There’s nothing more important for an HR team than the employee lifecycle. It covers all aspects of the employee’s experience while working with the company. Starting with attraction and recruitment, the lifecycle continues into onboarding, development, retention. The life-cycle concludes with off-boarding.
Every stage has metrics to help HR measure the success of their practices, initiatives, and policies, especially when it comes to onboarding and retention. Off-boarding tends to be left behind. But, it is still a key stage that deserves some attention.
Just because an employee is leaving, doesn’t mean they still won’t have an impact on the organization. First, a poor exit experience will directly impact your employer brand, which decreases the chances of a referral candidate. Second, today’s job-hopping culture has created more boomerangs (people who return back to a company). If you’re losing a high performer, you want them to be your biggest advocate for your employer brand, recommend great talent, and possibly return after gaining skills and experience.
That’s just the tip of the iceberg for the importance of off-boarding. So, to help keep an eye on your off-boarding process, here are a few HR metrics.
To calculate, take the total number of employees that will be at retirement age within a given timeframe and divide it by the total number of employees. Multiply it by 100 to get the percentage. This will give an indication of how much of the employee population with a lot of organizational knowledge will be leaving.
Retirement rate = (# of expected retirements/ # of employees) x 100
Retirees typically have a longer off-boarding process. To ease the transition, alternative work schedules or gradually decreasing hours can be beneficial for both parties. It allows time for knowledge transfer and for the person retiring to adapt to lifestyle changes. Also, think about providing a tool-kit on resources like applying to Medicare and distributions from their 401(k).
Exit Interview Completion Rate
To calculate, take the total number of completed exit interviews and divide it by the total number of exit interviews solicited or by the total number of voluntary separations. Multiply it by 100 to get the percentage. This rate tells you how many people are completing your exit interviews.
Exit Interview Completion Rate = (# of completed interviews/# of interviews solicited) x 100
A low completion rate can indicate a few things. Either the process is too cumbersome, long, or inconvenient for employees. This can be especially deterring when most are tied up training peers to pass over their work. Or they feel so disconnected or angry from the organization they do not want to provide feedback and may even fear retaliation. Either way, feedback from exit interviews is vital for combating high turnover rates.
Status Change Processing Time
Total the number of days it takes for HR to process a termination in the HRIS from either the last day worked or the date the term was submitted and divide it by the total number of terminations processed. The result is the average number of days it takes for a termination to be processed. Consider separating involuntary vs. voluntary since involuntary terms are typically acted on immediately and may skew your numbers.
Status Change Processing Time = # of days to process/# of status changes
Delays in processing terminations can have significant impacts. For example, if an employee leaves the company on August 20th and benefits term at the end of that month. If that status change is not processed until two weeks into September, COBRA packets are delayed and you’ll be paying fees for benefits for termed employees. Also, that status change tends to be the indicator for IT to terminate system access. A termination processing checklist can be helpful in creating timely off-boarding practices.