Should I Stay or Should I Go? How Exit and Stay Interviews Can Improve Employee Retention

Employee turnover is part of the business life cycle, and there are a variety of reasons—avoidable and unavoidable—that you may lose team members along the way. Some employees will choose to accept an outside job offer, while others may leave for health reasons, conflict with a manager or coworker, or because they decide to stay home with their children.

Although there are unavoidable circumstances, in most cases, employees—often those you count on the most—will leave for reasons that can be traced back to a situation or situations that, handled differently, could have prevented them from walking away. In fact, with open communication and valuable feedback, you can avoid high turnover and build a more loyal, inspired (and successful) team.

One way to collect honest feedback, so you can identify and improve upon any ongoing and/or pervasive issues, is through exit interviews with departing employees.

While the thought of conducting exit interviews might initially make you uncomfortable, if approached from a positive perspective—and with an open mind—they can provide valuable insights about employees’ perceptions of your organization and its culture. You can also uncover information that helps you defuse conflict in the workplace and, if necessary, prepare you for possible litigation if a soon-to-be ex-employee considers taking legal action.

Denise Macik, Manager of Strategic HR Services for G&A Partners, says a proactive way to collect feedback from your team is to weave “stay” interviews into your company culture. Conducting these interviews with your existing employees can help you keep them more engaged and can strengthen your retention efforts.

Stay interviews involve:

• Checking in with employees at regular intervals to get their feedback
• Finding out what they need from you to be successful in their work
• Identifying and sorting out problems before they reach a point of no return

The Cost of Employee Turnover

Employee exits come at a price. In fact, the average cost to replace an employee is approximately 50% of the annual salary allocated to that position, according to G&A Partners’ Calculating The Cost Of Employee Turnover - How much does employee turnover cost your business?

So, what are the costs included in these estimates?

Separation Costs

These refer to expenses your company incurs to administer an employee’s termination, including severance payments, unemployment insurance claims, and continuing benefits. You must also factor in the time other employees spend processing the termination and fulfilling the vacant position’s job responsibilities in the interim.

Recruitment Costs

Recruitment costs result from your search for a new employee to fill the vacant position—including recruiting platforms and services—and the time managers and/or HR professionals spend screening resumes, interviewing candidates, creating offers, and onboarding a new employee. The longer the hiring process, the more expensive the recruitment costs.

Productivity Costs

These costs include the hours, experience, and expertise your business loses when an employee leaves, and the expenses associated with training a new employee. It simply takes time for a new employee to achieve the previous employee’s productivity rate.

“Research has shown that high turnover predicts low company performance and that an organization with turnover lower than its competitors can be at a considerable advantage—particularly if it retains its top performers,” states Harvard Business Review’s Making Exit Interviews Count. “According to our research, many companies don’t even conduct these [exit] interviews. Some collect exit interview data but don’t analyze it. Some analyze it but don’t share it with the senior line leaders who can act on it. Only a few collect, analyze, and share the data and follow up with action.”

How to Master Your Exit Interview Strategy

Exit interviews have gotten a bad rap for feeling more like an interrogation rather than a two-way assessment for both the HR team and the departing employee, according to Human Resources Director Magazine's Exit interviews: What questions should you be asking? The team or manager conducting the interview should prepare to hear negative feedback about the company's overall culture and how they might improve.

Instead of treating an exit interview as a box to check in your termination process, view it as a golden opportunity to elicit valuable data from someone who may be more forthcoming with information because they are no longer worried about losing their job. Communicate from the start that the information they share with you is private and will not affect the employee references provided by your company.

Ways to create or improve upon your exit interview strategy:

• Structure and plan exit interviews like you would a hiring interview. Many of the same best practices for interviewing a potential candidate applies to interviewing an employee leaving your organization.
• Conduct a one-on-one exit interview—not a panel interview. An employee who faces a group of people during an exit interview might hold back information or shut down because they feel like they're on trial.
• Don't ask employees to name names or assign blame during an exit interview. Instead, ask about specific instances or situations and how they affected their work performance.
• Sometimes, employees use exit interviews to air their grievances. Try not to get defensive and, instead, get the root of their issues. This may be the most challenging for you, but it is how you glean the most significant insights.
• If you're not sure why someone is leaving, ask them. For example, when a star employee decides to leave, use the exit interview as an opportunity to respectfully ask how they came to that decision. You may find out that there are growing problems in your organization.
• If you don't want your employee to leave, ask them to stay. And find out what needs to change for them to remain on the job.
• Follow up on feedback from your exit interviews. Remember, the reason you are conducting them is to find out the information current employees might be uncomfortable sharing. If you're not going to follow up on the feedback, don't conduct exit interviews.
• Use information gathered during exit interviews to proactively address issues within your organization, improve your company culture and employee morale, and, ultimately, increase your employee retention rate.

The Society for Human Resource Management (SHRM) recommends that an HR professional conduct the exit interviews if possible. In addition to their background and training, HR professionals are knowledgeable about the separation process. They can collect company property that needs to be returned before an employee's departure, advise them of continuing benefits, and ensure that relevant paperwork is completed. In smaller companies, however, there may not be a dedicated HR position. For a variety of reasons—HR expertise a very important one—HR outsourcing could be a great way to improve employee satisfaction and avoid costly turnover or legal issues.

Position Your Stay Interview Strategy for Success

A stay interview should encourage open and honest communication. If your employees believe these interviews will result in repercussions, they will hold back information or provide answers they think you want to hear. Like exit interviews, there is no need to conduct stay interviews unless your company is willing to solicit constructive criticism and act on employees’ feedback.

“Stay interviews are a great tool that more managers should use to gauge employee satisfaction, company culture, and shared thinking on how to improve and grow the organization. Managers who conduct stay interviews can retain top talent, engage their employees, and lower their employee attrition in ways that others cannot,” according to Business.com’s The Benefits Stay Interviews Can Bring to Your Company.

Suggestions for fostering a successful stay interview strategy include:

• Explain to employees that stay interviews are conversational, trust-based, and strategic discussions where they can share positive and negative feedback about the company, its culture, and their position.
• If you have a dedicated HR position or an HR outsourcing partner, like G&A, consider having at least initial stay interviews conducted by this person. This can help employees feel more comfortable offering up honest feedback—especially if they have concerns about the company culture or their direct manager.
• Schedule regularly occurring stay interviews, so they are on the calendar and employees come to expect them.
• Stay interviews are not meant to be employee performance review meetings. Don’t confuse the two, or you may lose your employees’ trust and miss out on future opportunities to get vital feedback.
• Explain to employees that you will consider their feedback, but don’t promise to make specific changes. However, when your organization implements new policies or changes based on employee feedback, communicate that information to all employees and express appreciation for their contributions.
• Conduct one-on-one stay interviews (not group interviews) because employees are more likely to be forthcoming in a private setting.
• If the interview is leaning too heavily toward negative feedback, create balance by weaving in questions that solicit positive responses, such as: What aspects of your job do you enjoy? What are some of your team’s recent successes?
• Approach the interview with an open mind. When you demonstrate that you are there to listen and not to get defensive upon hearing criticism, you gain employees’ trust and set the stage for a successful stay interview program.

The end goal for both “exit” and “stay” interviews is to gain valuable and actionable feedback from people who know your business best and view your company from a different angle. If you need help establishing your interview program or with your employee engagement, recruiting, and retention efforts, consider working with a team of HR experts, like G&A Partners.