Management Corner

Want the Real Scoop on Why You’re Losing Employees?   Try Exit Interviews

By Michael Anthony

Employee turnover is simply another aspect of being in business. At least that’s how too many employers see it. While it is inevitable that employees will come and go, if it gets out of hand or if you are losing key employees it can hurt your company’s growth. While employee turnover is a serious issue for employers of all sizes, smaller businesses are more vulnerable because they have fewer resources. According to Martin Fishman, vice president of worldwide sales at Castlewood Systems Inc., Pleasanton CA., which employs 70 people, "If someone leaves here, the company is left with a big hole to fill. In a large organization, one person might go less noticed."

If you’re having a problem with employee turnover perhaps you should try conducting exit interviews. In an exit interview you simply ask the employee why they’re leaving. According to Rodger E. Herman, retention specialist and CEO of The Herman Group, a North Carolina based management consultancy, "Exit interviews are an excellent way to find out how your departing employees see your company, its operations and management." The information received from such interviews can be a real eye opener.

While exit interviews are not very expensive and don’t take too much time, many business owners/managers don’t talk to departing employees. They tend to simply dismiss them and start looking for someone to fill the vacated position. But filling a key position is no easy proposition. And if internal problems are driving employees away, you won’t be able to hold on to your new hires either. The hiring process will become a tedious time and energy consuming cycle.

Second, exit interviews may alert you to potential legal bombshells like discrimination and sexual harassment within your company. One caveat, if a departing employee makes a charge of discrimination or sexual harassment the company should investigate. If there is a problem within the organization and you try to ignore it you may expose your company to a huge lawsuit.

The information gathered from exit interviews can also help employers recruit new employees. It gives you insight into what your employees like and dislike about working for your organization. Sharing some of the information with prospective employees demonstrates that the company is constantly striving to improve the workplace experience and that your company is willing to listen to and act on an employee’s suggestion.

Establish an exit procedure

While many companies have an established procedure for hiring and firing employees, few have a procedure for dealing with employees who give notice. Having a systematic approach makes the exit interview process easier and puts departing employees at ease. All exit interviews should be handled by the same person and should never be conducted by the employee’s immediate supervisor. If you do, it’s highly unlikely you’ll get any useful information. Some companies outsource the exit interview process to Human Relations Professionals like Chicago’s HR Solutions. According to HR Solution’s president, Kevin Sheridan, "people are more likely to speak frankly and honestly to an uninvolved third party than to an in-house interviewer."

Start with the basics

When you start the exit interview you should first discuss items of immediate interest to the employee such as when company benefits will end, distribution of pension funds, 401k-plan transfers, distribution of earned vacation time and sick pay, legal obligations relating to company secrets, and the return of keys, security cards and other sensitive information to the company before departure. After these items are taken care of, it’s time to get to the heart of the interview.

Ask open-ended questions

To get useful information, the interview must not look or feel like an interrogation. This will only make the employee nervous and possibly resentful. The interviewer should put the employee at ease and explain that the interview is an attempt to improve the company not put the employee on the spot.

Ask open-ended questions that will force the employee to elaborate on why they’re leaving. Simple yes-no answers won’t be very useful in retaining other employees, improving working conditions, increasing efficiency or growing your company. Ask the employee questions like, what prompted their decision to leave? What didn’t they like about working with the company? What did they like about working with the company? Where are they going to work next? Does the new job carry an increase in salary or a higher position? Would they have liked to stay with the company? What could have kept them with the company? Would they consider returning to the company one day? If they had the chance, what would they change about the company?

Herman, author of 11 books including business best sellers Keeping Good People (1990) and How to Become an Employer of Choice (2000), both published by Oakhill Press, stresses that if a valuable employee decides to leave, the employer should let the employee know that they are welcome to return to the company. "An employee may jump to another job because it looks good, but once they get there, they may find out they were wrong." If you handled the exit process properly there is a good chance you can get that "boomerang" employee back.

It’s all about communications

While Mr. Herman feels that exit interviews are a very effective way of gauging employee satisfaction, he isn’t a hardcore advocate of the process. Instead he suggests that employers should use what he calls re-recruiting. Re-recruiting calls for opening a continuous dialogue with your employees. It doesn’t have to be a formal program, just keep in contact with and talk to your people on a regular basis. This helps the company understand how employees feel about the company’s operations, working conditions, management style, wages, career advancement opportunities and so forth, allowing the company to act proactively and take the necessary steps to deal with internal problems before they begin to drive employees away.

Using the information

One of the biggest sins of businesses of all sizes is to gather information and not use it to improve the company. If you have no intention of using the information, don’t ask for it. If you don’t use the information the process becomes nothing more than a waste of the company’s time and money. And once the employees find out the company is simply going through the motions they will stop cooperating.

However, if you listen to your departing employees you may find some invaluable information in their answers. As you review these interviews, watch out for trends. Are several key employees leaving for more money? Then perhaps your wages are too low. Are people leaving to take better positions? Perhaps your company lacks the career advancement opportunities today’s employees expect. Are employees leaving because a particular manager is too difficult to work for (AKA a jerk)? Perhaps that manager needs to be retrained or replaced. Are people leaving because the company doesn’t help them grow professionally? Then perhaps you should offer them on the job training or supplement their continuing education through seminars and college courses, provided the courses taken are job related.

The exit interview will help your company understand the real reasons why you’re losing employees. If properly used, the information will help you take action to stem the tide of employee defections, increase operational efficiency and boost employee morale, creating a stronger, happier and ultimately more profitable company.


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