Employee offboarding done right saves you from chaos

Employee offboarding is the structured process of managing an employee’s departure — covering knowledge transfer, security, paperwork, and relationship preservation. Most companies get it wrong by treating it as an afterthought instead of a real workflow.

You spend many hours, energy, and money trying to find the right person to hire. Then you spend a ton of resources on that employee’s onboarding. Employee onboarding comes up in about 300 of our discussions at Tallyfy, and I’ve noticed that the offboarding process gets neglected until it causes real problems.

In our conversations with mid-market teams, the pattern is remarkably consistent: companies invest heavily in recruitment and onboarding but treat departure as an afterthought. One operations leader at a 50-person professional services firm told us their offboarding was essentially “a scramble to collect the laptop before they walked out the door.” Six months later, they discovered the departing employee still had access to their CRM.

That’s broken.

When it comes to employee offboarding, you don’t worry as much. But you should. The employee offboarding process isn’t just about leaving your outgoing employee feeling good — it also ensures that their departure causes minimal disruption.

After all, you don’t want to end up running around trying to work out where the keys are, how Mary did her job, or what happened to Johnny’s company-issued cell phone.

The real issue most people miss is that offboarding is just the flip side of onboarding. And both can be systematized with the right approach.

Why offboarding matters more than you think

Why should you use up resources to help with someone’s exit process? Four reasons.

First, you want to capture the precise value your employee was adding to the company. That knowledge doesn’t belong to one person — it belongs to the organization. Without a process, it walks out the door.

Second, you want them to be as helpful as possible during their remaining time.

Third, you want to maintain a good relationship in case there’s an opportunity to work together in the future.

And fourth, you want to keep a good reputation as an employer. This matters more than most people realize. We kept hearing the same thing in early conversations with new teams — how you handle departures shapes how remaining employees feel about working for you.

Bottom line — you need to pay more attention to how you let people go. There’s a lot more to parting with a team member than simply saying goodbye.

Offboarding process with flowchart and checklist

There are three main ways an employee can leave your company:

1. At their own will — through resignation or after a contractual period is over
2. Because of a layoff or firing — you decide to not have them around anymore
3. It’s time for them to retire — this can happen at any point they decide to do so

Whichever way an employee offboards, the process you must go through is pretty much the same.

Before the employee departure

Receive or give the notice

First, there should be a notice of leave or layoff in accordance with the contract you and the employee signed at the beginning of their employment period.

This period is usually two weeks notice, but it may vary from contract to contract.

Best case scenario — in case of a resignation, the general best practice is to get the employee to tell you at least one or two months in advance so your HR team has the proper time to find a replacement.

Complete the paperwork

Second, the moment the employee notifies you or you notify them of their offboarding, all proper paperwork must start getting completed.

The paperwork generally includes:

• The resignation letter or the letter of termination — these are the legal documents that officially communicate the departure of the employee.
• The severance package agreement (if applicable in cases of termination) — this legal document prevents the employee from suing your company at any given point, even if you haven’t done anything wrong.
• The non-disclosure agreement — your employee has had access to classified information, so you want to make sure they won’t spill the beans to a competitor once they’re gone.
• The after-employment benefits document — in some cases, your employee is entitled to certain benefits after having worked for you. Especially if they’re retiring, you should help them calculate the final payments, work out the retirement compensation they’re entitled to, and have your legal and HR team prepare the appropriate documents.

Other legal matters related to employee offboarding include roll-over pay and the discussion of tax and liability matters.

Document all employee responsibilities

Third, you must ask the employee to start documenting all the responsibilities and duties they were in charge of — so you can see how much of their knowledge is transferable before the official offboarding.

This includes all processes, projects, documents, or contacts they were responsible for.

Don’t ask them to create reports or briefs as a form of documentation.

You might think it’ll help with a smoother transition of responsibility after they’re gone, but they don’t want to write it, and the next employee doesn’t want to read it. Running Tallyfy taught us this play out repeatedly: this type of documentation rarely gets used and is almost always a waste of time.

We got this wrong at first too, until an HR team set us straight: one legal services firm with 10+ employees found that having junior staff shadow departing attorneys and hear their problem-solving stories transferred far more knowledge than any written handoff document. The stories stuck. The briefs gathered dust.

Instead, encourage less-experienced employees to watch the departing employee work or ask them to share memorable experiences about how they handled problems in the past.

Communicate the offboarding

Fourth, if the employee decides to leave on their own will, send out an email to all team members to notify them of their colleague’s departure.

Include kind words and wish them the best.

If you decided to let someone go, don’t send a mass email since this might be a source of embarrassment or produce negative feelings. Instead, only talk to key managers or persons who might be affected by the offboarding of the employee.

Don’t forget — notify HR to start looking for another person for the job, whether it’s an existing employee or someone who’ll be hired externally.

The day of employee offboarding

Retrieve everything

On the day of the employee exit, first make sure you retrieve all relevant hardware, software, contact details, and credentials.

You don’t want any sort of compliance risk, no matter how friendly the offboarding might be. Trust matters here.

Below is a detailed checklist for what you should be looking for.

Physical Assets:

• Keys
• Access cards
• Work cell-phone
• Work laptop
• Physical folders and files
• Work pager
• Clean up personal devices

Non-physical Assets:

• Internal software credentials
• Shared workflow platform credentials
• All company-related credentials
• All contact lists

Note: This may vary from company to company, but take whatever seems fit.

Conduct an exit interview

Second, you must conduct an exit interview.

Exit interviews are sometimes looked upon as hogwash, despite being conducted by 91% of businesses.

What’s said and how they’re conducted are basically a formality. But it doesn’t have to be that way.

You can find value in exit interviews by really listening to the employee on how things are going. They don’t have the pressure to conform or not be honest anymore, so it’s usually the case that they’re being truthful — and other employees probably have similar experiences.

Make exit interviews an opportunity for the employee to remember all their contributions and achievements within the company by asking about them.

Have a general structure for all interviews, but don’t hesitate to turn it into a conversation and end the relationship on a positive note.

Throw an offboarding celebration

If the employee is leaving on their own accord or is retiring, you should be happy for them.

Go the extra mile and give them a parting gift.

Get the team together for a work lunch, a happy hour, or throw a party.

Who doesn’t like cake and wine anyway?

After the employee leaves

Once you’ve parted ways with the employee, make sure to remove them from the current system and wipe clean their work devices.

Clean up their desk and personal space.

Get ready for someone else to fill the spot, physically and psychologically.

Offboarding best practices by scenario

There are different best practices at play depending on the nature of the employee offboarding.

When the employee resigns

If you already have good relations with current employees, keeping a positive attitude when they decide to part becomes much easier.

In any case, don’t take the decision personally.

It goes without saying you should be courteous, respectful, and fair. Keep it professional and kind.

Leaving is the employee’s personal decision and isn’t meant to hurt or reflect upon you or your abilities (unless the employee explicitly says so).

Try to stay in touch with them after they part through your company’s alumni network group and encourage them to remain supporters of the company.

You never know what sort of feedback you might receive or what the future holds. What’s important is the offboarding process is positive and doesn’t add unneeded stress. It’s better to have a friend than a foe.

When the employee retires

All the tips we gave you when the employee resigns also apply when the employee retires. But there are four more best practices to make the departure as pleasant as possible:

First, double-check the employee pension scheme rules to make sure you’re in compliance with everything.

Second, calculate the final retirement payment for your employee with the help of the accounting and HR team to see what they’re entitled to.

Third, provide a helping hand by gradually, over the course of two weeks (or more, depending on the notice), reducing working hours for the employee until their retirement day.

And last but not least — don’t forget to throw them a retirement party and give them a retirement gift.

They’ve probably been with you for a long ride and deserve to be honored and recognized.

Once, my boss at a large company wasn’t able to attend an employee’s retirement party because he had an important meeting.

An hour later, she was tagging him in hateful paragraphs on Facebook about “not being appreciated” while dragging the company’s name through the mud.

Yikes.

So when we say the retirement party is important, we mean it.

When firing employees

Obviously, you’ve heard all about how to fire an employee before — be kind and understanding, do it behind closed doors, don’t humiliate them, be gentle, have a witness, have tissues at hand.

But here’s the twist.

The best practice when firing employees is to never have hired them in the first place.

If you end up firing plenty of employees because of poor performance, there’s something wrong with the recruitment process.

In all cases, set clear expectations and go over job descriptions before they start working.

And never, ever, do it as a surprise, or rush it.

If an employee is underperforming, give them notice beforehand. Give them constructive criticism and a second chance at improving.

If they’re not a good fit or are dragging you down, you sadly have to part.

Why offboarding is a team effort

Unless you’re running a very small business, offboarding will be a team effort. Various employees and departments contribute to the process, and it must be well-coordinated and efficient.

The exact steps you’ll follow depend, to a certain extent, on the role that the employee is vacating. However, this basic step-by-step process should cover most eventualities and need only be adapted rather than redesigned when employees leave.

If you’re in a big company, you’ve probably seen employees being offboarded all the time. At some point, you might have been wondering — isn’t this a bit repetitive? And time-consuming?

It surely is.

With so many details and intricacies, you want to make sure you’ve done everything correctly.

What if we told you the entire employee offboarding process can be automated?

Yes, you heard us right.

There are several ways to automate the employee offboarding process. You could ask your dev team to tailor the process to your existing workflows and software, but that can turn out to be quite expensive. Your developer could spend the same precious time fixing P0s and developing new core features. Another, more cost-efficient way is by using workflow software or business process management software. Here’s where it gets interesting though - before you automate anything, you need the offboarding process itself to be solid. That’s the prerequisite. You can’t automate what you haven’t defined, and you can’t define what you haven’t mapped out step by step. The companies that skip this end up with automated chaos, which is worse than manual chaos because it moves faster and nobody catches the errors until it’s too late.

Automating offboarding with Tallyfy

All those little details to remember, the people to be contacted, and legal paperwork can be handled in seconds with Tallyfy. Let me walk you through a practical example of how to implement the employee offboarding process.

Ready-to-use offboarding templates

Example Procedure

Employee Offboarding & Termination Workflow

1Termination type: voluntary or involuntary?

2Voluntary resignation: employee submit termination letter

3Voluntary resignation: HR & Management meet to discuss exit strategy

4Voluntary resignation: 2 week notice period?

5Voluntary resignation: HR inform employee of immediate dismissal

+10 more steps

View template

Example Procedure

Exit Interview Form

1Schedule the exit interview

2Gather reason for leaving

3Discuss job and management experience

4Review company feedback

5Cover administrative details

+1 more steps

View template

For this example, we’ve used screenshots from our workflow software, Tallyfy. It’s a cloud-based workflow management software designed to assist teams of any size in reducing time-consuming workflows by automating repetitive tasks. The employee offboarding process is by definition a workflow with multiple repetitive tasks involving many users.

Implementing the entire process described above manually would take a huge amount of time. And communication would become increasingly difficult with larger teams. Imagine all the mess created from hundreds of emails and spreadsheets.

Automating the employee offboarding process with workflow software like Tallyfy takes only a few minutes. The best part is that you can create a template for a process. This template can then be customized by the entire team, or by whoever has permission.

Once the template for the employee offboarding process is created, you can reuse it and customize it on the go as many times as you want. If something new comes along, you can easily adapt the blueprint to the new requirements.

Without worrying about the process breaking or bottlenecking. Here’s a template and what it would look like in Tallyfy:

Custom field tasks for your offboarding process

Tallyfy has another feature that makes a real difference — its ability to show the status of tasks so employees can prioritize assignments and avoid missing something important. Like an employee leaving the next day.

As workloads can sometimes be overwhelming, employees tend to forget about deadlines or face difficulties deciding where and when to put most of their effort. With Tallyfy, you can set alerts and deadlines for your employees.

For example, you can set an alarm to notify you several times during the last two weeks before an employee leaves the company. This way you can plan ahead for the goodbye party, relevant documentation, and so on. Your employee offboarding process will go smoothly, without upper management having to micro-manage every step of the process.

Based on hundreds of implementations, we’ve found that the companies who get offboarding right don’t rely on heroic effort from HR. They rely on a repeatable workflow that runs the same way every time, for every departure.

Common offboarding questions answered

What is the offboarding process of employees?

Employee offboarding is the entire process of an employee leaving their company. Think of it as a farewell planned with care — including important paperwork and security measures. It typically involves gathering company property, transitioning knowledge, wrapping up accounts, and ensuring things go smoothly for both the departing employee and employer.

What is one thing you should do when offboarding an employee?

First and foremost, take all their systems offline and change passwords as a matter of urgency. This ensures company data is secure and prevents any accidental or intentional security breaches. It’s not meant to be personal — it’s just practical security.

Why is the offboarding process important?

A strong offboarding process protects your business while supporting departing employees in becoming outstanding ambassadors for your brand. When it’s done well, it helps reduce security threats, maintains legal compliance, keeps team spirits high, and keeps the door open for potential rehiring in the future. Exiting employees who have a good exit experience are more likely to refer your company to others.

Who is involved in employee offboarding?

It takes a village to offboard. HR is most often the “process owner,” but it also includes the employee’s manager, IT (for system access), facilities (for building access), the finance department (for processing final payments), and sometimes legal (for confidentiality agreements). It’s like a relay race where every department takes care of their share of the process.

How long should the offboarding process take?

A good offboarding process will last from a minimum of two weeks to a maximum of one month, based on the employee’s role and responsibility. Some things are immediate (for instance, revoking system access), while others might need catch-up periods (knowledge transfer). The trick is to find the balance that lets you move with some speed but not be totally sloppy.

What are common offboarding mistakes to avoid?

The most common ones? Not making a checklist, racing through the knowledge transfer, or skipping the exit interview entirely. Another big mistake is relegating offboarding to backend administrative duties instead of seeing it as a continued opportunity to maintain good connections. Today’s departing employee may be tomorrow’s referral source or even a rehire.

How do you handle remote employee offboarding?

The same rules apply when offboarding remote workers, though with a bit more nuance. You’ll need a plan for returning company equipment, conducting exit interviews virtually, and removing all digital access. Video calls can help keep a human touch, even if it means saying goodbye from across the digital divide.

What should be included in an offboarding checklist?

The ideal checklist should include removing system access, returning equipment, transferring knowledge, documenting how to receive final pay and benefits, and exit interview scheduling. Think of it as a backward onboarding checklist — everything that was activated when they began needs to be deactivated when they leave.

How can you make offboarding a positive experience?

Do it in a respectful, orderly fashion. Celebrate what the employee has done, let them know what their final benefits will be, and keep talking to them through the process. Ending on a high note may convert your former employees into great brand ambassadors and even prospects for future referrals.

What documentation is needed for offboarding?

Key paperwork includes a resignation notice, a non-disclosure agreement, information about the final paycheck, forms for continuing benefits, and a form confirming company property has been returned. Good documentation helps protect both the company and employee from future confusion.

How does offboarding affect company culture?

The way your organization handles departures is a powerful signal to remaining employees about what your company stands for. A respectful, well-run offboarding process demonstrates that you care about people even when they’re leaving — which helps build trust with the employees you currently have and reinforces a positive company culture.