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May/June 2005 - By Emily Layzer Sherwood

The Exit Interview: A Final Compliance check

While most companies spend considerable time and resources on employee recruitment and hiring, many are now rediscovering the importance of learning from their departing employees. Spurred on by the revised federal Sentencing Guidelines for Organizations and judicial decisions holding companies to higher standards, organizations are increasingly gauging the ethical climate of their firms—not to mention specific code of conduct infractions—through the exit interview.

The exit interview grew in popularity during the nineteen seventies as organizations scrambled to reduce employee turnover, enhance their working conditions, and ultimately improve overall performance. Yet too often those interviews “simply weren’t effective,” notes Richard Kusserow, President of National Hotline Services, a professional hotline service that provides around-the-clock exit interviews. “If the supervisor did the interview, much of the time he or she was part of the problem,” throwing a chilling effect on employee candor. If the human resource officer performed the interview, often it was done perfunctorily, and rarely was information shared with the compliance officers within the firm. In either scenario, employees felt reluctant to speak honestly for fear of immediate repercussions on the job or a poor reference in their job search.

Regaining stature

But the exit interview appears to be regaining stature in the workplace. One important reason for its new prominence is that it is seen as a powerful tool for identifying legal minefields such as sexual harassment or discrimination.

Roy Snell, CEO of the Society of Corporate Compliance and Ethics (Minneapolis), argues that “it is foolish not to take the little time required to perform exit interviews and find out if there are any problems that have either not been shared or not been resolved properly. It is actually a form of insurance that gives the organization every opportunity to correct its own problems.” In short, the exit interview is a win-win situation: Departing employees have little to lose by telling the truth, and employers have a fairly simple means of protecting themselves and their companies from legal consequences.

Kusserow, a former FBI agent and a retired Inspector General for the federal government, argues that most employees have a hard time talking about compliance violations unless they are specifically asked. “When there is misconduct,” says Kusserow, “one of three things happens: the (innocent) colleague either becomes part of the problem; he buries his head in the sand and pretends he doesn’t see it; or he leaves.” If he leaves and becomes a whistleblower, the company has lost a significant opportunity to turn things around. “If there is a potential liability, you (the employer) want to know about it first…and you have the opportunity to take corrective action before the employee leaves,” says Kusserow.

Exit interviews are becoming so commonplace in the health care industry that, according to Roy Snell, “hospitals or group practices of any significant size use them on a regular basis.” Martha Frase-Blunt, in a recent article in HR Magazine (August 2004), notes that “exit interview practices and policies vary widely according to company size and industry, but human resource professionals agree on at least three points: the company should have a formal policy regarding exit interviewing; exit interviews should be reserved for voluntary separations, because issues raised by layoffs and terminations for cause will require a special approach; and exit interviews should be extended to all departing employees—not just key performers or long-timers.” However, some would argue that the exit interview net should be cast as widely as possible, including retirees and employees who have been laid off.

In-house or outsourced?

One major decision that companies must make when setting up their exit interview policies is whether the interviews should be done in-house or outsourced. Ross Ronan, Director of Compliance for EmCare, a Texas-based company that provides emergency department management in some 300 hospitals in 40 states, believes in a team effort between in-house human resources and compliance personnel. “Human resources personnel have the information on the employees, and they often can evaluate whether the information they’re getting is accurate or inaccurate…Sometimes the employee is just blowing off steam.”

According to the EmCare company policy, “If the employee does have concerns regarding suspected or potential violations, the employee will be asked to discuss all relevant details including dates, locations, and the nature of the issue (with the human resources or management services professional)…” All documentation is forwarded to the compliance department within three days of the initial exit interview, and the compliance department then works with the human resources department to investigate the expressed concerns. EmCare promises a two-week turnaround time between the initial interview and completion of the preliminary investigation.

Despite the obvious convenience and cost benefits of the in-house model, outsourcing the exit interview to a neutral third party can avoid the pitfalls of an employee’s reluctance to bare all to his or her superiors. The Wackenhut Corporation, a Florida-based division of Securicor USA and provider of security-related services, recently added a telephone exit interviewing service to its longstanding compliance hotline service. According to Fred Giles, Vice-President for Research Services, the advantage of the phone interview is that “everyone has access, and a live agent has the ability to draw out employee concerns.” The employer can give Wackenhut a list of exiting employees, and the outsourced communications specialist will set up a time for the interview that is mutually convenient. Employees can also phone in, but the response rate is not as reliable.

A web-based alternative

National Hotline Services, another third-party exit interviewer, recently added a less costly web-based alternative to its phone service. According to NHS President Kusserow, “It’s a surprising, winning model. It’s more anonymous, less confrontational, and allows employees the time to be more thoughtful with their answers.… Also, people are conditioned to doing things on the computer, and this is a service people want.”

Still, Kusserow admits, “there is no substitute for a live, skilled phone interviewer using the same techniques as those used for years by investigators: establishing rapport, debriefing, and following up on open-ended questions.” 

Specific questions used by companies to root out compliance concerns or violations vary considerably depending on the organization. Both Wackenhut and NHS work with employers to customize their interview questions. Wackenhut offers a comprehensive list of ten ethics/compliance questions that include the following:

    • When you were trained, did you receive an adequate orientation regarding the company’s ethics and compliance policies?
    • Are you aware of exactly how to make a report about ethical concerns, anonymously if you choose?
    • What was the most effective means of communication used to reach you regarding the company’s ethics and compliance policies?
    • How could the company strengthen its message regarding ethics and compliance?
    • Do you feel that your co-workers adhered to the company’s ethics and compliance standards?
    • Do you feel that your supervisors adhered to the company’s ethics and compliance standards?
    • Do you feel that company executives adhered to the company’s ethics and compliance standards?
    • Do you feel that the company as a whole adhered to the company’s ethics and compliance standards?
    • Are you leaving the company now because of any ethical or moral concern that you had about your job or work environment?
    • Do you now have a concern about the ethical behavior of the company or any of its employees?

During the exit interview, the skilled interviewer is trained to follow up on all leads with a series of more detailed questions. According to Wackenhut’s Giles, these ethics and compliance questions consume between one and ten percent of their total exit interview, depending on the company. While no legal violations have been unearthed in the 12 months Wackenhut  has been providing third-party exit interviews, they have found “less than positive management interaction, such as respect and fairness issues, that have been addressed,” he says.

Nonetheless, with corporate fraud (think Enron, HealthSouth, and WorldCom) and questionable corporate practices (think Marsh & McLennan and AIG) in the headlines on a regular basis, an early warning system could be invaluable in averting costly investigations. By nipping unethical practices in the bud, the exit interview clearly seems to be a simple and cost-effective tool in a company’s inventory.

Emily Layzer Sherwood is a freelance writer based in Scarsdale, New York.

Reprinted from the May/June 2005 issue of Ethikos.
© 2005 Ethikos, Inc. All rights reserved.

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