Employee exit interviews are extremely effective in determining why a staff exit occurs in an organization, as well as how to decrease turnover and ultimately cut excessive costs. In fact, no other instrument is more effective at achieving this goal.

Companies should care to know why employees leave because selection, recruitment, and training are time-consuming and costly. Specifically, replacing a single employee costs 25-250% of their annual salary. Once themes for resignation are established you can prioritize precisely where to best invest your time to reduce turnover— an exit interview purpose.

Employee exit interviews are an integral component of an employee retention strategy. Employee exit interviews are a great preventative measure, allowing the company that is losing employees to gain more information on why their talent is leaving and make action plans to better retain the top talent that remains.

Are employees leaving because they are unhappy with the working environment? Do they lack opportunities to develop and grow? Is the company hiring the wrong people? A company can find the answers to these questions through exit interviews, and ultimately decrease turnover and save money.

For best results, the time to conduct employee exit interviews are two weeks prior or two weeks after the separation date.
After as little as 30 days of the separation, perceptions of the experience change and less accurately represent the feelings and choices made in the moment to resign. Employee exit interviews conducted after 90 days are called post-exit interviews, and have a different purpose and benefits.

Post-exit interviews are exit interviews conducted 90 days or more from the separation date. These can be beneficial when companies intend to hire boomerang employees (employees who are re-hired). In addition, they also help strengthen alumni relations and measure an employer’s brand.

The U.S. Bureau of Labor Statistics has found that the U.S. voluntary turnover rate is 23.4% annually. Extensive research supports that rehiring and replacing an employee costs from 25% to 250% of that employee’s annual salary. So, if only 20% of a workforce is replaced per year, and the average pay is $42,000 (US average), it would cost a 500-person firm between $420,000 and $4.2 million per year. Some of these costs come from candidate interviews, employment advertising, lost customers, new hire orientation and training, etc. You can find more information on cost of turnover here.

Information about employee exit interviews should be shared with the human resource department and also with the organization’s leadership. If managed by a third party you should expect monthly, quarterly, or semi-annual reports that analyze the data collected from exit interviews. This report should show trends in both negative and positive feedback.

Though we want to include all types of employees in exit interviews, it is most critical to conduct employee exit interviews for employees who left voluntarily. Include employees who have left involuntarily, worked part-time, and those who transferred in employee exit interviews for additional insight. That allows the organization to gain diverse perspectives of employees’ experience and positions. Voluntary separations can inform the organization of why employees were unfulfilled in their positions and in the organization. Involuntary separations can inform the company about the reasons an employee does not succeed in his or her position.

Was the employee unmotivated? Were they unhappy? Why was it a bad hire? Should recruiting procedures be modified? Part-time employees are critical to include because they have a different commitment to the organization. They may have different perspectives of the organization. Transfers should also be included in employee exit interviews because they are a specific group of individuals who show deep commitment to the organization.

In order to avoid legal issues it is critical to be clear about local government policies regarding anonymity and confidentiality. Some companies have individual conversations with managers or department heads. While very powerful this does not allow the claim of confidentiality. This is another reason to use a service provider. It is also important for the third party exit interview provider to red flag and report to HR potential serious matters that need to be directly addressed.

Just like there is no one kind of organization, there is no one-size-fits-all exit interview form or exit interview template. That said, there are exit interview questions to ask in every exit interview:

a. What did you like most about (Organization)?
b. What did you like least about (Organization)?
c. Why did you choose to leave (Organization)?
d. What are your recommendations for improvement at (Organization)?

Employee exit interviews should be conducted in a structured format in order to facilitate quantifying and comparing employees’ answers across departments, positions, locations and demographics. Both open-ended and closed-ended questions are beneficial. Open-ended questions allow for more detailed answers. Closed-ended questions on the employee exit form are beneficial when coding data and determining significant trends in exit interviews.

Each interview is a combination of open-ended (depth) questions and structured questions (forced-choice response options). Some of the structured questions are required and the others are selected by the client from an employee exit checklist provided.

For voluntary separations, employee exit interviews are generally completed by about 50-80% of employees. To achieve the highest possible response rate, multi-mode approaches: online and telephone employee exit interviews, should be used.

The employee’s direct manager should not conduct the employee exit interview. Select an individual preferably someone from a third party who can provide a non-biased perspective and who will not unnecessarily intimidate or influence the departing employee’s responses.

The length of the interview varies depending on the method and goals of the employee exit interview. Voice-based exit interviews typically take 10-30 minutes. Paper-based typically take 10-15 minutes and web-based take typically around 8-12 minutes. In addition, the specific length of the interview varies depending on the employee’s reasons for departing, and his or her position and experience.

Common mistakes made during employee exit interviews that should be avoided include: asking loaded questions, showing emotion or opinion while asking questions or listening to answers, and emphasizing specific questions or certain answer choices.

Employee exit interview results should remain confidential to the degree that is possible. In order to increase this confidentiality, third parties can be used. The more confidential employee exit interviews are, the more honest and accurate information staff exits will provide. This reduces desirability bias, the tendency of respondents to reply in a manner that will be viewed favorably by others. For certain situations such as claims of legal misconduct, disclosure is unavoidable. In addition, in order to increase confidentiality, all in-person interviews should be held in a private office or other setting where the employees’ responses cannot be overheard. All phone interviews should also be conducted when the employee is in a confidential and private location. 

The information gained from an employee exit interview can be used to track and analyze trends throughout the company, or identify trends in specific departments or units of the company. Once trends are identified companies can communicate the employee feedback to appropriate parties and work to address problems identified by employees.

Even though employees may not benefit directly from participating in an employee exit interview, most staff exits will want to focus on constructive comments to help make the work situation better. Ultimately exiting employees can find a sense of closure by voicing their opinions about their previous employer.