Offboarding employees: 6 ways to minimize the impact of turnover

Every employee a company hires is going to leave eventually. Despite its inevitability, few companies proactively plan how to manage turnover. Companies may have extensive processes for onboarding new hires but almost nothing to manage departing employees. The following are six ways to lessen the impact caused by the unavoidable loss of talent.

?1. Make leaders aware of the realities and consequences of turnover. The number of job changes in the US reached an all-time highs in 2021 and studies suggest many more employees are considering changing jobs . Barring a major economic downturn most companies will probably experience greater turnover over the coming years. Business leaders may not realize the impact this turnover will have on the company. For example, in companies with higher turnover rates, employees were 65% more likely to state it could be very difficult to get information to do their job well .?When an employee quits their peers are also much more likely to leave .?There are also significant risks associated with poor administration of employee exits. Making business leaders aware of the consequences of poorly managed offboarding can trigger investment in methods to manage these risks.?

2. Have a strategy for managing compensation’s influence on turnover.?An HR leader recently told me, “people often say they aren’t leaving for money, but very few quit for jobs with a lower salary”. Compensation when used the right way can both prevent and reduce the impact of talent loss.

• Use long-term incentives to encourage employees to put off turnover decisions. But do not wait for someone’s stock options to vest before talking about their long-term career plans!
• Proactively adjust employee pay to ensure compensation remains on par with the market. Some companies conduct pay surveys and make compensation adjustments as often as quarterly given how quickly salary levels are changing in certain industries.
• Communicate how the company sets pay levels. This includes sharing criteria used to make pay decisions and explaining why pay levels are set above or below the market median for different jobs. If you cannot explain your pay levels in a transparent manner then your pay levels are probably non-competitive, inequitable, or both. ?
• Have a process for countering external compensation offers. Define criteria for determining whether to counter an offer based on the type of job or capabilities of the employee. Create guidelines for counteroffers to ensure the company is not sending a message that the best way to get a raise is to threaten to quit.

These compensation methods are more about preventing turnover than managing it. But once you start talking about money in the context of retention it may be too late to keep employees. Once people start wondering if they could make more money elsewhere then they are starting to leave mentally. And even if an offer is countered successfully, employees may still leave within a year or so.

3. Embrace rehiring employees after they leave.?Studies have found it can cost half as much to rehire an ex-employee compared to a new person, rehires are 40%?more productive in their first quarter at work, and they tend to stay in the job longer. But some company cultures spurn employees as though they were “traitors” should they decide to leave. Reframe turnover as just a step in a person’s larger career. Do not assume it means anything about commitment to the company. And the impact of turnover can be significantly reduced by creating alumni networks and actively hiring people back after they leave.??

4. Have a socially networked offboarding process. Part of onboarding involves connecting employees to the people and knowledge resources needed to do their jobs. Reverse engineer this process for offboarding. Most departing employees do not want to make life difficult for the coworkers they are leaving behind. Work with them to identify people and projects that will be impacted by their departure. Then create a method to transition responsibilities and share resources to lessen the impact of their departure. This may take weeks, not days, so put it into place as soon as you know the person’s intention to leave.

5. Automate offboarding tasks to reduce risks.?Most departing employees are leaving on good terms. But not all. Failures to turn off security access or mistakes in severance or backpay can cause major operational and financial losses. Use technology to automate links between employment status, compensation, equipment ownership, and security access.

6. Educate managers to talk with employees about turnover before it happens.?Some managers view employee turnover the same way some people view death. They know it is inevitable but avoid talking about it and do little to prepare for it in advance. The best time to talk about turnover is before people decide to leave. With that in mind, l will close with a script I have used to manage expectations with my own team members about the realities of turnover:

“As a manager, I want people on my team that other companies would like to hire.?Or put another way, I don’t want to manage people that no one else wants.?It is also my responsibility to help team members achieve their career goals.?If I’ve hired the right people and am managing them the right way, then I expect other companies will actively try to hire them.? And it is unrealistic to think staying at our company will always be the best career choice.?Other companies may have opportunities we simply can’t offer.?

My ask is that team members let me know they are considering other opportunities far enough in advance so I can explore possible alternatives in our company that might enable them to stay with us.?If we can’t provide a good alternative, then I will readily support their move.?The goal isn’t to avoid turnover completely.?Everyone will quit eventually.?The goal is to avoid unexpected, unmanaged turnover.?This requires having a relationship where team members are comfortable talking about potential external career opportunities before they have committed to leaving.”