Exit interviews, designed to gauge the reasons for an employee's exodus, can help firms change ineffective policies, address potentially illegal situations, and give employees a chance to voice what may have been long-running, unspoken complaints.
"Anytime you have people leaving your organization, you have to understand why," said Kristin Bowl, a spokeswoman for the Society for Human Resource Management. "Turnover costs a company serious money. Even if someone feels that an employee is disloyal, you have to ask 'Why were they disloyal?' At virtually no cost, you might be able to save the company thousands and thousands of dollars."
According to the society's 2000 survey on retention practices, 87 percent of companies say they conduct exit interviews, asking departing employees their reasons for leaving, aspects of the company that made them unhappy, and what the company can do to prevent future departures. Of this 87 percent, Bowl said more than half the companies make changes based on the interviews.~
Even if a complaint can't be changed right away or seems to an issue troubling just one person, companies should listen for possible resonance among later departures.
"Something that bothered someone, if it doesn't appear to be a trend, or if someone wants to work where there's a day care center, well, I'm not sure a company should go out and pay for the expense of a day care center, based on one person's opinion," Bowl said. "But one person's complaints can lead to questions on future interviews."
Studying exit interviews on an annual basis can help a company pinpoint aspects or people in the company upsetting workers. Collecting these annual reports can help companies track longer-term trends.
And interviewing departing employees can provide an early warning system about managers who might be harassing or discriminating their employees.
"Not everybody, despite the fact that our society is very litigious these days, wants to pursue a lawsuit," Bowl said. "Even if there's no legal ramifications immediately, there could be in the future."
When exit interviews go bad
But for an exit interview to be effective, employees must be candid and employers must be listening. Robert A. Giacalone, a professor of business ethics at the Belk College of Business Administration, at the University of North Carolina Charlotte, has identified four cases where exit interviews won'tmake a difference.
Workers may simply feel uncomfortable discussing personal reasons behind their departures. They may fear their comments will lead to retribution or get leaked to their new employers. They may worry about retribution leveled against workers who remain at the old job. Or finally, they may feel the managers conducting the interview have no intention of making changes.
"An EIS [exit interview and survey] must be methodologically sound, responsive to an organization's multi-faceted diagnostic and developmental data needs, be based on an identifiable purpose, and designed to assess specific problems and identify new opportunities," Giacalone writes at his web site, The Exit Interview and Survey Homepage.
For Tran Ha, a graphic designer, her exit interview with a small family-owned publisher of trade magazines in Illinois resulted in a less than satisfactory result since she felt the human resources officer conducting the interview to be too aligned with the publisher.
"The atmosphere was such that the management needed to know who poor things were," said Ha, now a web designer for a large Midwestern newspaper. "But the human resources woman who did the interview was in cahoots with everyone else, so it felt good to get it off my chest, but I don't think it made a difference."
Raise your hand if you're sure
To combat workers' fear of retribution and to reassure them of impartiality, some HR consultants recommend that companies use outside experts to conduct exit interviews, even though others say such outside experts lack the intimate knowledge of a company that an HR officer might possess.
"If the exit interview is done by same someone in the same organization, they may not be able to get the most helpful information," said Joyce Gioia-Herman, the president of the Herman Group, based in Greensboro, N.C. "Employees are reluctant to share their real feelings if they believe that the sharing will hurt them in any way at all, in the short run or long run."
Besides gleaning information about the bosses or routines and rules that might be disgruntling employees, exit interviews can help managers take care of some routine business. Exit interviews can be a time for departing workers to turn in laptops, books, car keys, and other company equipment. In exchange, managers can brief workers about the status of their last paychecks, unused vacation pay, health care continuation plans, and pension plan rollovers. And, lastly, managers can use exit interviews to record forwarding information about departing employees.
Keeping updated information about former workers lies behind the idea of corporate alumni networks. Over the decades, McKinsey & Co., the consulting firm that helps companies devise business strategies, has won a reputation as a training ground for the nation's business elite. Young college graduates, often those with most bountiful post-college options, frequently choose McKinsey, knowing that the experience they gain as junior strategy consultants can one day propel them into the boardrooms of the country's largest and most influential companies.
McKinsey has long understood that its present consultants can grow into future clients, and has maintained an alumni network to encourage these types of business connections. But now other companies have begun establishing their own formal alumni programs.
A few years ago, the ad firm J. Walter Thompson came under criticism that it relied too much on account management and branding efforts instead of creative campaigns. The criticism came most pointedly from "creatives" at the firm who spoke with their feet by leaving for other agencies. But last year, it shifted its emphasis back to creative somewhat and hired a New York City software company to create an agency alumni network to get the word out to staffers who had left.
"They wanted to say 'Look, we're a better place than when you left,'" said Cem Sertoglu, the 29-year old founder of SelectMinds, a two-year-old company that created J. Walter Thompson's alumni network.
Besides writing the software that lets companies keep track of alumni, SelectMinds can also help companies manage these networks. Through SelectMinds, companies like J. Walter Thompson can publicize job openings or company news. SelectMinds' clients, Sertoglu said, hope the alumni networks will help them shape public opinion, drum up business among former workers who might now be clients, and recruit workers who might want to return to their old bosses.
Most businesses treat turnover as a perennial, intractable problem, but for businesses that invest in high salaries or extensive training, such as consulting, advertising, and banking, turnover can be especially costly. Alumni networks can help mitigate these costs.
"Companies are getting a lower return on their investment on human capital, so we see our produce as a way of extending the life of human assets, so companies can still get value from people after they've left the company," Sertoglu said.
Sertoglu said he founded his company after working as a consultant with a client who suffered from extensive turnover. Sertoglu's consulting team suggested tapping the company's alumni network, but when the company complained that it couldn't find any software to help them do that, Sertoglu found himself staring at a vast entrepreneurial opening. Since it premiered its software early last autumn, SelectMinds has won 12 clients, including the investment bank Robertson Stephens and the Wall Street law firm Cadwalader, Wickersham & Taft..
The downfall of the dot-com economy has proved a boon for SelectMinds. Its high-prestige, old economy clients use their alumni networks to lure back chagrined dot-comers burned by the Nasdaq downturn. One large ad firm client, SelectMind's other such client besides J. Walter Thompson, witnessed a quadrupling in the number of rehires it made over the past two quarters compared to the period before.
"[Our clients] are actually coming to us and saying, 'Look, we think this is a great time to get the dot-comers back as the industry is experiencing a downturn,'" Sertoglu said. "'Let's create a consistent message that these people are welcome back, and we want them back.'"
Five Tips For An Effective Exit Interview
1. Make sure the person conducting the interview is as far removed from the departing employer as possible. Don't allow supervisors to interview one of their departing employees. Outside consultants offer the most impartiality, but HR officers possess knowledge of the company that might be needed to apply findings from the exit interviews.
2. Oral interviews are more effective than written ones. "There are things that people won't or don't say that you can pick up on with their body language," says Joyce Gioia-Herman, the president of the Herman Group, based in Greensboro, N.C.
3. Ask open-ended questions that allow an employee to get as detailed as possible. Don't rush the interviewee or distract him with a deluge of paperwork.
4. Decide beforehand what employee satisfaction goals you'd like to meet with exit interviews. Consolidate interviews annually to help accomplish those goals.
5. If an employee describes episodes of harassment or discrimination, don't respond right away. Resist the temptation to speak extemporaneously when the legal stakes can be high.
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