9 risks of neglecting to conduct exit interviews

Tapping into gold mine of data from departing employees can reduce turnover
By Laura DiFlorio
|Canadian HR Reporter|Last Updated: 03/13/2012

Imagine reviewing a series of exit interviews and finding the following written comments from departing employees eager to take advantage of the opportunity to express grievances before leaving for ostensibly greener pastures:

• “I asked multiple times to be trained more and no one seemed to care.”

• “There could have been more recognition. When I gave notice, I was approached by many IT leaders indicating their admiration for my work, which I was not aware of before.”

• “I am leaving for better pay and benefits. The health and dental benefits are very poor.”

• “I’ve been discriminated against based on my age. When I brought this to the attention of my manager, I was told I needed to choose my battles.”

Statements such as these are solid gold for an HR manager trying to identify and correct causes of turnover. Yet some companies don’t bother to conduct exit interviews, either face-to-face or by using technology.

That’s unfortunate. Whether seeking insights for attrition analysis, suggestions for improving the work environment, early warning of litigation risks related to issues such as harassment or other information that can help make an organization a better workplace, exit interviews supply a rich vein of data typically not available from any other source.

Think of it as a bank account. If you keep “paying” into it by polling employees as they leave, you will have the resources to understand why employees stay, leave and much more.

How does ignoring exit interviews, or failing to mine the exit interview data collected, put an organization at risk? Let us count the ways.

Inability to identify causes of turnover: Exiting employees are the horse’s mouth when it comes to pinpointing irritants that prompt the best and brightest to walk out the door. Without hearing what they have to say, it’s impossible to know where the root problems lie.

No road map for developing retention programs: By isolating the reasons for dissatisfaction, exit interviews also identify the issues that need to beaddressed. If, for example, the exit interviews revealed a pattern of turnover because of a lack of schedule flexibility, the employer could look at implementing flexwork to reduce the churn.

Lost opportunities to avert litigation: Exit interviews can function as an early warning system to identify harassment, discrimination and even violence. This kind of information can be elicited by including a qualitative question such as, “During your employment, were you aware of or did you observe any conduct or activity that could be considered questionable, unethical or illegal?” If the answer is yes, steps can be taken to resolve the problems before they escalate to a level that will land a firm in court. Departing employees are typically more willing to disclose this information because there is no fear of repercussion.

Inability to gather competitive intelligence: What are competitors offering? Higher salaries? If so, are we talking two per cent to five per cent higher or six per cent to 10 per cent? What about bonuses? Stock options? Flextime? Job-sharing? Expense accounts? Ask the right questions and the answers can provide a framework for deciding whether to adjust policies to ensure you have a competitive work package.

Unnecessary costs for recruiting and training: Turnover is expensive. Costs include new employee recruitment and orientation and training, not to mention indirect costs such as lost sales, lost expertise and reduced morale. The median cost of voluntary turnover jumped 60 per cent between 2009 and 2010, according to the HR Metrics Service, a collaborative venture by the BC Human Resources Management Association (BC HRMA), Human Resource Management Association of Manitoba (HRMAM) and the Human Resources Professionals Association (HRPA).Exit interviews can help reduce costs by shaping retention strategies.

Guesswork leading to bad decisions: Without exit interviews to either prove or disprove theories about what’s to blame for high turnover, an employer runs the risk of arriving at the wrong conclusions and, therefore, taking action it might regret — such as firing a good manager.

Picture the following: Executives at a company think low retention in one department is the manager’s fault. Before issuing a pink slip, however, the firm decides to examine exit interview data for that department. It turns out the manager is well-liked but employees are leaving because a training program critical for their advancement has been cancelled. So exit interviews not only save the manager’s job but avoid a change that might have triggered the departure of more employees.

Loss of employees for frivolous or easy-to-fix reasons: Frequently, exit interviews reveal annoyances that can be easily remedied. In some cases, departing employees might claim they are leaving because of a lack of career development opportunities, despite the fact the company has strong training, education and mentoring programs.

The problem can be rectified by increasing efforts to publicize these programs.

Inability to measure differences by department or other variables: Exit interview data allows HR to compare turnover causes and other salient information by variables such as division, department, job class, age, length of service and performance rating. This exposes patterns that may help increase retention or establish consistency across the organization.

If the data shows attrition rates in accounting are much higher than in sales, for example, HR can compare the causes and initiate communication between the two managers to narrow the gap. The manager from the department with higher turnover can learn the strategies and methodologies successfully used in the other department.

Overlooking pluses that aid retention: Exit interviews are invaluable in revealing positives that can help guide retention and recruitment efforts. Asking departing employees what they liked is a convenient way to add to any other measurements you might be taking on the topic.

The results can reveal what programs to keep or expand, point employers in the right direction for new additions and indicate what to highlight when promoting the benefits of joining the organization, such as a profit-sharing plan, flexible work schedule policy, mentoring program or monthly town hall meetings where senior executives share new business developments.

The bottom line: Risk management

Without the insights gained from exit interviews, organizations are like a boat without a rudder navigating the rocky waters of attrition. Knowing what employees who have left for other jobs liked — and disliked — about the organization can help shape a wide variety of initiatives.

It’s all about risk management. Exit interviews clearly belong in every organization’s HR toolkit. There’s no other way to take the pulse of lost talent.

Laura DiFlorio is the Ontario-based regional sales director at Nobscot, a provider of online HR tools and associated services. She can be reached at laura.diflorio@nobscot.com.

Add Comment

  • *
  • *
  • *
  • *