Quick Look: There’s no doubt employers have conducted more than their fair share of interviews during The Great Resignation. And for an HR professional or manager, the current rate of employee turnover can be overwhelming. However, a best practice called “stay interviews” is gaining traction and helping business leaders understand why employees are leaving, and why they’re sticking around.
Employee retention continues to be an important concern for many employers. To attract and retain top talent, some companies are offering more work flexibility, some are increasing compensation, and others are taking a long hard look at employee engagement strategies. Unfortunately, there’s no “quick fix” for this problem, as workers are still leaving in droves. The most recent Job Openings and Labor Turnover Survey found that 4.5 million workers quit their job in November 2021.
But one powerful employee retention tactic growing in popularity is the “stay interview.” While stay interviews aren’t a new concept, many employers are now leveraging this tool to learn about what’s working and what’s not. Here, we’ll explore exactly what a stay interview is, how stay interviews improve retention, best practices, and how the HR professionals at a professional employer organization (PEO) can help small- and medium-sized businesses (SMBs) develop an interview retention strategy.
What is a stay interview?
Think of a stay interview as the opposite of an exit interview. Instead of asking an employee why they’re quitting, a stay interview focuses on checking in with workers to determine their satisfaction levels and what is motivating them to remain with the company. During a stay interview, an HR representative or manager will sit with an employee and ask questions related to an employee’s current job: what’s going well, what’s not, areas of improvement, potential problems, and short- and long-term goals.
Tip: Remember, a stay interview isn’t a performance review. These one-on-one meetings should focus on gaining feedback rather than giving it.
Overall, the main objective of a stay interview is to have an open and honest discussion about the employee experience.
The ugly truth of turnover
According to Indeed, it’s estimated that turnover costs employers about 33% of an employee’s annual salary to find and hire a replacement. These dollars come from hiring costs associated with advertising, screening and interviewing candidates, onboarding, training, wages for employees or managers to work extra hours, and conducting background checks. Add in the soft costs of decreased productivity and engagement, reduced morale, culture impacts, lost expertise, and disruptions to workflows and the message is clear: employee turnover is expensive.
Given the surge in job hopping and the fierce competition for top talent, many employers are finding that stay interviews are helping reduce this expense. Conducting stay interviews can improve retention by helping organizations uncover areas where they can better serve employees. All employees want to be heard, and to know that their feedback is important. The only way to truly understand how employees are feeling is to ask them.
Tip: In addition to stay interviews, SMB leaders could consider regular one-on-one check-ins, employee surveys, or anonymous suggestion boxes to ask employees to share feedback.
Even if stay interviews aren’t mandated, it can still be valuable for managers to conduct them. Managers have a deeper understanding of what an employee is doing on a day-to-day basis, including workload, challenges, and successes, so it potentially gives them more power to make changes.
Best practices to conduct stay interviews
There is no right or wrong way to conduct a stay interview, but in general, some best practices are:
- Don’t wait until your best employees start leaving! Conduct interviews after an employee’s first 90 days on the job and continue twice annually for the duration of the employee’s tenure.
- Identify employees. To gain meaningful insight, it’s important to include a range of employees across different departments and roles. Consider including key employees whose absence will impact your company most, long-term employees, new hires, high performers, individuals who are in high-demand fields, or those with the potential for growth.
- Schedule for 30 minutes to one hour. While these are designed to be focused conversations, you’ll want to make sure you allocate enough time to keep the conversation flowing.
- Opening the interview. Make sure the employee knows why they’re there, and what the goal is. Consider a conversation starter such as, “You’re a valued member of our team, and I want to make sure we’re doing everything we can to help you stay satisfied and productive. Today, I’d like to talk about the reasons you continue to work with our company and what we can improve upon, so I understand how to better support you.”
- Do more listening than talking. Avoid trying to steer the conversation into what you want to hear. Pay attention when an employee is getting excited. Dig deeper into responses that aren’t clear, or responses that could get them further engaged.
Make sure to include a list of questions that you’d like to ask during the stay interview (and a few to stay away from). Some common questions a manager can ask are:
- What excites you to come to work?
- What are your career aspirations?
- Do you believe that’s possible within this company?
- Do you feel your talents are being used?
- What are some of your current challenges?
- What keeps you here?
- What can we do to support your career goals?
- In what ways do you like to be recognized/how can we recognize your work and efforts?
There are also certain questions to avoid. Try not to ask “yes/no” or closed-ended questions. The goal is to learn specific information and these types of questions impede the flow of open discussion. Also avoid questions such as “Are you happy working here?” or “Do you think you make enough money?”
Tip: Don’t send questions in advance. This limits the conversation and could result in employees scripting their answers ahead of time.
When closing the interview, summarize key discussion points and reasons the employee gave for staying, as well as what would potentially entice them to leave. Be sure to end on a positive note and work with the employee to develop a plan to continue making your organization a great place to work.
Implementing positive change
Checking in with workers to determine their current satisfaction levels and overall employee experience can lead to higher retention and job performance. And while a stay interview may not always keep an employee from leaving, it can improve an organization’s understanding of what workers like and dislike, which can help retain other talent.
Limiting turnover in an organization can seem tough because it requires adjusting multiple areas of the business but working with a PEO company can advance efforts immediately. A PEO like ExtensisHR has a full staff of HR specialists dedicated to workforce management, recruiting, compliance, employee engagement, and more, helping your organization to be an employer of choice.
With deep industry expertise, and the latest HRIS technology, tools, and resources, the HR experts at a PEO company can help you create a strategy to reduce turnover, develop a plan for stay interviews, and offer insight and tips to keep current staff happy and engaged.
Looking to develop an action plan for stay interviews? Our HR professionals are here to help.