RSM Resources

Employee turnover adds hundreds of thousands of dollars to a company’s expenses — anywhere from 50 to 200 percent of the average employee’s annual salary, according to human resources professionals.

Not to mention intangible losses such as knowledge about your company, your customers and current projects, all of which could fall into the hands of your competitors. Plus, any relationships that the employee built with customers may be severed, which could lead to potential customer loss.

That’s why it’s so important for employers to better understand why employees leave their organizations.

Reasons for leaving

Even when there is a significant financial upside for taking a new job, key employees are unlikely to leave just for the money. In fact, according to most human resources professionals, the "better compensation" reason is often a cover-up for other underlying reasons. In a Workforce Magazine article, leadership expert Philip J. Harkins outlines the following six reasons why employees typically leave a company:

• The listening factor. Employees need to believe they’re being heard. This is perhaps the most frequently cited reason why employees leave an organization. Employees want to feel that their ideas and contributions are both sought out and valued.
• The emotional factor. Employees need to be recognized, rewarded and encouraged to grow. When employees leave an organization, they often cite lack of recognition, inadequate compensation and rewards, no opportunity for advancement and too little focus on their personal development as reasons to move on.
• The manager factor. This factor often goes hand-in-hand with the listening and emotional factors. Employees’ primary work relationship is with their managers. If a company’s managers don’t have the knowledge, training and sensitivity to work effectively with people on an individual level, the company will have trouble retaining employees.
• The fit factor. Employees who dedicate themselves in their organizations need to feel as though they fit — that their values and principles match those of the organization and that their skills and talents match those required for the job.
• The confidence factor. It’s not always clear to employees what the company’s strategy is, or even if there is one, and how it’s linked to the long-term mission and health of the organization.
• The trust factor. Too many broken promises and commitments that weren’t kept can lead employees to feel distrustful of the company. Trust and loyalty have to be a two-way street.

The exit interview
Exit interviews can be one of the best ways to get true feedback from departing employees — information that you can use to help prevent other employees from leaving your company for the same reasons. However, to be truly effective, exit interviews need to be conducted systematically: The information needs to be gathered in a consistent and structured manner; the information needs to be analyzed to identify trends, patterns and themes; and the results should be used to implement retention strategies.

Before the interview. Ask departing employees to complete a pre-interview form as a springboard to a more productive exit interview. The answers on the form won’t tell the whole story, but they will be useful for preparing specific follow-up questions for the exit interview itself. The form should cover questions that get at the full range of operational, organizational, job-specific and personal variables that played a part in the employee’s decision to leave.

Among the questions that can be asked:

• What are the primary reasons why you decided to leave your position?
• What did you like most about your job? Least?
• How did you feel about working with other employees in the department?
• How did you feel about working with your manager?
• In what way did this job meet and/or not meet your expectations?
• In what way did this job meet and/or fail to meet your career objectives?
• What would you have done differently if you’d been the manager?
• How would you evaluate your own performance?
• What part of dealing with other people did you find most frustrating?
• How would you rate your pay and benefits?
• How would you rate the training you received?
• How would you rate the feedback and recognition you received?
• If you could have made any changes to your job, what would they have been?
• Do you feel you were given ample opportunities for advancement?
• How would you rate your overall working conditions?
• Have you already accepted another job? If so, in what areas do you find your new job more attractive?

Most human resources professionals find that the average response rate is fairly low for exit interviews that only include completing a form — about 30 to 35 percent. Among the reasons employees choose not to complete this type of exit interview include:

• The employee procrastinates or forgets.
• The exit interview is too long.
• The employee doesn’t believe the exit interview will be read or make a difference.
• The employee is afraid of repercussions.
• The employee is angry at the company.
• The employee feels the questions are confusing or personally invasive.

During the interview

Because exit interviews are first and foremost about eliciting honest feedback, a face-to-face interview is integral to the process. Just as important as what is being said, is the tone, expression and conviction with which it is said — things that can’t be detected or measured in a written format. In addition, it gives you the ability to explore certain topics or perspectives in greater depth. For the best interview results, ensure the following:

• Find an impartial interviewer. The interviewer should not be someone the employee worked with directly. Select someone — preferably from the HR department — who can provide an unbiased perspective and who will not intimidate or influence the employee’s responses.
• Assure confidentiality. Be clear with employees that honest feedback will be kept confidential, will not become part of their personnel file and will not result in repercussions. Statements on an exit interview should never be used to prevent future eligibility for rehire or ruin the chance for a good reference.
• Establish a relaxed and open atmosphere. Make sure the employee feels comfortable, respected and valued. This will encourage them to participate more fully and more candidly. Emphasize that the point of the interview is to find ways to improve the organization and that anything they can contribute would be of great value.

After the interview

Remember, no amount of exit interviewing will help unless you investigate and act on the information you uncover. Share your findings with the appropriate people and make changes to policies or programs when necessary.

Share the feedback. Share what you’ve learned — both positive and negative — with the departing employee’s manager and department.

Compile and analyze. Consolidate the information into some form of report that can be used to identify areas that should be investigated or trends that may be leading to turnover. Trends can be organizational (e.g., inadequate health insurance benefits or salary practices that don’t match the marketplace) or they can be clustered among employees who reported to a specific manager or held a certain type of position.

Implement solutions. Use the information you’ve gathered to craft and implement policies, procedures and programs that meet employee concerns head-on. Carla Joinson, a contributing editor to HR Magazine, suggests that a retention program may include one or a combination of the following strategies:

1. Realistic job previews
2. Improved employee selection process
3. Good employee orientation
4. Appropriate training
5. Supervisory leadership
6. Well-designed employee mentoring systems
7. Equitable or fair pay system
8. Improved working conditions
9. Job enrichment
10. Opportunities for career advancement

Solicit feedback regularly. Many HR experts suggest that if some of the common questions asked during exit interviews were put to employees on a regular basis, it would go a long way toward helping keep employees satisfied — and on the staff. Using the feedback received from these regular surveys to gauge satisfaction levels, identify emerging problems and implement both immediate and long-term improvements can be a great way to increase employee satisfaction, productivity and retention.