The Effectiveness of Exit Interviews in Reducing Employee Turnover

The prices of employee turnover demonstrate that it costs businesses about one-fifth of an employee’s salary to replace that worker. Indeed, it's expensive to replace employees because of the productivity losses once somebody leaves employment, the prices of hiring and training a new worker, and the slower productivity till the new employee gets up to speed in their new job (Boushey & Glynn, 2012). In keeping with the United States Bureau of Labor Statistics, (2014) the annual employee turnover rate for all areas of business in 2014 was around 43%. The most talented and the productive workers are considered the stars that drive the success of any organization and the failure to retain the same, in the smaller organizations even can collapse/run when losing thousands of dollars, a year within the form of knowledge and experience. United States Bureau of Labor Statistics, (2014) further explains that in the case of huge organizations, the price is even steeper costing millions of dollars. When characteristic the apparent costs, the small, as well as large firms, are taking proactive steps to reduce employee turnover and retain talented personnel. Workplace policies and practices improve worker retention will facilitate companies to cut back their turnover costs (Boushey & Glynn, 2012). 

Fig. 1 TOP REASONS FOR EMPLOYEE TURNOVER 

(United States Bureau of Labor Statistics, 2014)

Fig. 2 UNDERSTANDING WHY YOUR EMPLOYEE IS LEAVING

(United States Bureau of Labor Statistics, 2014)

As per the above Fig. 1 six reasons have been highlighted for employee turnover i.e. Lack of fit, Management issues, no flexibility in working hours/condition, no job security, no career advancement, no good pay/benefits. In Fig. 2 further illustrating reasons for employee turnover, into that cultural misfit, failed expectations, no coaching, organization instability, Poor working environment. Learning and understanding why employees prefer to stay or leave the organization are imperative to the success of any business and in several workplaces improving employee retention to have key success (Zoltan & David, 1999). Several organizations and talent auction specialists are utilizing exit interviews to capture key information from workers as they leave the corporate, to prevent employees from following their colleagues out the door, the organizations will utilize the valuable information collected through exit interviews (Bharthvajan 2014).

Conducting exit interviews are crucial to putting together better teams and boosting culture, which ultimately plays a huge role within the overall success of your business (Marielle 2017). In the early part of HR, exit interviews looked like a formality just one of many components of the method of leaving a job. Employees were particularly hesitant to give feedback, thinking about what was the purpose of explaining what could be improved upon at employment that was already leaving (Zoltan & David 1999). Previously exit interviews were not conducted on a routine basis, as a result, it was considered as futile to ask the departing employee-” Why do you go?” The employers were a lot of targeted on obtaining the position filled as soon as possible rather than determining how the vacancy could have been avoided (Bharthvajan 2014). however, within the past few years, Employees/Employers each started taking within the exit interviews seriously since organizations have currently started to realize the significance of exit interviews (Boushey & Glynn, 2012). 

As stated by Marielle, (2017) here are the top four reasons you must conduct exit interviews: -

• Understanding & giving opportunities for worker Development: 

Glassdoor Economic Research, Marielle, (2017) found that workers are about three times more likely to depart for a new employer than to remain and get into a replacement role at their existing company, Exit interviews will provide you with valuable information to help stop more of those motivated workers from jumping ship.

• Get Insight into Management Issues:

Sometimes issues with management can be hard to identify, as a result of relationships between managers and employees are so personalized, even cannot capture during alternative review processes. Exit interviews will open up theses area for rectifications.

• Keep up to date with Compensation and Benefits:

Compensation could be a common reason that workers leave, exit interviews can assist you to determine if that’s extremely the case, and then decide if the problem is significant enough for you to revisit your compensation strategy.

• Strengthen the Employer  Brand:

The act of asking outgoing workers for constructive feedback shows workers that you just worth their time with you, and demonstrates your company’s interest in rising.

Who Should Conduct Exit Interviews?

The definition of exit interview implies that exit interviews are conducted by the employer or the management to unearth the explanations for employee turnover. (Zoltan & David1999) within the case of an in-person exit interview, the company's representative could also be either the functional head of the worker or somebody from the HR department and not the employees' direct supervisor (Marielle 2017). so as to reap the advantages of exit interviews, the organizations will rent a full-fledged third party, a consultant or firm that makes a specialty of conducting these sensitive interviews because most of the outgoing workers might not prefer to offend the management at the time of leaving the organization (Bharthvajan 2014).

How and when to Conduct Exit Interview?

Upon being made aware of an employees' notice of resignation, without any further delay an exit interview meeting should be arranged by human resources (Zoltan & David, 1999). This meeting is generally should schedule at least one hour in the final days of employment in a private meeting room (Robyn 2002). As per Robyn, (2002) Prior to the exit interview, the human resource representative who conducted the meeting reviews historical documents contained on the employee's file such as performance appraisals, memos, and letters. The interview climate should be positive and professional; the physical ambiance should be given apt most importance (Bharthvajan 2014). The employers should avoid conducting the interviews in public places like coffee shops or canteens where they may be overheard by supervisors or other employees and, it is always better to conduct them in the HR department's private office or on the premises of third party consultant office (Bharthvajan 2014). As pointed out by Robyn, (2002) at the interview a combination of predetermined open- and closed-ended questions to asked, allowing the employee to respond based upon his or her knowledge and experiences. Robyn, (2002) further says points of interest are raised the human resource representative digs deeper to get more specific details and to make sure to understands exactly what the employee reasons for the resignation. The human resource representative attempts to listen and gather facts by asking them to share both positive and negative experiences (Robyn 2002). Meetings are almost always should be finishing on a positive and uplifting note and are always carried out by a member of the HR department/ consultant (Bharthvajan 2014).

Boushey &Glynn, (2012) some available types of exit interviews given below. 

• In-person Exit Interviews
• Telephone Exit Interviews
• Paper and Pencil Exit Interviews
• Online Exit Interviews.

How to use the data collected from Exit Interview?

According to Bharthvajan, (2014) the aim of conducting exit interviews goes to be fruitful once it's aimed toward encouraging the retention of valued employees. To accomplish the explanation of exit interviews not only the HR department, however, everybody from the superior management to all or any or any department heads/supervisors ought to be concerned in the method. The exit interview is a medium that will be used to resolve how the company is being perceived by its human resources. The knowledge gathered through these interviews is otherwise difficult or not possible to search out, they assist avoid costly lawsuits down the line, caused by discontented employees. They additionally facilitate assess the key areas of the company like pay packages, training, and development, recruitment, infrastructure, management policies. the company can begin the method of holding talented employees within the initial stage itself. an organization has the liberty to make your mind up on from a range of ways offered that they contemplate being the foremost effective fitted to their organization.

In conclusion for the exit interview method to be an efficient management tool for reducing employee turnover, it is very important that correct and reliable information is gathered from outgoing workers. The exit interview is one of the effective ways, by which the organization will retain the best, by correct serious documentation of feedback obtained from the staff as they resign from the organization will determine and resolve key problems which will be useful in retaining valuable human capital. A well-designed plan of exit interview has the potential to become a valuable tool to assist retain the talented manpower supported the qualitative proof gathered by human resource management. On the opposite hand, the responses from the commanding management are extremely very important for improving career development practices, strengthen company culture, and uncover different problems which will be affecting the ability to retain workers, if the top management not conservative on the exit interview then the organization is only wasting money, human energy, and resources of the organization.

References

Bharthvajan R.,(2014) Exit Interviews. Engineering and Technology, 3(5), pp.12073-12075

Boushey .H., & Glynn S. J., (2012)There Are Significant Business Costs to Replacing Employees https://www.americanprogress.org/issues/economy/reports/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/

Marielle L. (2017) Glass door for Employers, 4 Reasons You Must Conduct Exit Interviews [Online]. Available at < https://www.glassdoor.com/employers/blog/4-reasons-you-must-conduct-exit-interviews.>.[ Accessed on 05th December 2019].

Robyn J., (2002) Proceedings of the 12th Annual LERA Conference, The Effectiveness of Exit Interviews in Reducing Employee Turnover [online]. Available at < https://pdfs.semanticscholar.org/65f6/2bb2e11981cf338a0c310dc79dcb3251c629.pdf>.[ Accessed on 07th December 2019].

US Bureau of Labor Statistics, USBLS (2014) global compliance. com/exit-interviews, International Journal of Innovative Research in Science, Engineering, and Technology. USA, USBLS.

Zoltan J. and David B. (1999) “Innovation in Large and Small Firms: An Empirical Analysis,” American Economic Review, 78(4), 678-690.