Why Exit Interview Is Need Of The Hour For The Companies With High Attrition?
Employee attrition is one of the two most important metrics when it comes to human resources. Another is employee turnover. In simple words, both of these deal with the employees leaving an organization through retirement, resignation, or death.
In case of employee turnover, the organization seeks a replacement for the position vacated by the ex-employee. On the other hand, employee attrition refers to the employee leaving the organization of their volition and hence cannot be replaced.
What Are the Major Reasons Behind Employee Attrition?
Employees are perhaps the greatest asset of any organization. Therefore, people leaving an organization in bulk is something to be concerned about. High attrition rates indicate that there are underlying issues at one or multiple levels inside the organization leading to lower employee retention. Consequently, the organization suffers from a gradually diminishing workforce.
India has an Information Technology industry worth a whopping 190 billion dollars. Despite the COVID-19 pandemic situation, all the top IT companies have been successful in generating billions in revenue by leveraging advancements in technology on a global scale.
That being said, there is an alarming rise in attrition rates even in these top organizations. A 22% to 23% attrition rate is expected in 2021. Employee retention is proving to be a real challenge even for industry leaders like Wipro, TCS, Cognizant, and several others. Especially in light of the COVID-19 pandemic, IT companies across the world seem a lot keener on building and adapting to build brand new business models and transformation projects.
Wipro and TCS have an attrition rate of 20.5% and 11.9% respectively in 2021. Cognizant has the highest attrition among its peers at 33%.
Employees may decide to leave an organization for various reasons. An attrition rate that is greater than the industry standard points to several deficiencies within the organization which need to be recognized and rectified. Companies with high attrition rates can opt to conduct exit interviews to get a better insight into what exactly motivates an employee to exit the organization.
What Is An Exit Interview and How Does It Work?
The main motive of conducting an exit interview is to find out what makes an employee want to quit one organization and look for another. The management is supposed to let their guard down and be open to criticism regarding anything that the employee speaks about. In most cases, it is better to hire a third party to conduct the exit interview so that the employee can speak up honestly without any hesitation. This in turn helps the organization in identifying the issues within the organization that works against employee retention and to come up with strategies to resolve the problem.
Ideally, all departing employees should be asked to appear for an exit interview except for those who are getting fired. In top companies, it is an integral part of the entire exit process. The interview mainly is held to collect information about the employee’s job experience so far, problems they have faced while working for the organization, and the factors that made them quit their job.
Ideally, feedback received through exit interviews can be used by an organization to fix the underlying issues, create a better workplace for the existing employees, and reduce the rate of attrition.
Cognizant plans on allocating higher bonuses to retain its employees. While demand for IT services is still on a rise, companies are struggling to cope with high attrition rates which impose serious threats to the company’s future.
How To Make Exit Interviews Count?
Changes made based upon the exit interview data help in retaining the staff, reducing costs, and therefore increasing the profitability of the organization. Unfortunately, extensive surveys have implied that there are companies who would rather skip conducting exit interviews for the departing employee as they would no longer serve the company.
This is a major red flag and needs to be addressed as soon as it’s recognized. According to the research conducted by the students of Harvard University, some companies collect exit interview data but don’t bother to analyze it.
Few of them might analyze it but don’t share conclusions with the leaders at senior levels who hold the means to act upon it. That leaves us only a handful of organizations that collect, analyze, and share the data and follow up by taking action. Of course, the companies that set themselves a class apart often take the time and pay close attention to their employees’ needs while seriously taking the difficulties their employees face into consideration.
Exit interviews are considered to be something that only the HR team should take care of. Sometimes it acts as a loophole in the process since the underlying problems may be existing within the HR team itself. Therefore senior line leaders need to participate in the process so that the real issues come to light and are worked upon effectively.