Capterra, the B2B software search website, has revealed the results of a study on employee offboarding strategies, and whether Australian businesses are considering alternatives to lay-offs during this period of economic downturn.

Capterra interviewed more than 1,300 Australian workers to gather more insight into how these exit strategies are being handled by SMEs, and results show that more can be done to ensure that the complications that come with the offboarding process can be minimised.  

When asked whether their company had made lay-offs in the last 12 months, over a third of survey-takers (37%) answered in the affirmative; of this group, 38% said the rate at which staff were being let go had increased compared to the previous year.

Additionally, according to Capterra’s survey results, SMEs from the telecommunications sector have seen the most lay-offs, with 80% of respondents reporting job cuts in their firms. An industry such as telecommunications may be rethinking roles in several areas, such as customer experience positions, perhaps due to improved AI tools leading to more job automation, the report states.

For small businesses, the possibility of a recession can leave them concerned about reduced demand for their products or services, and whether they can afford to retain their current workforce. Capterra asked respondents who reported job cuts within the last 12 months why their company had laid off employees, with the most common answer being 'cost-cutting' (48%).

This was followed by a 'decrease in operations' (34%) and a 'decrease in funds' (22%). Economic uncertainty is hitting Australian businesses hard, and the way that management teams navigate these difficult times can make or break a company’s reputation.

One of the vital ways to maintain employee morale during redundancies is effective communication in the workplace, the researchers state. 45% of survey-takers said their company communicates lay-offs to employees, whilst 38% said their employer doesn’t.

Employees will likely appreciate honesty and would rather receive information directly from management rather than via hearsay. Crucially, the process of offboarding (including steps such as exit interviews and the transfer of information between colleagues) is a surprisingly uncommon one, with 40% of respondents indicating that no offboarding strategy is active at their workplace, despite its benefit in minimising the impact that a departing employee has on the company.

Laura Burgess, Content Analyst at Capterra Australia, says, “If an SME needs to downsize, they should consider the costs of lay-offs and rehiring. Companies should evaluate alternatives to redundancies, such as employee upskilling or offering staff a voluntary reduction in hours, first.

“If companies have no choice but to make lay-offs, it's vital to implement an offboarding strategy, such as holding exit interviews, to show support and compassion to employees, and avoid damaging the company's reputation.”

To collect the data for this study, Capterra conducted a survey from May to June 2023. To do this, a sample of 1,376 people was selected. The sample of participants is representative of the population of Australia, and the criteria for selecting participants are as follows: Between 18 and 65 years old; employed part- or full-time in a junior, intermediate, manager or executive position; and work at same small to midsize enterprise (SME) of 2-250 employees for at least one year.