If you are having a big layoff event, or have a lot of involuntary turnover in general, you’ve probably thought about outsourcing your exit interviews.
So, in this blog, we will go over the pros and cons of outsourcing your exit interviews to give you a better understanding of what to look for, if this is a decision that's weighing on your mind. But before we get in that, we should discuss why it is so important to conduct exit interviews in the first place.
Believe it or not, there are several large companies that still don’t conduct exit interviews when employees leave.
Well, there are a number of reasons. You might find it too time consuming, or that you don’t have the infrastructure to host the data, or even that you don’t have the authority to fix the problems that are mentioned by the exiting employee. And there are plenty of more reasons after that.
While all of those are valid reasons, none of them are good enough to balance out the positives that come from conducting exit interviews.
If you’re looking for data as to why exit interviews are so important, look no further than recruitment trends around retention and cost to hire:
- Replacing a lost employee costs an average of 21% of his or her salary.
- Millennial turnover costs the U.S. economy $30.5 billion annually.
“Putting a strong exit interview program in place helps you improve career development practices, strengthen your culture, and uncover other key issues that may be affecting your ability to retain employees.”
When you look at the impact exit interviews can have on reducing costs spent in recruiting and replacing employees, it is easy to see why they are so important.
All you have to do is show your CEO these numbers, and they will completely understand. In fact, they will be begging you to do as many exit interviews as possible with your leaving staff!
So now that you understand why exit interviews are so important, let’s get into the pros and cons of outsourcing the exit interviews.
(You can also download our exit interview question guide here.)
Outsourcing Exit Interview: The Pros
While historically most companies have conducted exit interviews in-house, there is a growing trend in the number of companies who are looking outside the organization to conduct their exit interviews.
And for good reason! There are several advantages to outsourcing your exit interviews.
The first advantage of outsourcing exit interviews has to do with logistics. If you are having a big layoff event, conducting exit interviews for over 1000+ employees could be difficult to manage.
Even with every HR worker at your company working to conduct these, it would still be a hard task to compile all the data and develop actionable insights from it. All while also conducting the logistics of a layoff: giving notifications, providing severance benefits, fielding legal questions, reorganizing your teams, and managing layoff survivor sickness.
Does that sound like a lot to anyone else? It does to me!
So in cases of very high volume, where your human resources team already has limited bandwidth, it makes total sense to outsource your exit interviews.
The second advantage of outsourcing exit interviews has everything to do with expertise. While I’m sure some of your HR staff has experience with conducting exit interviews, none of them probably have as intensive of experience with it as an actual exit interview outsourcing company.
A company specializing in this topic will inherently have more knowledge of best practices and be able to more thoroughly achieve the goals of the exit interviews in the first place.
For example, consider asking a chef from a five-star Michelin restaurant to make a beef wellington versus an amateur at home chef. (If you don’t know what a beef wellington is, you're in for a treat!)
While both chefs might be able to complete the task, the chef from the five star Michelin restaurant will probably be able to make the beef wellington more easily, and probably at a better quality than the amateur chef. This is because the professional chef knows all the best practices, and has probably made a significantly higher amount of beef wellingtons in his or her life than the amateur chef.
Another advantage is that your exiting employees might feel more open to sharing insights with someone outside of the organization than someone they have been working with for a while from HR. This could allow you to receive more valuable information since the employee won’t be using the same filter as they would for one of your internal employees.
Outsourcing Exit Interview: The Cons
Now that we have gone over the pros of outsourcing your exit interviews, it is important to also go over the cons.
The first disadvantage of outsourcing exit interviews has to do with cost. Referencing the example above, a lot of companies will outsource when they are having a huge layoff event.
Makes sense, right?
Well, maybe not...
If you are having huge layoff event, you are most likely trying to contain costs due to financial downturns. So spending thousands of dollars on outsourcing exit interviews in this situation might seem like an irresponsible use of company funds.
Honestly, this situation is usually why most companies don’t end up outsourcing exit interviews to begin with. It just doesn’t align with their objectives of containing costs.
But what about the cost of outsourcing an exit interview for normal, voluntary turnover?
Executives can be swayed both ways in this argument. It is easy to make an argument for why you should spend money to conduct the exit interview when you look at the costs associated with getting a new hire.
But it is also just as easy to argue that not enough insightful information will come from said exit interview to justify paying to outsource it, when the company is going to have to incur even more cost replacing the person.
And this executive at your company isn’t wrong! It really all depends on what the objectives are of your organization as to if you think it is worth the cost to outsource your exit interviews.
The last disadvantage of outsourcing exit interviews has to do with the intrinsic value that comes with being an employee of a company. It is a commonly held belief that if you feel apart of something, or if you feel ownership over something, you are more likely to care about the activities or tasks associated with said thing. As well as having intrinsic knowledge about said thing that someone external might not have.
For example, last month when I went on vacation, I left my dog with a friend. I know my friend very well, and trust him a lot. But since my friend doesn’t own my dog, they don’t have the same skin in the game when it comes to taking care of the dog. Even though he did a great job, it still wasn’t the same as if I had been with my dog that week.
And my friend also doesn’t have the same knowledge of my dog’s background. If something had gone wrong, he wouldn’t know her health history or that she is really startled by plastic bags (what a weird trait, right?).
You can draw parallels between these exact points and the decision on whether or not to outsource exit interviews.
While I’m sure the employees at said exit interview outsourcing company are fantastic, they aren’t your employees. So they just might not care as much as your own employees.
Also the people conducting the exit interviews wouldn’t have the same intrinsic knowledge of your company. So they would have a harder time asking probing questions about a specific event or process at your company. Which is how you get really rich insights and feedback into your company.
Outsourcing Exit Interviews: The Final Say
It is important to stay true to your company objectives when deciding on whether or not to outsource you exit interviews. Make sure that you review all options, consult with your executives and legal team, and make the best decision for your particular situation.