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How Exit Interviews Reduce Employee Turnover

How Exit Interviews Reduce Employee Turnover

By: Dona DeZube

When an employee hands in their resignation, is an exit interview part of their exit protocol? If not, you’re likely missing out on some valuable information. Exit interviews:

Not to mention that exit interviews can reduce the likelihood that a former employee will sue your firm.

“Exit interviews are a way to understand your brand as an employer and how you come across to employees,” says Robert Greene, CEO of Reward Systems, Inc., a Glenview, Illinois, management consulting firm.

So why are they so often overlooked? 

A Matter of Honesty
In small- and mid-size companies, exit interviews can be uncomfortable, given the intimacy between management and employees.

“People are guarded, particularly if they’re leaving the organization,” says Lori Johnson, a team lead for ADP TotalSource, Culver City, California, an HR outsourcing firm.

And then there’s the issue of honesty. Many departing employees don’t want to alienate their former employers, so they avoid honest criticism in exit interviews. Instead of telling you the operations manager is a bully, they come up with inoffensive reasons for their departure: More money, better benefits or more responsibility.

To overcome employee reluctance to share criticism, instead of asking an employee why they’re leaving, ask why they started looking, Greene says.

“That will get them to tell you the truth,” he says. “You’ll see where you’re coming up short. Maybe you can’t train the way a big organization can and the employee got stuck doing the same thing over and over. It may be that person is ambitious or bored and wants to move along.”

Supplementing an in-person exit interview with either a follow-up pen-and-paper or an online survey can also boost results.

“People can be more honest about how they feel when they’re alone and just getting their thoughts out,” Johnson said.

Exit Interview Questions
A question that helps uncover the reasons for employee turnover makes a good exit interview questions, such as:

  • How do you feel things went here?
  • Do you have suggestions for improvements?
  • Where are we coming up short?
  • What could we have done that would have stopped you from leaving?
  • What is your new employer giving you that you did not get from us?
  • How does your new job fulfill your career goals?
  • Would you like us to stay and touch to let you know about future opportunities? Can you also please let us know as you gain new skills and experience?

Exit Interviews Inspire Change
Over time, keep a tally of what people say at exit interviews. Once you know why employees leave, you can decide if you want to (and can) change your business practices to reduce employee turnover.

“If everyone complains about vacation, you need to rethink your vacation policy,” Johnson says.

If you see a pattern and are unable to change the situation, you can still reduce employee turnover by using the information to change the employee selection process.

For example, if your job requirements include a lot of routine accounting tasks, a recent grad may not be happy working for you because the job doesn’t utilize all his newly acquired job skills.

Meanwhile, an accountant who is winding down his career and close to retirement might be perfectly happy in the position.

“If people are leaving for reasons you can’t fix, learn from it instead of just saying it’s painful,” Greene says. “It may be the cheapest consulting you ever get.”

Exit Interviews Reduce Liability
No matter why an employee is leaving, it’s a good idea to do an exit interview to discuss the company’s and the employee’s rights and obligations after termination. This conveys the message that your company follows the law.

It can also reduce your exposure to discrimination, harassment and employment lawsuits filed by former employees, says Lori Goldstein, an employment attorney in Northfield, Illinois.

In addition to covering routine issues such as COBRA and unused vacation pay, talk about and share copies of any non-compete, confidentiality or post-employment agreements that the employee signed. Doing so gets everything out in the open, so employees leave without feeling like they need to go talk to a lawyer, Goldstein says.

Make Note of the Conversation
Goldstein also recommends having a witness take notes at the exit interview. If you choose to not have anyone sit in on the exit interview, take notes yourself to document what was said. That way, if you’re called into court later, you can say which questions were asked and what responses were given.

For example, suppose you asked an employee why he was leaving and he didn’t mention discrimination. If he later files a discrimination lawsuit, your notes about the exit interview may aid your defense. “It may not [make your defense] be a slam dunk, but it may go a long way toward resolving, settling or getting rid of the claim,” Goldstein says.

If an employee does claim discrimination, harassment or threatens legal action, it’s better to hear about it during the exit interview rather than later. You may be able to derail the lawsuit by offering increased severance, or complete an investigation into the complaint before the suit is filed.

At worst, you’ll have a heads up that you need to consult an attorney.

Avoid Retaliation after an Exit Interview
When you hear information that you don’t like during an exit interview, remember to remain objective.

“You cannot retaliate for a good faith complaint,” Goldstein says. To reduce hurt feelings, think carefully about how to tactfully share exit interview information with others in the company.

An angry supervisor or co-worker who damages a former employee’s reputation by falsely defaming them can get you sued. “Train your employees to be careful what they say to employees and the outside world,” Goldstein concludes.