C-Suite Advisory

4 Reasons Why Employee Offboarding Is So Important

When you’re running a successful company, you get used to interviewing, hiring, and onboarding new faces. Your business is growing, and that means you need to welcome aboard new talent who can bring added dimensions to the company. You also need to get used to people leaving.

Valued employees deciding to move on from your company can be a hard pill to swallow. They have their reasons—many of them understandable and valid, like a new opportunity or a chance to start their own business—and once the make that decision, it’s not up to you, necessarily, to change their mind. It’s up to you to offboard them the right way.

Offboarding, or “employee exit management,” is an often-overlooked aspect of running a business. The last days of an employee’s time at the company are typically spent scrambling to find a replacement, moving their files and documents to a new party, or just running out the clock until their departure.

But while most companies turn offboarding into an extended farewell, others work to turn this period into a strategic advantage for the company. Here are four reasons why a positive employee offboarding experience is so important for your business:

Keeps morale among remaining staff high

When an employee leaves, especially a high-level employee such as a manager or VP, other employees wonder what drove them to depart. Even if the reasoning is something personal and/or unrelated to the company’s culture or performance, seeing someone leave of their own volition can hurt overall company morale.

A major part of your offboarding experience should be to show appreciation for this employee. Shout them out in a company-wide email or in your next all-hands meeting. If possible, let that employee share their reason for leaving the company, and assure others that their decision was personal.

Showing appreciation and being transparent about this departure does two things. One, it lets the employee know that you value them and will miss them (more on that in a bit). Second, it tells existing employees that they have nothing to fear themselves. They don’t need to worry about the company’s projections, or whether there would be a backlash if they, for some reason, decided to leave as well.

Keeping employees happy and engaged, even in uncertain times, is critical. Highly engaged teams are more profitable, and engaged team members are less likely to leave than their disengaged counterparts.

Makes your replacement search easier

If your employee is leaving on good terms with your company, your relationship with them can make finding, interviewing, hiring, and onboarding their replacement that much easier.

Keep an open dialogue with your departing team member. Use their expertise about the role and their familiarity with your company to create and tweak your job listing, and get their feedback on who you’ve brought in as a possible replacement.

In some situations, you can also use your positive relationship with that employee to extend their departure runway. If they’re leaving to start their own company or to freelance, would they consider staying on for a month rather than the usual two weeks? That will give you more time to find and train their replacement, perhaps under their wing.

Helps you discover what, if anything, went wrong

The first two reasons listed above assume that this is an amicable parting between your company and this employee. But is there anything you could have done differently that would have resulted in them staying?

Open and honest exit interviews with your soon-to-be-ex-employee might give you some insight into ways your company can improve. What factors about their role or the company played a part in their decision to leave now? What issues have they noticed, unrelated to their departure, that you need to address?

These interviews aren’t just an opportunity to air grievances. Take notes and give your full attention to what this person is saying. Rarely will you get the opportunity to have a direct line to what’s plaguing your employees.

If you want to be proactive in sniffing out friction points and issues that your business is dealing with internally, consider using anonymous polling tools like TINYpulse to gather intelligence about your processes, workflow, and culture.

Leaves the door open for a return

Believe it or not, there’s such a thing as a “boomerang employee”—a worker who comes back to an old company after some time away. Rehiring when the opportunity and fit is right is actually an excellent decision—you bring aboard someone who is already familiar with the culture and processes of the company, and you save a ton of money on training and ramping up as well.

One of the few potential issues with hiring a boomerang employee, according to Workplace Trends, is that they still may have some stigma or baggage from their last go-around hanging over their heads. But if you’ve shown that person appreciation, listened to their stories in their exit interviews, and utilized them as a resource—as the first three reasons above outline—you’ll be far less likely to have to deal with lingering hurt feelings in the second chapter of their tenure at your company.


It can be tempting, when an employee leaves, to get them out the door and to move on as quickly as possible. But a strong offboarding experience is such an emotional and financial boon to your company, you’d be wise to invest in it. You can improve this process with just a little extra time and care spent on each person who leaves. Start with your next departure—which, hopefully, won’t be for some time.

Written by Jared Hecht.

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Jared Hecht
Jared Hecht is the co-founder and CEO of Fundera, an online marketplace for small business financial solutions. Prior to Fundera, Hecht co-founded group messaging app, GroupMe, a group messaging service that in August 2011 was acquired by Skype, which was subsequently acquired by Microsoft in October 2011. He currently serves on the Advisory Board of the Columbia University Entrepreneurship Organization and is an investor and advisor to startups such as Codecademy, SmartThings and TransferWise. Jared Hecht is an opinion columnist for the CEOWORLD magazine.