Exit interview is what employers need

What next? Better prospects and salary hike motivate employees to quit companies.

Hit by high attrition rates, many companies are taking ‘exit interview’ seriously to build employer-employee relationships.

TeamLease Services, India’s largest composite staffing company, has released the findings of its latest survey ‘Impactful Exits’ as part of its survey series to understand ‘India’s new World of Work’, which has  found that almost 92 per cent of employees and managements across industries took exit policies very seriously, with 99 per cent doing so in Bangalore and Chennai, and 85 per cent in Mumbai.

The survey conducted across major cities revealed that a majority (92 per cent) of employees and managements across all industries followed exit policies very seriously. This went up to around 99 per cent in Bangalore and Chennai, establishing Gen Y’s preferences for policies and processes at workplace along with a good pay packet.

Another startling revelation made by the study was the importance of relieving letter. Apart from a mere 8 per cent, majority of the companies expressed apprehension in formalising recruitment without the relieving letter.

Aimed at mapping in-depth facts about the beliefs and practices of Gen Y, the current study tries to capture the importance of exit policy and its impact on exit process.

According to the study, better prospects and salary hikes motivated employees to quit the incumbent organisation. However, one third (33 per cent) of the employees surveyed said, they would rejoin their organisation if given an opportunity.

 Further, according to the study, except for a minor 8 per cent, majority of the companies still favoured manual exit interviews over online ones, emphasising the reliance on face-to-face interactions.

Adopting online

Also another fascinating disclosure was unlike the popular notion that the ‘Silicon Valley of India’ still lagged behind in terms of adopting online exit interviews. Only a mere 4 per cent of the companies conducted exit interviews online in Bangalore.

The study also highlighted the demand for longer notice period. Around 78 per cent of employees stressed on having longer notice periods for the company, helping the employees to complete pending work as well as the companies to contract the right candidate.

Apart from the sentiments of employees, viewpoints of HR managers from a company perspective have also been captured in the study. Though salary deduction is the norm for non-compliance, companies did not hold back from taking legal action in cases of violation of integrity. With more than half of the HR managers in Mumbai (55 per cent) using the feedback as a resource, the study has further reinforced exit interviews as an important data source for formulating HR policies.

Speaking on the study, TeamLease Services Senior Vice-President (IT Sourcing) Surabhi Mathur Gandhi said, “Employees are recognising that the labour markets are a small place and ungraceful exits come back with compound interest later.

Adherence to a professional and clean exit is increasingly being seen amongst the work force today. But we don’t anticipate relieving certificates becoming a deal breaker for new employers until the skill crisis eases.”

Conducted by Market Search IPL for TeamLease, the survey covered employees in the 8 major cities namely Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune.

The respondents’ profile ranged between the age group of 21-45 years across industries; and functions of sales, marketing, business development, operations, finance, admin/HR, systems (IT) and others. The study covered a total sample of 800 respondents.

Rich insights

HCL Technologies Senior Vice-President HR Ravi Shankar said: “Exit interviews help us in understanding an individual’s feedback about the job employee held, manager deficiencies and in gathering some rich insights about the HR processes and polices starting from the induction till the time an employee leaves the organisation. It also serves as a valuable retention tool since the information collected from exiting employees is used for making improvements in the organisation.”

On challenges, Ravi Shankar said: “We need to understand that the exiting employee is always reserved about the feedback he provides. At HCL, our HR team is trained to handle exit interviews in a professional manner rather than being emotional about them. Our idea is to extract maximum information for the betterment of our processes to ensure further retention; therefore, open questions are asked and employees are encouraged to give their honest opinion.”

Agreed, Cognizant Vice-President Human Resources Sriram Rajagopal said: “Yes we do follow exit interviews and it’s highly effective. While we have mechanisms to elicit employee feedback all through the year, through blogs, specific dip stick surveys and the annual Business Effectiveness Survey administered by the Hay Management group, exit interviews gives us an additional channel to get a pulse check on our employee practices, organisational effectiveness, and areas for improvement.”

In the quarter ended December 2011, Cognizant global attrition (including BPO, trainees and those in subsidiaries… practically everyone) was 10.1 per cent, among the lowest in the industry. Cognizant prides itself in having one of the highest retention rates in the industry.

“Our belief is: Faster the company growth, faster the career progression of employees. Our industry-leading growth rates coupled with progressive HR practices has enabled our retention rates to be one of the best in the industry.

Our research shows that much of our attrition happens at the most junior levels of our staff who leave us to pursue higher education. It would be pertinent to mention that Cognizant is one of very few large companies that does not have an employee bond or a service agreement,” Rajagopal adds.

Key findings of the Survey:

Around 92 per cent of Indians across all industries and cities believe exit policies should be taken seriously and given lot of importance. Bangalore and Chennai with 99 per cent top the list whereas employees in Mumbai do not care much.

A majority of around 76 per cent of the companies still conduct exit interviews manually only.

Better prospects and salary hike are the top two reasons for leaving the company.

23 per cent of the companies surveyed say that they do not proceed with employment due to unavailability of a relieving letter.

Relieving letter is an important document while recruiting a new person for most of the companies across industries.

Overall, 78 per cent of employees surveyed feel that longer notice period (>30 days) is required for a company.

More than half (56 per cent) of HR managers opt for salary deduction for not serving the required notice period.

Overall, 39 per cent of HR managers take legal action against errant employees who have violated any integrity or ethical boundaries.

Higher per cent of Mumbai employees have observed the change in behaviour from managers to resignee (17 per cent), from peers to resignee (9 per cent) as well as by resignees themselves (12 per cent).

Resignees show lesser responsibility and low interest towards work in their notice period.

Fixed factors related to job profile, compensation, work environment, company policies are captured by higher per cent of companies during the exit interviews as compared to variable factors which are more dependent on people (eg., support and guidance provided by the managers, training, timely feedback, clarity of communication, etc.).

Exit policy mainly helps in future decisions and policy making for HR managers.