Reducing employee turnover needs to be at the center of your human resources strategy. Not only do high attrition rates lead to lower employee morale—but the cost of recruiting new employees is so high that doing so constantly can quickly run you out of business.
In my work as a business broker, I consult with business owners to help them grow their companies. My goal is to help them sell their business for a profit, which means my focus is on maximizing the value of their company. A valuable business not only drives revenue from a diversity of sources, but it is also optimized for efficiency and productivity. Because of this, employee retention rates can be seen as a good indication of both the health and value of a business. Low turnover demonstrate stability, which is a precursor for growth. High turnover is a red flag, and the high cost of recruiting new employees can make things even more uncertain.
As a result, many managers conduct exit interviews to learn about problems with the employee experience. But exit interviews are a reactive strategy; the person has already left. The damage is done. We should always try to be proactive, and stay interviews allow you to gain the same information from employees earlier, helping you avoid having exit interviews in the first place.
Here’s a little more about why you should be dedicating more energy to these valuable opportunities to learning about your employee experience.
The Difference Between a Stay Interview and an Exit Interview
But first, we should spend a moment to clarify something. The words “stay” and “exit” are opposites, but stay interviews and exit interviews are not. An exit interview is conducted after someone has already left the company. As a manager, you may conduct it yourself during the final days someone is with the company, or you may hire an outside HR firm to contact the employee and do the interview after they’ve left.
A stay interview, on the other hand, is much more like a performance review. It’s a chance for you to sit down with employees and find out what it is they like about working for the company, what they don’t like and what they wished was being done differently.
The reason these are not opposites is because they both accomplish the same thing: they give you a detailed synopsis of your employee experience. However, just because they tell you the same thing does not mean they should be equally desired. You should be trying to avoid exit interviews at all costs.
A Proactive Strategy
We’ve all known since we were kids that it’s much better to be proactive than reactive. Studying hard for an exam to ensure a good grade is a much better strategy than trying to convince the teacher to offer extra credit opportunities that will allow you to boost your grade.
Well, when talking about exit versus stay interviews, the same thing applies! Conducting exit interviews means there is already something wrong with your employee experience, and this means any strategies you put into place will be reactive instead of proactive.
It's hard for this approach to work. If you wait until people are already soured about their jobs, then any attempts to improve the employee experience might seem trite or contrived, which could make them feel even worse about their jobs. Focusing on stay interviews allows you to discover issues with your employee experience before things get so bad that people feel as though they must start looking for another job. Prevention is the best cure.
Managing a Remote Team
Because of this, when I launched my first business, I made sure to adapt a decidedly proactive strategy. I had spent years working as a freelancer, and during this time I dealt with countless clients who drove me crazy. I often didn’t get a chance to talk about how to improve the arrangement, largely because they never asked. My issues would not get discussed until the relationship was ending. So when I started my company, and I began hiring people to work for me, I wanted to make sure I was not “that client” that I used to hate working for.
First, I started getting to know the team with monthly one-on-one meetings. Understanding the challenges that come from working with people in an online environment, I made sure to ask them how things could be improved to maximize efficiency and minimize waste. The conversations we had were interesting, funny, and enriching, and they helped the company develop a real culture of feedback and innovation that ended up being a big part of its success. Many of these people joined me after that company was sold and now work with me on my current business. So I guess you could say it worked!
Demonstrate Your Commitment to the Employee Experience
No one likes feeling like they’re a number or just a cog in the machine, and stay interviews are a great way to demonstrate to people this is not the case!
Think about it. If you don’t like something about your job, wouldn’t you love the chance to tell someone about it? And then wouldn’t it be great to see your concerns addressed? This is the primary purpose of a stay interview, and conducting them regularly will help you instill confidence in your employees about their place of work.
Failing to do these stay interviews will just put people off. With no outlet to vent their concerns, they’re simply going to start looking for new jobs meaning you’ll be conducting far more exit than stay interviews, which is not a good sign.
What To Ask In a Stay Interview?
Good things to ask are how happy people are with certain company policies, such as flexible scheduling, remote work, PTO, etc.? You may also want to ask people what holds them back from doing their job. Is it meetings? The systems we use? Time differences? People get frustrated when they waste time not doing their jobs, so find out why this is happening and address it. But while it’s smart to have a set of questions going into the interview, it’s equally valuable to just let a conversation happen. You should be having these meetings enough to develop a rapport with each team member, and this will allow them to open up more freely and point to areas issues that had not previously occurred to you.
No matter how the interview plays out, make sure you’re attentive to people’s needs, and try to be realistic about what you can do about them. If you can’t do something, it’s best to show your sympathy and then explain why things aren’t going to change. If you can make changes happen, then make this clear and be sure to follow your words up with actions.
Time to Adjust
Much of your success in improving employee retention will come back to recruiting. If you can find the right people—those who are not only qualified but also committed to the company vision and values—then you’re more likely to keep turnover rates low. However, if you’re conducting lots of exit interviews, meaning a lot of your people are moving on, then you’re going to have a hard time convincing others to come work for you.
Word will can spread quickly about your poor employee experience. There are now sites like Glassdoor where employees can go to leave online reviews of their company. People talk to their friends, families and industry contacts about their jobs all the time, so you can bet that your company will quickly acquire the revolving-door reputation we’re all so desperately trying to avoid. Conducting stay interviews will help you identify these problems before word gets out. You can find out what concerns people have, and then you can address them. This allows you to change what people are saying about you as an employer. Employees from a company conducting lots of exit interviews will likely say to people, “I hate working there,” whereas employees at a company doing stay interviews will say, “Things used to be bad, but I spoke up and they got better.” Everyone would rather work for the second company, so start integrating stay interviews into your retention strategies before it’s too late.
A Culture of Feedback
Dynamic, innovative companies thrive because they develop cultures that encourage open and free communication. If an employee feels silenced, or as if their voice doesn’t matter, then they are much less likely to take a risk and propose something new and innovative. And when this happens, people will feel as though they’re being held back, which is a good way to start encouraging people to look for other jobs.
Doing stay interviews demonstrates to people that they should feel free to speak up about something when they think it’s wrong. Of course, you can’t address every little issue, but just showing people they have a voice will help develop the type of culture you need to stay ahead in an ever more competitive world.
How Often Should You Do Stay Interviews?
It should be clear by now that stay interviews are critical to reducing the amount of exit interviews you do, i.e. reducing employee turnover. But the big question is how often you should do them.
Most companies already do a yearly performance review on top of an annual engagement survey, but for stay interviews to really work, you should be doing them much more often. Two or three a year is a good place to start, but you may want to consider scheduling them monthly.
A good in-between is to do two or three big ones a year with monthly “checkups” serving as a supplement. This will help you stay on top of any issues people may be facing and address them before they become too serious, allowing you to develop a proactive strategy that will keep people happy and working hard for much longer.
About the Author: Jock Purtle consults with entrepreneurs and other small to medium sized business owners, helping them develop a growth strategy and also plan their exit. He knows the power and impact of having the right people on board can have on business growth. You can connect with Jock via LinkedIn.