Onwards HR report says most companies still manage offboarding manually

A new Onwards HR survey finds 94% of organizations lack fully automated or integrated offboarding as workforce restructuring becomes more frequent. The report warns that manual processes, compliance gaps and manager readiness are leaving companies exposed during layoffs and other employee transitions.

Why it matters: - Workforce restructuring is becoming a routine operating issue, not a one-time event. - Onwards HR says the gap between how often companies restructure and how they manage departures is creating compliance, execution and morale risks. - More than 1.2 million U.S. employees experienced layoffs in 2025, underscoring the scale of employee transitions companies are handling.

What happened: - Onwards HR released its 2026 Workforce Transition Benchmark Report with SHRM. - The report found 94% of surveyed organizations have not reached fully automated or fully integrated offboarding. - Fifty-two percent said more than half of their offboarding and severance process still requires manual effort. - The research was released Oct. 7, 2026, in Atlanta.

The details: - The report says companies are handling restructurings, role redesigns, voluntary separation programs and routine departures across distributed workforces. - A single workforce reduction can require coordination across employee data, severance calculations, payroll, benefits, legal review, notices, agreements, signatures, communications and IT access. - That work can involve HR, Legal, Finance, Payroll, IT and managers, sometimes across multiple states or countries. - Sixty-six percent of surveyed organizations use two or more tools to manage employee separations. - Nearly four in 10 use three or more tools. - Among respondents who answered the question, 61% cited state-specific separation notice requirements as a compliance difficulty. - Forty-nine percent cited managing a multi-state or multi-country workforce. - Forty-three percent cited keeping templates and agreements current as laws change. - Only 10% reported using dedicated compliance software. - When determining WARN and mini-WARN requirements, 49% said HR manually checks government guidance. - Just 12% reported using software that tracks thresholds in real time. - Fifty-five percent identified manager preparedness and script compliance as the top severance and offboarding challenge. - Forty percent cited cross-functional coordination. - Thirty-six percent cited consistency across locations or business units. - Fifty-eight percent linked poor offboarding to lower morale among remaining employees. - Fifty-five percent linked it to legal disputes or complaints. - Forty-nine percent linked it to negative employer-brand reviews. - Forty-seven percent said it can reduce the pool of potential boomerang employees. - Forty percent said a compliance issue, close call or EEOC complaint could trigger evaluation of a dedicated solution. - Another 40% said they have not adopted one because no significant problem has happened yet. - Fifty-three percent said severance calculation or separation agreement errors had occurred, although rarely. - Another 6% said those errors occurred occasionally. - Fifteen percent said they do not track error frequency. - Incorrect severance calculations were the most commonly reported error type, selected by 42% of respondents who answered the question. - Respondents said automation could help most with compliance and with document generation and management, at 61% each. - Severance calculations and documentation followed at 54%. - Big technology gaps included state-specific document generation, a single platform for HR, Legal, Finance and Payroll, direct HRIS integration and automated severance calculations. - Open-ended responses pointed to AI tools that could monitor changing compliance rules, surface relevant information and flag issues while keeping HR and Legal in control of review and decisions. - Onwards HR says the next stage of workforce transition management will require connected systems, embedded compliance, consistent documentation and better manager preparation.

Between the lines: - The report suggests many companies are still treating offboarding as an administrative afterthought even as workforce change becomes continuous. - The biggest risk is not just inefficiency. It is error-prone execution across legal, payroll and employee-communication workflows. - The findings also suggest buyer demand for offboarding technology may rise only after a problem becomes visible, which can leave organizations reacting late. - Rodehorst said companies are restructuring faster than they can manage the resulting workforce transitions, and that “nothing has gone wrong yet” is not the same as a resilient process.

What's next: - More organizations are likely to evaluate automation as layoffs, reorganizations and compliance demands continue. - The report points to growing interest in integrated platforms that connect HR, Legal, Finance, Payroll and IT. - Onwards HR says AI may play a role in monitoring compliance changes and surfacing risks, but final review should stay with HR and Legal teams. - The company says its platform supports planning, preparation, execution, employee support and governance across the workforce transition lifecycle.

The bottom line: - Companies are reshaping work faster than they are modernizing offboarding, and Onwards HR says that mismatch is leaving them exposed to errors, compliance issues and avoidable reputational damage.