In the midst of today's "war for talent," recruiting and onboarding are top priorities for HR departments. But experts stress that the opposite end of the employee lifecycle -- offboarding -- is equally important. But many HR departments do not have an automated process in place, which can create risk.
In the 2013 State of Talent Management Survey from SilkRoad, a vendor of cloud-based talent management software, 50% of respondents said that their organizations had not automated transition management processes. April Escamilla, director of product management at the cloud HR vendor, said this statistic raised eyebrows.
"So many people believe in automation, but there's so little in terms of transition management. [With] offboarding, security violations can occur, [and] to see that it's an area where companies are not automating, I was surprised," she said. "Offboarding seems very cut and dry, but it really impacts an organization that doesn't have it down."
To avoid errors that could result from a manual offboarding procedure, experts suggested automating the process through a talent management system.
Faulty offboarding can cause benefits overpayment, security risks
To understand just how critical it is to have a functional offboarding process in place, consider the University of Wisconsin. According to an audit conducted by the Legislative Audit Bureau, the school system overpaid $15.4 million for health insurance premiums during the 2011-2012 fiscal year. More than half that amount was paid for workers no longer employed by the organization. While UW system officials said glitches in its new human resource management system, which had been implemented in April 2011, were partly to blame, the audit also questioned the security of the organization's payroll and benefits systems.
The school system overpaid $15.4 million for health insurance premiums during the 2011-2012 fiscal year. More than half that amount was paid for workers no longer employed by the organization.
Besides overpayments, a poor offboarding process can create security gaps when employee access to internal systems is not terminated. "With all the internal social networks and the applications companies have today, [if] those are not kept up to date well enough, people can be on them for quite a while," said Claire Schooley, senior analyst at Forrester Research Inc., based in Cambridge, Mass. Ensuring physical assets like company-provided cell phones, computers and key cards are reclaimed or deactivated is another important offboarding consideration, according to Rebecca Wettemann, research vice president at Boston-based consultancy Nucleus Research.
While both Schooley and Wettemann said that automating the offboarding process can reduce errors and help HR make sure nothing slips through the cracks, Wettemann pointed out two additional benefits: lessening the amount of manual labor involved in offboarding and decreasing an organization's vulnerability to wrongful dismissal lawsuits.
To the latter point, Wettemann said that when the Family and Medical Leave Act was instituted, some dismissed employees filed lawsuits against their employers not because they felt they had a case, but because they knew the organization didn't have a sufficient audit trail. With this in mind, Wettemann said offboarding automation can protect a company from unfounded suits. "Having a standardized, automated process reduces the likelihood of errors, but it also reduces the likelihood [of] perception of errors," she said.
Sharlyn Lauby, president of ITM Group Inc., a consulting firm based in Gainesville, Fla., said that the productivity benefit could be significant. "It's so easy to say, 'We have a spreadsheet that does that for us, [so] we don't really need to automate,'" she said. "[But] I believe many organizations don't realize how much time, effort and resources they're using with a manual process."
Four steps for offboarding automation
Offboarding technology is not a distinct market, and there are only a handful of vendors that claim to specialize in the function. In the report "Offboarding Software Avoids Risks, Reduces Cost, and Provides Efficiencies," Schooley wrote that offboarding modules are often components of broader talent management systems, and Wettemann said that she expects the function to be integrated into most human capital management (HCM) products, if it hasn't been already. "In general, I think we're seeing a move with HR and HCM systems to have everything integrated, so the offboarding functionality or workflow will likely be integrated with the applications responsible for ongoing employee management," Wettemann said.
In her report, Schooley lists four steps to automate offboarding. First, an HR manager should "create an exit package," which involves gathering the employee's data and creating an exit survey. Next, the HR manager should "send [the] deprovisioning checklist to appropriate departments," after which the employee completes the exit survey and reviews appropriate documents. Lastly, the documents should be "archived in a company system."
But even if an organization automates offboarding through an HR system, Wettemann said the process still needs to be monitored to ensure proper functioning, as the University of Wisconsin example makes clear. "It's not enough to just put the technology in place, you have to have the management strategy around [it]," she said. This governance aspect will vary company to company, she added.
Alumni networks keep former employees close
Once the offboarding process has been automated, it might seem natural to let it slide down to the bottom of the priority list once again. But Schooley pointed out that valuable insight can be gleaned during the exit interview process that could inform an organization's talent management practices. In her opinion, this warrants a degree of continuous attention to offboarding.
More on talent management technology
Find out how talent management software is going social
Get tips on how to successfully implement social performance management software
Get three action items for HR managers in 2013
"I don't find many [organizations] looking at a quality survey where they ask questions that would then inform what they do with new hires -- the kinds of things that will help them to keep present employees," she said. For instance, "asking them about what kinds of issues [they] had that might have made [them] think about staying longer if those issues had been addressed."
Schooley also said many organizations miss opportunities to keep in touch with former employees by neglecting to set up alumni networks.
"There are a lot of people who might be retiring or leaving because they got a wonderful offer they couldn't refuse, and the organization needs to think about how to keep in touch with these people. I don't see a lot of discussion on that," she said. "Sometimes there may be opportunities that will bring [former employees] back, and they're rehired at a later date. But if you don't have some way of staying in contact with them, that doesn't happen."
Dig Deeper on Talent Management and Recruiting Software
Emma Snider asks:
Does your organization automate offboarding?
1 ResponseJoin the Discussion