HRMS Software

Employee Offboarding: Everything You Need To Know

Employee termination or resignation is never good news. In an era where HR professionals are struggling to fill positions, attrition is a huge blow to management. But no industry is immune to this process. Whatever the circumstance of an employee leaving the organization, the HR department should strive to handle the process in a legal, fair, and timely manner.

A termination or wilful resignation means that the organization has to again start the hiring process leading to added costs and loss of time. The offboarding process can be strenuous in the absence of a pre-defined process. Employee exit checklists are excellent in keeping the process organized and removing any unnecessary friction.

If employee termination goes badly, you stand the risk of a lawsuit or reputational damage to the company. Adhering to a checklist ensures that you cover every segment of the process and that all the bases are duly covered.

Here are our recommended steps for effective employee offboarding:

  1. Communication

Regardless of how an employee conveys their resignation news or in case you’re terminating them, it is always best to convey the news privately. When an employee resigns they inform their immediate superior of the news. The supervising authority tries to talk to the employee to make them stay. 

Once their decision to leave is confirmed, the news is conveyed to HR who takes over the formal offboarding process. The HR then sets up a meeting to know the circumstances of the resignation and if anything can be done to reverse the decision. Having an empathetic approach makes the process more seamless. 

The HR informs the exit information to the management and the other departments, setting in motion the departure process of the employee.

  1. Documentation

Employee offboarding involves a lot of paperwork that an HR representative has to deal with. A systematic approach to documentation saves time and streamlines the process for the future. Documenting employee release letters, along with other paperwork and completing formalities on time is crucial. If you offer severance packages to terminated employees communicate the same to them.

Listed below are documents that must be completed during the offboarding process:

  • Acknowledgement of the termination/ resignation letter.
  • NDA with relevant forms and policies of the company. 
  • The employee benefits they are entitled to.
  • Letter of experience.

3. Prepare for knowledge transfer

The work that an employee does in the organization is important in the larger scheme of things. As they leave, another person needs to be bought in to complete the tasks and for a smooth transition. If the replacement is hired before the resigned/ terminated employee, then a process for knowledge transfer should be initiated.

We all know how chaotic resignations or terminations can be. It can leave projects incomplete, put unnecessary pressure on remaining employees, and lead to bad reviews from clients in extreme cases. To prevent any disruption, it is essential to begin the knowledge transfer process well in time. In the absence of a suitable replacement, ask the employee to list out ongoing projects and tasks that the new employee should prioritize.

4. Recover company assets

An employee has access to various company assets during their time of service with the organization. You need to ensure that the employee returns the asset to the company in a proper condition before their last working day. It could include the company laptop, mobile phone, other accessories, company credit cards, or keys to the property. It is helpful to draw up a list of assets you need to recover to remove any last-minute hassle. 

The IT team needs to undertake the process of disabling passwords so that they can no longer access the computer/ mail/ company messaging apps, etc. once they leave. Doing so ensures data privacy and minimizes the risk of data loss.

5. Conduct an exit interview

Exit interviews are essential to understand employee sentiments and gain a perspective of company processes. An exit interview can be conducted as a face-to-face interaction between the outgoing employee and a member of the HR, or they can be forwarded a questionnaire to understand their opinions of the company, its policies, ideas for improvement, and reasons for leaving.

Modern organizations understand the importance of exit interviews and their relevance in improving operations. It is not merely a process but also a means to improve processes. Since there are instances of employees resigning due to their managers, a neutral person like an HR needs to conduct the interview. Take the feedback seriously and remember that the process is crucial for employee experience.

6. Update personal information and process paycheck

Even after an employee resigns or is terminated from the job it is critical to update their personal information in your centralized system. Having updated documents even on past employees comes in handy during audits or for filing tax documents at the end of the financial year. If your organization provides healthcare or other benefits that the employee is entitled to, you need to cancel them as well on their termination. Provide them with the necessary information and let them know of this upon their resignation. 

Process salary after checking their end-of-service benefits and other considerations. Consolidate data from all channels and process the salary without any error in the final settlement. The full and final settlement should include the employee’s last month’s salary plus any other additional earnings or deductions.

The above-mentioned offboarding activities though not complex can be mundane and time-consuming. Be it a large organization or a small business, ineffective employee offboarding can lead to feelings of resentment or disappointment. The offboarding experience holds immense value and strengthening it can positively affect your company’s reputation and image. 

Offboarding software can create a structure for your offboarding process by automating the most mundane tasks associated with the process. Paylite® Human Resource Management Software is an end-to-end HRMS system that meets the ever-growing needs of modern-day workplaces. It makes your HR process streamlined, smart, and swift, replacing the age-old legacy systems with system-driven workflows.

Schedule a free demo of the software today!