Staff turnover is an inevitable part of any business, but how it is handled can make the difference between an angry, disgruntled employee and one that leaves the company with feelings of goodwill. An ill-planned exit by one employee can cause the spread of negative information internally, and has the potential of reaching future potential employees in extreme cases.
The frequency and need of exit planning should not be ignored, and while the cost of replacing an employee can be considerable, it can also be an important source of information and provide an opportunity to examine workplace practices and culture.
Pros and cons of staff turnover
- Creates opportunities for upward mobility
- Encourages staffing flexibility
- Attracts employees with new ideas and experiences into the business
- Reduces frustration of employees staying in the same job – for both them and subordinates
- Costs of replacing employees including advertising, recruiting, orientation and training
- Potential of losing high performing members(Neal, 1987)
All companies should have formal, standardised exit procedures to make sure a positive employer brand is upheld. Best practice includes the following:
An exit interview is often a verbal, face-to-face interview but can involve an online survey or be conducted over the phone. It provides an employee who is leaving the opportunity to discuss their time with the organisation, their perceptions about the organisation, workplace morale, what they liked about the company and what they would change. If the employee is departing because of sensitive issues such as harassment, discrimination etc., then legal advice should be sought before conducting an exit interview.
Some of the benefits:
- Ensure that the employee feels cared for and respected by their employer, and that their voice is being heard
- Understand the basic reasons behind the employee leaving
- Enables transfer of knowledge and experience from a departing employee to a new employee
- Provides information on how to make the organisation a better place to work, leading to changes in satisfaction and ultimately higher productivity
- Exit interviewing is a straightforward procedure that can be incorporated into the resignation processes
- Reviewing summaries of exit interviews can assist in identifying causes and trends which may be contributing to staff leaving and help employers consider options to prevent future staff losses
The exit checklist provides a structured and practical tool to ensure all processes are completed. The best person to complete the checklist is usually the employee’s supervisor and should be done on the day they leave.
The checklist can include:
- Handover information, if possible try to begin organising necessary tasks and information that needs to be shared as soon as it is known the the employee will exit
- Collect any company property such as credit cards, mobile phones, keys, security passes or password information
- Notify all relevant areas of the business, eg. Payroll, IT
- Disable access to the building and computer network
- Review any existing contracts and what expectations of the employee may remain post-employmentBe sure not to leave any loose ends behind. While you may have the highest level of trust with your exiting employee you need to know that only existing staff have high level access in the future.
What happens if you don’t have a good employee exit process?
- Legal action (unfair dismissal) – while unfair dismissal claims may not always go to court, the time and money associated is enough to do some permanent damage to your productivity and public image
- Use of intellectual property – it is likely that your employee may use their skills in a similar environment. It is your responsibility to make sure that reasonable limitations are set with insider knowledge and trade secrets through relevant agreements.
- Brand damage – all your efforts in creating and maintaining a positive workplace can be ruined when people believe that you care more about short term gains than the overall care of staff. Today information travels much faster than before, especially through social media. It doesn't take much for potential candidates to dig up previous information or rumours about how staff have enjoyed (or not enjoyed) working for you.
Implementing a sound Exit system
Psych Press provide a structured online exit survey that effectively assesses an exiting employee's feedback. Whilst face to face meetings can gather some emotional information, an online assessment aims to build your trend analysis information to allow you to identify areas of improvement for long term satisfaction and growth. Talk to a consultant on 03 9670 0590 or email email@example.com to find out more.