The world of HR technology has expanded rapidly over the last several years.
New and innovative systems for Core HR, Learning, Performance, Recruiting and more have transformed the way that organizations optimize their human resources and talent management processes, and successful companies have embraced the importance of these key functions. However, one area of HR that has not seen as much digital transformation is employee separation management.
In this post, we’ll dive into this area and discuss what offboarding software is, how it works, and why we’re seeing an increasing number of HR leaders investing in this type of technology for their organizations.
What is offboarding software?
Employee offboarding is the process by which a company handles a departing employee. This process involves any number of steps to guarantee an amicable employee separation, a transfer of knowledge, and the securing of company property and data.
While we traditionally think of employee offboarding as involuntary, an increasing number of organizations are presenting voluntary exit options to their employees, as they work to avoid involuntary workforce reductions, while still meeting their cost cutting goals.
Offboarding software, therefore, is an application that helps organizations streamline the administrative, legal, and financial processes associated with an employee separating from the organization, voluntarily or involuntarily. This type of software supports the execution of a transparent experience to impacted employees, while protecting organizations from financial and compliance risks that can occur by executing workforce reduction events improperly.
How does offboarding software work?
Employee offboarding software works similarly to other HR technologies that have been implemented within organizations and as with most HR technology, it all starts with data. Offboarding software enables a centralized location to bring together the data needed to comprehensively process employee separation events, which may not otherwise be connected. This includes employee profile information, payroll and salary data, benefits data, performance data, and any other data that an organization needs to support, plan for, and execute events. The software also sends outbound data to relevant systems that are ultimately responsible for paying out severance packages, deactivating access to downstream applications, tracking returned equipment from employees, and more.
Consolidating the data into one system streamlines the administration of workforce reduction events by making critical information easily accessible to HR administrators so they have what is necessary to model potential scenarios, identify impacted audiences, and inform available to decision-makers more efficiently. In addition, consolidation allows for personalized communications to impacted employees while ensuring the messaging is consistent and includes all required elements.
Additionally, by having an offboarding software solution, stakeholders involved in the decision-making process can be granted visibility and access based on their role. They are only able to see what is needed to make their decisions and can act in a more effective and timely manner.
In addition to enabling the required actions for employee separation decision-making, all the data is audited and tracked in the system and available via reporting. Whether standardized reports for compliance such as WARN, OWBPA, ADEA, etc., are needed or reports customized for the unique needs of an organization are required, offboarding software reduces the risk of non-compliance by enabling auditable, defensible processes and making data easy to access via reports.
Offboarding software technology can also improve the financial outcomes associated with workforce reduction events. The financial impact of improving the effectiveness and efficiency of decision-making, reducing total time spent on offboarding activities across the entire organization, and minimizing the risk for human error that is all too common when these activities are managed by spreadsheets and homegrown systems cannot be overstated.
Why are we seeing an increasing number of HR leaders prioritizing offboarding software?
In today’s world, technology is embedded within every HR and talent function at an organization, and while offboarding technology has not been historically, an increasing number of HR leaders are now prioritizing offboarding software. The reason is simple: the technology not only allows organizations to develop efficient, streamlined processes that reduce manual administrative burden and risk, it improves the experience for employees – both those who remain with the organization, and those who are let go. Offboarding software helps decrease the uncertainty for employees and enables transparency into the actions being taken by the organization. Since employee separations and workforce reductions are a challenging and often sensitive topic, it’s important that employees see that their organization is handling these events in the best way possible.
What types of companies benefit from having an offboarding platform?
An offboarding platform can provide benefit to any organization, as it helps standardize processes that are most often manually managed within spreadsheets and homegrown systems. This standardization is particularly beneficial to large, enterprise organizations, who are dealing with higher volumes of data, involving a greater number of stakeholders and decision-makers, and are subject to a higher degree of risk and related potential compliance impacts.
Additionally, the technology can be especially beneficial to companies managing the following business activities:
- Mergers & Acquisitions (M&A)
When two organizations are merging, it is typical for those organizations to analyze their workforces and evaluate what roles and responsibilities will be needed to effectively manage the newly merged company and determine how their current employees fit into this future state. A similar process occurs when one organization is acquiring another, as the acquiring organization makes decisions about how they expect to incorporate their new employees into their organization. These evaluation processes often lead to decisions related to offboarding. Offboarding software enables organizations to make these difficult decisions by consolidating all the required data and putting it into the hands of decision-makers. - Restructuring
While restructuring can be an outcome of M&A activities, it is also something that many organizations conduct on an ongoing basis for a variety of reasons such as changes in strategic priorities, a need to reduce costs, impacts of financial and market conditions, or a desire to increase operational efficiencies.
The goal of organizational restructuring is typically not to offboard employees, but offboarding can be a potential outcome. Having offboarding technology in place can enable effective and fair restructuring evaluations and support the work needed to execute any potential workforce reduction events that result from restructuring. - Layoffs
Layoffs are something that many organizations conduct periodically on both a small and large scale. While the reasons can range from a business downturn to reduction-in-force of highly skilled labor whose skills have become obsolete, offboarding software can help businesses execute layoffs in a fair and transparent manner, supporting both the impacted employees and the organization.
As HR technology continues to evolve in helping organizations to manage their HR processes in a better, more efficient manner, now is the time for offboarding software to come to the forefront. Educe’s Transition Manager customers have benefited greatly from using the product to better manage their employee separation and workforce reduction processes. If your organization is ready to learn more, contact us.
