Exit interviews: centre stage

by 25 Jun 2009

Voluntary staff turnover is costly to any business, both in terms of direct costs associated with recruitment, training and productivity losses, as well as indirect costs such as loss of corporate knowledge (often to competitors) and negative impact on client relationships and employee morale.

High rates of voluntary staff turnover are continuing to negatively affect Aus tralian organisations and the cost of replacing employees is on the rise, accord ing to findings from the Australian Insti tute of Management (AIM) 2009 Staff Turnover Report.

Its studies found that the cost of replacing an employee is between $10,000 and $50,000. A notably higher proportion of organisations indicate that the cost of staff turnover is rising, with 38.9 per cent of organisations placing the cost of staff turnover at more than $20,000 per employee (up from 28.5 per cent in 2008)

Understanding the actual motivations behind resignations from an organisation is a vital first step in addressing staff turnover issues, yet this process is regu larly overlooked, according to Matt Dri nan, manager, AIM Research & HR Consulting.

Failure to effectively identify the rea sons behind staff resignations means that remedial action cannot be undertaken to increase staff retention, leading to the avoidable loss of staff, he says.

It must be asked as to what differen tiates those organisations that are expe riencing above average levels of staff turnover against those that that are expe riencing below average levels of staff turnover, in terms of the specific HR poli cies and practices employed by organisa tions within these comparator groups.

According to the findings of the AIM Report, conducting exit interviews is the key business process used to help allevi ate staff turnover.

Pitfalls of exit interviews

Exit interview surveys are conducted to gather information from departing employees to help the company improve working conditions, retain existing employees and identify problem areas within the organisation.

One of the great aspects of exit inter views is that the departing employee often feels less concerned about the ramifica tions of “treading on toes” and is typi cally willing to provide extremely open and honest feedback about their reasons for leaving and their thoughts about what the company could do to improve.

However, while exit interviews clearly have their place and are a vital tactic for any organisation serious about retaining their staff, there are many pitfalls to avoid, says Paul Quinn, managing director, PeoplePulse Online Surveys.

According to Quinn some of the key chal lenges that companies face in conducting exit interviews include:

1. Interviewer bias: The person charged with asking the questions may not be 100 per cent impartial or may have negative preconceived notions about the departing employee.

2. Interpretation: Often, the departing employee says “X”, yet the interviewer writes down “Y”. He or she may hear what they want to hear and record what they want to record.

3. Data entry: Often the person responsible for interviewing the departing employee is at management level and places a low priority on data entering the results of the exit interview into a centralised system that authorised managers can access.

4. Reporting: As notes are typically hand-writ ten, there is not one central place where all exit interview data is stored. The data also needs to be held on secured servers (because the infor mation is often sensitive) and results accessible to only those with appropriate privileges.

5. Consistency: Without a standard exit inter view questionnaire, the questions asked and information collected can vary wildly.

6. Confronting: The departing employee can sometimes feel as if it’s too confronting to pro vide open and honest feedback face-to-face, espe cially if the interviewer is personally known to the employee or if the interviewer has a good working relationship with the departing employee’s manager.

7. Timing: If the departing employee leaves the organisation suddenly, the task of con ducting the exit interview is often overlooked. However, employees departing in this manner still have valuable information and feedback to contribute.

The exit interview process

Many companies are turning towards a cen tralised online exit interview process. This system involves HR being notified once an employee leaves the organisation (or in the final weeks of their tenure). Then HR e-mails the departing employee a link to a structured online exit inter view survey, and asks that he or she complete it at a time that suits them over the next one to two weeks maximum.

The survey form is pre-coded with the employee’s name, their division, their manager’s name, and their location so that HR can easily report and filter results by this information.

As soon as the survey has been completed, HR is notified by e-mail, and, the survey results are automatically entered into an online database where reports can be run and charts produced.

According to Quinn, this type of centralised approach alleviates problems such as interviewer bias, interpretation errors, data entry, reporting access.

“A well-constructed exit interview process can provide invaluable insight, improve employee reten tion levels, and should be a mandatory considera tion for any employer serious about improving employee satisfaction levels,” says Quinn.

“As staff may be reluctant to provide infor mation about their motivations for resigning directly back to the organisation they are leav ing,” says Drinan, “it is important for compa nies to be able to produce a report that amalgamates feedback into an overall report that help ensure anonymity.”

The AIM exit interview questionnaire, for example, is designed for self-completion to encourage employees that leave the organisation to provide honest feedback regarding their moti vations for leaving. It is also important to use such a template as an interview guide and to be completed by the interviewer during a face-to- face exit interview.