The process-heavy experience of offboarding employees—whether voluntarily or involuntarily, individually or as part of group layoffs—naturally comes with a range of very human reactions.
Poor communication or rushing on the part of the employer can cause excessive stress for both departing employees and their remaining teammates. It also leaves the company open to compliance violations and lawsuits, and claims against the company’s executive liability insurance coverages, such as D&O and EPLI.
“Offboarding is a natural part of the employment cycle, and should be treated with the same level of planning and care as onboarding and performance management,” said Anna Beach, Co-Founder Chief Insurance Officer, Anzen. “Employers can significantly reduce stress and confusion for all parties involved by ensuring that the process is communicative, professional, and humane.”
Anzen has put together this “Offboarding Do’s and Don’ts” Primer for businesses to ensure a smoother and more compliant culture when separations occur.
Do: Treat laid-off employees with dignity and respect
Layoffs are in the headlines everyday and across industries, yet many individuals and business owners feel a stigma of shame when they are personally impacted. Plenty of firms, especially privately owned companies, wish to comment as little as possible on specifics of layoffs so as not to shake confidence in their brand or spook remaining employees. This can make those impacted in a layoff feel isolated, unvalued, and unacknowledged. It can also have consequences on your go-forward team, who may be wondering if their value comes with a time limit as well.
Do have a professional and well-documented communications and transition plan for each of your departing employees, including details of any severance packages and equity arrangements. “Anzen policyholders can use the Safety Auditor to upload all of these documents and check for any compliance gaps or vulnerabilities at an employee or organization level,” said Jose Muniz, Co-Founder and Chief Technology Officer at Anzen.
Once layoffs have been communicated, someone from the business HR team or an appointed transition liaison should be readily available to answer any questions the departing employees have.
Don’t: Miss any steps on critical exit paperwork and documentation
There’s simply no excuse for mistakes with an offboarded employee’s last paycheck or benefits; not only is it particularly inconsiderate in the circumstances of a layoff when a family’s livelihood depends on it, but it also exposes your organization to compliance vulnerabilities that can lead to stress… and lawsuits.
While traditional insurance in the executive liability space has a more reactive response and activates when a claim is filed, Anzen takes a proactive approach by flagging potential documentation errors to insureds before they can cause an issue.
“Human error contributes significantly to these kinds of ‘documentation mismanagement’ mistakes, and then there is a spiraling of stress as an offboarded employee is calling the bank, or calling the former employer, or calling a benefits specialist for answers,” said Muniz. “We took a big step back at Anzen and evaluated how we could simplify this painstaking process. By bringing AI and machine learning into the employee documentation space, we can protect organizations from legal vulnerabilities while saving the employee from these tremendous pain points.”
Do: Take adequate information security measures
For larger and corporate companies with fully fledged in-office IT departments, collecting company electronics and devices may be a cinch. But “in smaller and family-owned businesses, or where UYOD (use-your-own-device) programs are in place, there can be more of a blurred line between personal and professional equipment,” said Beach. Scheduling an exit interview where a portion of the conversation is dedicated to identifying and mitigating any data and security risks is a strong best practice.
“Even aside from the discussion around offboarding, this is a great reminder that from an executive liability standpoint, every company—no matter how big or small—should have a serious discussion about cyber liability insurance with your insurance broker,” said Beach.
Don’t: Burn any bridges
Many businesses rely on referrals and reputation, and keeping things professional and polite in offboarding is beneficial for everyone involved. You never know when a former employee may become a future client or distributor—or if you will end up interviewing for a job with someone you once offboarded.
“Having a tight and compliant process supported by technology that can root out any gaps and pitfalls for you removes much of the potential awkwardness—and more importantly, risk— offboarding,” said Muniz.
You can learn more about Anzen here.