How do businesses react to the uptick in worker resignations? What are exit interviews revealing? According to https://www.hrcuity.com “Over 90% of Fortune 500 companies conduct exit interviews, yet just over 40% of them view the practice itself as successful.” That is not good. According to https://wwwrecruiter .com, “Research suggests that exit interview participation rates are between 30 and 35 percent for paper interviews, and this number increases for online interviews. If your organization has 200 employees and 10 percent employee turnover, you might see about six completed exit interviews per year.” Is there strategic value falling through the crack as workers walk out the door? What are we really losing and how can we minimize it?
I suggest we lose more than we know. And consider this…What additional data do we miss that impacts those who remain at work…beyond the routine data extracted from the interviews on those who choose to leave. I am convinced that whatever triggered those decisions to leave may be a continuing force restraining performance at various Points-of-Work. Certainly, not in every case of worker separation, but not extracting those attributes promotes blind spots of residual challenges left unaddressed.
The existence of unknown attributes prompting a decision to resign triggered a few thoughts in my mind that some may view as radical…although some might say, “Wait a second, this thinking could break a pattern we don’t fully understand or adequately address.” When a worker leaves the organization, some companies complete routine exit interviews. Then what happens to those exit interviews? Are the interviews HR checkbox events to be filed away in a personnel folder? Are any actionable data points leveraged outside of HR to affect change? Does this practice represent a pattern that we do not fully address? This leads me to some potentially radical thoughts…
Before I share my thinking, understand I am not bashing HR or traditional exit interviews; rather, I am suggesting an evolved approach to capture actionable information to impact change necessary to optimize the work environment and other Point-of-Work performance attributes for those left behind. Some of the routine questions like “Why are you leaving?” or “What do you feel we need to change to be better?” are valid, but do we really get honest answers when workers are in a “burn no bridges” mode when speaking with HR? Also does the questioning go deep enough into job frustrations and the root causes behind them? Here are a couple of things to consider to evolve beyond status quo exit interviews:
- Initiate a Point-of-Work Assessment (PWA) discovery methodology to reveal root causes that triggered the decision to resign.
- Consider utilizing a neutral third party to accomplish exit interviews to promote anonymity; protection from “burning bridges” fears; and promoting truthful answers relative to what led to their decision to separate.
- Consider providing a cash incentive to promote participation in the interview
Cash incentive? Why throw good money after bad? Is it crazy to spend more money on those leaving? At first blush, it sounds crazy until you compare the cost to the business to backfill positions by recruiting time and resources; interviewing and hiring; training a new hire up to a level of acceptable productivity…not to mention the productive downtime associated with this development curve. Seriously, how much does it cost to hire a new employee?
After some research, I found some good data on The Total Cost of Hiring an Employee
So with most of our common cost areas identified, it is simply the case of adding all the ones which are relevant together to get a total cost. Following is an example, calculating the one-off costs of hiring an employee using an internal HR Manager:
- HR Manager 30 hours effort – $7,700
- 1-month job ad on Monster – $249
- Basic background check – $50
- IT equipment – $600
- Training courses – $400
- Employee support 20 hours effort – $6,000
- New employee signing bonus – $2,000
Total – $16, 999
This is just an example, albeit an expensive one! But it gives you a good flavor of the potential cost of hiring an employee in 2022.
- Another studyby the Society for Human Resource Management states that the average cost to hire an employee is $4,129, with around 42 days to fill a position.
- According to Glassdoor, the average company in the United States spends about $4,000 to hire a new employee, taking up to 52 days to fill a position.
Could it be possible we are throwing good money after bad if we are NOT fixing the challenges and frustrations that caused workers to leave? Would a small fraction of what would be spent as replacement cost not make total sense to reduce the churn and avoid the embedded cost to acquire, hire, and train new talent?
How much should a cash incentive be? $250? $500? How critical is the position to be backfilled? How many additional workers plan to bail for similar reasons and frustrations?
To recap this radical idea, why initiate a Point-of-Work Assessment with the workforce members LEAVING the organization? We need to know what happened at their Point-of-Work that triggered the decision to leave.
- What were the root cause(s) triggering the desire for a job change…a life disruption.
- Could those causes have been avoided or eliminated if the particulars were known? Obviously, it is too late for the workers leaving but how many more are fighting the same frustrations?
- Do Exit Interviews yield actionable information or are they merely HR checkbox drills?
- How much does finding a replacement and training them up to task really cost?
- Would it be worth a much smaller investment to find out what was broken that contributes to costly churn from those who are freshly churning and likely waiting to share WHY?
- Could determining a departing worker’s reasons for leaving prove to be more valuable than hiring and orienting a brand-new worker?
Going to the trouble of completing exit interviews and NOT searching for performance restrainer root cause is, to this camper, a valid example of throwing good money after bad. My sometimes-radical thinking says it is a solid investment to fix the churn triggers at ground zero (the Point-of-Work) versus considering the departing worker as a bad investment by throwing good money after bad.
Like I said…radical thoughts. Granted Point-of-Work assessments are primarily intended to optimize workflow performance for the existing workforce. But what about those choosing to leave the organization? Seems to me that assessing a separated worker’s motives to determine WHY they chose to leave would offer a red flag alert for another iteration PWA targeting the role vacated. What is the cost of NOT fixing a situation that caused one worker to leave? Or two? Or ten?
I am interested in your thoughts, so feel free to share them. Plus, I welcome deeper conversation with any who want kick this around further.
Take good care!
Workforce Performance Advocate, Coach, Speaker
Web: Living In Learning