The Complete Employee Offboarding Checklist [+ Free Download]

Simplify your employee’s exit process with these easy-to-follow offboarding steps.

June 21, 2022

When we think about the employee lifecycle, we tend to refer to onboarding and engagement. We often overlook a crucial part of every organization’s life cycle—the offboarding process (or employee exit process).

In small and medium-sized companies, an overwhelmed manager may overlook the importance of offboarding an employee before looking for a replacement. Adding to the issue, less than one third of companies have automated their offboarding workflow in part or in full.

Download the Guide To Creating a
Positive Offboarding Experience

A positive last impression can be just as important as a positive first impression for an employee—they may return as a boomerang employee or become an active part of your organization’s alumni while promoting your employer brand. Also, your current employees will notice how you treat their former colleague (and potentially, their friend) during the employee exit process and this can have an impact on the way they view you as their employer and their future in your organization.

What is Employee Offboarding? 

2022 Employee Offboarding Checklist
Click here to download our 2022 Employee Offboarding Checklist

Employee offboarding is the exit process that helps both, organizations and employees, understand the reasoning behind their decision of leaving the company. Whether the employee herself decided to leave, or the organization decided to let her go, the offboarding process is important to reduce the chance of misunderstandings between both parties. It can also be a great opportunity to receive the departing employee’s feedback about the organization, and answer any questions she might have before she moves on to her next professional step. 

For human resources, the interpersonal aspects of the employee offboarding process are crucial—even if the employee is leaving on positive terms, terminations can be sensitive. You’ll want to ensure you are consistently completing all of the necessary exit process documents and remaining compliant. To achieve this, you can utilize a solution like GoCo to streamline your outdated, manual processes for offboarding paperwork. Just like with the process of onboarding new hires, by dealing with the paperwork aspects of offboarding first, you can focus on the human element to ensure a smooth transition for the organization.

We’ve created an offboarding checklist to serve as a guide for small businesses. Use this checklist to ensure the offboarding process goes smoothly, you use your time efficiently,  and your company’s relationship with former employees remains positive. To get the full picture, be sure to also check out our Onboarding Checklist and our New Hire Paperwork Checklist!

Offboarding Checklist for 2022

1. Gather Basic Data

The first step is to start collecting some basic data like the employee name, job titles, and their last day at work. Depending on how thorough you want to be, you can also add the reason for their termination, their organizational department, contact information, HR liaison’s name, and the final date of checklist completion

2. Ask for an Official Letter of Resignation

This can be a written letter or an email from the departing employee, but make sure to keep a copy on file.

3. Sync with Human Resources

As soon as you receive a resignation letter, your first order of business should be to inform the HR department. If you’ve received verbal confirmation through the employee, tell them to draft an official letter and submit it to the HR department.

This helps provide a notice (typically 2 to 4 weeks) so that every party involved with the employee can stay informed. This also includes providing notice to banks, credit card providers, health insurance providers, life insurance providers, and other relevant parties.

After that, you will need to gather all documentation, including receipts, termination letters, confidentiality agreements, and performance reviews in the personnel file.

4. Complete the Termination Letter

Platforms like GoCo allow you to easily generate a personalized letter from a template. You can use this for any relevant exit process documents.

5. Ensure They Have a Copy of Any Relevant Policies

This can be a reminder to them about their non-disclosure agreement or non-compete agreement. Through an HRIS platform like GoCo, you’re able to upload these documents to the employee’s account so they can access them at any time. You will also be able to track the dates the documents were signed or acknowledged by the employee for report purposes. 

6. Create an Internal Communications Plan

Terminations, whether voluntary or involuntary, are sensitive. Determine a communication plan for delivering the news to their team, department, or the organization. This will likely be through an offboarding email that thanks your employee for their contributions before the employee leaves. Consider employees who are significantly impacted by their colleague’s departure and take the time to deliver the news to them personally. You’ll need to use your discretion here based on the employee’s contributions and attitude toward the organization.

7. Create an External Communications Plan

This is important if the employee was in a client-facing or high-profile role. You’ll need to instill confidence in your clients to ensure his offboarding period does not negatively impact them. Remember to remove the employee from the company directory, website, or any other external communications.

8. Schedule an Exit Interview

Exit interviews are your chance to not only make the employee feel like they made a difference, but also provide insights into your company’s work environment and its processes.

Meanwhile, it provides you with the opportunity to discuss things like the final paycheck, vacation time and sick time, trade secrets, and other company information. It’s also an opportunity to explain the company property retrieval system.

During the termination meeting, let the terminated employee talk about their work experience and how they feel about existing employees. Try to get an idea about what they think about the company, its business processes, and all of the other employees.

Considering that the employee will be applying for other jobs, you should have them sign an agreement that will let you verify their employment at your company. It can also be used as a reference by the employee.

Keep in mind that you will need to get all updated employee information, such as their address, since you have to correctly fill out W2 tax forms. Then, verify all the information (such as the emergency contact information).

9. Create a Transition Plan

Determine a plan for coverage during the offboarding process. Who will cover their work until you have the opportunity to hire and train someone new? You’ll need to evaluate the urgent and important work. To encourage the team to take on additional work during this period, highlight the opportunity for someone to show initiative and take on more responsibility.

10. Re-Evaluate Their Position

Before you immediately start to recruit for their backfill, take a moment to reflect with the manager. Do you need to backfill this role exactly as it was? Most small to mid-size businesses are continuously evolving. This provides an opportunity to reevaluate what your organization needs. As part of the offboarding process, get the employee’s opinion on what may be needed.

11. Let Them Know What Will Happen to Their Healthcare and Retirement Programs

You’ll need to terminate their health and welfare benefits according to the terms in the plan documents. However, you may have to offer them an extension of their healthcare coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). Your organization will stop making contributions to any spending accounts and retirement programs, but the employee may leave the funds in the plan if they choose to. Provide them with the necessary login information and documentation of their options so they can make informed decisions.

12. Update Their Personal Information for Future Documents

They may not be your employee anymore, but you are still responsible for providing them with tax documents at the end of the tax year. You can utilize a self-service option, such as GoCo, to automate this process.

13. Make Arrangements for Their Final Paycheck

You’ll need to include any clawbacks (e.g., borrowed vacation, courses the company paid for with an agreement), and payouts (e.g., banked vacation). You can track their vacations through GoCo, which allows you to track your team’s time-off requests, balances, and approvals—all without spreadsheets.

14. Collect Any Company-Owned Equipment/Sync with IT

This includes their laptop, cellphone, ID/Access card, credit cards, parking pass, keys, etc. Don’t forget about computer accessories like special order keyboards, monitors, or additional computer chargers. Instead of tracking these items on a spreadsheet, you can utilize an HRMS like GoCo.

15. Remove Their Access to Any Organizational Systems

Disable their email and remove their access to any systems that they may have used to do their job, such as Sharepoint or Google Drive. Change the passwords for any team accounts. If possible, route emails to their manager or set up an automated email response to notify the sender that the employee is no longer with the company.

By using this employee offboarding checklist, you’ll create a streamlined and consistent process for every employee. The last impression is an often overlooked opportunity to create brand ambassadors for your organization, but with GoCo’s software solution, you’ll be able to automate the paperwork and compliance elements of the offboarding process. This ensures that you are not wasting your time on administrative tasks like printing documents and chasing signatures. Instead, you’ll be able to create a positive last experience and a smooth transition.

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