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July 2019
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TD Magazine

Manage the Resignation Tsunami

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Manage the Resignation Tsunami

Effectively handle employee turnover with high-impact offboarding.

If you consider the task of processing resigning employees to be a minor administrative concern, you will be surprised to learn that data are now revealing that shifting to a high-impact resignation process can make it a major contributor for improving both HR and business results. When you research the employee resignation process—or offboarding—you'll find that, historically, many employees' job tenures lasted decades, so HR seldom had to handle a large volume of resignations. However, now that employee turnover rates are at their highest levels in nearly 18 years, companies are experiencing a small tsunami of resignations. At the same time, data-driven HR executives who are seeking to increase their measurable business impacts in every talent area have slowly become aware of the importance of the offboarding process.

Offboarding is gaining increased attention as more data reveal the numerous HR areas that it affects. Those impact areas include reducing turnover, enhancing recruiting, and identifying toxic work environment issues. If designed correctly, offboarding can lead to an increase in business revenue. Therefore, if your company still has a single person handling your resignation process, it may be time to consider a major process update.

Traditional offboarding vs. high-impact offboarding

The first of the employee life cycle's six steps is when the person is still a candidate. After the individual accepts an offer, the remaining steps are preboarding, onboarding, the employee experience, offboarding, and the post-initial employment relationship. Offboarding traditionally covers only the smooth ending to the employment relationship.

In high-impact offboarding, companies ask the most desirable ex-employees to maintain a relationship with the company as part of a corporate alumni group. During onboarding, make new hires aware of the company's desire to maintain a relationship with former employees. Further, in this high-impact model, employers may want to add a supplemental post-exit interview to the process to ensure they discover the causes of employee turnover.

High-impact offboarding prioritizes employees

To maximize the effectiveness of offboarding, it's important to realize up front that all employees and all jobs don't have equal business impacts. Thus, as the first process redesign step, it makes sense to prioritize your resigning employees and devote a disproportionate share of your limited resources to those departing from jobs that have the highest business impact. Often that means focusing on executives, innovators, top performers, individuals in cybersecurity or artificial intelligence, and employees who work in jobs for which recruiting replacements is difficult. It's often more important and effective to find out why a director of product development is leaving than to discover why a janitor is departing.

As your company begins to navigate toward high-impact offboarding, take note of the model's 10 strategic goals. Those with the highest potential HR and business impact are listed first.

Goal 1: Reduce future turnover

Imagine your CEO's reaction if he knew that up to three-fourths of the costs and the disruption associated with key turnover were unnecessary. Recent Work Institute research estimates that employers can prevent nearly 77 percent of turnover. However, to curb that turnover in the future, firms need accurate information on why their best employees (that is to say, regrettable turnover) decided to leave.

Unfortunately, the standard exit interview has not proven to be an accurate tool for identifying turnover's root causes. This approach is flawed because companies conduct it during the time when the exiting employee may still have a need for a positive reference. And if the employee's manager personally administers the exit interview, the probability of receiving honest answers may decrease even further. Work Institute research reveals that when an employer does not correctly handle exit interviews, more than 40 percent of employees will give a false answer.

But fortunately, there is a simple complement to traditional exit interviews: post-exit interviews, which occur three to six months after an employee leaves. Getting the causes right is important, because not knowing the real turnover causes may make a company act in the wrong direction. Additionally, knowing the true reasons enables employers to, when appropriate, refurbish the job and to retrain the manager so that the next job incumbent won't face the same underlying issues. Note that you can improve your response rates and the authenticity of your interview answers if you make the interviewees aware that the company has a formal process for taking action with the information they provide.

Goal 2: Identify toxic work environments

Numerous organizations are now suffering from the negative publicity and the huge legal costs associated with toxic behaviors in the workplace. That's why it is now critical to identify toxicbehaviors—such as sexual harassment, employee bullying, and racial or religious discrimination. Despite companies' well-intentioned anonymous reporting processes, these toxic behaviors often seem to go on for years, only to be finally revealed well after an affected employee resigns.

Post-exit interviews can increase the likelihood that former employees and contractors will reveal their past toxic work environments, because their fear of retribution will have likely waned months after leaving the firm. Telephone surveys conducted by a neutral third-party are the most likely to elicit honest answers from former employees. Develop specific questions designed to bring out the causes and the creators of the former toxic work environment. Also effective are anonymous post-exit surveys designed to identify the functional areas where the toxic behavior is occurring (without identifying individuals).

Goal 3: Strengthen your employer brand

Offboarding can improve your external employer brand image if it creates a former employee alumni network group on social media. Multiple companies, including Microsoft, Deloitte, and IBM, have found that these groups can aid in recruiting and employer brand building. So, make it a formal part of your offboarding process to suggest to key departing employees that the relationship with the firm continues. Having an invited corporate alumni network enables companies to continually communicate and to build the relationship with former employees. With a strong relationship, you can ask group members to act as your brand ambassadors and to positively spread the word about what it is like to work at your company.

On the other side of the spectrum are unhappy former employees. According to Allegis Group research, 16 percent of employees say that they've posted negative comments about their employers online. The offboarding process can help you to keep your brand image from being tarnished by these former disgruntled employees. The first step toward minimizing any disparaging comments from former employees it is to make sure that each resigning employee leaves happy. You should make a formal effort to reduce any level of unhappiness.

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Start by taking some time during the employee's last days to praise the individual's work and highlight contributions. It's equally important that you listen with empathy to any possible concerns that the employee may reveal. Next, build the individual's confidence that the company has a formal process to ensure that it takes proactive actions to remedy any issues. Finally, measure exiting employees' perceived level of unhappiness to ensure that it has been minimalized across the board.

Goal 4: Provide future recruiters

With an established alumni group and a strong relationship with its members, you can ask them to continually scout for talent who they believe would fit your firm and to make hiring referrals. You also should target your best alumni with the goal of making them boomerang rehires, which is where a company encourages or invites a key former employee to apply for a current opening. Because the company is familiar with their performance, these employees are likely to return as top performing. Also keep key alumni involved in your company by asking them to occasionally sit in on important hiring interviews.

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Goal 5: Contribute to business results

The same corporate alumni group that can make employee referrals also can make business referrals. Because many of these former employees are likely still working in your industry and they know and like your company, it's relatively easy for them to talk up your products and services as informal product ambassadors (when there is no conflict of interest). And when asked, they are usually more than willing—again, when there is no conflict—to proactively make customer referrals to your firm. Alumni also can contribute to business results when they are asked to provide advice on new products, industry trends, and technology.

Goal 6: Refill vacant positions with better talent

Departing employees can be a great source of information on how to improve the job they are exiting, so use the exit process to help improve your selection criteria for refilling their job. For example, if you find that an employee is quitting because of a lack of knowledge, skills, or experience, it makes sense to revise the hiring standards appropriately.

In the case where a resigning employee is a recent hire, during the exit process find out if she is leaving because the job wasn't what was promised. In those cases, counsel the recruiter and the hiring manager to not oversell. In other cases, it may even be appropriate to ask the exiting employee to make internal or external referrals for her job.

Goal 7: Get key employees to reconsider their decision to leave

Even when key employees have resigned, that doesn't mean that you should accept that result. Instead, when your firm's policy allows it, consider a counteroffer for these employees in an effort to keep them.

Start by simply asking them if they would reconsider their decision to leave. And if so, the company should quickly negotiate with them to determine whether a deal to stay is feasible. However, if an employee has accepted a position with a company that historically exaggerates its job opportunities, be aggressive, and get the employee's permission before he leaves to call him after 30 days at the new job to see how things are going. This is based on the premise that if the employee is unhappy, you could ask him to return to his old job or a different one.

Goal 8: Ensure access to the knowledge retained by former employees

Because a formal process for capturing and curating departing employees' knowledge has often proved to be extremely expensive, consider using your alumni to supplement any formal knowledge retention efforts. Begin by simply asking departing employees who work in critical jobs where knowledge retention is important to agree to help as former employees. Then periodically call on them when you need background knowledge and technical help in their former job area. This outside assistance may enable you to maintain operations on legacy systems for many additional years.

Goal 9: Settle reference issues

Providing accurate reference information months or years later can be a chore. Therefore, while a departing employee's work is fresh in your memory, it's wise to determine what type of reference the manager and the company will give for her. Often that means having HR work with the departing employee's manager to complete the reference. That effort should include determining the appropriate answer for any future "Would you rehire the individual?" inquiry.

Goal 10: Use metrics to continually improve offboarding results

The process of continuous improvement should begin with quarterly metrics that show the percentage of employees who have completed the offboarding process. If you prefer to demonstrate your impacts using a scientific approach, split your resigning employees into two similar groups and only administer the high-impact approach to one group. Then after six and 12 months, check to see whether the group under the high-impact offboarding approach has lower levels of turnover, more accurate troubled work environment identification, and a higher level of candidate and business referrals. Work with the CFO's office to quantify those business impacts and to calculate the overall return on investment of high-impact offboarding.

Prioritize offboarding

The design and implementation of the resignation process has historically been a low-priority item. However, with the growth of negative former employee comments on social media and skyrocketing turnover rates, it now clearly makes business sense to prioritize offboarding and to transition it to a data-driven approach. First, because of its large economic impact (which can be in the millions of dollars for large companies) and second, because it helps to improve a wide range of critical talent areas.


Consider Turning a Resignation Into a Sabbatical

Occasionally, you should take a never-give-up approach when a critical employee announces that she is resigning. One original but powerful approach was pioneered years ago at Agilent Technologies, where I used to be the chief talent officer. This informal process can work in any firm where the manager has the power to take a risk. It works like this:

When a stunningly effective critical employee announces that she is leaving for an opportunity that does not appear to be a perfect fit for her, the employee's senior manager tells her, "I am considering your new opportunity as if it were a sabbatical." The manager can then explain that if she finds her new job to be completely different than promised, she is welcome to return during the next six months.

This approach will require periodic "How's it going?" calls, and the company must keep the employee's former job open for the promised period of time. Even if the employee doesn't return right away, this startling sabbatical announcement indicating your faith in her will likely make her a friend of your company for the long term.

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About the Author

John Sullivan is an internationally known HR thought leader from Silicon Valley, California, specializing in strategic talent management solutions. He is a prolific author with more than 900 articles and 10 books covering all areas of talent management. Along with his many articles and books, Sullivan has written over a dozen whitepapers, conducted more than 50 webinars and dozens of workshops, and has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at more than 300 organizations in 30 countries on all seven continents. His ideas have appeared in major business sources, including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., the New York Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column and the LinkedIn Talent blog. Sullivan has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets.

Fast Company called him the “Michael Jordan of Hiring,” Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industries most respected strategists.” He was selected among HR’s Top 10 Leading Thinkers and was ranked #8 among the top 25 online influencers in talent management. Adding to these acclamations, Sullivan has also served as the chief talent officer of Agilent Technologies, the HP spinoff with 43,000 employees as well as becoming the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. Sullivan is currently a professor of management at San Francisco State.

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I would add several other issues that reinforce the value of effective offboarding. I've noted that when former employees go to competitors, their exit experience can be an influence on how they message about their former company when working. This can have a big impact particularly because they are still engaged with shared networks in the same market. Whether they left on a high or a low note can shape their messages in ways that either strengthen or hurt a brand.
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