Offboarding is a necessary step in the employee life cycle. No matter how much you invest in a great culture, employees will leave your company at one point or another, whether voluntarily or not. And when they do, it’s important to be prepared.
The way you offboard employees can have a huge impact on your business and your team, so understanding what it entails is crucial. In this guide, we answer your most common offboarding questions and provide an employee offboarding checklist that you can keep handy should you ever need it.
We also offer a simple solution to help global businesses stay compliant at all stages of the employee life cycle, including offboarding.
Offboarding is the process that happens at the end of the employee life cycle when an employee leaves your business. It covers involuntary termination (dismissal and redundancy) and voluntary termination (resignation and retirement).
The offboarding process typically involves:
- Informing the employee of termination or vice versa.
- Determining next steps, such as handing over responsibilities or finding replacement talent.
- Requesting feedback through exit interviews or surveys.
- Revoking access to company information and retrieving company property.
- Processing payroll and tying up loose ends.
The employee offboarding process can take one day or several months, depending on your employee’s notice period and reason for termination. Some companies use offboarding software to make offboarding employees more streamlined and automated.
Local labor laws determine when, why, and how you terminate employees. These rules differ from country to country. If you fail to comply with local regulations, you risk legal action and hefty fines.
Labor laws typically influence the following aspects of offboarding:
- Legitimate reasons for termination
- Notice period
- Required paperwork
- Compensation and severance pay
- Continuation or withdrawal of benefits
Some jurisdictions have more protections for the employee, while others make it much easier for employers to terminate workers.
For example, France has strict termination laws that are highly regulated. In most cases, employees are entitled to a notice period of around one to three months and also receive severance pay.
In contrast, it’s fairly easy for an employer in most US states to terminate an employee due to “at-will” employment. This means an employer can dismiss their employee for any reason, at any time, without notice, as long as the reason isn’t illegal (i.e., due to a protected characteristic, such as race). There’s no entitlement to severance pay under federal law either.
If you have a global team, it’s important to understand the differences between these regulations and how they apply to your staff. This can be complex and time-consuming, so we recommend working with a global employment partner like Omnipresent, which can provide localized expertise and support.
What’s the Difference Between Onboarding and Offboarding?
The difference between onboarding and offboarding is simple: onboarding happens when you welcome a new hire to the team, and offboarding happens at the end of the employee life cycle when you formally say goodbye to an employee.
Onboarding includes enrolling a new hire onto your system, activating company accounts, meeting colleagues, reading policies, etc. On the other hand, offboarding involves taking employees off company accounts and formally ending the employment relationship.
Why Is a Smooth Offboarding Process So Important?
Having a well-considered remote offboarding process in place can greatly benefit your company. It can help you:
- Prevent negative employer branding by providing a fair and professional offboarding process for your employee.
- Reduce impact on the existing team, ensuring they feel secure and have everything they need to continue working effectively.
- Minimize the risk of legal action against your company for unfair dismissal or non-compliance.
Despite its nature, offboarding can be a positive experience for both the employee and your business. It’s a chance to thank the employee for their work (if appropriate) and grow as a company. Ultimately, employee offboarding allows you to identify areas for improvement so you can reduce attrition in the long run.
Employee Offboarding Checklist Template
If you’re unsure where to start, take a look at our employee offboarding checklist to better understand the typical termination and offboarding process*.
✓ Inform a member of HR (and your EOR if applicable) before talking to the employee about termination.
✓ Understand the local labor laws and how they affect termination.
✓ Prepare for your termination meeting by preempting any questions.
✓ Hold a brief meeting, remaining neutral and factual.
✓ Confirm the termination through official means, such as a termination agreement.
✓ Agree on next steps for the employee, including final day and handover documents.
✓ Inform team members who will be directly affected by the decision.
✓ Start the process of replacing the employee, whether through recruitment or upskilling.
✓ Prepare the final payroll and any other outstanding documents.
✓ Retrieve all company assets and revoke access to company accounts and data.
✓ Update internal and external information with new points of contact, if necessary.
Read our in-depth guide for more information on how to offboard an employee remotely.
*Please note that some or all of these steps may not apply or may apply differently according to local country regulations and practices. You should consult a legal professional if you’re unsure.