Cenek Company

The Value of Exit Interviews and Surveys

Employees leave organizations for a variety of reasons - some understood, and some misunderstood.

Organizations that wish to attract and keep the best available talent can benefit immensely by identifying the true reasons for an employee's departure, or by proactively identifying the risk factors for turnover that seem to be present in the workplace. Well-led firms do this for the same reason that they desire to know why a customer has opted to move to a competitor. It's simply a good business practice.

Illustrated below are just a few of the key arguments for systematically conducting both stay and exit interviews.

Reduce Cost of Turnover	The American Management Association says the cost of turnover can vary greatly - from a few thousands dollars for the lowest wage earner to between $75,000 and $100,000 for a top executive. Estimates of turnover costs range from 25 percent to almost 200 percent of the employee's annual compensation. Costs that are more difficult to estimate, but can often be easily seen and felt, include service disruption, emotional costs, loss of morale, burnout/absenteeism among remaining employees, loss of experience, continuity, and "corporate memory." The U.S. Department of Labor says that businesses should count on turnover costing an amount equal to one-third of the compensation for the position. A survey of companies by the consulting firm William H. Mercer revealed that across all jobs (from custodians to CEO's - and all other positions in between), about 45% of all survey respondents are now confronting replacement costs in excess of $10,000 per resignation.
Retain Valuable Talent	Its' been reported that it costs three times as much to recruit an employee than it does to retain the same individual. The war for talent has been well-chronicled, and with an increasingly tightening labor market, well-managed organizations emphasize keeping the talent that already exists within their borders.
Improve Recruiting Efforts	Exit interviews can help organizations determine what type of employees (attributes and capabilities) seem to best fit the organization, which can then be used to better target recruiting efforts.
Improve Organizational Effectiveness	A properly constructed exit interview or survey can glean tremendous insights from departing employees on how to enhance the effectiveness of the organization's culture, procedures, structure, marketing plans or product development.
Repair Organizational Trouble Spots	Occasionally exit information can help to pinpoint particular leaders, departments or teams that are operating in a toxic manner, resulting in lower morale, employee engagement and ultimately greater turnover.
Demonstrate the Value of Human Capital	People run organizations, not spreadsheets, new products or creative financing methods. Asking for an employee's opinion on the way out demonstrates a sense of caring, concern for their past contributions, and is simply proper etiquette.