While many American workers may be familiar with the concept of the exit interview, a tightening labor market is prompting employers to initiate stay interviews as a preemptive means of hanging onto talent.
In a new survey of HR executives conducted by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc., more than 50% of respondents said their companies were already conducting stay interviews or planned to start doing so in the near future.
“Exit interviews with departing employees can be enlightening, but the obvious downside is that any useful information gleaned from it is too late to keep the person from leaving.
As talent becomes more scarce, it is critical that companies be more proactive when it comes to retaining their best workers,” says John A. Challenger, CEO of Challenger, Gray & Christmas.
The survey, conducted among approximately 100 human resources executives, found that 27% of companies were already conducting stay interviews to reduce turnover.
Another 24% of respondents indicated that they plan to start conducting such interviews.
Exit interviews have long been a part of the human resources toolbox.
Conducted when an employee leaves an organization, the exit interview helps companies determine what they are doing well and identify areas to improve; confirm skill sets, experience, and attributes best suited for the position; and capture useful knowledge, contacts and tips from the departing employee.
Most importantly, exit interviews provide insight on why the employee is leaving.
Stay interviews, as the name suggests, are intended to provide all of this insight before the employee leaves. It is important that organizations understand why employees stay and what might compel them to leave.
Following are some sample questions for stay interviews offered by the Society for Human Resource Management:
- What do you look forward to when you come to work each day?
- What do you like most or least about working here?
- What keeps you working here?
- If you could change something about your job, what would that be?
- What would make your job more satisfying?
- How do you like to be recognized?
- What talents are not being used in your current role?
The pool of available talent with a college degree is also getting particularly shallow.
Labor Market Tightening
Stay interviews are likely to become more widely used as labor markets get tighter around the country.
As of February, there were 63 metropolitan areas with an unemployment rate of 4.0% or lower, according to the latest data from the US Bureau of Labor Statistics. There were 97 more with a rate below 5.0%.
Furthermore, the pool of available talent with a college degree is also getting particularly shallow. Among Americans 25 and older with a four-year college degree, the unemployment rate is just 2.6%.
“At these levels, it is undoubtedly getting more difficult for employers to find candidates, particularly those in industries requiring highly educated and highly skilled workers,” says Challenger.
“In this environment, retaining talent is just as important as bringing in talent.”
Retaining employees is indeed getting more difficult.
The latest BLS Job Openings and Labor Turnover Survey shows that 2,950,000 Americans quit their jobs in February—up 9% from a year earlier when 2.7 million people voluntarily left their employer.
As the chart (right) illustrates, the number of monthly quits has been rising steadily since 2010.
Raises Not Always the Answer
“Some assume that the best way to hold onto talent is to simply increase wages,” says Challenger.
“However, raising salaries does not necessarily lead to improved engagement and loyalty. There are plenty of highly-paid workers in America who are not happy in their jobs.
"Stay interviews are designed to help employers determine what is most likely to increase job satisfaction and engagement.”
“Employees are not identifying salary and benefits as their main reasons for staying with our company,” said one survey respondent.
“The retention categories identified most include flexibility and autonomy, work-life integration, and the ability to develop knowledge and skills through challenging work assignments.”
Indeed, in one of the most comprehensive surveys on job satisfaction, a 2014 survey of 200,000 people around the world by Boston Consulting Group found that the top factor for employee happiness on the job is to be appreciated for their work.
Salary ranked eighth on the list of top 10 factors.