Onboarding and Offboarding: Two Comprehensive Guides for Small Businesses

Did you know hiring a new employee costs an average of $4,000? According to a study, 80% of employees have a negative onboarding experience, causing many to contemplate quitting their new jobs. 

The onboarding period creates a crucial first impression, and a well-structured process sets both new hires and your business up for long-term success. Similarly, offboarding an employee requires preparation, compliance, and care. How you handle an employee’s departure shapes their overall experience and affects how they remember your company. It’s also an opportunity to gather valuable feedback to help reduce turnover in the future. 

An organized onboarding and offboarding process not only creates a positive impact but also saves time by streamlining necessary tasks. In this article, we’ll discuss what you should consider when building your own onboarding and offboarding checklist.

Onboarding an Employee

Onboarding refers to the process of welcoming and integrating a new hire into your company. This includes completing paperwork, an  orientation, and providing ongoing support to help them transition smoothly into their role. To really set new hires up for success from day one, you can't beat a solid checklist. Let's discuss what you should include on your employee onboarding checklist.

Complete the Proper Paperwork 

As you may already know, there's a lot of paperwork for a new hire. So, the sooner you get organized, the smoother the process will go. Make sure you have the following documents ready: 

• Offer letter: Start the new hire’s file with the job description and a written job offer confirmation, which may also include a signed employee agreement. (This will be needed during offboarding too!)

• An I-9 form: An I-9 form is used by the Department of Homeland Security (DHS) to document the verification of the new hire’s identity and employment authorization. E-Verify offers employers a streamlined process to confirm eligibility.

• Tax withholdings forms: A Form W-4 determines how much federal tax should be withheld from each employee’s paycheck. Some states also require their own withholding forms, so confirm with the state’s local website for more information. 

• Employee handbook: An employee handbook outlines company expectations and policies, including paid time off (PTO). Have the new hire sign an acknowledgment of receipt after reading it.

• Wage notices: Many states require written wage notices, so check the state laws and have these ready if applicable.

• Any additional state or local paperwork: Some states or cities may require extra paperwork or wage notices, so review local laws as needed to ensure compliance. 

Confirm Classification and Payment Practices

This includes classifying the employee correctly, setting up payroll, and confirming pay schedules with the new hire.

• Employee classification: Determine whether the new hire is an exempt or non-exempt employee. Remember, exempt employees are exempt from overtime regulations. 

• Payment methods: If direct deposit is offered, have the necessary paperwork ready so the new hire can be set up for the next payroll period.

• Pay schedules: Include your established work week and payday schedule in their welcome packet for easy reference.

Compile Benefits Offerings

Provide all relevant benefit information to the employee on their first day so they have time to review the options and select their choices. 

• Mandatory benefits: Based on the employee's location, determine the required benefits, such as state unemployment, disability, and family leave. Have this ready for them so they know what they are entitled to upfront. 

• Family leave benefits: This only applies if you offer paid leave benefits outside the mandatory requirements. Be sure to make individuals aware of all the different family leave benefits available to them.

• Health insurance benefits: If your business offers health insurance, provide the necessary paperwork for enrollment. Be sure to inform them of the enrollment deadline and when coverage begins.

• Retirement offerings: If you offer retirement benefits, have the enrollment forms ready on their first day, giving them enough time to review and confirm their selections. 

Set Up Their Workspace

Coordinate with your IT team to confirm that the new hire is ready to go on day one. You should set up their:

• Desk/Office: Prepare their physical space before they arrive. For an extra warm touch, include a nice welcome note from the team!

• Email: Set up their email account in advance so they can start receiving important notices right away.

• Any additional software: If you use software and/or internal communications tools, help them create accounts and let them know who to contact for any questions as they settle in.

Consider breaking up onboarding tasks with a multi-day orientation, including team introductions, group icebreakers, and assigning mentors to support the new hires in their first week. When employees feel welcomed from day one, they begin forming positive connections with the company and their coworkers. Including small and thoughtful gestures on your employee onboarding checklist can make a big difference in helping them feel like part of the team on their first day.

Offboarding an Employee

Employee offboarding is the process of handling an employee’s departure, whether voluntary or involuntary. While specific steps vary by situation, like whether it's a termination, layoff, or resignation, here’s a general guide for your offboarding checklist template:

Compile the Proper Paperwork

Similar to onboarding, there's a good amount of paperwork that needs to be completed when an employee leaves a company. Here are the main ones to organize:

• Original offer letter or employee agreement: You’ll want to collect all applicable documents relating to their employment, including their original offer letter and/or employee agreement.

• Termination or resignation letter: The employer writes this for a termination or layoff, while the employee provides it for a voluntary resignation.

• Remaining benefits information: Inform the departing employee about their options for continuing health benefits with enrollment deadlines, if applicable. Also, provide access details for their retirement plan and any life insurance policies.

• State-required documents: Some states require specific paperwork at termination, so check the employee’s state for any additional requirements. For example, employees in New York are required to be provided with the NY DOL Record of Employment upon termination.

Determine the Final Payment Information

Before the employee’s last day, determine their final pay and the deadline for issuing it. Since state laws vary, review termination requirements carefully to avoid penalties.

• Final payment amount: Calculate the wages owed based on their last day (this is often pro-rated). Some states require payment on the last day, while others set specific deadlines.

• Unused PTO: Payout rules for unused PTO vary by state. Some require all unused vacation time to be paid out upon separation, while others don’t require payout, as long as there’s a written company policy that states it. 

Collect Company Property

For your business’s security, establish a process for collecting company property and revoking access to internal (and sensitive) information. These include:

• Physical/hardware property: This includes laptops, cell phones, tablets, and any other electronic devices.

• Physical building access: Collect keys and/or ID badges to prevent the departing employee from accessing the office after they leave.

• Access to company information: Revoke access to internal systems, software, VPNs, internal communication tools, and social media pages (if applicable).

Conduct Exit Interviews

Exit interviews are one of the most undervalued aspects of the offboarding process. Taking the time to ask about the employee’s experience can give you valuable feedback to reduce future turnover and save you money. Especially since the cost of replacing an employee can be up to two times that employee's annual salary.

Schedule exit interviews and consider asking questions like:

• What caused you to decide to leave this position?

• Would you change the job description for the next person in your role? If so, how?

• What other support or resources would’ve helped you accomplish your job better?

• What could have been done differently to keep you employed at our company?

Having an offboarding checklist template not only helps with compliance but also reminds you to gather insights regarding your company's overall employee satisfaction.

Justworks Can Help

With onboarding and offboarding being integral to your business, let Justworks simplify both processes for you. Along with our onboarding and offboarding checklist offerings, we also automate many of these tasks directly on our platform. 

We streamline the onboarding process, so the new hire can ramp up quickly. When it’s time to offboard an employee, we ensure you remain compliant with state regulations, plus offer 24/7 customer support if any urgent matters arise. Ready to learn more about how Justworks can help you free up time to spend on growing your business? Contact us today to get started!