Employee Offboarding: An 8-Step Checklist

By: Dorothy Bond on November 30, 2023
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Human resources (HR) departments invest significant time and effort to onboard employees. This common-sense strategy can help reduce turnover while ensuring new hires know what to expect from their jobs.

However, it's essential to expend the same time and effort when an employee leaves an organization. Offboarding reduces the risk of legal problems. It also provides a window into employee satisfaction and company culture.

What is employee offboarding? 

Employee offboarding is the process an organization uses to formally end a work relationship with an employee. HR staff is responsible for overseeing the offboarding process and communicating changes to payroll, IT, and other departments.

The HR team also handles employee exit interviews. The idea behind these interviews is to gain insight into what is and isn't working at an organization. Your exit interviews should focus on understanding why the employee is leaving, what they liked about your workplace, and any workplace or work culture factors that they feel are negative.

What is the purpose of an employee offboarding checklist?

The process of offboarding is complex. HR staff must close all business ties with the employee, but they also coordinate to ensure that departing workers leave with a positive impression of the company.

Doing offboarding well is essential for a variety of reasons. A strong offboarding process sets expectations for how knowledge will be transferred from the departing employee to their replacement. It's also an opportunity to gather the employee's honest feedback about your company.

Of course, offboarding is also the time when payroll, IT, and other key departments need to terminate the employee from their systems. This ensures that former employees don't have access to company assets. It also protects employers from claims that they didn't alert employees about benefits termination and continuing insurance options.

An offboarding checklist for employees helps HR and other personnel complete all departure tasks once an employee gives notice. Creating an offboarding list is a smart way to ensure critical employee termination duties don't fall through the cracks.

What to include in your employee offboarding checklist

Use this offboarding checklist template to guide your organization as it manages the employee lifecycle. 

1. Communicate the change ASAP

When a department manager receives notice from an employee, they should alert the HR department. You might wish to keep the news from other workers until you have a clear succession plan in place. However, it's best to get ahead of any gossip and announce the departure as soon as you can. Be sure to communicate the change to key personnel and departments, such as:

2. Start doing the paperwork

HR staff must complete various paperwork before an employee's relationship with a company officially ends. They should start this process as soon as an employee gives notice. Needed paperwork may include:

  • Letters of resignation or termination

  • Any applicable non-disclosure or non-compete agreements

  • Benefits documents, such as medical insurance, retirement accounts, and unemployment insurance

Tech tip

Consider using benefits administration software to issue notices about continuing insurance coverage and any benefits that will end when the employee leaves. Upload copies of all paperwork into a talent management system for simple, secure storage.

3. Initiate a successor

Employees have valuable knowledge and insights about their positions. Before an employee leaves your company, ask them to write down a description of their job. Ask the employee to create process documents that detail every aspect of their job, and store them in a knowledge management system so you can access them later.  You might also request they create a checklist detailing their daily, weekly, and monthly duties.

If you already know who will take over the employee's job, have them shadow the departing worker for a week. If you still need to hire a successor, ask another employee in that department to do the job shadowing instead.

4. Conduct an exit interview

Both departing employees and HR staff tend to dread exit interviews. They might seem pointless, especially to employees who feel their bosses ignored their concerns. However, an exit interview is an opportunity for your organization to learn what it's doing right—and what's going wrong. Take the employee's feedback seriously.

Not sure where to get started? Here are a few sample questions that you should ask in exit interviews. Remember that it's essential to ask all existing employees the same basic questions to avoid accusations of discrimination or favoritism. 

  • Were you given the training you needed to do your job well? 

  • Why did you decide to leave our company? Was there anything we could have done to encourage you to stay? 

  • Were the responsibilities and expectations for your position always clear to you? 

  • How would you describe our company culture?

5. Recover company property

Ask the departing employee to promptly return computers, cellphones, keys, ID badges, and other company property. You should also ask them to sign out of any software programs for which your company buys a license. Use an IT asset management system to ensure that all credentials are suspended or deleted on the day the employee leaves.

6. Celebrate the employee's journey

To keep morale high, hold an office party, goodbye lunch, or quick break-time gathering to wish the employee well on their new journey. Remember that you want employees to leave with a positive impression of your organization. There are two big reasons for this: 

  1. If the employee was a productive member of your team, you want to leave the door open for them to return in the future. 

  2. It communicates to the rest of your team that you see and value the contributions of individual employees, and that no one is working in vain at your company. 

Tech tip

Consider a farewell party or luncheon a part of your overall employee recognition program. Employee recognition software can help you acknowledge and reward employees for their hard work and accomplishments.

7. Consider opening the door for a return

If the departing employee would be welcomed back to work with your organization in the future, let them know. You can do so in a formal letter that thanks them for their efforts and tells them that they can return at any time. You can also connect with the employee through LinkedIn or another social platform and send them a personal message. 

Regardless of the approach you take, ask the departing employee to keep you updated if their contact details change. You can record this new contact info in a company contacts database or in a file that lists and tracks prospective employees.

8. Take care of any loose ends 

Go over your offboarding checklist with managers to ensure you've handled all necessary paperwork and employee termination processes. During the review, pay attention to these often-overlooked actions:

  • Double-check that the employee no longer has building access passcodes, employee user logins, and phone accounts in the company system. 

  • Update the company's organizational chart and notify insurance and retirement plan providers. 

  • Ensure the employee's company email address isn't in company-wide email alerts, chat groups, and mailing lists.

SA graphic: What to include on your employee offboarding checklist

How to customize an offboarding checklist for your company 

The eight offboarding steps above are essential for any organization. Be sure to customize the offboarding checklist with any other items specific to your company. For example, you might need to do the following: 

  • Provide a reference letter or other employment-related documents.

  • Provide information about COBRA/continuing insurance coverage options.

  • Ensure that all wages, benefits, and bonuses have been paid through the end of the employee's contract as agreed. 

  • Establish a timeframe for taking possession of any company property the employee has—this helps prevent legal liability should that property be misused by a former employee. 

  • Check with your legal department or advisor if you need the employee to sign a non-disclosure agreement (NDA) or non-compete agreement (NCA).

  • Invite the departing employee to a company alumni group.

  • Calculate final bonuses and pay incentives.

Best practices for employee offboarding

It's essential to follow the same offboarding process for every employee who leaves your organization. Avoid showing favoritism. If you have a departure party for one employee, you'll need to give departure parties for all employees who've worked for your company for six or more months.

You should also let the departing employee know all the steps you'll complete during the offboarding process. Give them information about continuing health care coverage elections as soon as possible to avoid misunderstandings.

How to troubleshoot common offboarding problems

In a Software Advice survey* 71% of HR managers have had problems with departing employees not returning company assets; plus, 86% of HR managers said that employees have ghosted their exit interviews. HR staff can reduce asset-loss issues by retrieving company property as soon as possible after an employee has given notice. Ask the employee's direct supervisor to update you about any property the employee still needs to return.

Preventing interview ghosting can be more challenging. To increase exit interview participation, keep these key considerations in mind: 

  • Exit interviews should be conducted before the employee's last day of work and in advance of any celebrations thanking them for their service to your company.

  • Use electronic exit surveys to avoid the awkwardness of sitting down face-to-face and discussing why an employee is leaving—you'll get more candid results this way.

  • If you want to have an in-person interview, ensure that a member of the HR staff conducts it to avoid any legal liability issues.  

  • Speak candidly to the employee and let them know why their feedback matters and will be kept confidential (unless you are legally obligated to disclose something they tell you, like an incident or harassment or abuse by a supervisor). 

One of the best ways to increase exit interview participation is to show employees that you care about their feedback from the day that they're hired. If your company continually ignores employees' concerns, departing workers aren't likely to do exit interviews. Why? They already believe that your organization won't take them seriously.

Recommended resources on employee offboarding

Offboarding should be manageable, not complicated. Check out these further resources on employee offboarding, employee wellness, and the talent management lifecycle. 

Survey methodology

*Software Advice's 2022 Employee Offboarding Survey was conducted in November 2022 among 287 HR employees who handle offboarding responsibilities for their employer. The goal of this survey was to understand the challenges companies run into offboarding employees, and if the prevalence of different challenges varies between on-site, hybrid, and remote employees.