Source | Harvard Business Review : By Everett Spain and Boris Groysberg
An international financial services company hired a midlevel manager to oversee a department of 17 employees. A year later only eight remained: Four had resigned and five had transferred. To understand what led to the exodus, an executive looked at the exit interviews of the four employees who had resigned and discovered that they had all told the same story: The manager lacked critical leadership skills, such as showing appreciation, engendering commitment, and communicating vision and strategy. More important, the interviews suggested a deeper, systemic problem: The organization was promoting managers on the basis of technical rather than managerial skill. The executive committee adjusted the company’s promotion process accordingly.
The greater goal for any company, of course, is to retain valued employees. Research has shown that high turnover predicts low performance and that an organization with turnover lower than its competitors’ can be at a considerable advantage—particularly if it retains its top performers. If people are leaving an organization in ever-increasing numbers, figuring out why is crucial. And the most useful tool for doing so is one that too few leaders pay attention to: exit interviews. According to our research, many companies don’t even conduct these 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. The company mentioned above is in this final group, and it’s undoubtedly better for it.
In today’s knowledge economy, skilled employees are the asset that drives organizational success. Thus companies must learn from them—why they stay, why they leave, and how the organization needs to change. A thoughtful exit-interview (EI) process can create a constant flow of feedback on all three fronts.
Though we are unaware of research showing that EIs reduce turnover, we do know that engaged and appreciated employees are more likely to contribute and less likely to leave. If done well, an EI—whether it be a face-to-face conversation, a questionnaire, a survey, or some combination of those methods—can catalyze leaders’ listening skills, reveal what does or doesn’t work inside the organization, highlight hidden challenges and opportunities, and generate essential competitive intelligence. It can promote engagement and enhance retention by signaling to employees that their views matter. And it can turn departing employees into corporate ambassadors for years to come. Indeed, of all talent-management processes, a strategic EI program—one that is designed to yield ongoing, long-term benefits—may be one of the most powerful yet least understood.
The State of Exit Interviews
Too often EI programs fail to either improve retention or produce useful information. We’ve identified two reasons why. The first is data quality. The usefulness of an EI depends utterly on the honesty and forthrightness of the departing employee. People may be less than candid on their way out the door for many reasons. Some feel pressed for time or unmotivated to explore their feelings. They may not want to say anything negative about a supervisor they like, or anything at all about a supervisor they don’t like. As one HR leader at a European mining company puts it, “Are they really going to tell you they’re leaving because they don’t like their boss? Probably not, because they want references.”