You’re in an ongoing fight to win HR a seat at the decision-making table.
Part of that fight is transforming HR from an administrative function to a strategic department.
Recently, a new HR exercise has fallen into your continuous improvement crosshairs: Exit interviews.
Exit interviews are a routine offboarding practice at most large companies.
The problem is they’ve become so routine that they’re almost meaningless.
A survey from KPMG found that 20% of senior executives believe their HR strategy doesn’t possess enough hard data, including data analysis from exit interviews.
As a result, when HR leaders make recommendations, senior management doesn’t take them seriously because there’s no hard data to back up their claims.
If HR leaders want to implement a solution, they need evidence that there’s a problem in the first place. Otherwise, time and money will be invested elsewhere.
Exit interviews present a rich opportunity to gather this evidence.
When good employees leave, it negatively impacts a company’s bottom line.
It can cost up to twice an employee’s salary to find a replacement and train the new hire.
So it’s important to understand why they leave, and exit interviews give companies a chance to find out.
But if organizations want to get this information, they need to get serious about exit interviews. And getting serious about exit interviews requires a shift in mindset.
Instead of viewing exit interviews as a “check the box” exercise, HR teams should view them as a chance to turn a loss into an opportunity to improve retention.
It’s an opportunity for HR leaders to learn more by asking meaningful questions and collecting more data to support their future employee engagement initiatives.
In fact, the more data an HR department collects, the more strategically valuable the department becomes within the company, by using big data and artificial intelligence for predictive analytics.
For example, some companies have systems that analyze large data sets to determine when a top-performing employee is at risk of leaving.
This allows the organization to proactively have a “stay interview” with that employee, give them a raise, or offer them a promotion.
Companies like Wal-Mart and Credit Suisse have used methods like this to improve their retention rates by 20%.
Of course, moving from superficial exit interviews to meaningful data collection exercises requires effort. If your company has conducted exit interviews for a while, it’s challenging to change programmed behaviors.
To initiate a change, HR leaders need a plan and a clear understanding of why specific changes are necessary.
By clearly articulating the purpose of exit interviews and how they will support the company’s growth, your team can embrace a stronger, more meaningful approach to exit interviews.
To support your planning, we’ve divided this article into 3 sections:
How to prepare for an exit interview
Exit interviews suffer from two main afflictions:
- Lack of consensus on best practices
- Poor data quality.
Let’s start with the lack of consensus or knowledge about best practices.
Different stakeholders have different opinions about the purpose of exit interviews and how to conduct them.
Your HR specialists may think they are the best equipped to conduct exit interviews.
They may also believe that exit interviews are routine exercises designed to be filed away and kept on record, only to be looked at if there’s a massive issue or a manager requests it.
Changing these attitudes can be very difficult, especially for employees who have been in their roles for years.
Overworked employees may also view enhanced exit interviews as a further demand on their time. They have so much to do as it is, now they have to worry about supporting HR’s data analytics ambitions.
Data quality is another big issue.
If your HR team isn’t clear on the strategic purpose of exit interviews, then they won’t ask the right questions.
This, in turn, compromises the quality of the data collected. At the end of the day, the results of your exit interviews should answer these essential questions:
- Why are employees leaving?
- What needs to change about the company to prevent employees, especially top performers, from leaving?
If you already have a hunch, you need the data from your exit interviews to support it. This way, you have ground to stand on when presenting to decision-makers at the executive level.
So what steps should you take to prepare your new approach to exit interviews?
Define and share the purpose of exit interviews with your team
As mentioned, many companies view exit interviews as a routine part of the offboarding process.
They equate it to telling IT to deactivate an employee’s keycard or asking payroll to mail a record of employment.
This is a big mistake. Exit interviews are not a standard, administrative task.
Make it clear to your employees that:
Exit interviews are a strategic exercise for identifying how to motivate and retain employees.
Make it clear that the onus is on the company to create the conditions for a successful exit interview
Generally, employees view exit interviews as something to get out of the way without burning bridges.
So most department employees politely say they’re leaving the company because they want better pay or more opportunities. This is helpful if true, but a waste of time if it’s said in place of meaningful answers.
Providing candid responses on poor management or a toxic company culture runs the risk of spoiling a future reference.
As a result, it’s up to HR to create the conditions for a successful exit interview.
One way HR can do this is by stepping away.
Exit interviews are often conducted by an HR specialist, which seems like the objective route, but in reality leads employees to sanitize their responses even further.
When HR specialists conduct exit interviews, two misconceptions abound:
- The HR team is just going to file my comments away, so there’s no point in being honest.
- My comments are going to get back to my manager, so it’s not worth burning bridges by being honest.
Instead, HR teams should consider handing exit interviews to the manager one step removed from the employee.
For example, if the employee reports to the Manager of Product Design then the exit interview should be conducted by the Director of Product Design (the person the Manager reports to).
Even enlisting someone further up the chain, perhaps the VP, is a great strategy as well depending on the quality of the departing employee.
The involvement of a senior-level person makes it evident that the employee’s feedback is valued and will likely be followed up on.
Another option is engaging a third-party HR consulting firm. These firms have trained interviewers who know how to obtain honest answers from employees.
Plus, an external firm doesn’t bring any biases to the interaction.
An employee is also more likely to trust that their responses will be scrubbed of identifying information when a third party is running the interview.
Sparkbay makes it easy to go to one spot and have a bird's eye view of what's happening. Each manager can pinpoint the goods and where to improve.
How NARS reduced turnover by 10% with Sparkbay
Strategically choose the time and length of an exit interview
When’s the best time to conduct an exit interview?
At the halfway point between the day the employee submitted their resignation and the employee’s date of departure.
Conduct the interview too soon after the announcement, and you risk an emotional conversation that produces few meaningful insights.
Conduct the interview after the employee leaves and you risk a disengaged conversation. At that point, the employee is more focused on fitting in at their new job than talking about what went wrong with their previous one.
In addition, you don’t want the interview to be too long, but you also don’t want the interview to be so short that there’s not enough time to build rapport.
While there’s some debate over whether to conduct interviews over the phone, via a questionnaire, or face to face, generally speaking a face-to-face interview is best.
On the face of it, questionnaires and phone interviews may seem better. The former is more cost effective (and offers the feeling of anonymity) while the latter reduces discomfort.
But it’s important to remember that the new strategic purpose (not administrative purpose) of exit interviews is to generate meaningful insights and collect data for predictive analytics. Not to be a standard procedure for HR.
Finally, consider including open-ended questions in your interview.
While structured interviews make it easier to collect data, unstructured interviews offer stronger insights for your team.
That said, interviewers should avoid offering specific solutions to issues employees identify. Instead when a departing employee presents an issue, the interviewer should ask the employee to offer their own suggestions for how to fix it.
Top questions to ask during an exit interview
There are countless questions employers should ask during an exit interview, but there are a few main questions that they should not skip over.
These questions provide a jumping-off point for more specific questions as well.
1. Why did you start looking for a new job?
Start by congratulating the employee on their new opportunity to avoid sounding confrontational when you ask this question.
You want this question to sound inquisitive, not accusatory.
That is what it’s supposed to be, after all. An opportunity to learn why an employee thought it best to continue their career path elsewhere.
If the interviewee points to a specific aspect of company culture they dislike, it’s tempting to jump in with changes the company plans to make or is in the process of making.
Resist the urge to do this. Instead, ask the employee what they would have liked to be different.
This helps your team focus its efforts. If the employee is talking about a problem your team has already identified, then you can compare the employee’s suggestions to your plan of action.
2. What were the main reasons you decided to take this new offer?
It’s normal for employees to peek at other job postings or brush up their resume, even when they’re happy. This is par for the course for ambitious professionals.
What your team wants to understand is what caused them to go from researching the market to putting themselves on the job market.
A proper understanding of these factors helps you have more effective retention conversations with your existing workforce, also known as “stay interviews”.
For instance, was the departing employee dissatisfied with their potential career progression within the organization?
Is the new role a lateral move, or is it a step up from their current role?
If a top performer left because they didn’t see a role for themselves at the company, that’s a sign that your organization needs to revisit its career development plans.
Did your employee leave because the new organization was offering them a higher salary?
It’s time to consider why that employee didn’t feel comfortable asking for a raise, or if they did, why it wasn’t given.
Recruiting for a highly skilled employee is often more expensive than simply coughing up the money a deserving employee wants.
You may also learn that something incredibly simple caused your employee to look elsewhere.
A regional director of sales for a multinational company learned that his top performer took a job elsewhere, because he wanted to leave the office in time to pick up his kids from school.
The director only learned this information after the employee took a new job.
He was understandably frustrating since he would have happily given the employee more flexible hours had he known in advance.
But of course, employees often feel uncomfortable asking for what they deem to be “special treatment”.
3. Did you have what you needed to perform your job well?
This is a common frustration high performers have.
They’re frustrated that they lack the systems, tools, or even latitude to do their jobs well.
Rather than put up with poor outcomes, they begin looking for organizations that “have their act together” and will give them the tools they need to do a good job.
Employees also worry that if they stick around at a company that’s technologically behind, they’ll lose their marketability.
One recruitment professional advises companies who can’t afford cutting-edge technology to send their employees out for training on those technologies, so they feel up to date.
Gathering data like this is another way that HR teams can prove their value to executive teams.
If HR departments can quantify the human capital cost of not investing in resources, their recommendation to invest in new systems or additional administrative support will have more standing with senior leaders.
4. What is your opinion of the company culture?
Companies with a great culture retain employees longer.
Company culture is about more than just perks like free snacks or ping pong tables.
It encompasses a set of “deeply held and enduring beliefs about what is desirable and appropriate”.
For instance, employees who value collaboration, open communication, and problem solving won’t feel comfortable in an organization where isolation, secretiveness, and assigning blame are the norm.
This doesn’t mean organizations should instantly change their company culture just because a departing employee doesn’t like it.
In reality, asking about company culture is a way of assessing whether you have the culture you want.
For instance, if an employee leaves because they don’t like a collaborative environment, when that’s the environment you’re striving for, you can chalk that departure up to a poor fit.
On the other hand, if you’re striving to build a business that is innovative and creative, and a departing star employee finds the environment stifling and siloed, you have clear proof that your company culture isn’t aligned with your company’s goals.
Notably, company culture is also tied to performance.
Case in point: When Satya Nadella became CEO at Microsoft, he focused on rebooting the company culture.
Before he stepped in as CEO in 2014, Microsoft struggled with a bureaucratic culture that allowed rivals like Google and Apple to gain ground.
In the 6 years since Nadella became CEO, Microsoft’s become a trillion-dollar company.
If you already have a clear idea of your intended company culture, you can use this opportunity to ask additional pointed questions about specific aspects of your company culture like:
- “Do you find that ABC Company gives you the freedom to innovate and develop creative new products or services?” or
- “Do you believe there are open lines of communication between different business functions?”
5. What would need to change for you to consider working here again in the future?
This question sounds similar to the earlier question, “What were the main reasons you decided to take this new job offer?” but it’s different for a few reasons.
First, you pose this question to make it clear that there is no ill will.
It makes it clear that the exit interview is a sincere attempt to learn why the employee left and how the company can keep employees like them in the future.
Second, this question makes it clear that the employee can always come back.
Smart companies maintain a relationship with departing top performers, so they can potentially re-recruit them down the road.
In some cases, this works to the company’s benefit since that employee returns with deeper insights about the market and competitors.
If an employee says that a more collaborative work culture, more flexibility in terms of work hours, or more challenging opportunities are important for them, then this information informs re-recruitment efforts down the road.
Third, it reduces the likelihood that an employee will be a negative brand ambassador for the company.
Like attracts like, which means top performers likely know other top performers.
If departing top performers advise people in their network not to apply to your company, it can seriously impact your ability to attract top talent.
6. Were you happy with the way you were managed?
You’ve heard the saying, “People don’t leave jobs, they leave managers”.
While there’s some debate over how accurate this statement is, the general sentiment holds water.
If you work at a great company but your manager doesn’t share information, doesn’t meet with you regularly, and doesn’t work with you to create a career development plan, then the most expedient option is to find a new job.
Complaining about the manager or requesting a transfer to another department can easily backfire.
This is why it’s important for HR departments to get someone above the departing employee’s manager to lead exit interviews.
One bad manager can lead to the departure of several excellent employees over time.
Take the example of one financial services company that hired a new mid-level manager for a specific department.
When the new manager was hired, there were 17 employees. A year later, there were only eight after four resignations and five transfers.
When senior management reviewed the exit interviews of the departing employees, a clear picture emerged. The new manager lacked key managerial skills like communication with team members and outlining a clear vision.
Plus, employees were frustrated with the company’s policy of hiring new managers based on their technical skills rather than their managerial skills. Consequently, the company made adjustments.
Understandably, a departing employee may be hesitant to criticize their manager. Asking more specific questions may help. Consider adding:
- Did your manager make themselves available for one-on-one meetings?
- Did your manager work with you to create a clear development plan?
- Did your manager set clear goals and objectives for the year?
- Did your manager communicate a strategic vision for your team?
- Do you feel like you were empowered to do your job or did you feel micromanaged?
- Did your manager provide constructive feedback on a regular basis?
7. What did you enjoy the most about your job?
HR departments should be wary not to treat an exit interview as an investigation meant to dredge up the worst anecdotes about the company.
Unless there are extreme circumstances, most departing employees can identify elements of the company they enjoyed.
Documenting these positives is just as important as identifying the negatives.
The general wisdom is that organizations should approach a company culture improvement project as a renovation, not a transformation.
This means identifying what makes the company great and building from there, not razing the company’s entire legacy to the ground.
How to process employee feedback from an exit interview?
You’ve completed an exit interview. Well done.
Now comes the big question: What are you going to do with everything you’ve learned?
What you shouldn’t do is file the exit interview away until a manager asks for it.
These startling statistics illustrate just how little action companies take based on employee engagement surveys:
- In one study, less than a third of respondents could identify a single action taken in the HR department, marketing, or operations as a result of an exit interview
- Despite the fact that most companies consolidate their exit interview data, less than a third of surveyed respondents report regularly sharing this data with senior-level decision-makers
- Two-thirds of exit interviews are conducted primarily as a way to talk to departing employees rather than generate insights with strategic value
This is unacceptable. What happens after the exit interview is equally as important as the exit interview itself.
Conduct anonymous focus groups with your remaining employees
While exit interviews are a great way to gather feedback and suggestions from departing employees, they aren’t helpful for understanding whether existing employees feel the same way.
Even if your company conducts in-person conversations with remaining members of a team or department, they may not feel comfortable disclosing how they feel because the conversation isn’t anonymous.
Anonymous focus groups allow employees to provide their honest feedback about the company’s culture and their individual level of satisfaction.
With the right employee engagement software, your company can facilitate these focus groups easily and compare the results to your exit interviews.
Create a standardized exit interview process
Whether your interview questions are structured (e.g. multiple choice questions, scales) or open-ended, they should be standardized.
This allows your company to compare responses across interviews and aggregate data effectively.
This also ensures that there aren’t huge data gaps in your exit interviews.
Without a pre-established set of questions, different interviewers may focus on one area and forget about another.
For example, an interviewer may focus on how departing employees feel about their manager and forget to ask questions about their pay or benefits. This creates a lost learning opportunity for the organization and a huge gap in the data.
In addition, interviewers should make departing employees comfortable by reminding them that the interview is confidential and that the interviewer’s notes will be scrubbed of any identifying details.
Generate reports summarizing important insights from exit interviews on a quarterly basis
Exit interviews should feed into a positive feedback loop, so create a process that ensures insights from exit interviews are captured, summarized, and reported.
This could mean giving an HR specialist the job of reviewing exit interview notes, aggregating data points for structured responses, and summarizing the main remarks from open-ended responses.
On a monthly or quarterly basis – depending on the level of turnover within the company – HR should share its findings with senior leadership.
By collecting, aggregating, and summarizing exit interview data, the HR department can share impactful statistics like the following (these are sample statistics for illustrative purposes):
- 50% of departing employees identified as top performers said their top reason for leaving was lack of development opportunity
- 75% of departing employees said a poor relationship with their manager was one of their top 3 reasons for leaving
- 25% of departing employees identified as top performers said they would consider working for the company again in the future
These are impactful, data-backed statements that inspire senior leaders to take action and that solidify HR’s role as a strategic function, not a purely administrative department.
Final thoughts: use exit interviews in conjunction with other tools
At the end of the day, exit interviews are a helpful way to do a health check of your company culture and employee engagement.
That said, they’re not the only way.
Look, employees leave for all sorts of reasons.
They may want to switch industries, take time off work, or move to a different city.
They may have had an incredibly positive experience at your organization, and the time has simply come to move on.
This is why it’s important to consider exit interviews in conjunction with other tools like employee engagement surveys and focus groups.
For instance, Sparkbay offers user-friendly tools for HR departments to conduct annual employee engagement surveys, pulse surveys, and focus groups.
While annual surveys give organizations an overall snapshot of the employee experience, pulse surveys and focus groups can help companies assess how employees feel about specific issues on a more frequent basis.
Interested in learning how technology can get employee engagement to the next level? Learn more about our people analytics and employee engagement software.