Offboarding Checklist

Is your company part of the 71% of organizations with no formal offboarding process? With a statistic like that, you probably are. No big deal, right? Well…unfortunately, it could be. The same survey found that 76% of IT leaders strongly agree that offboarding is a significant security threat and that 20% of businesses have experienced data breaches connected to former employees. 

It’s time for a change. Here at Lumos, we know just how important offboarding is—as well as all the stages of the employee lifecycle. Our comprehensive access management platform has you covered from employee offboarding automation to managing permissions and more. We’ve seen just how important it is to have the right tools during offboarding in order to protect your company’s data, maintain productivity, and foster a positive work culture. In this guide, we’ll give you our insights into how to handle offboarding effectively with lots of checklists and best practices to help you along the way. Let’s dive in!

Why Is Offboarding Important?

Creating an effective offboarding process is important for a smooth and secure transition when an employee leaves. Some key benefits include: 

• Improve Security: The best reason for creating and following a detailed offboarding process is because it secures your company data by revoking access and collecting company assets. This prevents departing employees from accessing sensitive information or taking company property. One report highlights some rather shocking statistics: some text
  • During the first half of 2022, there was a 20% increase in voluntary turnover compared with pre-pandemic levels. This coincided with a 35% increase in data theft incidents caused by employees leaving companies. 
  • 12% of employees took sensitive IP with them when they left an organization, including customer data, employee data, health records, sales contracts, and more.

• Maintain Operations and Productivity: Proper offboarding minimizes knowledge loss and helps maintain continued operations. Plus, by clearly defining roles and expectations during the transition, offboarding helps keep your teams productive even as changes occur.

• Safeguard Compliance: A structured process helps you make sure you meet all regulatory requirements and that all the necessary paperwork is completed. And, accurate employee records are important for future reference—or in case of an audit or legal issues. 

• Create Potential for Referrals and Returns: A positive offboarding experience can make former employees more likely to suggest potential job candidates or customers, or return in the future. 

• Gain Valuable Feedback: Exit interviews and feedback collected during offboarding can provide insights to improve employee retention and workplace culture.

• Foster a Positive Culture: Treating departing employees well reflects positively on your company, showing current and former employees that you value and respect your team. 

What Does a Good Offboarding Process Look Like?

A good offboarding process should be thorough and well-organized, creating a smooth transition for both the departing employee and the company. It should include revoking access to all systems, backing up and transferring data, and retrieving company assets. The offboarding process steps also involve conducting an exit interview to gather feedback, processing final payroll and benefits, and making sure that all legal and compliance requirements are met. 

What Are Three Most Important Aspects of Successful Employee Offboarding?

The three most important aspects of a successful offboarding process are maintaining security, facilitating clear communication, and sustaining positive relationships. Security should be at the forefront when you’re creating an employee offboarding policy. Be sure to check that all access to company systems is revoked and retrieve company assets promptly to protect sensitive information. Communication is key throughout the whole flow—HR, IT, and other departments need to be informed throughout each step of the process to make sure offboarding is completed successfully. Plus, clear communication helps you foster positive relationships, leaving a great final impression.

Best Practices for How To Create an Offboarding Plan

When creating an offboarding policy and procedure, be sure to keep these best practices in mind:

• Keep a Positive Attitude: No one likes going through an offboarding process, especially when you’re losing a valuable employee. However, keeping things positive will help your departing colleague leave with a good final impression—which can impact what they say about your company and whether they might consider coming back in the future.
  
  
• Set Your Team Up For Success: A worker is only as good as their tools, and this holds true for your offboarding processes as well. Creating and using checklists or an offboarding process flow chart can help keep small, yet important, details from being missed. Employee lifecycle management software is another tool to consider, especially if your company is in the process of growing.
  
  
• Customize Your Workflow: An offboarding template is a great starting place, but it should be just that—be sure to adjust the process to fit different teams and create offboarding workflows that work for each department. 

• Be Consistent: Once you’ve established the workflows, try to make sure everyone follows the steps the same way every time.
  
  
• Monitor and Improve: Offboarding shouldn’t be a “set-it-and-forget-it” type policy. Be sure to ask for feedback when appropriate (like during an exit interview) and make adjustments to your process as needed.
  
  
• Emphasize Proactive Communication: Clear, proactive communication during offboarding leads to the best results. The departing employee needs to know their responsibilities and remaining employees need guidance on their roles in the process.
  
  
• Leverage Technology: Yes, we already talked about employee lifecycle management software, but it’s just that important. Using tools that have automation capabilities will help your offboarding (and onboarding and everything in between) flow smoothly and minimize human error.
  
  
• Check for Compliance: Be sure to check and double-check what you need to do in order to stay compliant with relevant laws and regulations. Review all the steps you need to take and make sure you document everything appropriately. This will help mitigate the risk of fines or legal punishments. 

• Follow Up: If appropriate, be sure to reconnect with the employee after they leave. For example, you might send them an email to let them know when their tax documents or final paycheck will be coming. This helps create a positive relationship—which can come in handy if you want to rehire them in the future.

These best practices were adapted from Indeed.com. 

What Is an Offboarding Checklist?

An offboarding checklist is a great tool to use when someone leaves your organization. The process of creating your offboarding checklist will help you think through what the process should be. When making an offboarding checklist, think about who is going to use it and what information and tools they’ll need in order to carry it out successfully. Be sure to ask each department manager what they think the essential steps are to offboard an employee smoothly to make sure you’re not forgetting anything. In general, the two departments that have the most responsibilities during an exit process are HR and IT—these departments are a great place to start when creating checklists. 

What Should Be Included in an Offboarding Checklist for HR?

An offboarding checklist for HR should cover many different areas to make sure there is a smooth transition when the employee leaves. Your checklist could look something like this:

• Determine Type of Termination:‍
  • Voluntary:
    • Receive resignation letter (if verbal resignation, provided employee with a written confirmation of resignation)
    • Schedule exit interview             
    • Complete exit interview
  • Involuntary:
    • Provide termination letter
    • Provide severance agreement if eligible
    • Receive signed severance agreement

• Notify Employee’s Team:‍
  • Inform manager of exit plan
  • Check to make sure there is a plan in place to either hire someone or to transition employee’s responsibilities

• Notify IT Department:
  • ‍Communicate with IT so that employee is offboarded promptly from company systems
  • Coordinate collection of hardware and access badges
  • Check that any security codes have been disabled
• ‍Notify Facilities/Office Manager:
  • ‍Change office mailbox
  • Clean work area and remove personal belongings

• Administer Benefits:‍
  • Provide termination/continuation of employment insurance benefits information (COBRA, life insurance, supplemental insurance, etc.)
  • Check FSA/HSA participation and inform employee of remaining funds and reimbursement deadlines, if applicable
  • Check dependent care FSA participation and inform employee of remaining funds and reimbursement deadlines, if applicable.
  • Check PTO balance and inform employee of any remaining PTO and how it will be processed at termination of employment
  • Inform employee about retirement plan account options

• Complete Compensation:
  • Provide notice of policy regarding any outstanding balances for money owed to company (e.g., educational loans/pay advances)
  • Notify the payroll department to process the final paycheck.
  • Inform payroll of any unused but earned PTO amounts due to the employee
  • Notify payroll to process severance pay and whether lump sum or salary continuation (if applicable)
    

• Check Contracts/Legal: 
  • Provide written notice to employee of any legal obligations that continue post-employment (e.g., noncompete/confidentiality agreements/employment contracts)
  • Notify company immigration attorney of termination if employee is on a temporary work visa

• Update Records:
  • Pull personnel file to be stored with terminated employee files
  • Pull Form I-9 to be stored with terminated employees' I-9s
  • Obtain written authorization from employee to respond to employment verification requests

Following a checklist like this can help protect your company’s interests and provide a respectful and organized exit for your employee. 

This HR offboarding checklist is from SHRM, adapted for this guide. 

What Is an Example of an Offboarding Checklist for IT?

An example of an offboarding checklist for your IT team could look like this: 

• Cut Off Access:
  • Disable email accounts
  • Revoke VPN access
  • Remove access to all company systems, apps, and databases
  • Update shared passwords and login credentials
    

• Backup and Transfer Data:
  • Back up all the employee's data
  • Transfer data to the appropriate team members or managers

• Collect Hardware:‍
  • Retrieve all company-owned hardware (laptops, phones, security badges)
  • Check the condition of the returned hardware
  • Wipe data from devices to keep things secure

• Manage Software Licenses:‍
  • Reassign or deactivate software licenses tied to the departing employee
  • Check to make sure licenses are available for current and future employees

• Perform an Audit:‍
  • Audit the employee's access before they leave
  • Identify any unusual or unauthorized activities
  • Check compliance with company policies and regulations

• Communicate:
  • Coordinate with HR and other relevant departments

• Document:‍
  • Track approvals and keep detailed records for security compliance audits
  • Document the entire offboarding process

By creating and following a checklist like this, you can easily manage employee offboarding smoothly and securely.

How Do You Successfully Offboard? With Lumos by Your Side

The best way to successfully offboard, onboard, and manage your employees throughout their entire lifecycle is with our unified access platform. You’ll have employee lifecycle management tools that let you:

• Streamline IT Operations: Automate the setup of user accounts, provision of access to necessary software, and ensure new employees are ready to work from day one without delays or unnecessary expenditures

• Manage Identity Access: Track and manage the allocation of apps and licenses during employee transitions. Monitor usage to the entitlement and improve asset utilization strategically.

• Create HRIS-driven workflows: Support employee and contractor onboardings with ease. Set triggers such as status changes, event data (start date or end dates) or an API call to grant or revoke access according to your controls.

• Enforce Joiner-Mover-Leaver policies: Ensure entitlements are appropriately managed as part of your provisioning flows and delegate manual tasks to your admins. Configure advanced actions like transferring user data to managers or wiping all session tokens.

• Take control over internal changes: Set alerts and kick off onboarding workflows based on changes in title, team, or department. Advance mover processes to require micro-certifications, validating employees have the right access post-transition.

• Monitor progress across the entire lifecycle: Govern all JML processes before, during, and after they occur with a centralized view. Loop in managers to gain context around their reports, ensuring employee productivity.

If you’re ready to get offboarding done right, you’re ready for Lumos. See it in action today.