The Properly Designed Exit Interview a Necessary Step in Uncovering Ethical Violations

Do You Know Why Your Employees are Leaving?

Exit interviews (“EI”) are usually conducted when an employee terminates.  However, many interviews are not designed to unearth potential issues and information about ethical issues, blind spots, and even the warning signs or red flags of potential or existing fraud.  Even more troubling, the write-up of exit interviews is when they are not reviewed by Compliance or Internal Audit on a regular and on-going basis.  Important issues that could highlight possible fraud or inappropriate behavior can go unchecked.

“Regardless of method, the effectiveness of an EI program should be measured by the positive change it generates. We asked the executives whose companies had programs to name a specific action taken as the result of an EI (a policy change or an intervention in HR, operations, marketing, or some other function). Fewer than a third could cite an example. Thus two-thirds of existing programs appear to be mostly talk with little productive follow-up.” 

When you learn why employees leave, you gain valuable insight into how your organization functions at every level and in various departments or business units.  Ultimately, identifying trends and potential blind spots are the most valuable outcomes of conducting exit interviews.  Your organization can quickly recognize themes or problems and implement changes.  For instance, if several people report the same or similar issue as their reason for leaving, you can immediately begin working on that issue to elicit change.

Employees leave a company for various reasons; conducting an exit interview is the most effective way to determine why.  The importance of discovering why people leave cannot be overemphasized, especially in the face of serious workplace problems that may otherwise lurk beneath the surface.  You cannot take appropriate action to fix what you do not know exists.  Further, exit interviews make good sense for lawsuit prevention. Conducting an exit interview with all outgoing employees could help your organization avoid potential liability.

By conducting a comprehensive exit interview, your organization will receive answers to the following questions and more:

  • Do employees feel unprepared or incapable of performing in their position?
  • Are employees unhappy with their salary, level, time-off, or benefits?
  • Are there employees who frequently clash with other staff or have other performance issues that seem to go unnoticed or unaddressed by management?
  • Are employees aware of the occurrence of unethical or potentially fraudulent practices?
  • Was an employee aware of questionable or illegal activity but afraid to report it for fear of retaliation?

Picture, if you will, an individual leaves your organization and one month later files a lawsuit.  He or she is alleging that questionable or illegal activity took place while they were employed there.  Your organization is taken aback as this is the first time you hear of such an allegation.  And yet, you never asked them the direct question when they were leaving your organization whether he or she was aware of any questionable or illegal activity going on during their employment with you.

The better course to follow would be to ask the questions and encourage your employees to report questionable or illegal activity while still employed.  If a departing employee was interviewed before he or she left your organization and denied knowledge of any questionable or illegal activity, then that individual’s credibility could be called into question if he or she later states that they observed such activity.  On the other hand, your credibility as an organization may go up, particularly if you can show that you routinely ask these questions of everyone who departs the organization—thus demonstrating that your practice is to root out potential fraud, unethical conduct, or other illegal activity.

Key Steps in Conducting an Exit Interview

  1. Keep it professional and non-confrontational.
  2. Do it quickly. Try to interview before the person actually leaves. Better yet, make it an essential part of turning in keys, equipment, or other company property, etc. as you closeout the employment relationship.
  3. Actively listen.
  4. Get it in writing.
  5. Ask specifically about questionable or illegal activity. Make sure you ask the individual if they ever observed any questionable or perceived illegal activity and ask them to explain the observation in detail. Let the person know you will check out those concerns and follow through!

Sample Exit Interview Questions

Here are some example exit interview questions that can help detect and address potential illegal or questionable activity before it becomes an issue at your organization:

  • Why are you leaving the organization?
    • Are you leaving the now because of an ethical or compliance concern that you had about your job or work environment?
  • Why did you begin looking for another job?
  • What did your supervisor say, and how did they react when you informed them you were leaving?
  • Did you feel you were adequately trained and equipped to do your job well?
  • Did you receive adequate training on the organization’s compliance, ethics, and anti-fraud policies?
  • How would you describe the organization’s culture?
    • Do you feel management supported compliance initiatives?
    • Do you feel executive leadership supported ethics and compliance initiatives throughout the organization?
    • How would you describe the working relationship with your supervisor and team / immediate co-workers?
  • Did you believe your coworkers, supervisors, and management comply with the organization’s ethics and anti-fraud policies?
  • Do you know how to report concerns about fraud, dishonesty, or other misconduct?  If yes, did you ever report any concerns?
    • Were you aware of exactly how to submit a report about compliance concerns, anonymously if you choose?
      • If you feel comfortable, can you tell me if you reported a concern via the ethics hotline?
      • Have you reported any serious compliance or ethical problems or concerns to management that have not been addressed? If yes, please explain.
  • Were you comfortable talking to your direct supervisor about ethical concerns or issues?
  • Has anyone ever asked or pressured you to override a control or controls?
  • Do you have any unresolved ethical concerns or issues related to the position you are leaving?
  • Do you know of any unresolved ethical issues in general?
  • Do you know about any potential fraud that occurred during your time with the company?
  • Do you know of any ethical or compliance issues that should be addressed? If yes, please explain.
  • What was the most effective means of communication used to reach you regarding the company’s compliance policies?
  • How could the organization strengthen its message regarding ethics and compliance?
  • Have you ever witnessed any conduct by an employee, provider, volunteer, contractor, or vendor you would characterize as either unethical or illegal? If yes, by whom and what was the issue?
  • Were you ever asked to engage in conduct you believe to be either unethical or illegal? If yes, please explain.
  • Have you engaged in conduct due to your employment, which you believe to be unethical or illegal? If yes, please explain.
  • Concerning the position you are leaving, what remains unresolved that someone needs to know about?

These types of questions—answered by departing employees who are much more likely to give you candid answers—can give your organization invaluable information when it comes to rooting out improper conduct.  More importantly, obtaining this information can give your organization – in conjunction with legal counsel – the opportunity to get out in front of potential compliance or ethics problems. Self-reporting is preferable to having it uncovered in an audit, investigation, lawsuit, or the court of public scrutiny and opinion.

Some Benefits of a Properly Designed Exit Interview Program

  • Uncover potential red flags (i.e., unethical, illegal, fraudulent, or otherwise inappropriate activity)
  • Identify trends, patterns, or themes in employee turnover and benchmark that against your organization and industry.
  • The information gathered is firsthand and likely to be candid and believable.
  • Build points of comparison or benchmarks when analyzing trends and patterns in employee departures
  • Exit interview data is actionable.
  • Protects the organization and whistleblowers

Closing

Even beyond protecting the organization, asking these types of questions during an exit interview allows you the opportunity to get candid answers from departing personnel that can help improve morale, working conditions, employee satisfaction, and overall management of your organization.

We welcome your comments and suggestions.

Best from Our Team!

Jonathan T. Marks, Steven Goldberg, and Amy Slevinski

 

Attribution:

Making Exit Interviews Count HBR  From the April 2016 Issue

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