Introduction
Offboarding an employee is a critical process that ensures a smooth transition when someone leaves your company. Whether due to resignation, termination, or retirement, it's crucial to handle the departure professionally and efficiently to protect your company's interests and maintain a positive relationship with the departing employee. This guide will walk you through the essential steps to offboard an employee, covering everything from revoking access to company resources to ensuring proper documentation and compliance with legal requirements.
Which offboarding options are available?
When it is necessary to organise an employee's exit from the company, it is easy to follow a step-by-step process on Ledgy.
There are three ways to begin the offboarding process for stakeholders:
In bulk - If you have a group of stakeholder with the same termination date and all need termination transactions.
Individual - If you have a single stakeholder with specific termination rules.
Workflows - If you have standardised leaver policies and want to automate offboarding activities.
Option 1: In bulk
Within the Stakeholders page, click the Offboard button at the top of the page.
Within the offboarding pop-up, you can choose to add more than one stakeholder from the drop-down:
Add the Termination date & Effective vesting date (if applicable).
Note: If an Effective vesting date is added, the amount of grants to terminate will be calculated based on this date. If left empty, the effective vesting date will be the termination date
(Optional) Toggling the Allow exercising button expands the menu so the collaborator can set the exercise window length.
(Optional) Stakeholders can optionally be notified of their exercise window by toggling on Notify affected stakeholders. The stakeholders will be notified via email on the day the exercise window opens.
Once 'Offboard' is entered and the workflow completed, any stakeholders affected will have a Termination transaction attached to them for the respective dates within Ownership > Transactions. This can be edited and changed retrospectively if necessary.
Important: In the event, a stakeholder is offboarded but still holds shares in the company, it is recommended that the email address be changed from work to personal, and then they are re-invited to the platform with said email. This ensures the cap table remains accurate, the stakeholder retains their access for transparency, and they are still able to receive any relevant communications in the future.
Option 2: Individual
Go to Stakeholders, and using the search bar on the top-right of the grid, enter the name of your leaver. Find the three-dot button on the stakeholder and choose Offboard stakeholder.
Within the offboarding pop-up, choose the Termination date & Effective vesting date (if applicable).
Note 1: If you have connected your HRIS to Ledgy, the Termination date will be automatically set based on your HRIS information.
Note 2: If an Effective vesting date is added, the amount of grants to terminate will be calculated based on this date. If left empty, the effective vesting date will be the termination date
(Optional) Define which group the stakeholder should be assigned to after offboarding.
(Optional) Toggling the Allow exercising button expands the menu so the collaborator can set the exercise window length.
(Optional) Stakeholders can optionally be notified of their exercise window by toggling on Notify affected stakeholders. The stakeholders will be notified via email on the day the exercise window opens.
If the Re-invite stakeholder via email toggle is off, stakeholder access will be revoked upon offboarding, and they will not be re-invited. If the Re-invite stakeholder via email toggle is on, the stakeholder will be re-invited. However, if the user account email is the same as the re-invitation email, the stakeholder will retain access and not be re-invited.
Note: If the offboarded stakeholder's stakeholder profile contains a personal email, the system will automatically pull the information into the field.
Define whether or not fractions of the unvested grants should be terminated. You can chose to Select all unvested which would automatically add all the unvested amount to terminate.
Once you click 'Offboard' and the workflow completed, any stakeholders affected will have a Termination transaction attached to them for the respective dates within Ownership > Transactions. This can be edited and changed retrospectively if necessary.
Option 3: Offboarding workflows
💡 Use this option if you have standardised leaver policies and want to automate offboarding activities with a single click.
Automated workflows enable you to create and group a series of offboarding actions, such as terminating unvested equity, re-inviting with a personal email, or moving individuals to a post-offboarding group. These workflows can be applied individually or in bulk and linked to specific predefined leaver reasons.
Step 1 - Create leaver reasons (set up once)
Go to Company settings > Data management > Leaver reasons
Add leaver reasons; these can be as simple as 'Good leaver' or 'Bad leaver', or more granular, such as 'Retirement', 'Redundancy' etc.
Step 2 - Create offboarding workflow (set up once)
Go to Equity plans > Workflows > View Workflows > Add Worfklow
In the first sections you can select a name, and the leaver reasons for that workflow. You can select multiple leaver reasons, these will be shown as options when offboarding a stakeholder/employee. A leaver reason can only be linked to a single offboarding workflow.
Add a stakeholder post-offboarding group
Decide whether to re-invite stakeholders to Ledgy via their personal email, if available on their profile.
Add rules for vested equity. This section describes what happens to the vested equity of your stakeholder when they're offboarded. The options are:
Opportunity to retain — Vested equity remains untouched.
Exercise window — You can additionally select the option of creating an offboarding exercise window for that employee. Select the length and the settlement methods you'd like for that window.
Terminate grants — Generates termination transactions for all of the employee’s vested equity.
Add rules for unvested equity, this section describes what happens to the unvested equity of your stakeholder when they're offboarded. The options are:
Terminate immediately —- Unvested equity is terminated, generating one or more termination transactions, each dated with the offboarding date.
Continue vesting — Unvested equity continues at the granted vesting schedule.
Accelerate vesting — Accelerated vesting allows a stakeholder to receive all unvested equity at their offboarding date.
Select 'Add workflow'. Make sure your workflow is enabled.
Step 3 - Offboard stakeholders
Go to Stakeholders and select the stakeholder you'd like to offboard.
Select 'Offboard' from the island bar and select termination date and leaver reason.
Click 'Offboard' — all your termination transactions are now in draft state and waiting for publishing. Ledgy will create a termination transaction for every grant that needs terminating.