Exit Interviews

Turn Your Former Employees into Workforce Consultants

PRESENTED BY DANNY A. NELMS

The Work Institute

MEET YOUR SESSION LEADER

Mr. Danny A. Nelms, MBA

Managing Director

The Work Institute

� Co-author of The Why Factor: Winning With

Workforce Intelligence

� Agent of change, thought leader, and expert in

helping companies forge new directions with 20

years of experience and insight into human capital

dynamics

� Bachelor of Business Administration from Georgia

State University

� Masters of Business Administration from the

Massey School at Belmont University

� Adjunct faculty member at Lipscomb University in

Nashville, Tennessee

KEY TOPICS FOR DISCUSSION

� Impact of Employee Retention

� Former Employees as Consultants

� Making the Case: Former Employees Make the

Difference

� Evidence-Based Employee Retention

� Q & A

� We Believe Every Word Counts

The Impact of

Employee Retention

“Leading-edge companies are increasingly adopting sophisticated

methods of analyzing employee data to enhance their competitive

advantage. If you want better performance from your top

employees – who are perhaps your greatest asset and your largest

expense – you’ll do well to favor analytics over your gut instincts.”

- Competing on Talent Analytics, Harvard Business Review, October 2010

WHY FOCUS ON EMPLOYEE RETENTION?

� Cost of turnover

� Significant loss of company knowledge

� Disruption of customer service

� Turnover creates more turnover

� Significant loss of productivity

� Lower employee engagement

� Lower performance

� Undue stress on employees and organization

Elements of Turnover Costs:

�Lost productivity

�Temporary replacement

�Hiring costs

�Training costs

�Administrative costs

FINANCIAL CASE FOR IMPROVING RETENTION

� Typical Company� 1500 employees

� 12% turnover

� 180 terms per year

� Average salary = $50,000

� Cost of Turnover� $50,000 * 33% = $16,500 per employee

� $16,500 * 180 =

� Direct Cost� $2,970,000 * 1/3 =

COST IMPACT FOR A SMALL COMPANY

$2,970,000

$990,000

� Typical Company� 5000 employees

� 10% turnover

� 500 terms per year

� Average salary = $35,000

� Cost of Turnover� $35,000 * 33% = $11,550 per employee

� $11,550 * 500 =

� Direct Cost� $5,775,000 * 1/3 =

COST IMPACT FOR A MEDIUM COMPANY

$5,775,000

$1,925,000

� Typical Company� 10,000 employees

� 15% turnover

� 1500 terms per year

� Average salary = $40,000

� Cost of Turnover� $40,000 * 33% = $13,200 per employee

� $13,200 * 1500 =

� Direct Cost� $19,800,000 * 1/3 =

COST IMPACT FOR A LARGE COMPANY

$19,800,000

$6,600,000

Former Employees

as Consultants

“someone who provides professional or expert advice[ in a

particular area.”

- Consultant Definition

BUILDING A RETENTION STRATEGY

COMPLETELY ASSESS THE REASONS WHY

RECOGNIZE EXITING EMPLOYEES AS A SAMPLING

BUILDING BLOCKS TO A SOLID RETENTION STRATEGY

The first phase of developing a comprehensive retention strategy is

completely assessing the reasons why employees decide to leave your

organization.

Recognize that employees that leave are a representative sample of

employees who are considering exiting the organization.

USE INTELLIGENCE TO BUILD A STRATEGY

Once reasons for turnover are recognized, you will be able to take the

necessary steps required to reduce turnover and increase the overall

value of your organization.

BEHAVIORAL BASED EXIT INTERVIEWS

� Exit interviews have been conducted since the 1920s

� Timing

� Inside vs. Outside

� Confidentiality

� Mixed method approach

� Act on the data

� Former employees are a representative sample of

current employees at risk

� Engagement data supplement

Research Musts• Clear Goal

• Proper communication

• Sound questionnaire design

• Data and Demographics

• Research execution

• Detailed reporting and analysis

• Meaningful action planning

Effective Communications:

� Drive High Response rate

� Encourage Authenticity

� Reinforce Confidentiality

� Report Findings and

Actions

EFFECTIVE COMMUNICATIONS

DATA AND DEMOGRAPHICS

- Who needs to receive reports

- How do we manage our organization

- Facility

- Business Unit

- Country

- How detailed can I get

- Don’t forget

- High potentials

- Performance Rating

- Special groups

Let us ask the right questions

Question Structure

On a scale of Excellent, Very Good, Good, Fair or Poor, how

would you rate Company X as an employer?

<Ask: Why?>

<Probe for specificity and for up to 4 responses. Ask which is

most important.>

<If Very Good or Good Ask: Why and What would it take to

earn an Excellent rating?>

<Probe for specificity and for up to 4 responses. Ask which is

most important.>

GETTING THE ANSWERS

EMPLOYEE ENGAGEMENT

Engagement Drivers

- Team

- Manager

- Organization

- Job

Develop Questions with Engagement in Mind

� 10-12 open-ended questions

� Double probing for specificity

� 12-15 minutes

� 6 outbound calls per employee

� Talk with behavioral interviewer

� External, third party

RESEARCH EXECUTION

Real Time – Flexible and Decision Oriented

• Require Real-time reporting

• Ability to slice and dice data

• Drill down to qualitative data

• Action Oriented

• Data whenever and wherever you need it.

REPORTING THE DATA

ACTING ON EXIT INTERVIEW INTELLIGENCE

Use the results from exit interview intelligence to begin

building the foundation for your retention strategy.

Identify topics

whose results

suggest issues

you should

address.

Define those

issues to get to

the root cause.

Create an action

plan for each

issue.

TYPICAL EXIT INTERVIEWS FINDINGS

According to research by The Work Institute, these are the key

retention issues facing companies over the last two years:

� Career factors

� Supervision and management

� Scheduling and hours

� Training opportunities

� Type of work

Any computer can perform a survey. To answer the question “Why?”, understand employee characteristics, needs, values, and experiences.

+ USE RESOURCES & EXPERTISE

Combine quantitative and qualitative methodology for a comprehensive look at what drives the people in your organization.

No single research or survey tool can convey the breadth of factors that drive behavior in a workplace or institution. Involve practitioners that utilize a variety of methods and customized reporting tools.

+ GET THE BEST AVAILABLE RESEARCH

+ EXAMINE THE EMPLOYEE EXPERIENCE

WORKFORCE INTELLIGENCE TO DRIVE EVIDENCE-BASED DECISIONS

IMPROVED DECISION MAKING

Making the Case:

Former Employee

Feedback Makes the

Difference

“I believe the real difference between success and failure in a

corporation can be very often traced to the question of how well

the organization brings out the great energies and talents of its

people.”

- Thomas Watson, Jr., A Business and Its Beliefs, 1963

THE SCENARIO

� In 2005, a national comprehensive cancer center partnered

with The Work Institute to collect actionable intelligence

from employees leaving the organization.

� They chose to partner with The Work Institute because they

wanted to collect data that would help identify issues that in

turn could be addressed.

� They did not have the internal resources to regularly conduct

exit interviews and thought former employees would be

more willing to share information with a 3rd party.

THE SITUATION

Prior to 2007:

� Nurse turnover was 14.1%

� Nurse vacancy rate was 11%

� Attended approximately 35 nurse specific career

fairs per year

THE WORKFORCE RESEARCH

� Top reasons for leaving� compensation (82%)

� schedule/hours (60%)

� Supervision/management (20%)

� Top suggestions to make the organization more

attractive� improve compensation (50%)

� improve supervision/management (25%)

� increase opportunities (25%)

THE ASSESSMENT AND ACTION PLAN

� HR began reviewing the exit interview data regularly and sharing

it with Nursing Administration.� Held bi-weekly meetings with HR and Nursing Administration to discuss and

address nurse recruitment and retention issues

� In 2008, they implemented a nursing career ladder.� Allowed the organization to pay for experience and entice nurses to obtain

advanced degrees and oncology specific certifications; geographic differentials

� They partnered with a local university and the local union to provide increased

tuition assistance to nurses

� They strategically removed several poor performing nurse

managers (approximately 6) and realigned outpatient clinics to

ensure adequate supervision.

THE RESULTS

� Nurse vacancy rate is 1%� They have a nurse waiting list for employment.

� Top reasons for leaving� retired

� personal

� Top suggestions to make the organization

more attractive� compensation (from 50% down to 22%)

� other

� work demands

Evidence-Based

Employee Retention

“A good spy movie never ends with the agents capturing the

intelligence; it starts with it. Good intelligence makes for a good,

action-filled plot. It should do the same in your workplace.”

- Danny Nelms, The Why Factor: Winning with Workforce Intelligence

TURNING OUR LENS TO A WIDER VIEW

What are the significant issues going on in your

organization?

� Turnover on the rise and engagement declining

� Strong financial case for improving retention

� Cost of turnover = 33%

� Exit Interviews based on Evidence-Based

Management

� Findings used as basis for solutions to reduce

turnover and improve overall value of organization

WINNING WITH WORKFORCE INTELLIGENCE

Typical Approach = Another HR Program

WORKFORCE INTELLIGENCE APPROACH = STRATEGIC BUSINESS IMPERATIVE

� Analytics need to be combined with financial measures and workforce

research to yield intelligence we can use to specifically and intentionally

intervene and impact business practices and results.

� If we don’t consider the employee’s perspective and feedback as well as

the organization’s financial resources, we are limiting our ability to be

effective to assumptions and predictions and leaving out the critical answer

to the question “Why?” – the question only our employees can answer.

RESEARCH IS THE KEY DRIVER

What gives us the foundation, perspective and ability

to think about HR differently?

RESEARCH

Q & A

“Judge a man by his questions rather than by his answers.”

- Voltaire

We Believe Every

Word Counts

“While quantitative surveys may provide you a compass to

understand direction, The Work Institute methodology is a GPS! We

can hone in on the key actionable information so you drive your

organization and achieve your goals with confidence.”

- Danny Nelms, The Why Factor: Winning With Workforce Intelligence

Discover a better approach to gathering and

understanding workforce intelligence, and get results

that give you a competitive advantage.

� proprietary, customized solutions to get to the root of

how people respond to your organization

� emphasis on mixed method research – we get the best

information, so we can give you the best information

� a commitment to meeting clients where they are,

matching research and analysis to the client’s needs,

and asking the right questions

The Work Institute gives your organization the power to

improve overall satisfaction, reduce cost, and promote

growth.

Leading national and international

organizations rely on The Work Institute

to gather actionable data to help

manage talent, improve performance

and mitigate risk.

Stop wondering. Start knowing. Start winning!

ABOUT THE WORK INSTITUTE

UNDERSTAND YOUR EMPLOYEES.

MANAGE MORE EFFECTIVELY.

COMPETE AT THE HIGHEST LEVEL.

The Work Institute | 1620 Westgate Circle, Suite 100 | Brentwood, TN 37027

Toll Free: 1-888-750-9008 | Phone: 615-777-6400

www.WorkInstitute.com