While employees have been hanging onto their jobs and riding out a tough year, the start of 2010 may see a different scenario emerge as the economy improves and people start looking elsewhere for work. Rather than letting those employees disappear from the ranks without a trace, experts warn that employers should be capturing as much information as possible about their reasons for leaving via exit interviews.
"With HR departments often straining to meet multiple demands, exit interviews can be regarded as a nice to have," says Shaun Rogers, research project manager with Insync Surveys. "Organisations that skip exit interviews open themselves up to a range of unacceptable and potentially damaging behaviours. Exit interviews provide an early warning system, alerting management to possible discrimination or fraudulent activity and any current or potential compliance breaches."
Lenore Lambert, director of Exit Info, says that by failing to conduct exit interviews, or not doing them well, organisations are missing out on the single most accurate source of information to identify what is really driving staff turnover. "Some organisations look to their engagement data for this but studies and anecdotal evidence have shown engagement data predicts only about 25% of quit behaviour. Exit data doesn't speculate why staff might leave; it pinpoints what actually drives quit decisions," she says.
In addition, the opportunity to complete an exit survey demonstrates appreciation of the outgoing employee's time and efforts with the organisation - an important factor when word of mouth can spread like wildfire.
"It is tempting to drop exit interviews, but I think there can be a good return on investment for the organisations that choose to run them and collect that data, and then use it to change their strategy - whether that's the recruitment, induction, retention or leadership strategy. The data can be extremely powerful if you have an organisation that's open enough to receive that criticism and feedback," says Leslie Alderman, partner, career management services, Chandler Macleod Group.
Who does it?
Exit interviews can be conducted by three separate parties - all three have their pros and cons.
Depending on the size of the organisation, it is common practice for HR to conduct the interview. Alderman notes that HR's success will largely depend on their relationships with employees and whether the exiting employee feels they have the objectivity to really let loose.
An alternative is to have the manager's manager do the interview. This, however, can be troublesome. "It can end up being a personal refection of them, so if the employee is leaving because of their manager, well, the manager's manager probably hired that person so it reflects badly on their recruitment decisions and their ability to manage that manager. It's not objective and they may be selective about what they choose to write down - it's a can of worms," says Alderman
Other organisations may engage a third party to do exit interviews, and while this may engender a sense of objectivity, Alderman warns that some service providers will use junior staff to conduct the interviews - whether that's face to face, over the phone or via questionnaire. "You must have the ability to ask probing questions to get the good hard data about the real reasons why people were going. Experienced consultants are best," she says.
While a third party has no agenda other than to get the truth, timing can be crucial. Alderman says that targeting individuals prior to them leaving can go one of two ways. Firstly, if they have already secured another role, Alderman believes more truthful responses will be forthcoming. Alternatively, if the employee hasn't secured another role they may need to have referees and will feel compelled to speak positively about the organisation.
To obtain honest answers, Alderman says it's crucial to set the guidelines upfront. "Make it clear why you want to obtain this information, how it will be used, who will see it, and reinforce that it will be done confidentially. Make sure they know that general information based on demographics and other factors will be revealed to senior managers but not location or department - unless it's a sizeable organisation which would make tracking answers to one individual difficult," she says.
Getting the nuts and bolts right
Exit interviews should take 30-45 minutes - anything less and the impression from the exiting employee will be that the employer really doesn't care and is merely 'ticking the box'. A survey or questionnaire can be done prior to the actual interview, but the results need to be probed with meaningful questions as a follow up.
The questions should be positively focused on encouraging the exiting employee to express their views in relation to: changes in the organisation; management and leadership competence; what the person did and did not like about the job; communication within the organisation and business unit; and so on. "The key is not to do it in a way that is overbearing or threatening in any way. Ask them how they would like the organisation to use that information," says Alderman.
A good exit interview covers not only the employee's reasons for leaving, but also broader measures around that person's perceptions of their work environment. In many cases, there are underlying issues and concerns which don't surface when people are asked directly why they're leaving. "There's the tendency for employees to state socially acceptable reasons for leaving such as career opportunities or pay, in an effort to not burn bridges," says Rogers. "Without solid questions and an unbiased approach, your organisation might brush over issues such as poor leadership or bullying."
The disclosure control process needs to be watertight. Lambert notes that when an employer collects exit data internally, it can be considered part of the employee record, which means it's not subject to Privacy legislation. However, an external party that adheres to privacy legislation will protect the departing employee's information according to their instructions.
All bad news?
While exit interviews are not all about the bad news, most people will be leaving for a specific reason. "A lot of the time the feedback can be taken as constructive feedback, but nine out of 10 people will stay where they are if they are happy and satisfied with the organisation, their manager and their career path. There may of course be situations out of their control - personal or financial reasons - where perhaps they have been happy but a once in a lifetime situation arises and they just can't stay. In those instances the feedback would be positive," says Alderman.
Likewise Baby Boomers, who may have delayed retirement for several years following the erosion of superannuation savings, may once again be considering a transition into retirement next year. Their responses are unlikely to dwell on the negative.
The results
If the organisation is prepared to spend the time and energy in assessing the data, Alderman maintains it can be a very effective tool in HR's armoury. "Look at the demographics, the tends, the issues, and then create some strategies around what's coming through. For example, if something comes through time and time again about the leadership team - perhaps they talk about values but act totally the opposite to those values - that's a good sign that something is wrong. Perhaps you need to assess your leaders, do some 360s, and then put some leadership development programs in place."
Insync Surveys takes this a step further by benchmarking exit survey information from thousands of Australian responses. "Exit survey benchmarking allows business leaders to confirm their gut instincts with hard facts. This is powerful because leaders can find out what's really having an impact on employees' decisions to leave compared to other organisations," says Rogers.
With aggregated data, Lambert says it's important to have a flexible reporting tool that can be accessed by HR whenever they need it. HR can then identify the meaningful employee segments for analysis and then slice and dice it to really understand what's driving turnover for each of the different employee groups. Examples of this are role types (eg sales, professional, administrative, front line management), gender, departments, geographic locations (rural locations can differ from the big cities), tenure profiles (eg those with less than one year of service, or those leaving with less than a year in a new role).
"Ultimately, HR should be able to easily answer the question: 'what's the one thing that, if addressed effectively, will have the biggest positive impact on staff retention'," she says.
Rogers suggests HR leaders gather exit information to develop talent management strategies rather than merely concentrating on areas of dissatisfaction. "In particular, when organisational leaders move on, we can seek to learn from their aspirational qualities and knowledge via the exit interview process. Future-oriented questions are commonly used to draw upon leaders' knowledge of the business environment. An example question may be: 'Over the next three years, what will be the big story for executives at your organisation?'"
Despite the economic turmoil the key reasons why people leave remain the same. They include: their manager or colleagues - the old saying 'people don't leave companies they leave their managers'; career progression or lack thereof; and finally, money or a better offer elsewhere.
"From Insync Surveys' experience, the behaviour and actions of the boss are not commonly rated as the 'primary' reason for leaving. Although it can be a contributing factor in an employee's decision, it doesn't rate as high as other reasons centred on growth and enrichment - for example, career development opportunities, professional development, recognition etc. This isn't to say that staff do not leave ineffective managers, rather that more people leave unsatisfying jobs," Rogers explains.
Too little, too late?
It could be argued that an exit interview is too little, too late; the employee is already out the door and any action taken will be reactive rather than proactive. Alderman says one step can be done well before the exit interview: a post interview, undertaken 60-90 days after the person joined the organisation. "You ask them if the role has turned out the way they envisioned. What was their experience throughout the recruitment stage? How was their recruiter? Was their desk ready when they arrived? Did they have a timely induction? Again, that provides some powerful, insightful information for you to act on," she says.
Rogers stresses that the intention of exit interviews is not to persuade employees to remain with the organisation. In most cases their hearts will already be out the door and persuading them to stay will only be a short-term solution. Instead, exit surveying is an important step in the departure process, allowing organisations to maintain a sense of goodwill and providing an opportunity for departing employees to 'get things off their chest'.
In addition, exit surveys are important to identify issues that may be impacting remaining colleagues. "Organisations shouldn't think of exit surveys as only benefiting outgoing employees. Their real impact is in identifying strengths and weaknesses in your retention efforts and also supplementing data collected through other staff surveys. A structured exit survey system can play an important role in employee research," he says.