Why Exit Interviews are Essential to Retention
Employee turnover and talent retention are a major concern for businesses of every type and across every sector. Among the driving factors are a competitive talent market with historic 18-year unemployment lows and the high cost of turnover.
Consider this: voluntary employee turnover costs employers nearly $540 million annually and, according to the Bureau of Labor Statistics, more than three million employees voluntarily leave their jobs each month. Nearly two-thirds of organizations consider retention a major concern.
It’s easy to see why. When employees leave, they take with them valuable institutional knowledge and relationships. Candidate evaluation and new employee onboarding can result in reduced productivity in addition to the costs of hiring and interviewing.
Yet even in the face of these hard numbers, employers are still reluctant to conduct exit interviews. Or, if and when they do, the interviews aren’t conducted in a way that gathers valuable insights.
The reality is that exit interviews are utterly crucial to retention. When used effectively, exit interviews reveal the true reasons why employees leave, enabling employers to take action to address them—and prevent other talent from leaving, too.
Unique business, unique reasons
Since every business is unique, the reasons contributing to employee turnover are unique, too. Those reasons can include a combination of management style, culture and fit. Other reasons employees leave can include, compensation and benefits, the nature of work, team dysfunction, location, workload demands, and more. Wouldn’t you want to know which of these are at play so that you, your colleagues, and your leadership can address them?
Not just for disgruntled employees
Some employers decline to hold exit interviews for fear of hearing a litany of complaints from disgruntled departing employees. The reality is, however, the majority of employees feel positive toward an employer at the time (and after) departure: two-thirds of former employees rated their former employer as a very good or excellent place to work.
Conduct exit interviews the right way
There is a right and a wrong way, though, to conduct exit interviews in order to glean valuable insight. Research and best practices support the following:
- Use a third party to conduct exit interviews. Because a third party can be neutral, a departing employee may open up more—and may give more truthful answers. A third-party interviewer can also remove bias from the way the questions are worded or asked.
- Time interviews wisely. Hold the exit interview right after the employee has departed to gain the most valuable feedback.
- Used an open-ended qualitative approach to ask “why,” which can yield more detail and subtext in answers.
- Be organized and systematic about capturing data on each and every exit interview, so you and your colleagues can track trends and gauge progress over time.
Exit interviews aren’t just a necessary evil; they’re a must-do and must-do-right for any organization who wants to decrease turnover, reduce recruitment costs, and compete for top talent in a competitive labor market. Since 1939, DallasHR has served Dallas area HR professionals, helping them advance their careers and build their networks through education, events, and support. With more than 2,200 engaged members, DallasHR is the nation’s third-largest Society for Human Resources (SHRM) affiliate chapter. It powers The HRSouthwest Conference, the official State of Text SHRM Conference and—with 2,300 annual attendees, speakers, and exhibitors—one of the largest regional human resources events in the US.