Employee offboarding: what it is, why it matters, and how to do it well

Ever left a job and still had access to your company email or shared drive months later? Yikes.

Each time an employee exits a business, there’s the potential for something to be left unfinished, presenting dangerous security breaches and potential leaks of company assets.

A solid employee offboarding process is vital for every organization—not only for security but also as a means of respect for each and every employee.

In this guide, we will explain why the employee offboarding process matters so much, how to streamline and improve it by taking a holistic employee lifecycle view, and the positive effects this can have for your organization, especially when it comes to compliance and security.

What is employee offboarding?

Employee offboarding is formally separating an employee from their company after resignation, termination, or retirement.

It consists of all steps and workflows that occur when an employee leaves, including:

• Knowledge transfer
• Removal of software and account access
• Hardware reclamation
• Exit Interviews
• Payroll removal
• Approval workflow removal
• Updating company website
• Reclaiming ID badges

Good offboarding ensures there are no loose ends or open access when an employee moves on. This way, there is nothing lost, and there are no opportunities for any data or security breach.

Offboarding also gives the exiting employee a chance to provide feedback about his or her role, and for the organization to better understand how to improve its culture and employee experience.

Many businesses are much more invested in onboarding than offboarding, and understandably so. The start of a relationship feels like a more fruitful point to nurture than the end of one. Yet a strong offboarding plan is just as, if not more important than onboarding for several reasons.

Offboarding is a discrete and important process. But it is also part of a larger picture—the employee lifecycle. This spans from long before an employee’s first day until long after the employee leaves.

The benefits in terms of employee productivity, organizational efficiency, and reduced risk are well worth the effort that goes into building a streamlined employee lifecycle. Understanding and planning for the entire employee lifecycle is an excellent way to improve retention, morale, and ROI on new hires.

It also reduces the likelihood that you’ll find yourself at the center of a breach or PR scandal. Having a broader picture of how offboarding fits into the employee lifecycle can help you define processes, plan, and make strategic changes that benefit your entire organization over the long run.

For more on the first part of the complete employee lifecycle, see our guide to employee onboarding. Now, let’s take a deeper look at a framework for streamlining and optimizing your offboarding process.

The benefits of doing employee offboarding right

Effectively offboarding departing employees helps build a culture of security and compliance, and it protects you from liability. But that’s only the beginning of a long list of benefits the offboarding process brings once you part ways with an employee.

More employee confidence

People are your company. Employees who stay on board will notice how the offboarding process is handled—and word-of-mouth travels. It can color views of your organization and skew it in a positive or negative direction.

Some of your employees will inevitably be in charge of helping to offboard employees. Developing clear processes will make their jobs easier while emphasizing that you take security and compliance seriously. Research shows that 70% of job candidates look to company reviews before making career decisions. More employee confidence ensures that your reviews showcase a healthy work environment worth joining. To do that, your offboarding process must be both human and empathetic.

Greater productivity

Taking a people-first approach has the added benefit of improving your organization’s productivity. A good offboarding process will simplify life for your HR, IT, and leadership teams, and will also protect the company from negative perceptions.

Increased security

Customer data leaks or security breaches aren’t worth risking—and one of the best ways to avoid this is to develop tightly controlled offboarding processes. According to a recent IBM report, the average cost of a data breach is over $3 million.

A proper offboarding process dramatically decreases the odds that your company will be vulnerable to this type of attack.

Easier compliance

You may also need to meet relevant guidelines and regulations for your industry and organization type. For many SaaS-based organizations, SOC 2 must be adhered to at all times. This and many other compliance frameworks require tight controls around access—specifically around offboarding.

Strong adherence to compliance is an important way to win customer trust and show that your business takes its security seriously. Good offboarding is integral to that.

Should you automate employee offboarding?

A large part of the employee offboarding process can be automated. However, offboarding still requires a human touch. So parts of the process like exit interviews and gathering feedback are better handled with real-time human interaction.

Yet, for example, the process of access revocation to company data can be automated so it runs in the background while you finalize other aspects of the offboarding workflow.

Employee offboarding best practices

Here are some key factors to keep in mind when refining your offboarding process. It starts with setting a positive foundation.

Make the experience positive

Whatever the reasons for the termination of employment, offboarding should always be a positive experience as part of the company’s last impression. You should put in the same effort as you would during onboarding.

Acknowledge your employee’s contributions, and interact positively about their time in the company.

Get insight and data

An exit interview is an indispensable part of the employee offboarding process. Many employees may be hesitant to express their unguarded opinion while they’re still with the company to avoid conflict. An exit interview is a moment to get honest feedback.

Incorporate knowledge transfer efficiently.

Don’t wait until team members depart to start the knowledge transfer process. Instead, make it part of their ongoing work responsibilities. That way, they aren’t crunched for time as they finalize their last days with the company.

Stay in touch

The single best way to show your existing employees your appreciation is to stay in touch and support them. This might mean asking their permission to contact them through either email or a preferred phone number. If they decline, take note of their decision and proceed accordingly.

Consider a remote setup

With the onset of the great resignation and about a quarter of US employees working from home, remote employee offboarding is necessary. This will look like creating a preliminary setup along with a checklist that includes the revocation of access to sensitive data, monitoring the last few days of employee activity if the departure isn’t on good terms, and conducting virtual exit interviews.

The remote offboarding process stands to gain a lot from a predetermined removal process. Generally, the same steps to removing an in-house employee still apply.

How to do employee offboarding the right way [Checklist]

As soon as a departure is finalized, the process should begin in earnest. We’ve created this checklist as a template for your processes. You can personalize it so it fully covers the specific needs of your company.

1. First steps

• Communicate with employees: Gossip travels. By communicating with employees quickly, you can ensure that people receive correct information and head off any chatter. If the employee is resigning, ask for and receive a letter of resignation. In any case, you’ll want to inform human resources and current employees.
• Prepare final documentation: As part of a smooth offboarding process, you should begin to gather any documentation needed for an exit. This may include non-disclosure agreements, benefits and tax documents, final payroll, and any feedback requested.
• Notify network administrator: Part of offboarding will be the de-provisioning of email accounts, software tools, shared drives, and more. Inform your IT department so they can prepare.

2. Permissions/knowledge

• Knowledge transfer: Minimize disruption by creating a list of key tasks and knowledge that must be transferred, and prepare existing employees or any replacements. Will the exiting employee do any replacement training? Do backups of email accounts/documents need to be performed?
• Close/delete user accounts: Be sure to de-provision access to email accounts, company databases, shared drives, and software/SaaS tools. Each of these touchpoints is a potential security breach. Being thorough with this step will minimize your exposure.
• Recover company hardware: This can include credit cards, keys, phones, laptops, tools, or badges. Be sure to document these items and their return.

3. Final documentation

• Closeout employee benefits: Check with your insurance provider that you comply with COBRA requirements. Request and receive a benefits status letter from the HR department.
• Issue final paycheck: This can include outstanding wages, unpaid commission, unpaid business expenses, severance pay, unused vacation pay, and health spending account balances.
• Review all signed agreements: Have team leads and legal review documentation. Work with an approval process if this makes this easier.
• Clean and prepare the workstation for any new arrival: It’s essential to give a sense of progress and closure to the business, employee, and any coworkers.
• Update the company directory: To ensure accuracy. This might also include updating the company website if it has a public-facing page showcasing team members.

4. Exit communications

• Complete the exit interview questions: Use this interview to gather information regarding the working environment in your organization. When notified that an employee is terminating employment, your HR office will schedule an exit interview; record the date of this interview using the form field below.
• Maintain an employee file: Everything above and all documents, including receipts for returned items and termination letters, need to go into the employee’s file.
• Reach out afterward: If the separation was on friendly terms, then encourage your outgoing employee to stay in touch.

Using SaaS Management for comprehensive employee offboarding

SaaS management is unique in how it connects all aspects of the offboarding process. Many tools cover one or some aspects of the process—yet SaaS management is built to manage the entire offboarding workflow across all teams and tasks. SaaS management helps you:

Define a clear offboarding plan per team

Our workflow engine gives businesses a ready-made offboarding checklist, plus a platform to customize and formalize the particular process for the organization, able to be repeated whenever necessary.

When you begin an offboarding process, whether it starts in your HR tool, or email client, your solution generates a list of steps to ensure a complete offboarding, as well as assigning the task to who is responsible. Each team can easily define its own steps, tools, and processes.

Workflows are also automatically recorded and can be easily audited. This means easy documentation for compliance audits, as well as an easy way to investigate any issues by going back and seeing if all steps were successfully completed.

Your system-of-record provides a holistic view of what tools are being used by which department, at what level and through which license. This central source helps teams select and provision those tools to make sure your new hires have everything they need to be productive from day one.

Automatically lockout key accounts

Your SaaS management tool automatically freezes any accounts associated with the offboarded employee, preventing unauthorized data transfer. This can be done through your email or SSO provider, such as Okta.

Leverage IT automation

Your SaaS management solution integrates with your email or SSO provider to allow an offboarding to be initiated in any tool, and it manages the de-provisioning of tools through those platforms as it maintains consistency across all tools in an organization. When using other tools, your SaaS management solution will still track third-party completion.

Backup emails and files

Your SaaS management solution stores a backup of the offboarded account, along with any associated emails and shared files. This ensures there’s no data loss in the handover and enables you to delete the account to stop paying for the license and keep data to archive long-term.

Transfer SaaS billing ownership

Your SaaS management solution automatically transfers ownership of SaaS tools and billing, making vendor management more consistent, and ensuring that someone is monitoring spending on tools.

Employee offboarding: Bringing it all together

The employee offboarding approach outlined in this guide, when executed with a central platform in place, will make your organization a better place to work as it protects your valuable assets and keeps you from potentially fatal security breaches.

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