Use of Exit Interviews Grows, Gets More Sophisticated

By Eilene Zimmerman

Sep. 21, 2005

The HR metric of the moment may be employee engagement, but many companies have also placed a new emphasis on employee disengagement by reinventing the exit interview and acknowledging there’s much to be learned from a departing employee. The development and implementation of these surveys is increasingly being outsourced, and the data compared with other workforce surveys.

    Vendors that provide these services say demand is rising because outsourced exit interviews are often more comprehensive and strategic than internally devised surveys, which can be incomplete or haphazard. Beth Carvin is CEO of Nobscot, a Web-based software provider whose products include WebExit, which was introduced in 2001. She has seen growth in both the number of her business’s clients as well as her revenue of between 20 to 50 percent a year since then. “Exit interviews are the one process that companies haven’t really figured out how to do well,” says Carvin.

    Like Carvin, Diane Irvin has seen demand for her firm’s exit interview services grow rapidly in the last few years. Irvin, senior vice president for the HR research and consulting firm Strategic Programs, says the Denver-based company has been growing more than 70 percent a year for the past three years, largely due to its exit interview work. “Right now it’s trendy to do employee engagement surveys, but to engage employees you have to understand them. Comparing your exit data to your engagement data helps you do that.” Irvin and others in the exit interview business find employees are both more likely to participate and to be more honest when someone unconnected to their employer asks the questions.

    Nobscot, Strategic Programs and most other vendors provide clients with detailed reports that correlate responses from departing employees and analyze data, breaking it down by age, seniority, gender and other demographics. The number of questions ranges from about 35 to 70. For larger organizations, the questions are generally quantitative rather than qualitative, although most surveys contain a section for open-ended comment.

    Since January, Black & Veatch has been comparing data from its newly designed exit interviews with its workforce engagement surveys in order to accurately gauge how employees feel about their jobs. The engineering consulting firm hopes the information gleaned from its surveys will help senior management find ways to increase employee productivity and, ultimately, profits. The company may discover, for example, that supervisors need a specific kind of training or development to better manage their teams.

    Michael Harris, a professor of human resources at the University of Missouri-St. Louis’ College of Business, says that’s a smart move. “Think of your employee as your customer,” he says. “Most companies want to measure customer satisfaction, but it’s important to also find out why your customers are leaving.”

    Black & Veatch changed its old set of exit interview questions–which B.J. Holdnak, vice president of organization effectiveness describes as “kind of hit or miss”–to a standardized survey that identifies high performers and categorizes the reasons they leave. Black & Veatch’s exit survey also tracks demographics. “Are younger people leaving us more often than those with a longer tenure? If so, why? Is it compensation? Their team? The environment? The culture? We are looking for patterns,” says Holdnak.

    Some of the same questions asked in Black & Veatch’s exit interviews are also asked in their engagement survey, so that the responses of those currently in the workforce can be compared to those who are leaving.

    Richard Wellins, a senior vice president at human resources consulting firm DDI, says asking exit interview questions before people actually exit–in engagement surveys–can help a company prevent people from leaving. “The idea is that the questions you ask for a current employee are very similar to what you ask a person who is leaving. For example, on an engagement survey you might ask, ‘Do you feel you have opportunities to expand your knowledge and learning? Are we meeting your needs for learning and growth?’ and on the exit survey it’s the same questions, only past tense,” says Wellins.

    Richard Harding, director of research at Kenexa, says this kind of comparison across surveys is relatively new for businesses. “You’re looking not just at why people are leaving, but why they are staying,” says Harding. “Then you give your managers actions they can take to keep their people. Just doing exit interviews after someone leaves is like shutting the door after the horse has left the barn.”

Expansion plans
    Black & Veatch has an aggressive expansion plan in place, a response to dramatic growth in worldwide energy and water markets that began about three years ago. Its work is concentrated in those industries, says Holdnak, and the firm wants to capitalize on the opportunity for growth by hiring people that are a good fit and will stay put.

    “We are going to have to increase the number of people we hire and retention is also going to be an issue. If [energy and water] markets are better, people are more likely to jump ship,” says Holdnak.

    Black & Veatch hasn’t been collecting data long enough to know how it will use the information to make changes, but as the firm grows, a big concern is fostering a globally inclusive corporate culture.

    Between 30 and 35 percent of Black & Veatch’s 7,000 employees work outside of the U.S. “Having policies and processes that resonate with employees in different countries across a variety of cultures is a challenge for us and we’re hoping the data we get from these surveys will help us achieve that,” says Holdnak.

Increasing participation
    Sutter Health, a healthcare network based in Sacramento that serves northern California and Hawaii, overhauled its exit interview process when it developed a nursing retention and recruitment plan four years ago. The data is being used to help stem the turnover of newly hired nurses, which is very high compared to Sutter’s general nursing population, says Diane Lahola, director of workforce planning and retention at the company. Turnover of new nursing school graduates is high throughout the healthcare industry, says Lahola, and Sutter wants to find out “what it will take to create a more satisfactory work environment for nurses, because the cost of turnover is very high and they are difficult to recruit.”

    Sutter’s affiliates–the members of its network–have been allowed to either internally redesign their exit interviews or contract with third-party vendor Strategic Programs. “It made sense to use a third party because you tend to get better participation rates and more [candid] data,” says Lahola. The first year, between 40 and 50 percent of affiliates outsourced exit interviews; this past year 75 percent did. Lahola says for affiliates who conduct the interviews themselves, participation among departing employees is between 0 and 12 percent. With a third party, average participation is about 70 percent.

    The new exit surveys give Lahola more accurate information than she had previously. “A lot of times someone will say they are leaving because they are getting more money across town, when the real reason is that you can’t pay them enough to work for their manager,” says Lahola.

    In an effort to get at the true reasons employees leave, Lahola compares exit data to the data she gets on annual employee opinion surveys. She was surprised to learn this fall, after the most recent opinion survey, that the orientation and assimilation period was a sore spot for new nurses. It wasn’t the structure of the orientation program itself. It was other things, such as current employees not being prepared for a new employee’s first day on the job. “Although it wasn’t happening at all our affiliates, I didn’t realize the degree to which this was a problem,” says Lahola. “New nurses and other employees would show up for their first day and staff may not have been prepared to orient and assimilate them.”

    Also surprising was the issue of competitive pay. Employees currently with the organization are actually less satisfied with their pay than those who leave. “That tells me people aren’t leaving because of money,” she says. “And I can drill down by affiliates to see where the problem is most acute.”

    Sutter Health’s affiliates are just starting to make changes based on the exit data. New nurses are now surveyed about their work experience at the 30, 60 and 90-day mark and several affiliates have begun mentor or buddy programs. Another reason nurses were leaving, says Lahola, was a perceived lack of career opportunities, despite the fact that Sutter offers a variety of programs that allow employees to move from one affiliate to another or attend management and leadership programs. “We need to connect the dots better to show employees these opportunities exist,” says Lahola. “Now we focus on that in all of our communications.”

Hiring alumnae
    Jeppesen, an Englewood, Colorado company that provides aviation data such as maps and flight plans, redesigned its exit interviews in 2000 with the help of an outside vendor. Information from the exit surveys spurred the company to offer more training for managers and change the way management jobs are posted. “There was a perception here that people got jobs through who they knew rather than what they knew,” says Alice DiFraia, the company’s director of human resources and organizational development.

    The changes had a profound effect: by 2003, turnover was down to six percent, which was DiFraia’s goal, and the company stopped performing exit interviews. This year, however, turnover began rising again–it’s 12 percent now–and the company has reinstituted the interviews.

    Data from exit interviews is also used in less obvious ways. United Risk Partners, for example, a firm that doesbackground checks, is finding that about 40 percent of companies also use it to conduct exit interviews. Craig Lawrence and Marco Confuorto, partners in the suburban Chicago firm, are both trained investigators and use the interviews to gain information about a company that management can’t find on its own. “From a risk management standpoint, you can find out things about sexual harassment, drug and alcohol abuse, intimate relationships and criminal activity,” says Lawrence. “To investigate a criminal allegation you would have to hire an investigator to go under cover for a 90- or 120-day investigation. Exit interviews are a way to obtain inside intelligence about operations without having to make those significant investments.”

    Boomeranging–getting highly valued employees who leave voluntarily to return–can also be facilitated via exit interviews. Exit questions for those employees focus on what it would take to get them to stay. Beth Carvin of Nobscot recalls an insurance company client that was able to do just that. “They called an employee who had left to say, ‘All the great things you liked about working here are still here, and the things you didn’t like? They are gone.’ They hired this guy back within two weeks,” she says.

    Richard Harding of Kenexa says because employees sometimes find the grass isn’t necessarily greener at another company, doing exit interviews a few weeks or even months after valued employees leave can help a company find out what it will take to bring them back. Harding says Kenexa asks departing employees if they’d consider returning to the company, and under what conditions. About two-thirds say they would consider returning if the circumstances changed. Often, employees don’t say they want more money–they just don’t want to work for the same manger.

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