I know… you don’t do exit interviews. In fact, despite the escalating cost of employee turnover, most companies don’t. The common excuses are
1) I already know why people leave; 2) people don’t give honest answers; 3) we don’t have the time; 4) I am not sure what to ask; and 5) who needs them — the people are gone anyway.
None of these reasons equate to the tens, or even hundreds of thousands, of dollars a company can save on employee turnover, absenteeism and productivity by performing exit interviews. Losing one employee can cost a company a minimum of 50% and up to 300% of an employee’s annual salary. So exit interviews, which cost $30 to $150 each, provide one of the highest returns on investment (ROIs) you can get from an employee program. If it’s done right, you can gather new solutions to recruitment, management and orientation issues, as well as how to best meet the needs of the person filling the position.
By constantly evaluating the workplace you’ll decrease hiring and training costs and reduce employee turnover. Exit interviews are a formal set of questions asked of departing employees that serve as a barometer for the work environment. The best information comes from soon-to-be-departing employees who are comfortable expressing how they feel and who trust that those to whom they are speaking will listen confidentially. Whoever administers the exit interview should query five key areas:
1. Reasons they joined/liked working there (e.g., questions about salary, work environment, administration, what they liked most about their job, etc.).
2. Reasons they are leaving (same as above, plus management relationship and what they liked least).
3. Suggestions for changes (e.g., questions about training a replacement, challenges, improving communication, different reward system, etc.).
4. Verifying the understanding between employer and employee (e.g., concerning insurance, materials/supplies, confidentiality agreements, keys, etc.).
5. Open-Ended Opportunity. Let employees be expressive; it provides closure. People don’t quit a firm to play in the NFL. Ex-employees stay in the industry after leaving and become potential clients, vendors, partners or competitors. In every case, it’s a good investment to part on good terms. You can always use a partner and you don’t want to add emotional fuel to your competition.
Upon receiving the information, the provider should organize it into a format that can be easily used to make real-world changes. Once several departures have provided similar responses, it is time to make a change. Implementing the change is where a company reaps the benefits of exit interviews. It shows your remaining employees that the company values their opinions and works to provide solutions. Exit interviews provide suggestions and propel change, and give the small business owner the feedback needed to move forward.
Finally, a word about outsourcing:
During in-person interviews, especially with the boss, employees will dodge an honest response to keep a good reference. As a result, a company will not receive helpful insights on how to improve and may be falsely led to believe their company has no areas to improve upon. For this reason anonymity in exit interviews is crucial. Outsourcing exit interviews ensures honesty and saves money. A good third party can get your employee to open up, which is much harder to achieve if it is conducted within the business.