Time for a breakup: the exit interview in the employee lifecycle

Whilst it can be tempting to take a notice of resignation personally, the exit interview can provide valuable feedback that can be used to retain other staff, enabling the company to grow and develop further. The separation process of the employee lifecycle is natural and needs to be as strategically implemented as the onboarding process.

By understanding the reasons behind employee turnover, employers can devise recruitment and retention initiatives that reduce turnover and increase retention [1]. However, it is worth noting that careers are often seen as ‘stepping stones’ for millennials, and the concept of working their way up through a company, as the preceding baby boomers did, is foreign to them. The average millennial will only stay with an employer for a maximum of three years [4], so make the most of their job satisfaction with you.

What is the difference between turnover and retention?

Employee turnover refers to the proportion of employees who leave an organisation over a set period [1]. This is usually on a year-on-year basis to ensure completeness in comparisons, and is expressed as a percentage of total workforce numbers.

Conversely, retention relates to the extent in which an organisation retains its employees and may be measured as the proportion of employees with a specified length of service – typically a year or more – expressed as a percentage of overall workforce numbers [1].

Why are they leaving?

Turnover is likely to be problematic for an organisation primarily where skills are relatively scarce, where recruitment is costly or where it takes several weeks to fill a vacancy [1]. 61% of organisations have stated that they have difficulty recruiting senior, strategic, skilled or technical staff [2] due to a large skills gap.

When skilled staff make the decision to leave an organisation, HR teams must look into the reasons why through the use of an exit interview in order to protect their remaining workforce numbers.

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Take note: measuring trends

Measuring your turnover and retention rates is critical to the long-term success of an organisation. However, less than a fifth of HR professionals say their organisation currently measures the return on investment of their recruitment process [3], and more concerningly, 56% of organisations do not calculate the cost of labour turnover [2].

By measuring the levels and costs of employee turnover, you will be able to use these statistics to build a business case to implement effective recruitment and retention initiatives. Use online tools to assist you – an Applicant Tracking System (ATS) will allow you to export data and transform this into useable graphs for use in presentations.

When using data exported from your ATS, make note of employment trends in the form of peaks and troughs – are your staff typically handing in their resignation during a certain time of year? Is this related to their workload during this period? It may be worth monitoring any obvious yearly trends to observe if any retention initiatives could be implemented to reduce staff turnover.

Costly mistakes

An ATS will not only produce reports on staff hiring activity, but will also be able to process related costings. These costings can be a powerful tool for winning line manager and board-level support for resourcing activities [1]. 

New Call-to-actionIt is important to acknowledge the actual costs related to resignations rather than estimating the average costs of replacing each leaver with a new starter. Costs can generally be associated to:

  • Administration of the resignation
  • Recruitment and selection costs, including administration
  • Covering the post during the period in which there is a vacancy
  • Induction training for the new employee

With these costs, whether direct (via advertisements, agencies or assessment centre usage), or indirect (via management or administrative staff time and opportunity costs), it is clear that reducing employee turnover is not only favourable to company morale, but also to finances.

Think ahead

When an employee has made the decision to leave your organisation, there are a number of steps to take. Undertaking confidential exit interviews are invaluable – employees will have nothing to lose, so are more likely to provide candid and honest feedback regarding the working conditions of your organisation. This could be positive or negative feedback, and it is critical to take on board their thoughts. 

New Call-to-actionExit interview feedback should be recorded and used in conjunction with staff attitude surveys and 360-degree feedback questionnaires. If the feedback received is largely the same throughout, it could well be time to re-evaluate company culture and/or working processes.

Staff can begin to feel more valued in a working environment where staff training and development is encouraged and as such, 68% of HR professionals believe there will be a rise in the emphasis on developing existing staffs’ skills [2]. Indeed, already the most popular step taken to improve staff retention is through increasing staff training and development opportunities, with 57% of organisations opting to take this step [3].

Top tips to make the best of a separation

Take the following steps to strategically make the best of the separation process:

  1. Monitor your rates of turnover and retention
  2. Measure the costings of staff recruiting activities
  3. Build a business study using reports to initiate retention policies
  4. Talk to your leavers during their exit interview to gain an understanding
  5. Monitor staff satisfaction levels throughout the year with staff attitude surveys

By reflecting on feedback, and implementing change if necessary, your workforce will want to remain and progress in your organisation thanks to a good working environment and access to professional training and development.

As Richard Branson said:

Train people well enough so they can leave, treat them well enough so they don’t want to.

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[1] CIPD, ‘Employee turnover and retention’, 17 November 2016

[2] CIPD, ‘Resourcing and Talent Planning 2017’, infographic

[3] CIPD, ‘Resourcing and Talent Planning 2017’, survey report

[4] Towards Maturity, 'Learning Benchmark Report 2016-17'

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