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
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
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
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
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
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
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.