Laing O’Rourke plc is the largest privately owned construction firm in the UK, with offices in the UK, Germany, India, Australia and United Arab Emirates and over 27,000 employees worldwide. Led by Chairman and Chief Executive, Ray O’Rourke, the business has grown rapidly since the merger of Laing and R.O'Rourke & Son Ltd in 2001.
Laing O'Rourke specialises in delivering ambitious yet achievable construction projects that delight both clients and the communities who use them every day, and the company is responsible for numerous innovative construction solutions across the world. In January 2007, Laing O’Rourke commissioned Roffey Park’s Research team to hold ‘exit conversations’ with their leavers to explore in more detail their decision to leave. A total of 71 people were interviewed across two phases throughout
March-May 2007 and August-October 2007. The two phases of the project were designed to provide weight to the findings and pick up on any differences in responses over time. Previous exit surveys were also examined alongside this more qualitative data to validate the findings. As James Bray, Head of HR Policy and Programmes at Laing O’Rourke maintains:
“Whilst we were receiving very positive feedback from employees about the great opportunities and challenges they were being offered in Laing O’Rourke, our turnover rates were still higher than we wanted to them to be. We had some anecdotal evidence as to why this might be but needed to back this up with some good empirical evidence that would help to guide our HR strategy and help develop our offering to employees.”
Exit interviews can provide valuable information that is frequently overlooked by employers. They represent a valuable channel for employers to gather information from departing employees that may have a positive effect on future employment conditions and ways of working. It is particularly helpful having a neutral third party conducting these and often means that employees are more likely to be open and honest in their responses.
The psychological contract
The interviews were specifically designed to tap into the psychological contract of the organisation’s leavers. The psychological contract was first defined by Levinson in 1962 as:
“The sum of the mutual expectations between the organisation and the employee.”
These expectations will often be informal and imprecise: they may be inferred from actions or from what has happened in
the past as well as statements made by the employer. Some obligations may be seen as ‘promises’ and others as ‘expectations.’ The important thing is that they are believed by the employee to be part of the relationship with the employer (CIPD: 2008).
Guest’s (1998) more recent definition, emphasising the role of communication is also helpful:
“The contract resides in the interaction rather than in the individual or the organisation making it more like communication.”
The psychological contract can offer organisations a useful framework for thinking about the employment relationship against the backdrop of the changing labour market. Where employees believe management has broken promises or failed to deliver on commitments, this has a negative effect on job commitment and on the psychological contract as a whole.
So, linking into this concept, the interview structure was designed to look at the mutual expectations/obligations established from the first contact with the organisation, through recruitment and induction and during the course of
employment through contact with line managers and various HR processes.
The interviews were structured around six key areas:
• Joining/induction
• Current role
• Management support
• Career progression
• The organisation
• Decision to leave
The results
The interviews provided valuable in-depth data about individuals’ relationships with the organisation and perceptions about different aspects of organisational life. Where the psychological contract had been broken, they also indicated what had caused that breach to occur. The findings suggested that small changes in a few areas (such as managing expectations and communication and consultation processes) could make a big difference in terms of whether people decided to stay or go. Overall however, the findings were very positive with 63 out of 71 leavers suggesting they would consider working for the organisation again in the future if the right role was offered.
As James Bray, Head of HR Policy and Programmes suggests:
“The feedback from the Roffey Park research coupled with some very positive results from a MORI employee survey, showed us that we have very strong levels of employee engagement in Laing O’Rourke, but that we need to do more work around offering effective career development and progression which, for some employees, was where the psychological contract was breaking down. This will be a major focus for HR and business leaders during 2008.”