Benefits of Conducting Exit Interviews
Let us consider the benefits of employee exit interviews. Exit interview results allow a company to identify strengths and weaknesses in other stages of the Employee Life Cycle to improve their organization and management practices. Statistical reports and segmented results derived from valid and reliable exit interviews help prioritize issues. A purpose of exit interviews is to reduce turnover rates and improve existing morale and productivity. However, a poorly conducted exit interview process can cause companies to waste valuable time, resources, and money. Poorly designed exit interviews overemphasize minor issues or overlook valuable information that can only be provided by separating individuals.
1. Increase Manager Effectiveness: Exit interviews provide feedback that can enhance the understanding and experience that managers have of managing people and organizations.
2. Increase Attraction of Candidates: Exit interviews can be seen by prospective employees as a sign of positive company culture. They can be regarded as a caring and compassionate tool and as sign that the company is capable of exposing itself to criticism.
3. Reduce Training Costs: Exit interviews can generate useful information for training needs analysis and the training planning processes. Employee exit interviews can help identify gaps in specific job-related skill sets that can be addressed through focused and more cost-effective training.
4. Reduce Turnover: When companies find out why individuals leave they can address problems and retain members, retain students, and retain employees. Exit interviews also communicate that a company values their opinions and is committed to their membership, students, and staff.
5. Increase Customer Satisfaction: Exit interviews can provide valuable insight into job-related issues with a company’s products or services. Addressing these issues can lead to greater value for costumers. Employee exit interviews can provide feedback that can increase employee satisfaction. More satisfied employees often lead to more satisfied customers.
6. Improve Orientation (Shorten the learning curve): Exit interviews can result in valuable transferring of knowledge. Staff exits can provide insights, tip and experiences that can be very useful to their replacement or successor. As result the new hires accelerate their ramp to productivity.
7. Reduce Absenteeism: Exit interviews provide valuable information that can give companies tools to improve work environments, employee engagement and employee satisfaction.
8. Transfer of Knowledge: Most employees are pleased to share knowledge, help a successor, or brief management. In the process they can yield valuable information that can be used to enhance all aspects of the organization’s working environment including culture, management, and business processes.
9. Increase Performance: Exit interviews allow companies to uncover potential job-related inefficiencies and problems. Addressing these issues can help increase and sustain employee performance.
Employee Exit Interviews and Employee Turnover
Employee turnover is the ratio of the number of workers that have to be replaced in a given time period to the average number of workers. The cost of employee turnover is estimated to be 25%-250% of annual salary. There are both direct and indirect costs. Direct costs relate to the out of pocket leaving costs, replacement costs and transition costs. Indirect costs relate to the loss of production, reduced performance levels, unnecessary overtime and low morale, but are much harder to measure.
In addition, turnover also reduces the productivity of an entire work unit/team, particularly as a result of uncompensated extra workloads and the stress and tension caused by turnover. If employee exit interviews are conducted strategically, a company can tap into why they are losing employees, and ultimately take actions to reduce turnover. Reducing turnover has a significant effect on an organization’s bottom line, as costs related to replaced employees and decreased productivity are minimized. Employees don’t just wake up one day and decide to quit a job that they’ve held for years. In most cases their motivation for leaving is clear. The only way to access this information is through an exit interview.