We are now deep into the great resignation. But many companies are still not paying enough attention to a good offboarding experience for their employees. And that’s a mistake.
Offboarding is an increasingly important part of managing talent. It’s an opportunity to create lifelong relationships and the value that those bring.
Organisations need to plan well in advance for employees leaving. Not many people stay at one company for the whole of their career. And it’s important to have honest conversations throughout their tenure about their career goals and aspirations. Some employees choose to leave and some get asked to leave. When they do, their managers should acknowledge their contributions. They should provide resources to support them through that transition and use an exit interview as an opportunity for mutual learning.
Exit interviews should not be the last touchpoint an organisation has with its leavers. They should also create formal alumni programmes to keep former workers connected to the organisation. Together, these kinds of offboarding practices can create a whole heap of employees or ex-employees who become valuable customers, suppliers, mentors to current workers, ambassadors to the firm and boomerang hires in the future.
Organisations spend a lot of time and resources bringing new hires on board and then retaining those employees. But very little effort and few resources go towards offboarding employees. Employees who leave may receive fleeting exit interviews, instructions for handing over work to colleagues and some kind of communication of post-employment benefits and resources. And usually, a harsh reminder about a restrictive covenant. And that’s about it.
Sometimes they encounter impatient or annoyed managers, and at the extreme, they’ll probably be treated like traitors by their former bosses and colleagues.
That lack of attention to the exit process is a big mistake. Even before the pandemic caused millions of job losses, and with the issues that we’re seeing now in the great resignation, the labour market was in a state of flux. Average job tenure has shrunk to a few years and employee turnover is on the rise. It’s time for organisations to think about better offboarding. It needs to be approached not only as a necessary part of managing talent but as an opportunity to create value in long term relationships.
Management consulting firms have long held the lead in this regard. By treating leaving employees in much the same way that universities handle their graduating students – assisting in transition, setting up leavers for future success and staying in touch through alumni programmes – the incentives for those kinds of firms are too obvious to ignore. Their former consultants become future clients. And Hollaroo believes that similar incentives exist for companies in other industries too, where your alumni may become customers or suppliers, mentors to current workers, as ambassadors for the brand and boomerang employees.
A recent report by Cornell University shows about a third of corporate alumni maintain connections with previous employers, as clients, partners or vendors, and that approximately 15% of new hires come from alumni, rehires and referrals.
With the average annual employee turnover rate at approximately 15%, this could represent an ROI of almost £400,000 on your recruitment costs for a 5,000 FTE company.
The leaving process is more than just compliance. The amount that a company invests in its offboarding programme depends on its strategy, culture, budget, turnover rate, as well as the industry it’s in.
A primary concern for every company is to ensure that all legal obligations are met when an employee departs. A carefully designed offboarding programme can help protect the company from potential litigation by establishing guidelines and systematic processes for managing those exits. But legal compliance is just the beginning.
Holistic offboarding programmes need to be integrated and aligned with the company’s HR and talent management policies. This involves establishing objectives for the offboarding programme that supports the company’s talent needs. The size and scope of an organisation relate directly to the skill requirements for its workers, and the demand in the market for people with those skills.
The best offboarding plans are also informed by a company’s mission, vision and culture. The way that management treats exiting employees sends a really clear message about whether that organisation lives up to its alleged commitments and values. Building a humane and well run offboarding programme can have a considerable impact on people’s impressions of a company’s commitment to its workers. As we saw during the pandemic.
We believe in something called the peak-end rule documented by Daniel Kahneman, the Nobel Laureate and noted behavioural scientist, which says that people judge an experience largely by how they felt at its peak, its most intense point and at its end, rather than thinking about the sum total of the experience. This means that employees (past, present and future) tend to pay more attention to how companies manage exits, rather than how they welcome new hires. And goodwill between a departing employee and an employer can instantly be undone by poorly handled offboarding.
So what does that holistic onboarding programme look like?
We know that the best companies tend to pay continuous attention to offboarding rather than approaching it as a singular event. Their programmes go well beyond a well-executed exit interview, and the clean handover of work and responsibilities. The best companies begin their offboarding programme at the moment of hiring. We hope that newcomers and all staff will stay until they retire. But that’s just not realistic.
There should be resources to help employees build their careers, both inside and outside of the organisation. Ongoing career discussions can then continue throughout the employees time with the organisation, with managers acknowledging that individuals may sometimes need to go elsewhere to fulfil those goals. That frankness can be a massive and scary shift for many companies. All too often, career development conversations are stymied by a concern about staff turnover. Some employers are blind to the fact that, with a few exceptions, the era of a company man or woman is well and truly over. You no longer get a gold clock on your 21 years at the organisation.
Workers know they’ll probably have to switch jobs several times during the course of their careers. In fact, many talented mid-career executives are attracted to what LinkedIn co-founder Reed Hoffman calls a tour of duty appointment, in which the term limit and expectations for personal organisational growth are predefined.
An approach to talent retention that includes a willingness to accept departures may seem scary. But the benefits are not one-sided in favour of workers. Preparing for offboarding during employment can help keep managers from being blindsided by staff turnover. Companies can collect data to track employee satisfaction and intentions to leave, which helps with manpower forecasting. That in turn allows leaders to be transparent about their expectations for staffing needs and likely turnover, which helps set the stage for amicable separations and allows for a more strategic approach to talent acquisition. Furthermore, too little openness can hurt an organisation.
Even in today’s candidate led market, leaving your job can be a scary experience. Friendly separations depend on offboarding practices that acknowledge departing employees for their contributions to the organisation, support them by providing training and other resources to assist in their transition and help the employee capture and integrate feedback from them. If the company has a formal alumni programme, the occasion of someone’s departure may also be a good time to officially welcome him or her to that alumni group.
Corporate alumni programmes can come in various shapes and sizes. Some are overseen by company staff and have specific membership guidelines. In other cases, organisations simply create online groups and allow former employees to take the lead in maintaining the network and connections.
The most ambitious companies offer an entire alumni infrastructure. Boston Consulting Group, Microsoft and Deloitte offer dedicated alumni networks, websites and social media, as well as company newsletters to keep employees in touch with the organisation. Such platforms are used to spotlight the achievements of both alumni and current employees, which many people single out as being particularly inspiring. Another way to engage alumni is to include them in professional development workshops and speaker series, with content often tied to real-world events.
Alumni programmes create opportunities for maintaining social connections through fun events such as happy hours and reunions. eBay hosts dinner for the class of a specific year to bring together current and former employees who joined the company during the same period. Alumni programmes also offer an opportunity for top management to update alumni on the firm’s direction and strategy and to invite feedback.
Research suggests that more employers could benefit from offering structured alumni programmes. Yet most firms seem to be missing out on this opportunity to bolster their brand.
About 15% of companies have alumni networks, but a third of these companies have employee alumni who organise informal groups. LinkedIn hosts more than 100,000 corporate alumni groups, but most have no formal relationship with the organisation. The result is that many former colleagues are connecting in groups that are outside the control of the organisation they want to work for. The organisation cannot then take advantage of these relationships.
There’s no one size fits all solution to offboarding. Not all departing employees will have the same needs or the same appetite for engaging as they go out the door. Ideally, offboarding programmes will be versatile enough to deal with those needs and the external factors that influence that turnover. Such as the recent issues that we saw with COVID-19 departures.
It’s important to remember that departures are often emotional events. But a holistic well-designed programme can ensure that heightened emotions don’t prevent an orderly transition.
Putting such a programme in place will minimise the cost of turnover, and create long term value for both the company and those leaving. employee onboarding should not be an afterthought. It should be a well-integrated component of the talent management plan, using data and information from employees to drive decisions in today’s work environment where people frequently move from one company to the next.
A thoughtful offboarding has become a strategic necessity to create long term value.
To see how Hollaroo supports a well managed offboarding programme, click here.