Staff turnover is expensive, including both direct and indirect costs. Direct costs can involve replacement costs such as advertising, interviewing time and training. Indirect costs are harder to measure, consisting of costs related to the loss of knowledge and skills, lower productivity and the negative impact that frequent turnover can have among remaining employees. These indirect costs can often be greater than the direct costs of turnover.
Exit interviews are an important part of HR management and can give an organisation valuable insight into ways to improve all aspects of the work environment. Used correctly, exit interviews give employers the opportunity to get honest feedback from employees. Although employees may often cite the reason for leaving as better pay or opportunities, this may not have been the catalyst that started them looking elsewhere. To understand the underlying reasons for an employee's departure, exit interviews must ask open ended questions that go beyond the obvious and cover a variety of issues including:
- suitability to the work; "fit with job"
- working conditions
- working environment
- work/life balance
- opportunities for advancement
- salary and benefits
- policies and practices
- supervision and management
- training and development
- mentoring programs
- recognition and feedback given to employees
- communication within the work unit and within the organisation
Surveys have shown that although a large percentage of companies conduct exit interviews, few use a systematic method of collecting and analysing the exit interview findings. This means they are missing out on the opportunity to collect valuable data that would assist their recruitment and retention efforts. A systematic approach to collecting information from exiting employees should include:
1. gathering and collating the data in a structured manner
2. collecting the results for the organisation as a whole
3. analysing the findings to identify trends or patterns
4. using the results to determine and implement strategies to increase retention and reduce turnover
Ideally, an organisation should have a documented policy stating how, where and when an exit interview will take place. Exit interviews are best conducted face-to-face as this enables better communication, understanding and interpretation, while providing a better opportunity to probe further on sensitive issues. However, paper questionnaires are better than nothing if a face-to-face interview is not possible.
Some organisations hand the responsibility of conducting exit interviews to the HR department or alternatively a line manager or supervisor. Where possible, the employees should be given a choice of interviewer as they may not feel comfortable confiding in their supervisor, for example, if the supervisor's lack of support was a factor in their decision to leave. Interviewers need to be trained to interview just as for job interviews. Exit interviews can be sensitive emotional situations which require ability and maturity to handle properly, especially if interviewees are anxious or volatile.
When analysing the results of exit interviews some trends to look for include:
average length of employment
- most frequent reasons given for leaving
- positions with the highest turnover
- turnover patterns within a specific work unit or department, and
- what is being done at each level of the organisation to prevent future resignations
A well structured exit interview system has the potential to become a valuable business tool. It can help reduce turnover plus increase employee satisfaction and commitment. An effective reduction in turnover has clear economic and organisational benefits that can more than pay back the investment made in implementing an exit interview system.
By Norma Smith
Employee Relations Adviser