Why Every Company Needs to Master the Exit Interview in 2024

The labor market may be cooling, but voluntary turnover is still hovering near record highs. Over 4 million U.S. workers have quit their jobs every month since June 2021, according to data from the Bureau of Labor Statistics. And a recent study by Lattice found that 52% of employees are considering leaving their current role in the next 12 months.

All of this churn comes at a steep cost. On average, employee turnover costs companies 1.5-2 times the employee‘s salary, considering hiring expenses, onboarding and training, lost productivity, and other factors. For high-earning roles or tight labor markets, that multiplier can climb even higher.

While some attrition is inevitable, much of it is preventable – if you can get to the root causes. That‘s where exit interviews come in. By providing a safe, structured space for departing employees to give candid feedback, exit interviews can surface insights you may not get anywhere else.

But many companies still aren‘t doing them or aren‘t asking the right questions. In fact, only 63% of organizations conduct exit interviews with all voluntary resignations, a SHRM survey found. And the most common question asked is simply "Why are you leaving?"

To uncover the real drivers of turnover in 2024 and beyond, you need to go deeper. In this guide, we‘ll share exit interview best practices, reveal the top questions to ask, and provide a plug-and-play template you can implement today. Let‘s get started.

What Is An Exit Interview and Why Does It Matter?

An exit interview is a structured conversation between a departing employee and a neutral representative from the company, typically from HR. The goal is to gather honest feedback about the employee‘s experience, uncover any issues or grievances, and solicit ideas for improvement.

When done well, exit interviews can provide priceless data to help you:

  • Identify the real reasons employees leave. Resignations may be motivated by personal factors you can‘t control, like relocating or changing careers. But often there are underlying issues with managers, pay, advancement opportunities, or culture that you can address.

  • Spot problematic patterns and trends. By asking the same core questions in every interview, you can aggregate responses and surface common themes. Are women or people of color disproportionately leaving due to lack of inclusion? Are new hires churning because of unrealistic job previews? Connect the dots to diagnose systemic problems.

  • Benchmark progress over time. Tracking exit interview metrics, like average tenure or % of "regrettable" resignations, can help you gauge the effectiveness of your retention efforts. If scores improve after launching a new manager training program, you‘ll know it‘s working.

  • Gain a competitive edge. In today‘s knowledge economy, winning the war for talent is a key differentiator. By using exit interview insights to create a magnetic employee experience, you‘ll boost retention, engagement, employer brand, and even bottom-line revenue.

However, exit interviews are not a silver bullet. To be truly effective, they need to be part of a holistic retention strategy that also includes:

  • Competitive pay and benefits
  • Effective hiring and onboarding
  • Regular performance feedback and career development
  • Engaging leadership and a healthy culture
  • Ongoing "stay interviews" and pulse surveys
  • Proactive retention interventions for at-risk talent

Think of exit interviews as an early warning system. By shedding light on the factors causing employees to leave, they can help you course-correct before small problems become big ones.

7 High-Impact Questions to Ask in Every Exit Interview

The key to a revealing exit interview is asking the right questions. While you should tailor your questions to your company‘s unique context, here are seven high-impact prompts to include:

  1. What ultimately led you to accept another job?
    This open-ended question gets to the heart of the employee‘s motivation for leaving. Listen for mentions of compensation, growth opportunities, work-life balance, and other controllable factors.

  2. How would you describe your employee experience at [Company]? What were the highs and lows?
    Asking about the overall journey can surface insights you may miss by focusing only on the end. Follow up on any pain points or peak moments mentioned.

  3. How would you rate your direct manager in terms of support, feedback, and leadership? What could they have done differently?
    Poor management is a top driver of voluntary turnover. Probe for specific behaviors and examples to identify coaching opportunities.

  4. Did you feel your role and career path were clearly defined? Did you see a future for yourself here?
    Role clarity and growth potential are key engagement drivers. If the employee felt "stuck" or directionless, explore ways to define career paths and develop internal talent.

  5. How would you describe our culture and team dynamics? Did you feel valued and included?
    Assessing the employee experience through the lens of culture, belonging, and interpersonal relationships can surface DEI gaps and concerns.

  6. What could we have done to change your mind about leaving?
    While you can‘t always sway someone to stay, this question can reveal the tipping point and potential retention levers for the future.

  7. What advice would you give to your replacement? What skills or traits will they need to succeed?
    Asking for advice is an ego boost that encourages constructive feedback. This question can also yield valuable intel for succession planning and hiring.

The goal is to go beyond surface reasons and dig into the employee‘s lived experience. Ask follow-up questions, request examples, and create space for open-ended reflection.

Exit Interview Best Practices: Dos and Don‘ts

To make your exit interviews as productive and revealing as possible, follow these guidelines:

Do:

  • Schedule it promptly. Aim to conduct the interview within the employee‘s final two weeks. This ensures the experience is still fresh while giving them time to organize their thoughts.
  • Choose a neutral interviewer. To encourage candor, the employee‘s direct manager should not conduct the exit interview. An HR representative is ideal.
  • Create a standard process. Develop a consistent set of core questions to ask every departing employee. This allows you to track trends over time.
  • Set the stage. Explain the purpose of the interview, emphasize confidentiality, and express appreciation for their feedback. Make it a safe space for honesty.
  • Collect demographic data. Note the employee‘s tenure, department, performance level, age, gender, and race (if known). This allows you to segment results and spot any diversity issues.
  • Probe for specifics. When the employee mentions a pain point, ask for examples. The more concrete details you have, the easier it will be to address the root cause.
  • Take detailed notes. If the employee consents, record the session to ensure you capture every word. If not, take meticulous notes and read them back for accuracy.
  • Analyze data in aggregate. Look for patterns across exit interviews to identify the most common reasons for leaving. Share anonymized findings with leadership.
  • Take action. Exit interviews are only valuable if you use the insights to drive meaningful change. Work with leadership to prioritize issues and develop an action plan.

Don‘t:

  • Get defensive. Even if the feedback is hard to hear, avoid debating or pushing back. The goal is to listen and understand the employee‘s perspective.
  • Ask leading questions. Stick to open-ended prompts that allow the employee to share their unfiltered experience. Avoid fishing for a certain response.
  • Gossip or share private details. While you should communicate high-level trends, protect the confidentiality of individual responses. Don‘t fuel the rumor mill.
  • Treat it as a "check the box" activity. Exit interviews are not a formality. Approach each one as a critical listening opportunity. Block enough time and be fully present.
  • Delay or skip interviews. Even when things get busy, don‘t put exit interviews on the back burner. It sends the message that employees‘ feedback doesn‘t matter.

Remote Worker Considerations
In an increasingly distributed workforce, many exit interviews will need to happen over video or phone rather than in person. While the same best practices apply, take extra care to build rapport and foster psychological safety in a virtual setting. Test your tech setup in advance, minimize distractions, and express appreciation for making the time to connect.

Using Exit Interview Data to Boost Retention

Collecting exit interview data is only the first step. To drive meaningful change, you need to analyze the results and take targeted action. Here are some tips:

  • Aggregate data into themes. Use a spreadsheet or text analysis software to categorize open-ended responses and quantify the most prevalent issues. For example, if 30% of responses mention a lack of growth opportunities, that signals a problem area.

  • Slice data by segments. In addition to analyzing results in aggregate, slice the data by factors like department, tenure, performance level, demographics, and stated reason for leaving. Look for any concerning disparities.

  • Compare to other listening channels. How does exit interview data align with engagement surveys, Glassdoor reviews, and other employee feedback? If you see common threads, those should be top priorities.

  • Choose your battles. Not every issue raised will be addressable, and that‘s okay. Use a materiality matrix to map exit interview themes by their frequency and potential impact. Tackle the most critical issues first.

  • Focus on controllable factors. Resist the urge to explain away attrition as a case of "grass is greener" syndrome. While you can‘t control what other employers offer, you can control the employee experience you create. Double down where you have agency.

  • Communicate. Share high-level exit interview findings and resulting action plans with employees. This shows you‘re listening and committed to positive change. Celebrate progress and quick wins along the way.

  • Set goals and KPIs. As with any HR initiative, set clear goals for your retention efforts and choose metrics to track over time. Hold leaders accountable for incremental progress.

Case Study: Improving Manager Quality at Company X
Last year, Acme Inc. noticed a spike in early turnover, with 25% of new hires leaving within the first year. In exit interviews, a common theme emerged: poor management.

Based on this insight, Acme launched a new manager development program. They implemented 360-degree assessments, leadership coaching, and ongoing manager roundtables. Within 6 months, early turnover dropped to 10% and manager effectiveness scores on engagement surveys rose by 15 points.

Free Exit Interview Template

Want to put these best practices into action? Here is a free exit interview template you can copy, customize, and use at your organization today:

[Company Name] Exit Interview

Thank you for taking the time to share your candid feedback with us. This interview is an opportunity for us to learn from your experience and identify opportunities to improve.

Please be as honest as possible in your responses. Your feedback will be kept strictly confidential and only shared in aggregate with leadership. Let‘s begin!

Employee Details:

  • Name:
  • Position:
  • Department:
  • Manager:
  • Hire Date:
  • Last Day:

Questions:

  1. What is your primary reason for leaving [Company]?

    • Compensation
    • Benefits
    • Lack of growth/advancement opportunities
    • Lack of recognition
    • Manager
    • Team dynamics
    • Work-life balance
    • Career change
    • Relocation
    • Retirement
    • Other: ____
  2. How would you rate your overall employee experience at [Company]? (1 = very poor, 5 = excellent)

    1 – 2 – 3 – 4 – 5

    Please explain:

  3. What did you enjoy most about your job?

  4. What were your biggest challenges or frustrations in your role?

  5. How supported did you feel by your direct manager? What feedback would you give them?

  6. Did you feel you had opportunities to learn and grow in your role?

  7. How would you describe our company culture and team dynamics?

  8. On a scale of 1-10, how likely would you be to recommend [Company] as a place to work?
    1 – 2 – 3 – 4 – 5 – 6 – 7 – 8 – 9 – 10

    Please explain:

  9. What is your top recommendation for how we can improve the employee experience?

  10. Is there anything else you‘d like to share?

Thank you for your honesty and engagement throughout this process. We wish you the very best in your next chapter! Please don‘t hesitate to reach out if you need anything during this transition.

Mastering the Art of the Exit Interview

Voluntary turnover may be a fact of life in the modern workplace, but it doesn‘t have to be a mystery. By conducting thoughtful, probing exit interviews and putting those insights into action, you can identify the true drivers of attrition and work to address them.

Of course, exit interviews are not a panacea. They should be paired with competitive total rewards, best-in-class leadership, a healthy culture, and a holistic retention plan.

But when done well, exit interviews can be a powerful tool for diagnosing turnover hot spots and gauging the effectiveness of your people strategies over time. Most importantly, they send a message to your workforce, past and present, that their feedback matters – and that you‘re committed to creating a workplace where everyone can thrive.

So the next time an employee gives their notice, don‘t just say goodbye. Seize the opportunity to gain priceless perspective. Their candid insights just might be the key to unlocking your company‘s retention potential in 2024 and beyond.