Why does onboarding matter?
According to research from the Aberdeen group, 90% of employees make the decision to stay at a firm within six months of joining an organization. It’s critical to make those first months succeed, particularly if organizations have made a serious investment in selecting the best-fit employees. Indeed, some 76% of organizations surveyed now have a formal onboarding process, up from 40% in 2005.
What is the True Cost of Onboarding?
Clearly there is a price involved in effectively onboarding new employees. But what are the true costs of not onboarding employees? Consider the investment involved if you truly haven’t onboarded your employees:
Additional costs of recruiting, hiring, and training a replacement employee.
The impact on the remaining team members in terms of extra work, change in team dynamics, morale, etc.
The likelihood that in the future the departing employee will utilize the ideas, products and services your organization provides.
The likelihood that in the future the departing employee will be an advocate or at least refer your organization’s products and services to family, friends, and others.
The possibility that this ideal candidate may defect and work for a competitor.
Conversely, what if we do a poor job of onboarding? What if we inadequately train and develop? What if we make a poor effort to help him or her become a part of the culture? And then they stay?
Does Onboarding Really Work?
The following examples document the results organizations have experienced as a result of creating strong onboarding programs:
- At Designer Blinds, an Omaha based manufacturer of window blinds, upgrading the onboarding process played a central role in reducing turnover from 200% annually to under 8%! Because of the dramatic drop in turnover, they were able to reduce their recruiting budget from $30,000 to $2,000.
- Research at Corning Glass Works revealed that employees who attended a structured orientation program were 69% more likely to remain with the company after three years than those who did not go through such a program.
- A study conducted at Texas Instruments showed that employees whose orientation process was carefully attended to reached “full productivity” two months earlier than those whose orientation process was not.
- Hunter Douglas discovered that the primary reason for their 70% turnover in the first six months was because new employees never felt a connection to their new company; they never felt engaged. Prior to their onboarding overhaul, Hunter Douglas production workers received a ten-minute orientation before heading out to the shop floor.
Key Messages:
Onboarding Matters—Whether they stay on or not does matter to the bottom line of an organization. Selection is becoming a much more complicated practice and the cost/effort to hire and train an employee requires that we pay more attention to the onboarding process.
Exercise Influence not Control—In an HR leadership role, you may not be able to control the actual work experience itself, but there is much that can be done to influence the work environment new employees experience. This is particularly true in bridging employees between the honeymoon of joining the organization and the real world of working there.
Everything Speaks—Paying attention to the details of becoming a new employee paints the true portrait about the real culture the employee will experience. Where you sit, who welcomes you the first day, even matters as small as finding office supplies send a message about what the real culture is like in the organization.
No News Is Not Necessarily Good News—Don’t assume that because you haven’t heard a new employee (or other employees) complain, that everything is okay. You simply have to take the temperature along the way.
Beware of a Sink or Swim Mentality—The idea that the cream will rise to the top works both ways. Organizations are under trial as well as employees as to whether they are a right-fit to candidates who are able to choose where they work.
Mergers Matter Too—While the context is different, the idea of bringing two business cultures together can be more challenging, if not more difficult, than bringing new employees on board. Issues in bridging those cultures together as well as establishing new cultures are matters that require careful attention.
Consider the possibilities for improving your organization by emphasizing the onboarding experience. At World Class Benchmarking, we think that it’s a part of employee engagement. Our book, Lead With Your Customer: Transform Culture and Brand into World Class Excellence, emphasizes the role onboarding has toward the internal customer experience. Grab it on Kindle or a copy through Amazon today.
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