From the September 1999 issue of Entrepreneur

When an employee quits or gets fired, are you blowing an opportunity to learn how you can make your business stronger and healthier? You are if you're not conducting exit interviews. The flip side of pre-employment interviews, exit interviews don't focus on asking workers about themselves, but focus instead on your business.

What could that do? A lot, says Steven Mitchell Sack, a New York City employment lawyer and author of Getting Fired (Warner Books). "From the employer's perspective, exit interviews are very important. They can be a valuable tool. But you need a strategy to make them work for you."


Robert McGarvey writes on business, psychology and management topics for several national publications. To reach him online with your questions or comments, e-mail rjmcgarvey@aol.com

Finding ''Good'' In Goodbye

Exit interviews are the norm at many big companies. As far back as 1994, employment agency Robert Half International surveyed 150 executives from some of the nation's biggest companies, and 94 percent of them said exit interviews could provide useful information. A stunning 76 percent said the information collected at these interviews could be used to improve departmental operations or company policies.

"There's no good reason not to do an exit interview," says Allan Weitzman, a Boca Raton, Florida, employment lawyer with Proskauer Rose LLP. "Even if you've fired an employee for theft, we recommend holding an exit interview."

In its simplest form, an exit interview is a private session with the departing employee. It's partly done for housekeeping reasons--collecting any keys or ID badges, as well as explaining what, if any, benefits will continue. But an exit interview also provides closure to the employee's time with the company. See the worker out the door with a smile on his face, and that ex-employee may become a goodwill ambassador for your business.

"It only takes 15 minutes, and it will leave the employee feeling better about his overall employment experience with you," says Dave St. John, a principal with FSJ Services Inc., an Atlanta human resources consulting firm. "Exit interviews are a way to cement long-term relationships."

Who should do the interview? If possible, conduct the interview yourself, or have a senior staff member do it. "Approach this as important work," St. John says. "A good policy is to rotate the assignment among different managers so you get varying interpretations of the [exiting parties'] feedback."

Go into every exit interview with a script--and plan to ask at least these questions of resigning employees:

1. Who is your new employer?

2. Why are you leaving?

3. What could we be doing better in your department and in the business as a whole?

4. What problems exist that we might not know about?

5. What's your opinion of our compensation and benefits package?

In addition, when the employee is resigning, get in writing that the departure is voluntary. "That can be very helpful if a court case comes up later," says Weitzman.

Private Points

Should you promise confidentiality? Although experts offer differing opinions, the argument is strongest against offering it. Why? Issues may arise that demand further investigation. If, for instance, the employee alleges sexual or racial harassment during the exit interview, it's a substantial risk to simply shrug off these charges. Looking into them, however, could compromise any confidentiality promises that were made. And if such a promise is broken, it will get back to your remaining workers--and that will greatly reduce their trust in your company's exit-interview process.

When it's time to do the interview, keep your ears open and stay flexible. "Listen," advises St. John. "Don't confront and don't debate."

Giving the employee a chance to talk may open a door you didn't know existed. For instance, "if it's a good employee and he or she is leaving for more money at another company, you have the opportunity to meet the increase and possibly keep the employee," says Steven Adler, a labor attorney with Cole, Schotz, Meisel, Forman & Leonard in Hackensack, New Jersey. "An exit interview always gives you a last chance at retaining good workers."

What if the employee says he's leaving because of his manager? Listen up. "Exit interviews can be a good tool for finding out about problems with a particular supervisor," says John Challenger, CEO of Chicago-based international outplacement firm Challenger, Gray & Christmas.

Understand, however, that a worker with a grudge may be using the interview as a way to get back at his or her boss. "You've got to skeptically view the information you gather in an exit interview," says Sharon McFarland, a professor at the Carl H. Lindner College of Business at the University of Cincinnati. But if six resigning employees all point a finger at the same supervisor, you should take a hard look at how this supervisor manages.

Other complaints that may come up: Deadlines are impossible to meet; productivity demands are too stressful; there's a lack of respect for individual workers; rewards are inadequate. Employees rarely leave a job simply for more money; usually there's some overall dissatisfaction with the workplace. And if employees do open up, these are the complaints that you're likely to hear.

"[A problem with] many organizations is they don't want to hear the truth, so they don't do thorough exit interviews," says Challenger. But a small business doesn't have the luxury of hemorrhaging talent--you've got to hear the truth so you can take steps to make your business a better place to work for in the future.

What if the interview turns highly unpleasant and an employee threatens to sue? If an exit interview is likely to be stressful--and especially if an employee has been terminated--"involve two people from your side," says Adler, who cautions that you need to be very careful about what you say in the interview. If an employee says "My boss is a lecherous bum," don't say you've long suspected it, but don't say he's not either. Just listen to the employee.

Then, too, you may even find a way out of a lawsuit. "You can use this meeting as a chance to defuse a potentially explosive situation. See if there's a way to work out the problem without litigation," says Weitzman. "We tell clients to solve problems before they become problems. Once that employee goes to an attorney, it could open a very expensive can of worms."

Most times, however, matters won't go in such a perilous direction. It's more likely the employee will vent a bit about a job gone sour--and that's fine because the harder you listen to these rants, the more apt you are to have to hold fewer exit interviews in the coming months. "Everybody knows if you want to find out how the work is really done in a business, you talk to the workers," says St. John. "If you want to find out why people leave your business, talk to the ones who are leaving. That's the way to find out what you need to do to keep more good people on board."

Contact Sources

Challenger, Gray & Christmas Inc.,http://www.outplacement-chalenger.com

Cole, Schotz, Meisel, Forman & Leonard, (201) 525-6273, sadler@coleschotz.com

FSJ Services Inc., (770) 392-1771, fsjserv@mindspring.com

Proskauer Rose LLP, (561) 241-7400, http://www.proskauer.com

Robert Half International Inc., (800) 474-4253, http://www.rhii.com

Sack & Sack, 135 E. 57th St., 12th Floor, New York, NY 10022, (212) 702-9000, ext. 34