It’s an undeniable truth that a formal onboarding process works. The statistics are coming in waves; supporting the idea that onboarding is THE most critical time in an employee’s experience with the company. Annually, the top two challenges for HR professionals are recruiting and retention, respectively. In a survey by Allied, one-quarter of all respondents rated their onboarding programs as “highly successful”, 48 percent rated them as “somewhat successful”, and one-fifth reported that they don’t have a formal program at all. It is essential for organizations today to implement a top-notch onboarding program that fits their specific needs, and provides tangible results in retention, engagement, productivity, culture, and more.
Although the numbers unequivocally support the practice, there are staggering numbers that defy both logic and best business practices in regards to onboarding. With onboarding proven to be so effective , why do the following statistics remain?:
- $37 billion dollars is spent annually to keep unproductive employees
- 35% of companies spend $0 on onboarding
- 81% of companies have $0 budgets for onboarding (Allied)
Here are the simple truths of what effective onboarding does:
The numbers overwhelmingly support effective onboarding of your new hires. 69% of employees are more likely to stay with a company for three years if they experienced great onboarding (source). That’s a tremendous retention percentage. Organizations with a standard onboarding process experience 54% greater new hire productivity along with 50% greater new hire retention (source).
It typically takes eight months for a newly hired employee to reach full productivity (source), and most HR professionals believe that their employees don’t make up their mind whether they will stay or leave until the first 6 months. Nearly 33% of new hires look for a new job within their first six months on the job (source). These statistics show just a few of the “moving parts” taking place when a new hire is being integrated into the company, and why there is such a need for a formal onboarding program. HR leaders are already under heavy strain finding qualified candidates with a large skills gap in the workforce, and it’s no doubt frustrating to work so hard finding the right candidate, only to have him leave so quickly. Effective onboarding can close the proverbial “backdoor”, keeping talent in place for the long haul.
Simple Truth: Onboarding improves retention.
Brings the new hire to Full Productivity
Effective onboarding includes:
- Clear job descriptions
- Defined expectations of onboarding process, as well as job performance
- Job performance goals
These clearly defined objectives help a new hire to know exactly what he or she is supposed to be doing and what the expectations are, as well as giving them goals to pursue. These goals also show the new hire what the company values, and what is important to the organization. Without clear descriptions, expectations, and goals, a new employee is left to his own interpretations. This can often lead to an employee never reaching his maximum potential or productivity. How can you measure productivity if you don’t have what is considered to be productive, defined?
A 2007 study from the Wynhurst Group found an increase in employee performance by up to 11 percent, with discretionary effort increased by more than 20 percent…because of effective onboarding.
Simple Truth: Onboarding brings a new hire to full productivity.
Develops and Protects Culture
“Culture” is a big buzzword, and for good reason. 87% of organizations cite culture and engagement as one of their top challenges, and 50% call the problem “very important.” (Global Human Capital Trends 2015, Deloitte) The number one reason employees leave a job is because of employee-manager relationships. At the heart of a team being able to function is…culture. And while culture can include people simply “getting along,” it more powerfully represents the ideals, values, and standards that a company has. When a culture demonstrates the values of the company, people can focus on the work at hand to be productive, instead of getting sidetracked by interpersonal, office politics.
The onboarding process should assure that the new employee is immersed into the company culture. That doesn’t mean she loses her individuality, but it does require that she understand what’s important to the team by showing the what, and the why behind what the company does. Did you know that Zappos offers new hires $2000 to quit, if they feel like they’re not a good fit for the job after being hired? Zappos understands the importance of protecting culture, so much so, that they’re willing to pay a little bit now to save them from having to pay much more at a later date.
Simple Truth: Onboarding develops and protects culture.
Effective onboarding requires communication between HR, management, and employee. Great companies work to understand what motivates and inspires their staff. Offering a mentor, as well as training, signals to the new employee that you care about their wellbeing and potential future with the company. By continuously following-up with your new employee during the onboarding process, you can learn what’s working and what’s not. You can help them with real-time feedback and coaching that helps them assimilate at a faster speed. This process facilitates real communication, that helps both management and employee understand what the other is thinking, feeling, and needing.
In Brandon Hall Group’s 2014 State of Talent Acquisition Study, only 27 percent of responding organizations rated their onboarding process as more than moderately effective. However, their results outperformed and outclassed other organizations that classified their onboarding process as less than moderately effective. 54 percent of the best in class in onboarding saw significant gains in employee engagement metrics, including employee turnover, absenteeism, productivity, and employee satisfaction.
Simple Truth: Onboarding increases engagement.
Onboarding works, and the numbers overwhelmingly support the investment in a process that can increase retention, productivity, engagement, and ultimately the bottom line. If your company has no onboarding budget, no formal onboarding process, or if you’re steeped in an old-school mentality that onboarding is just filling out mounds of paperwork to get your new hire started…it’s time to re-evaluate what an effective and robust onboarding program can do for you!
Ben Olson is the Chief Technology Officer of Essium, a premiere software company that has developed a revolutionary, customizable, workforce management solution named Xenqu. Essium’s Xenqu Software leverages our Smart Content Technology to organize everything related to your workforce in one secure, digital file using the latest cloud-computing technologies and architectures.