Unlocking Employee Retention: The Cost of Ignoring Feedback and Communication

In today’s volatile economic and geopolitical landscape, managing emotions in the workplace has become one of the most challenging tasks for leaders and HR professionals. Employees face immense pressure, and when dissatisfaction goes unaddressed, the cost can be staggering. Research indicates that losing a talented employee can cost a company anywhere from $10,000 to $30,000. This figure encompasses delayed projects, training expenses, loss of expertise, disruption of team harmony, and recruitment fees.

Millennials, in particular, are less inclined to remain loyal to a single employer, prioritizing freedom, mobility, and rapid income growth. The frequent turnover among this demographic is reminiscent of migration patterns, driven by dissatisfaction. Despite companies’ efforts to enhance employee retention, many lack effective systems to learn from departures and prevent future losses.

Communication is key. Historically, companies have underestimated the importance of maintaining open channels between top management and employees. The principles of Total Quality Management emphasize that every team member’s contribution impacts the overall performance of the organization. Neglecting these contributions can lead to a decline in performance. HR experts recommend conducting quarterly or semi-annual individual interviews with employees to gather feedback on company policies and leadership practices.

Establishing a system to address negativity or dissatisfaction within a company can restore trust, boost productivity, and prevent the spread of discontent. Employee behavior often mirrors the internal dynamics of a company, reflecting leadership styles. This is particularly evident in sectors reliant on creativity, such as IT and marketing, where turnover can be extremely costly. For example, the annual turnover rate in the U.S. retail sector ranges from 25% to 100%, leading to significant financial losses.

So, how can companies control and reduce turnover rates? Recently, more organizations have begun to gather insights from departing employees through exit interviews or questionnaires. However, only 5% of exiting employees are typically interviewed, and even then, they may not provide honest feedback. To address this, some companies offer exit bonuses or positive recommendation letters in exchange for candid feedback. Others hire external agencies to conduct these interviews.

Here are some questions employers might use during an exit interview:

1. What prompted you to start looking for a new job?
2. What ultimately led you to accept the new position?
3. Did you feel equipped to do your job well?
4. Were your goals and objectives clear?
5. How would you describe our company culture?
6. What could have been done to keep you here?
7. Did you share your concerns with anyone at the company before deciding to leave?
8. If you could change anything about your job or the company, what would it be?
9. How can our company improve its training and development programs?
10. Would you consider returning to work here in the future? In what role or capacity? What would need to change?

Interestingly, one of the primary reasons employees leave is a lack of challenges and a clear career path. This issue ties directly to leadership and the ability to communicate a vision that aligns employees’ personal goals with the company’s objectives. Ultimately, if companies fail to act on feedback from departing employees, they risk repeating the same mistakes, leading to further losses.

Dr. Youssef Lamaa