Employee Offboarding Policy

Saying goodbye to an employee isn’t always easy, but having a good offboarding policy can make the process a lot smoother. It’s about wrapping things up neatly—collecting company gear, cutting off system access, and making sure everything is in order. The right policy helps keep things organized and secure. Plus, with the right employee offboarding automation tool, you can handle these tasks quickly and efficiently. In this blog, we’ll break down the key steps to create a hassle-free offboarding policy that helps your team manage departures without missing a beat.

Why Is Offboarding Important?

In short, a well-thought out offboarding process helps your company maintain security, compliance, and operational efficiency. Offboarding is more than completing paperwork and ordering a cake—it’s a necessary workflow that should keep former employees from accessing important company information or systems. 

Picture it: one of your programmers leaves but still has access to their work email and the code repository. Did they leave on good terms? Even if they did, can you risk them being able to tinker with your data? It may seem far fetched, but the risk is real. Cash App, a widely used mobile payment app, discovered this firsthand in 2022. According to a report filed with the U.S. Securities and Exchange Commission, a former employee downloaded reports containing the personal information of U.S. users after the employee left the company. The downloaded data included full names and brokerage account numbers, as well as brokerage portfolio value, holdings, and/or stock trading activity for one trading day. The end result? Over 8 million users were exposed to data theft—all because a former employee still had access to the Cash App systems after their offboarding. This kind of oversight can lead to significant financial losses and damage to your company’s reputation. 

Beyond security, think about compliance. Many industries require strict control over data access. If you don’t handle offboarding (or onboarding) correctly, you run the risk of fines and/or legal troubles. Take Tesla, for example. In May of 2023, Tesla was informed by a German news outlet that it had obtained confidential company information. An investigation by Tesla revealed that two former employees had leaked the information, violating the company’s IT security and data protection policies. The leaked data, which included personal and financial details of employees and customers, as well as sensitive company information, amounted to nearly 100 gigabytes. This breach exposed the personal data of 75,000 individuals, potentially leading to a significant GDPR fine of $3.3 billion for Tesla due to inadequate data protection.

On the operational side, good offboarding makes sure that projects and responsibilities are transferred smoothly. You’ve probably experienced the flip side of this in your career—one of your teammates leaves without a proper handoff, disrupting projects and affecting your team’s performance. An efficient offboarding process helps keep everything on track and minimizes disruptions. Speaking of efficiency, the offboarding process should also involve tasks like managing software licenses that can save your company a significant amount of money.

What Is an Employee Offboarding Policy?

An employee offboarding policy is a structured approach that your company can use to manage the departure of an employee. This policy should outline the steps and procedures that need to be followed when an employee leaves, whether through resignation, termination, or retirement. Remember: the primary goal of your offboarding policy should be to safeguard company data, transfer knowledge, and make sure there is a smooth transition. Let’s take a look some key elements to include in your offboarding policy:

• Access Revocation: One of the most important steps in the offboarding process is to revoke the departing employee’s access to all company systems. This includes email accounts, cloud services, and any internal databases. 
• Return of Company Property: The policy should clearly specify the return of all company assets. This typically includes laptops, mobile devices, ID badges, and any other equipment issued to the employee. Be sure to include that the items need to be returned in good condition, as well as detailing steps to take if the equipment is damaged. 
• Knowledge Transfer: Effective offboarding involves transferring the employee’s responsibilities and knowledge to their colleagues or replacements. The departing employee should document their processes, current projects, and any critical information that could help their successor.
• Exit Interviews: Be sure to include an exit interview in your offboarding flow. This provides valuable feedback that can be used to improve your company’s work environment and retention strategies. It also helps in understanding the reasons behind the employee’s departure and gaining insights into potential areas for improvement within the company.
• Compliance and Documentation: The offboarding policy should include steps to make sure that all personal and company data is handled in accordance with legal and regulatory requirements. Be sure to include details about the proper documentation of the offboarding process for auditing and record-keeping purposes.

What Are the Offboarding Tasks of HR?

Key offboarding tasks that HR can handle include: 

• Conducting exit interviews to gather feedback from the departing employee. This feedback can help inform future HR policies and practices and help identify areas for improvement within your company. 
• Handling paperwork like updating records, processing the final payroll, and managing benefits administration. HR may need to work closely with IT to make sure that the offboarding is documented properly for compliance purposes. 
• Coordinating communication with other departments and making sure that everyone is aware of the change in personnel. 
• Facilitating knowledge transfer by documenting critical workflows and processes and/or organizing training sessions for replacements.
• Collecting company property from the employee who is leaving, including laptops, cell phones, and access badges. 

It’s important to note that this offboarding checklist for managers may look a bit different from yours. This is an offboarding policy template that you can and should adjust to fit your unique needs—some of the responsibilities may be shared with other departments. For example, collecting company devices may fall under the IT team’s responsibilities. 

What Should Be Included in an Offboarding Checklist for IT?

An offboarding checklist for IT could include: 

• Revoking access to all systems. This should include company email accounts, network access, and all software applications, databases, and internal systems.  
• Resetting company devices by backing up data, then removing it and restoring the factory settings.
• Transferring ownership of shared folders and files to the relevant personnel. 
• Auditing user activity to make sure that no unusual or unauthorized actions were taken before departure.
• Generating and reviewing security reports to confirm there are no pending security issues.
• Managing software licenses by deactivating them or reassigning them to other users.
• Notifying relevant departments when IT offboarding tasks are finished.
• Documenting the offboarding process with a record of all actions completed for future reference and compliance.

How Do You Offboard a Terminated Employee?

Offboarding a terminated employee shouldn’t be radically different from offboarding an employee who leaves on their own accord. You still need to follow the same basic offboarding process steps:

• Notify the relevant departments
• Complete all the necessary paperwork 
• Revoke access to all company systems
• Retrieve company assets
• Conduct an exit interview

The only potential difference is timing—when an employee is terminated, you may want to remove access right when the news is delivered to mitigate the risk of data theft or retaliation. However, you should be promptly removing access from employees who leave voluntarily too. 

How Do You Begin the Employee Offboarding Process?

The best place to begin is with communication—notify all the departments, but especially HR and IT, about the employee’s departure. From there, you’ll just need to follow your carefully laid out offboarding plan. 

‍How To Create an Offboarding Plan

Creating an offboarding plan should include defining your objectives, outlining tasks for each department, creating a timeline for completing each step, and finally, making an offboarding process document. Once you’ve taken all these steps, it’s important to communicate this plan to each department and make sure that everyone knows their responsibilities. Be sure to regularly review and update your offboarding plan to reflect your company’s changing needs and compliance requirements. 

‍Simplify Offboarding, Onboarding, and More With Lumos

Creating an excellent offboarding plan is one thing—implementing is an entirely different beast. After all, an employee offboarding checklist can only take you so far. This is where Lumos truly shines. Our platform takes the hassle out of offboarding by automating and streamlining IT steps like revoking access and managing software licenses. 

But Lumos isn’t just about offboarding. You’ll be able to integrate our platform seamlessly with your onboarding process too, making it easier to welcome new employees. By automating repetitive tasks, you can free up your HR and IT teams to focus on what really matters: maintaining a secure, efficient, and compliant workplace. Plus, our user-friendly interface means anyone can manage these processes with ease, reducing the learning curve and the risk of mistakes.

With Lumos, you get more than a tool—you get a partner that helps you handle the entire employee lifecycle efficiently. Whether you’re saying goodbye to a departing team member or welcoming a new hire, we’re here to make the process smooth and hassle-free. So why struggle with complex transitions? Simplify your offboarding and onboarding today with Lumos, and keep your operations running smoothly without missing a beat. See what we can do for you—book a demo today!