Risks Of Improper Employee Offboarding

Organizations usually take their new employees’ onboarding process quite seriously. But when it comes to offboarding, they lack various parameters which sometimes pose multiple threats to their data security. In this article, we have discussed a few risks that may arise due to improper off-boarding processes and provided some solutions to avoid the compliance risks of improper offboarding.

For IT Organizations, cybersecurity is always a matter of great concern and improper offboarding processes can leave gaps in an organization’s cybersecurity defenses. This can lead to the leakage of critical information, data security breaches, and other threats because when an employee departs a company, their knowledge and experience also leave the organization, during their departure they may also possess access to some information that is valuable to your organization. Therefore, organizations must ensure the offboarding of employees compliantly.

To prevent the problems that usually arise due to improper offboarding, we first need to identify the potential risks of improper employee offboarding:

Key Risks Of Improper Offboarding 

  • Data Loss

The most common among the risks of improper employee offboarding is data loss. Sometimes, employee attrition is not a mutual decision. In simple words, things between an employee and employer don’t always end on a good note, sometimes sourness stirs up between both parties due to XYZ reasons. If the case is so, an employee may use the critical data or information to counter you with malicious intent. It puts the employer at risk of losing critical data.

It doesn’t matter what is the reason, any unauthorized and external use of your company’s data or critical information can adversely impact your organization’s operations as well as growth. So, organizations should follow effective offboarding processes to take off access to confidential data from their ex-employee. Streamlining your offboarding processes can help you to retain or revoke complete access to important files, and resources (devices and equipment). This way, your departing employee won’t be able to misuse your data and information stored there. 


Many organizations use common passwords for shared accounts and it is a common practice for employees to share their passwords, which usually puts your sensitive data at risk. To avoid such threats, you can use password managing tools, and ask your IT department to immediately change the passwords and transfer the data to another source/device as soon as the offboarding formalities are done. This is how you can prevent your ex-employee to access and misuse your company’s critical data.

  • Compromised Intellectual Property 

Many organizations create their products, designs, inventions, and patents to stay ahead of the competition and maintain their brand credibility. Safeguarding your intellectual property helps you to take 100% benefit of the innovation or creation your organization has come up with. However, when an employee leaves your organization without a streamlined offboarding process, you are most at risk of compromising your intellectual property rights. Without a well-streamlined offboarding process, your ex-employee can steal your data (or idea/concept/business strategy) and share it with your competitors which compromises your intellectual property rights. Any data theft such as client contacts, documents, and other information like business strategy can affect your business in a bad way. Compromised Intellectual property is one of the most common risks of improper employee offboarding.


The best way to prevent this issue is to have a strict approach toward non-disclosure policies and their compliance. Your employees should have access to only that information which is required to do their jobs, nothing more or less. Following this approach makes the offboarding process safer and more convenient for your organization. 

Organizations usually provide role-based access and set up proper user guidelines for their employees who need access to the organization’s data to perform their day-to-day tasks. Whether you are an SME or a large-scale organization, you should invest in your digital security. This reduces the chance of any data theft and unauthorized use of the company’s digital resources.

Set up strict guidelines for restricting email forwarding post-offboarding. Email forwarding and sharing information from an organization’s internal system to or from an ex-employee sometimes result in a data breach. Inform your IT department as soon as an employee leaves your company and ask them to collect the devices or move the company’s data somewhere else. If the data is available on the personal device of the employee, make sure to ask them to format it. This reduces the risk of data exposure from your ex-employees side.

  • Damaged Reputation

It takes years and lots of effort for an organization to build a positive reputation in the market, however, it can be lost with the tap of a few keys and clicks on the internet. Websites like LinkedIn and Glassdoor made the words of your employees travel faster than ever. If your employee leaves your organization on bad terms, they might try to badmouth your organization on these platforms which will further impact your reputation in the eyes of your potential employees and clients also. 

Therefore it is crucial for your organization and your employee who is departing your organization to go through a smooth offboarding process. In addition to this, you should also give assurance to your employee to protect their confidential or personal data such as medical records, family details, etc. 


To avoid any reputation damage due to bad terms with your ex-employee, you should follow a proper procedure to complete the off-boarding process. You can conduct an exit interview where you can ask the departing employee about his/her working experience with the organization and ask for feedback about the improvements that can be made to enhance employee experience. This helps you to leave a positive impression on the departing employee and opens a scope of retaining them in the future. 

Such small practices during the offboarding will leave a last impression on them and establish a positive impact while parting ways with the employee. 

To avoid unwanted data distribution from your ex-employees side, you should set up data loss prevention policies (DLPs) to prevent the accidental or intentional loss, theft, or exposure of sensitive data, such as confidential corporate information, customer data, intellectual property, financial records, and other sensitive or regulated data.

  • Breach Of Confidentiality

Not taking employee offboarding seriously can result in the loss of crucial information or errors/mishaps in the paperwork which may later become daunting for the departing employee as well as your organization. Not following a proper employee onboarding and offboarding procedure will prevent you from accessing the ex-employees data in time of need such as a legal investigation or audit. 

The auditors may ask for the details of the offboarding procedure, and who was present during the offboarding. During the investigation, auditors ask the company to present the maintained records of the ex-employees and their offboarding procedure. Therefore it is necessary to keep a detailed and accurate record of audit logs. They should be comprised of the offboarding practices and procedure including who conducted them along with the dates on which it has been held.


Ensure that all access to company systems and data is effectively revoked as soon as an employee leaves the company. Also, ensure that departing employees are reminded of their obligations concerning confidential information and are provided with clear guidance on how to communicate with clients or customers after leaving the company.

  • Unnecessary Expenses

When an employee departs from an organization, you should revoke their access to the internal system to avoid any recurring costs. Many organizations use software-generated billing and subscription plans which charges them only for the accounts created for the no. of employees existing in the company. 

If proper employee offboarding guidelines are not followed, you might not be able to take away or revoke the access of your departing employee’s account which can further result in unnecessary subscription charges and billing. You can avoid these extra costs by keeping proper track of the employee’s exit and following all the offboarding guidelines including the removal of employee access to email, other systems, and internal platforms, redirecting emails and calls to new point of contact. 


Remove the credentials of your ex-employee as soon as they leave their job and complete all the offboarding formalities. Also, cancel all the subscriptions allotted to their accounts to avoid any unnecessary charges. Ensure no employee signs up for unauthorized applications with the company’s card. You should also suspend the former employee’s accounts, this will free up the software licenses which you can use during the onboarding of a new employee. These practices will allow you to cut down the unnecessary costs and restore important data. 

  • Loss Of Employee Morale

Imagine an employee who has been associated with your organization for many years, her/him quitting the job may leave his/her coworkers stranded with an extra workload.  This tends to bring down their morale and spreads negativity in the workplace and impacts their work experience. Demotivated employees are less likely to perform productively, therefore it is necessary to follow a streamlined offboarding process.

A good Employee exit management procedure will help you to show your dedication towards your existing and departing employees and help you to maintain a positive work environment and avoid the risk of improper employee offboarding.


During the offboarding process, communicate with your team openly and transparently. This can help to alleviate any concerns or anxieties they may have about the situation. Be honest about the reasons why their coworker is leaving, and provide as much information as possible about how the offboarding process will be handled. Also, recognize the contributions of the departing employee, this will show your team that everyone’s efforts are valued and appreciated in the workplace. 

Offboarding can be a difficult time for both the departing employee and the remaining employees. To help alleviate any stress or anxiety, consider providing additional support and resources. This could include counseling services, additional training or resources to help the remaining employees take on additional responsibilities, or even a team-building activity to help boost morale. 

When saying goodbye to an employee, apart from the exit formalities, you can also arrange a parting gift or farewell for the departing employee.  

  • Reduced Productivity

If an employee leaves the company and feels like they were not treated fairly or respectfully during the offboarding process, it can decrease morale among the remaining team members. This can lead to a decrease in productivity as team members may be less motivated to work and may not feel as invested in the success of the company. 

Moreover, if an employee leaves your organization without transferring the knowledge properly to other members of the team, this can cause a knowledge gap in the company that can slow down the overall productivity of your team because the existing and new employees may have to spend more time to pick the pace with ongoing projects or processes.


By streamlining a proper offboarding process and conducting exit interviews, you can make the departing employee more valued and establish yourself as a positive employer brand that values employee resources. Encourage employees who are leaving your organization to share their expertise and knowledge with their remaining team members, this can be done through one-on-one meetings or by creating proper documentation that highlights important processes and procedures.  This will help you and your employees to delegate the former employee’s pending tasks efficiently and prevent any delays in the projects and processes. 

  • Legal and financial risks

Improper employee offboarding can also lead to legal and financial risks. For example, if departing employees are not paid their final pay and benefits on time, or if they are not provided with a positive reference if appropriate, they may take legal action against the company. Additionally, if the company violates any laws or regulations during the offboarding process, it could face fines or other legal consequences.


To mitigate legal and financial risks, it’s important to ensure that all laws and regulations are followed during the offboarding process. This includes providing departing employees with their final pay and benefits on time, providing a positive reference if appropriate, and ensuring that the offboarding process complies with all applicable laws and regulations.


Proper employee offboarding is essential to ensure that departing employees are treated fairly and that their exit does not harm the company or the departing employee. Improper employee offboarding can expose your company to a range of risks, including security risks, loss of knowledge and expertise, decreased morale, increased workload for remaining employees, and legal and financial risks. To mitigate these risks, it’s imperative to prepare a comprehensive employee offboarding plan, conduct exit interviews, properly revoke access to company systems and data, encourage knowledge sharing, and properly redistribute responsibilities. By following these solutions, companies can ensure that departing employees are properly offboarded and that the company is not exposed to unnecessary risks.




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