Exit Interviews, in a knowledge economy, can help you retain skilled employees. Research has shown that high turnover predicts low performance. So if people are leaving your firm in increasing numbers, you need to understand why.
Though some turnover is healthy, an organization with low turnover can have a huge edge over its rivals. This is particularly true for companies that retain the top performers who drive their success.
• Exit interviews can help you figure out how to hang on to these people.
• They can reveal why employees leave, why they stay, and how the organization needs to improve, creating a constant flow of feedback on all three fronts.
Let’s examine how this worked at a financial services company, where a new manager was hired to oversee a department of 17 people.
Within a year, four had resigned and five had transferred. A review of the exit interviews revealed why: The manager wasn’t good at showing appreciation, fostering commitment, or communicating strategy.
It also pointed to a deeper problem: The firm was promoting managers on the basis of technical skill rather than leadership ability. To fix that, the executive committee decided to change the promotion criteria.
Unfortunately, most companies don’t behave this way. Very few companies actually bother to analyze the data from exit interviews, share the insights with people who can apply them, and follow up with action.
But the companies that do all this reap lots of benefits.
• Exit interviews can highlight hidden challenges and opportunities, reveal what is and isn’t working inside an organization, and generate competitive intelligence.
They can increase engagement and retention by signaling to employees that their views matter. Done right, exit interviews can even turn departing employees into corporate ambassadors for years to come.
Of all the talent management tools available, exit interviews may be the most powerful—but they’re probably the least understood. Too often, they don’t improve retention or produce useful information. That’s true for two reasons.
The first is poor data quality: People aren’t always honest. They may not want to say anything negative about a supervisor they like, and they may be reluctant to say anything at all about a supervisor they don’t like.
The other challenge is a lack of consensus on why and how to conduct exit interviews. Their goals, strategy, and execution vary a lot. However, we did uncover a few promising tactics—which we’ll discuss shortly.
Let’s look first at current practices. In a study of 210 organizations, the authors found that the vast majority of companies left exit interviews in the hands of HR. At the remaining firms, a variety of people were assigned to handle them.
Discouragingly, many interview programs didn’t generate any positive changes. In fact, fewer than a third of executives at firms that did exit interviews could cite one specific policy change or intervention that resulted from them. That means two-thirds of the programs appeared to be mostly talk and no follow-up.
And fewer than a third of the companies in the study regularly shared the data from interviews with senior decision makers. In other words, most organizations ignore the strategic value of exit interviews.
So how can companies set up an exit interview program that delivers value? We’ll look now at what a good program sets out to achieve and how firms should design, conduct, and act on interviews.
Though there isn’t one proven approach, all exit interviews should have two overarching goals: gathering information about employees and the organization, and creating goodwill.
You’ll want to start by gathering information in five key areas.
The first thing to find out is, are there any issues with your HR practices? This is almost always on the agenda, but companies focus too narrowly on salaries and benefits. Unless your pay is out of alignment with your peers’, money doesn’t usually drive employees out the door. But other practices could be to blame: unfair performance reviews, for instance, or a lack of development opportunities.
Second, how do employees see the work itself—the job design, the work conditions, the culture, their peers? This information can help you improve employee motivation, coordination, and effectiveness.
You’ll also want to determine who’s a good manager and who isn’t. This will equip you to reinforce the skilled leaders and handle the toxic ones. Or maybe you’ll discover a common problem—say, micromanagement—that can be addressed through training.
Next, how does your company stack up against other employers when it comes to pay, time off, advancement opportunities, and so on? Do you need to make adjustments to stay competitive?
And finally, how could the company improve? Don’t limit the discussion to the employee’s immediate experience. You can explore broader areas such as strategy, marketing, operations, systems, and organizational structure.
Here’s one tactic you can use to elicit ideas. Ask every departing employee to fill in the blank in this sentence, and then look for trends across responses.
Your other primary goal should be to leave people with a positive impression of your company. If you treat departing employees with respect and gratitude, you’ll encourage them to recommend your firm to potential hires, customers, or business partners. The people you’re sending off into the world could be great ambassadors.
Once you have a clear grasp of what you want your interviews to achieve, you can decide how to set up your exit interview program. Remember, these programs should be aligned with your organization’s culture and strategy. But there are some options to consider for each step in the process.
The first step is assigning an owner. At most companies, exit interviews are wholly an HR function. HR conducts them and consolidates the data, sharing it only if asked. But this approach marginalizes the process. HR may run the program day-to-day, but you need to involve the right line leaders in the interviews, and the senior leadership team should oversee the design, execution, and results.
Next, determine who will be doing the interviews. Consider finding someone who will be more impartial than the employee’s direct boss, whether a higher-level manager, an HR person, or an outside consultant. Research shows that interviews conducted by second- or third-line managers are most likely to lead to action. Managers who are two levels up typically get more honest feedback, because they’re one step removed from the interviewees. Their participation also signals that the company cares about the opinions of departing workers. And they’re in a good position to follow up on what they hear.
The next question is whom to interview. Some organizations talk to everyone who leaves, and some single out the professionals or the executives. Research shows that the most progressive programs prioritize high potentials and stars, who are hard to replace. These people can help you learn what it takes to attract others like them. They also tend to have good insights into what’s going on at your company and—because they’re recruitment targets—what’s going on at your competitors.
Most interviews are held during the employee’s last week—which is probably long after he or she has disengaged. Researchers suggest that the best time is halfway between when the employee gives notice and the actual departure date—after emotions have died down, but before the person has mentally checked out.
Recommendations on the ideal length of an interview vary. Some people believe it should be kept to an hour, with the option of a follow-up conversation if needed. Others suggest 90 minutes.
Should you conduct one, two, or three interviews? Some firms get rich data by scheduling several interactions—including interviews, phone calls, and surveys before and after an employee departs.
Many experts advise having one interview before the employee leaves and another three to six months after departure. The idea is that employees are more honest when some time has passed.
This is something researchers have known for a long time. In one study, 59% of former employees who answered a questionnaire several months after leaving gave reasons for quitting that differed from those they had given in their initial exit interviews. And every employee who had initially failed to cite a cause mentioned a specific one. Unfortunately, few companies have acted on this information.
If your company performs a second interview, consider hiring an experienced consultant to do it. They’re trained to make employees feel comfortable sharing information. And because they’re unbiased, they often get more-reliable data.
Most experts believe that a face-to-face interview is the best way to build rapport, but some research shows that phone interviews elicit greater honesty.
That said, we advise conducting at least one in-person interview if you want to create ambassadors. If the program calls for more than one interaction, combining the two methods or adding a survey may help you get candid answers—and test for consistency.
Different interview formats also have pros and cons. Unstructured interviews can yield unexpected insights but can make information hard to consolidate.
It’s easier to spot trends in structured interviews, but they may come off as mechanical. This might signal to employees that their ideas aren’t important to the organization. Combining approaches in a semi-structured interview can give you the benefits of both.
You may want to let departing employees have a say about logistics. Some organizations go so far as to create an “exit interview menu” that allows each employee to customize the experience by choosing the interviewer, the location, the length, and so on. This respects the feelings of employees and may lead to greater candor and stronger ambassadors.
Now let’s see what the experts have to say about how to conduct interviews.
Interviewers should listen more than they talk, be patient and friendly, and occasionally ask open-ended questions.It also helps to frame questions positively. For example, how did the employee like the job? Was it rewarding, challenging, or easy? Finally, interviewees should have the opportunity to talk about any other pressing matters or thoughts.
Some interviewers ask how the departing employee’s colleagues feel about their jobs. Someone who’s reluctant to offer a candid opinion may be more comfortable ascribing his feelings to coworkers.
There are a number of things interviewers should avoid, such as displaying authority or making employees defend their decision to leave. It’s OK to ask about an employee’s new job, but not about how it compares with the job he’s leaving.
And though it’s good to ask people to recommend improvements or solutions to problems they’ve raised, an interviewer should not propose them. The interviewer is there to gather information and make the employee feel heard—not to lead the witness.
As we’ve already noted, you can’t just gather data—you have to act on it.
Of course, you must be careful to protect interviewees who have provided sensitive information—especially about their bosses. If feedback from the exit interview will be shared with those bosses, the employees should be told up front. But don’t be surprised if it makes them less frank.
One solution is to give executives aggregated data from groups of at least five former employees, keeping their identities anonymous. That will protect confidentiality to some degree while still giving people information they need to make improvements.
Another question is when to distribute the exit interview data. Its release should coincide with key decision cycles. For instance, a company might coordinate with executive committee meetings. That way, senior line managers can discuss their units’ data at the meetings and propose responses, which the committee is then poised to approve.
Important as exit interviews are, they shouldn’t be a onetime event focused on an organizational failure: the loss of an employee. In the most effective programs, they’re the culmination of a series of conversations designed to build relationships with employees. If the exit interview is the first time you ask about their feelings and ideas, something’s wrong.
Employees should be asked individually, and regularly, about why they stay with the organization and what might make them leave. The head of one government agency recommends that such conversations include three questions:
- Are we helping you be effective?
- Are we helping you build a career?
- And are we helping you have a fulfilling life?
Conversations like these can often bring issues to the surface before they lead to turnover. We recommend having retention conversations at least annually.
At the best organizations, the retention process starts at the time of hiring and continues long past the last day of employment, in the form of corporate alumni programs. A core tool in that dialogue is the exit interview process, which allows companies to systematically learn about their most important resource: their human capital.
If you hand exit interviews off totally to HR and conduct them in a rote manner, you’ll miss out on all their value. Make them matter—by taking care with their design and execution, making employees feel listened to, and putting the information they give you to good use. Do that, and you’ll find out how to retain your most talented people–and deepen their bond to your firm.