It's Not If, It's When: Why Manual Offboarding & Severance Processes Lead to Errors
Is a million-dollar mistake already in your severance and offboarding process? Disconnected systems and manual processes can fail at the worst possible moment, in front of the worst possible audience.
Oracle. Amazon. Meta. Block.
These are just a handful of companies that have made headlines in 2026—sometimes for the layoffs themselves, and other times because the process was mishandled. Though companies are pressured to move quickly when making layoffs, many are managing the process with manual processes and nonspecific technologies.
This leads to preventable mistakes and harmful headlines.
Maybe severance is accidentally paid before notifications are made. Maybe it’s a WARN Act oversight that led to penalties and a lawsuit. Maybe it’s a missing OWBPA disclosure that led to an unenforceable waiver of claims. In today’s hyperconnected world, even simple errors like these make headlines.
As the need to have an agile workforce increases, more company C-suites are making offboarding governance a priority. A single offboarding mistake can lead to significant legal or reputational risk that could cost the company millions. Responsible companies don’t want to be caught off-guard if the need for a workforce reduction presents itself; they want to be ready and have sound infrastructure in place to ensure employee exits are handled accurately and thoughtfully. Whether you’re managing everyday offboarding or layoffs, the final moments matter.
Severance and offboarding solutions fall into three categories. Each comes with its own set of myths—beliefs that keep companies stuck with the wrong approach until something forces a reckoning. In this article, we analyze these three approaches to offboarding management:
Use manual processes and disconnected systems;
Build a custom solution; or
Use specialized offboarding technology.
Let’s take a closer look at each of these solutions and their considerations.
Manual offboarding and severance processes create significant legal, operational, and reputational risk. Specialized offboarding technology helps enterprise HR teams automate compliance, reduce errors, and improve workforce reduction governance.
Option 1: Use Manual Processes and Disconnected Systems
The most common approach. Also the most dangerous.
Some companies manage offboarding using manual processes and disconnected systems. During a reduction in force, for example, that process may involve some of these steps.
Determine severance pay amounts using formulas coupled with calculation tools like Excel
Generate customized separation agreements and severance packages using static spreadsheets and mail merge
Use an HRIS or an HCM system—like Workday, SAP, or Oracle—to help obtain updated employee information, distribute documentation, and collect signatures
Although various technologies can help simplify parts of the process, this option still requires significant human involvement and coordination—i.e., manual intervention.
Myth #1 - The status quo is easier
Companies often stick with the status quo because it’s less disruptive. Perhaps the process is working well enough, so there’s no motivation to change it (if it ain’t broke...).
Reality: Manual offboarding processes are inefficient. It’s easy to underestimate how much time and effort could be saved by automating manual processes—especially during large-scale events like workforce reductions.
Consider these questions about the status quo:
Are we spending too much time on administrative tasks that don’t further our strategic goals?
Would it be easy to substantiate our process, including justification and documentation, if we were audited?
If the person who oversees offboarding leaves the company, will we know how to replicate the process?
“Before using Onwards HR, our team had to manually track separations, create separation notices, and send them out to employees. We no longer have to include this in our day-to-day since Onwards HR has automated this for us.”
Myth # 2 – We've got it under control
Many companies think their manual offboarding process is working because nothing has indicated otherwise ... yet. Perhaps everyday employee exits are going smoothly enough, and the occasional workforce reduction has been manageable.
Reality: The companies you see making negative headlines thought their process was working well, too. Often it takes a wake-up call to realize there were gaps—maybe in the form of severance pay mistakes, documentation oversights, or compliance errors.
Consider these questions about your process:
What measures do we have in place to ensure ongoing accuracy of employee data?
How do we monitor and comply with evolving geography-specific separation requirements?
Are we confident our group layoff process adequately considers the WARN Act, mini-WARNs, and ADEA/OWBPA?
Option 2: Build a Custom Solution
The illusion? Control. The actuality? A compliance nightmare.
Larger companies may turn to their IT departments or outside consultancies to build a customized solution to address their complex offboarding needs. Companies are typically satisfied with their homegrown solution at first, but challenges arise when it comes to maintenance.
Myth #1 – Our situation warrants a custom build
It’s common for companies to think that their offboarding needs are especially complicated or unique—and that it therefore makes sense to build a custom solution. The “We can do this ourselves” mentality also gives the illusion of greater control.
Reality: Before the development of specialized offboarding technology, it made sense for companies to think a custom build was the only way to fully address their needs. Today, though, technology like Onwards HR can be configured to each organization’s workflows and corporate policies—i.e., the perks of a custom build without the headache.
Consider these questions when evaluating a custom build:
Will it integrate with other existing systems, such as our HRIS platform?
Are we prepared to handle routine maintenance and time-sensitive updates?
Do we have the resources and knowledge to track regulatory updates and make sure we are compliant?
Is this solution capable of handling a large-scale workforce reduction event?
Myth #2 – It’s cheaper
Sometimes companies believe that it will be more cost-effective to build their own solution. For example, they might be seeking a way to leverage their current HRIS or HCM system investment by building a custom application on top of it.
Reality: Most companies underestimate the ongoing maintenance that’s required to ensure an offboarding system is up-to-date and legally compliant.
Consider these questions when evaluating the cost of a custom solution:
Can we afford to pull our IT team’s focus away from other strategic initiatives?
Are we mitigating the risk of compliance-related lawsuits by monitoring and implementing ongoing regulatory changes?
Will our processes and workflows enable us to move quickly in the event of a reduction in force (RIF)?
“[Onwards HR] has saved the company substantial time and costs associated with offboarding. It’s highly configurable, and they supported our needs.”
Option 3: Use Specialized Offboarding Technology
Built for the process email and spreadsheets were never meant to handle.
The third option is to invest in technology that’s specific to offboarding, like Onwards HR. Because the platform was designed with end-to-end offboarding in mind, every step has been thoughtfully considered and developed with compliance, consistency, and compassion in mind.
Myth #1 – We don’t need another technology
The thought of adopting new technology can be overwhelming, especially in a tech-heavy field like HR. Plus, people are generally resistant to change—particularly if they think the current system is working well enough.
Reality: Onwards HR's technology integrates with HRIS and HCM systems to enable real-time synchronization, which helps companies avoid making data-driven errors. Companies may think they have offboarding systems in place via technologies like Oracle, SAP, or Workday, but nonspecialized technologies only execute pieces of the process. When systems are disconnected, risk increases exponentially.
Consider these questions when shopping for offboarding technology:
How are disconnected systems creating inefficiencies in our offboarding process?
Do we feel confident that we are complying with all federal and local separation-related laws?
What strategic HR initiatives are on the back burner due to time spent on administrative offboarding tasks?
“This might not be the kind of technology HR professionals think they need, but once they have it, they’ll realize the considerable time savings it creates and the pressure it removes from HR and legal teams in ensuring accuracy of required documentation, as well as avoiding any wrongful termination lawsuits”
Myth #2 – It's too expensive
With a recent emphasis on revenue-generating technologies, companies may think that offboarding technology won’t be worth the return on investment.
Reality: Offboarding is one of the most sensitive parts of the employee lifecycle, and one misstep can have detrimental effects on an organization. Whether it’s a WARN Act violation, a severance overpayment, or a botched layoff notification, offboarding mistakes are expensive and can tarnish a company’s reputation.
Consider these questions when evaluating investment in a new technology:
Do we feel confident in our ability to comply with the WARN Act, mini-WARNS, and ADEA/OWBPA during group layoffs?
Does our current system create risk of cybersecurity issues?
Are our offboarding processes consistent and compassionate?
Which Should You Choose?
For most companies, specialized offboarding technology is the right answer. We’ve seen firsthand how Onwards HR can transform the end-to-end offboarding experience for employers and employees. Our customers can attest to this, too.
“Onwards HR helps us solve the challenge of managing complex, high‑risk severance and offboarding processes that were previously manual, fragmented, and difficult to coordinate across teams. The platform provides structure, visibility, and governance around severance events, allowing HR, Legal, Payroll, Finance, and Workforce teams to work from a single source of truth.”
Although manual processes, like Options 1 and 2, may be sustainable for a time, they aren’t the best solution for today’s evolving workforce. Before specialized offboarding technologies were available, an internal build may have been a very viable solution. However, since specialized technology exists, there’s no good reason to continue using tools that weren’t designed for the process at hand.
You can try to work within existing technologies, but this creates significant risk of error—especially in terms of compliance, an area in which one misstep can result in a multimillion-dollar lawsuit. You can also attempt to build an internal solution, but many companies underestimate the amount of maintenance this option requires. Plus, the compliance piece alone is a lot to ask of someone whose specialty is IT, not law.
That’s why more and more companies are investing in specialized technology like Onwards HR.
Why Now?
The next RIF is coming—and your severance and offboarding process might be at risk of a million-dollar mistake. Don’t wait until something goes wrong to reevaluate your process.
Offboarding risk is only becoming more prevalent. Regulatory scrutiny is increasing, workforce dynamics remain volatile, and separation-related litigation continues to rise.
Relying on manual and disjointed processes exposes companies to unnecessary compliance risk and slows down operations. By implementing a governed, automated infrastructure now, companies can:
Proactively mitigate the legal exposure and inefficiencies that arise from manual processes and fragmented systems
Protect the brand and improve the employee experience by leveraging an end-to-end offboarding solution
Use built-in compliance analysis tools to check for WARN Act applicability, adverse impact, and state-specific separation requirements
Automatically calculate severance and generate separation agreements based on employee data and corporate policy (and repeat the process with one click if dates change)
Establish scalable infrastructure that aligns with enterprise security standards before the next restructure or workforce reduction
This isn’t just about process improvement; it’s a risk management and governance investment that ensures consistent, compliant and supportive employee exits.
Summary
Offboarding is a historically underappreciated part of the HR function, but it’s critical and sensitive to get right. If you want to achieve better offboarding outcomes, specialized technology is a must. Goodbyes are an important part of the employee lifecycle, especially during involuntary separations. For this reason, it’s important to deliver a buttoned-up process that prioritizes compliance and compassion.
While some companies can skate by with nonspecific solutions, this can change quickly during large-scale offboarding events. Unfortunately, many companies don’t realize their solution was insufficient until they’re on the wrong end of a costly lawsuit. With workforces in flux like never before, responsible companies are proactively rethinking the way they manage offboarding.
Don't make headlines. Make a great last impression.
