of the onboarding process, you must ensure that all outgoing employees hand back company assets, such as laptops and mobile phones, and revoke their access to accounts and software. This part of the onboarding process is especially important when you consider that one in four employees still have access to accounts from their previous jobs. 

If you skip this part of the offboarding process, you leave the company and your clients or customers at risk of security and data breaches. This happened to the mobile payment service Cash App in December 2021. An ex-employee who still had access to his account downloaded reports that contained customer details. This led to a data breach that impacted more than 8 million users and could have been avoided if the company had simply deactivated the former employee's account.

4. Collaboration preserves institutional knowledge

One of the essential aspects of offboarding is documenting all important knowledge, information, and processes critical to the departing employee's role. Long-tenured or highly skilled employees, in particular, carry unique expertise and an understanding of their day-to-day roles that can be difficult to replace. In fact, 81% of employees report that knowledge obtained from hands-on experience is the hardest to replace.

Over time, the cumulative effect of knowledge loss from departing employees can snowball in one of the following ways:

  • Onboarding and training new hires become more challenging due to lost knowledge.
  • Less efficient processes can lead to a decrease in the company's performance.
  • Communication and information silos are created.
  • Relevant information becomes harder to find. 
  • Reduced productivity can significantly impact the company's bottom line.
  • Customer or client relationships can be damaged.

81% of employees report that knowledge obtained from hands-on experience is the hardest to replace.

5. The door remains open for former employees to return

About one in five people who quit during the pandemic have returned to their old jobs, and 41% of those who have not yet returned say they would consider it as an option. Therefore, it's essential to treat your offboarding process like an iIt's not goodbye; it's see you later." This means ending the termination on a positive note that makes departing employees feel comfortable enough to return to the company in the future.

An added bonus of leaving the door open for reconnection in the future is that rehires may also return with new skills, knowledge, and experience. A study has shown that these types of employees also show better commitment to a company than other staff. And because they're already familiar with your company culture and processes, rehires require less time to get up to speed. As a result, they can start off strongly compared to a new hire needing more training to reach maximum productivity. 

Build your company culture from the first to the last day

A company's core values and purpose influence almost every aspect of the employee's journey and experience—good and bad.

Your employee's onboarding experience should reflect your organization's commitment to engaging new employees and setting them up for success. Your training and learning programs should reveal your investment in your employee's growth through collaborative learning and knowledge-sharing opportunities. And the offboarding experience is the last opportunity to show respect and empathy to the departing employee and emphasize their value and contribution to the company.

360Learning's collaborative learning platform makes it possible to provide your employees with onboarding and training opportunities that will support their growth and development, whether they choose to stay at your company or eventually say adios.

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