The Competitive Advantage of an Offboarding Program
Alison Dachner, management professor at John Carroll University, and Erin Makarius, management professor at the University of Akron, say that an organization can become more competitive by implementing a stronger offboarding process. Their research shows that similar to the way universities maintain alumni networks, an offboarding strategy keeps former employees networked, which leads to more employee referrals, new business, expert consulting, or even re-employment. Dachner and Makarius wrote the HBR article “Turn Departing Employees into Loyal Alumni.”
CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.
I am a big fan of farewell emails, those missives that go out when someone’s leaving a job. I addressed my last one to friends, colleagues, and voices of clarity in a complicated world. It’s one of the few times in life when you get to be grandiose. Sometimes you can tell when those farewells are rushed, someone’s busy finishing their work, or they’re clearly spending more time thinking about their new job than the one they’re ending. But at its best, a farewell email celebrates common accomplishments, takes perspective and leaves the door open for another beginning. It’s still mostly up to individuals to stay in touch and maintain their networks, but nowadays you never know, your next big opportunity may well be at someplace you left behind.
Our guests today, say it’s time for organizations to stop leaving it to individuals to keep these connections alive. Based on their research, they recommend that companies develop stronger offboarding programs so that employees exit with a better taste in their mouth and organizations have a stronger alumni network to draw upon in the future.
Here to tell us more about offboarding in a strategic way, are the co-authors of the new HBR article, “Turn Departing Employees into Loyal Alumni”. Alison Dachner is a professor at Boler College of Business at John Carroll University. Allie, thanks for coming on the show.
ALISON DACHNER: Thank you for having me.
CURT NICKISCH: And Erin Makarius is a management professor at the University of Akron. Erin, thanks for being here.
ERIN MAKARIUS: Thanks for having me.
CURT NICKISCH: Let’s just start in by talking about offboarding, what that traditionally is. What is it? What is taught at your business schools about what the best practice of offboarding currently is or has been?
ALISON DACHNER: That’s a great question. Typically, both in our classes and in the research, offboarding isn’t really referred to under that name. There’s a lot of conversation about turnover and there’s some research and conversation about outplacement services in the case of a layoff, there’s some conversation about best practices for exit interviews, but there’s not a whole lot of discussion about offboarding and the whole process that we’re interested in, in managing talent as they leave the organization.
CURT NICKISCH: It seems like the big buzzword is retention, and if you can’t retain people, then companies almost give up.
ALISON DACHNER: Absolutely. You know, retention is great and we’re not saying don’t try to retain people, but retention is not realistic for a lot of people. A lot of people come in thinking they’ll leave, a lot of people leave for better opportunities. There are so many reasons. People are going to leave no matter what, and especially now, we see this changing landscape of employment where people don’t stay their whole career at the same place and they’re not loyal to the same company. And so our thought was really, what can organizations do about this, knowing people aren’t going to stay?
CURT NICKISCH: Erin, Ali just mentioned the fact that people’s tenures at companies is shortening, the average length of employment is down to what, 4.1 years, I think I read in your article. And so is that the real catalyst for this growing realization that before, when somebody left, they were onto something else and they would unlikely be back, but this is just a different reality now?
ERIN MAKARIUS: Yeah, I do think there’s a shift from the company employee that’s staying with the same organization for their lifetime, to more transitions between jobs and employers, but it’s also just the changing landscape of work, that we have more contract employees and part-time employees and different types of employees. The gig economy has changed a lot of this as well. So it’s not just the fact that people are changing employers, but it’s also just the changing landscape of work, that’s really created more of a need for these types of programs.
CURT NICKISCH: So I realize we’re lumping all of corporate America and the corporate world into one timeline here. But what typically happens when somebody leaves a company, what’s your average process?
ALISON DACHNER: I mean, it varies from company to company and industry to industry, but really, you often have your sit down with HR and a manager, where they discuss why you’re leaving, depending on that reason, if there’s benefits or severance or anything available, you have that discussion. Maybe you have an in-person exit interview, maybe you’re sent a survey. We know from a lot of research, that exit interviews aren’t often done well or in a way that it provides a lot of useful information to the company. And then the people go on their way and the organization goes on their way, it’s like a breakup where you cut ties and you separate and you don’t have interaction again.
CURT NICKISCH: Yeah. So what stops managers and organizations from doing this? Is it that they just don’t take the time and it’s a resource, or the fact that it’s uncomfortable to talk about a future where that person isn’t there, it’s just a harder conversation to have?
ERIN MAKARIUS: There are a lot of reasons and I think the difficulty of the conversation is part of it. A part of it is a fear of losing that resource, if it’s someone that’s valuable to you, you want to keep them in your group and your team and your organization. And so that’s where it comes into having this climate for mobility and really supporting the fact that people may not be with you forever. And one of the managers that we interviewed said, “I knew someone wanted to come into my role, but I wasn’t leaving the role for five years. And so I helped them get a job elsewhere. Why wouldn’t I provide them the resources and support to be the very best and know that they can serve another organization in the same role I’m in and have that valuable connection.”
ALISON DACHNER: Yeah, I think to their resources question too, we often hear HR gets cut first, the strategic role is questioned, things like that. And it’s hard enough to get the resources to invest in current or incoming employees sometimes and programs that support them. So how and why would we possibly use our resources on people leaving? So even if we’re not the type of company that has the, you’re a traitor, you left us, mindset, we still may not want to invest or think it’s worth investing the resources in people leaving-
ERIN MAKARIUS: Or have the resources.
ALISON DACHNER: Or have the resources to do it. And so one of the things I think is a misconception is that this has to be financially costly because it doesn’t. If it’s aligned with the other talent management systems, if you’re using an HR system and you’re using data you already have, it’s just an extension of what already exists. And so it requires some time and effort, but it doesn’t necessarily have to be this big financial investment to do this well. A lot of it surrounds praise and recognizing that people have been there, sending emails and newsletters, fostering relationships. It doesn’t have to be this huge financial investment that takes away resources from somewhere else.
CURT NICKISCH: Yeah. Some companies that do this, like management consulting firms, they have strong offboarding programs apparently, because they stay in touch with their alumni, they sometimes even host dinners for classes of alumni. But part of that is that the people who leave may end up working for a client or other companies and end up bringing business back in, in the future, or they help with networking and referring new employees at that organization. Can you talk a little bit about companies that do seem to do this more strategically and what they get out of it?
ERIN MAKARIUS: I think companies that are more strategic about it, have more formal programs. One of the things that we recognized in our research is that many companies miss the opportunity to connect with alumni. And so these alumni groups are formed by former employees themselves and managed and the events are actually put on by the former employees.
CURT NICKISCH: So they create a Facebook group.
ERIN MAKARIUS: A LinkedIn.
CURT NICKISCH: Yeah. LinkedIn group. Sure, sure.
ERIN MAKARIUS: Right. And so they’re creating these connections and the organization isn’t seeing the benefit from those connections. And so companies that strategically make this part of their talent management process, are able to see the benefits such as referrals, but also the reputational advantages, they can access information from those employees still, they have that social connection and those social capital. So there are a lot of benefits to a firm in making this a formal part of their talent management process.
CURT NICKISCH: Did your research show whether more of those employees come back and have a second tour of duty at that firm?
ERIN MAKARIUS: Again, it depends. There is some research out there that recognizes that boomerang employees are beginning to be increasing, that we see employees that have left organizations are coming back to those firms and it’s actually valuable to the company because now you’ve got experience from another perspective, from another organization that you can bring back to the firm.
CURT NICKISCH: Right. They’ve had all this professional development on somebody else’s dime.
ERIN MAKARIUS: Exactly.
CURT NICKISCH: So what kinds of things can organizations do?
ALISON DACHNER: Yeah. I mean, I think the first thing that companies have to do if they’re thinking about this, is really think about what is their current strategy, what is their current culture like and what are their goals? I mean, all HR decisions, all management decisions we make, have to come back to, how does this align with everything else we’re doing? We can’t just blindly say, “I want an alumni club.”
CURT NICKISCH: That almost sounds like, “I want an alumni club, so that there’s something for when I leave.”
ALISON DACHNER: Yeah, exactly. But if you have a culture where people don’t feel like they’re supported or treated well, it’d be very odd to try to now set up a system where it’s like, “We’re going to treat people well when they leave.” Or, “we’re going to have this new perception.”
So the starting point really is just establishing what are our goals from this and how does that align? What can we do that aligns with what we’re already doing? And from there, you can develop the appropriate programs and initiatives. But there’s no one right way or one right approach, it’s going to vary from company to company, it’s going to vary from industry to industry. And really, even if an organization offers a lot of different programs or options, different departing employees needs or wants or motivations for being involved will differ. And so, it’s constantly moving pieces, which is a neat challenge.
CURT NICKISCH: Erin, have you seen something a company did and just thought to yourself, “Wow, that is so smart.”
ERIN MAKARIUS: I think one the programs that we thought was valuable, is the NFL was offering their employees access to healthcare and exercise programs and their fitness benefits, even after employees parted. LinkedIn offered premium subscriptions to their services to employees after they had left.
CURT NICKISCH: Pretty low cost, but why not, right?
ERIN MAKARIUS: Exactly. But it opens up the door and shows, we still value you and we still want to have that connection for offering these programs to you. And even during COVID, many organizations offered mental health or work-life balance resources and programming, to help employees and alumni manage these new challenges in the work environment.
CURT NICKISCH: For a lot of people, when you leave a company, you leave a business, you’ve spent a lot of time there, you have a lot of strong relationships with people that is now incumbent upon you to maintain. And sometimes we’re just not as good about it, or as deliberate about it as we should be. And if companies ease that path for us, it makes it a lot easier to do.
ERIN MAKARIUS: I think so. It provides a way for companies to manage the process and a service to build those connections over time. And so it’s valuable not only for organizations, but also for those employees themselves, that it provides potential job opportunities and resources and information exchange. One of the benefits we saw some companies were doing is offering consulting work to former employees. So might not bring you back as a full-time employee, but we have a project that we think you have expertise and experience that you could add value to. And so offering those opportunities in a more structured way, I think is valuable.
CURT NICKISCH: Yeah. And that’s a very natural thing to do in business when somebody leaves, they often work on retainer or have some sort of ongoing contracts with their former organizations. But rather than having that be a one-off thing, you can set up a framework for this so it’s easier to set up for anybody, is what you’re saying?
ERIN MAKARIUS: Exactly. And even helping each other. So Airbnb had a program where they created a job board, not for employees to get jobs at Airbnb, but after they left Airbnb, to help spotlight and highlight the employees that they had and the experiences that they offered, for other jobs and potential opportunities in the future.
ALISON DACHNER: This is a common practice now for retirees too, and that’s one reason people leave and it’s really hard to shift from, I’ve been employed for 50 years, especially when I’ve identified with my career. We see it in doctors and surgeons, to be completely retired and off the grid, some people love it, but other people ,that’s a big transition and there’s a lot of thought that goes into how do we facilitate that? So bringing them back as Brown Bag speakers, assigning them a mentorship role for current residents, there’s all kinds of ways that they’re bringing back some of these retirees in the medical field, to capture that knowledge they have and give them the opportunity to keep a foot in the door.
CURT NICKISCH: The Airbnb example is interesting because this got a lot of press when they had to lay off workers during the pandemic, because travel and travel spending was way down. How do you adjust this for employees where you’re letting them go involuntarily or they’re being let go involuntarily? I know a lot of companies during the pandemic wanted to have sticky benefits or severance payments or cover medical expenses for somebody who left, to make it easier for people to come back. Is there a parallel there?
ALISON DACHNER: I think that really lends itself to the importance of having a well-developed program or initiatives that are known by employers prior to these potential layoffs or redundancies. Because telling someone they’re laid off and then be like, “But join our alumni club, or we’re going to try to support you in this way.” They have a bitter taste in their mouth probably, even if they had a great relationship with the employer.
So having this in place ahead of time, even if there’s a surprise lay off or someone loses their job in these types of crisis situations, they know what to expect, and even if they’re not ready to engage as an alumni immediately, knowing what exists and being really aware of the benefits to them, they may come back and they may be more interested in being an engaged alumni or taking advantage of some of the benefits that are afforded to them, or creating value to the employer.
CURT NICKISCH: Let’s talk about how you get this through at an organizational level and just as a manager, I find it interesting that you say that managers have to be prepared to have more of these conversations to discuss the reality that somebody may not be there long-term. And I’m just curious how you would hear a conversation like that go?
ERIN MAKARIUS: I think it should be part of continuous development and professional development opportunities. So often managers have career discussions with employees to talk about their current performance and future career goals. And so if you make it part of this continuous conversation, it becomes a little bit less awkward and more just part of the annual process, or even more often than that, of really having discussions about the career and the future opportunities. And that could be within the organization or beyond.
ALISON DACHNER: I completely agree. It could be as simple as asking someone, “What are your strengths that you don’t use in your role? Or what skills do you have that you wish you could bring to work? What types of challenges do you think you’re ready for, that we haven’t given you yet?” And just starting with the, how can we meet some of your needs here and then that starts the conversation about, okay, where might you need to go to do these things?
CURT NICKISCH: Yeah. How do you see this getting instituted at firms? Is this managers going to HR and asking for something, is this HR suggesting a program and doing it top down? What do you recommend?
ALISON DACHNER: I mean, there has to be buy-in from the top. So I would start with saying top down, but having involvement in all levels is going to be important because within a company, you don’t know what people might want, or what’s important, or what’s a good fit, without really incorporating a team.
ERIN MAKARIUS: And there’s not a one size fits all approach for all organizations, but I think we would argue that it does involve a partnership between managers and HR, in really thinking about what goals do you have for this type of program, what data do you need to get there? And ask them what programs and initiatives you already have in place that you can utilize for a more strategic and proactive offboarding program.
CURT NICKISCH: What do you say to managers who haven’t bought into this, who think that this is a waste of time and energy and they should spend their time on recruiting or keeping existing employees?
ALISON DACHNER: I mean, you’re probably not going to change anyone’s mind in one conversation, because I think the plan to do this reflects the climate that exists. And if there’s an individual manager who’s just not going to buy in, it’s going to be a hard sell. I mean, I would highlight the value to the individual and the value to the organization. So if their focus is on recruitment, I’d say, “This could save you a whole lot of time in the future, on your recruitment, or this could potentially bring you in referrals and hire top talent by managing the people leaving really well. They might refer you or put good things on Glassdoor.” There’s all kinds of benefits that I would highlight, but I don’t think one conversation is going to change someone’s mind.
ERIN MAKARIUS: But I believe our goals of the research is to show that there is value in these types of programs and to demonstrate the companies doing these offboarding programs have seen reputational advantages, human and social capital advantages, recruitment advantages. And so that’s valuable not only to the employers, but also to the employees that are currently in the organization and that have become alumni as well.
CURT NICKISCH: What do you do if you’ve listened to this episode, you’re a manager at a company, it’s not coming top down, but you want to take it to the top, where would you begin?
ALISON DACHNER: I don’t know about at a lower level, but I definitely think even among the top management team, it’s sometimes hard to create that buy-in. So I’ve talked to some CHROs who’ve indicated, “I think this is a great thing to do, but no one else is on board,” and it’s a really hard sell for a CEO or a CFO to get them on board. And I think it just constantly comes back to what type of workplace do we want to be? And what do we want our employees saying about us in the future? And what types of people do we want to recruit? When people are out there talking about us, what do we want them to say? What’s our culture overall? And when someone’s bringing that to a top management team or to executives, the answer to that really dictates a lot, what you’ll be able to do and what you won’t. Framing it in that way has been helpful for the people I’ve talked to.
CURT NICKISCH: How do you address the fear of competition and what information people will take to other companies? Because there are firms that have non-disclosure agreements that limit what people can talk about after they leave or even how they can talk about your own company. What do you make of that?
ERIN MAKARIUS: There are valuable reasons that those exist in some organizations. So if you need to have a non-disclosure agreement, I think that’s okay. But there are still things you can do to facilitate the offboarding process, to recognize the contributions that the employee made while they were there and leave the door open for them if they have the interest or potential to come back in the future.
CURT NICKISCH: If my company doesn’t do this when I leave, what should I do?
ALISON DACHNER: The individual leaving still can get some benefit from staying connected, just as you’ve mentioned in your introduction, your farewell email. Ending on good ties, maintaining connections, all of those things are still valuable to an individual, or could be valuable to someone who’s leaving. It just doesn’t necessarily benefit the organization in the same obvious way if they’re not managing that process. But I do think, as Erin mentioned, in some cases there are people or organizations who choose not to do this. And in other cases, there are companies that just don’t even recognize the possibility. We’ve had so many people since this was published, reach out like, “I never even thought to do that. We just retain, retain, and then say, see you later.” And it’s not something that is really acknowledged as much yet, which is a cool opportunity.
CURT NICKISCH: Allie and Erin, thanks so much for talking about this research and opening our eyes to the opportunity that’s out there to really be more deliberate and strategic with offboarding programs.
ERIN MAKARIUS: Thanks for having us.
ALISON DACHNER: Yeah, thank you.
CURT NICKISCH: That’s Alison Dachner, professor at Boler College of Business at John Carroll University. And Erin Makarius, she’s a management professor at the University of Akron. Together, they’re the authors of the HBR article, turn departing employees into loyal alumni. You can find it in the March, April, 2021 issue of Harvard Business Review or at hbr.org.
This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Adam Buchholz is our audio product manager. Thanks for listening to the HBR IdeaCast, I’m Curt Nickisch.