At a recent women business owner conference, I participated in a roundtable with other women entrepreneurs to discuss common challenges. The dominant topic, which surprised me, was employee recruitment and retention. Many women expressed concern about hiring an employee, training them, and then watching them leave after a short tenure.
The high cost of employee turnover
Employee turnover is expensive. Human research professionals estimate the cost of turnover ranges from 50 to 200 percent of an employee’s annual salary. Furthermore, an employee resignation can affect the morale and productivity of your remaining team members. Don’t you think you owe it to the health of your business to examine the true motivation behind an employee’s departure?
It’s important to conduct exit interviews
Exit interviews can be as eye-opening as customer complaints. They provide an opportunity to gather information about your company that might otherwise be difficult to obtain while someone is working for you. The interview may cover issues such as benefits, working conditions, opportunities for career advancement, the quality and quantity of the workload, and relationships with co-workers and supervisors.
To conduct a successful exit interview, set aside about one half hour in a quiet, private area. Because it’s difficult to conduct an exit interview, carefully plan what questions you intend to ask and what information you’d like to obtain. Start off by making the employee feel comfortable. You don’t want to make the meeting confrontational.
Questions to ask a departing employee
- Why are you leaving?
- How would you suggest we train your replacement?
- What were the most challenging issues in your job?
- How would you improve job satisfaction here?
- What did you like most about your job?
- Were you happy with the pay and benefits?
- How do you feel the business is run?
- Were there any policies that made your job more difficult?
- Would you recommend working for this business to friends? Why or why not?
- What did you dislike most about your job?
If you consider the employees a valuable part of your team, be sure to ask if there is anything you can do to make her want to stay. You might be surprised by what you learn, and the entire conversation may turn into a negotiation. For example, suppose an employee is leaving because she wants to be able to work from home, but she’s afraid it won’t be acceptable. You may be able to arrange a schedule that works for both of you, and the employee will be saved.
However, don’t be disappointed if that’s not the case. By the time someone has made the decision to resign, it’s probably too late to do anything about it because that’s a really big decision.
Putting what you learn to work
If you aren’t comfortable doing the exit interview yourself, or if you don’t think the employee will be honest with you, consider using an outside human resources professional. In fact many small companies find this is actually more productive. Small business owners typically have close relationships with their employees and as a result, the employee is often more comfortable with someone from outside the firm.
Finally, use what you learn. If you get negative feedback, don’t be defensive. Investigate the information, and if you discover a problem, fix it. It may protect you from losing another good employee.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com or Visa.