According to research done by the Brandon Hall Group, a positive onboarding experience can increase employee retention by 82% and increase productivity by over 70%. So why is it that we see organizations from all industries lacking in this area?
The process of onboarding employees is lengthy and involved—way more than a typical employee orientation day. It’s also something many companies are overlooking, whether they know it or not. And it’s costing them.
Organizations across the world are experiencing a growing and changing work environment, causing them to adapt their business structures to meet expectations. However, these rapid changes can sometimes cause more harm than good, especially if an organization is experiencing rapid growth and moving just as rapidly through the hiring process. I worked for an organization that was constantly hiring, looking for people to fill a schedule rather than focusing on the quality of their experience in the workplace. We were given a week or less to impart at least a month’s worth of knowledge to each new person. We often lamented the “three-month hump,” where new hires would struggle until the three-month point, after which they were finally comfortable with their knowledge and could be a strong, contributing member of the team. I worked with one individual (let’s call her Sara) who was finding it difficult to retain the knowledge passed along to her, while in the middle of constant rush of business. Her onboarding process was condensed into five days, all of which were during peak hours and in a high stress environment. This led to Sara looking to me for comfort during every step of her tasks, and me being unable to provide that comfort as I was being pulled in every other direction at the same time. On a particularly overwhelming day, she walked off the floor in a panic and never returned. She was not given the opportunity to learn properly, put in a high stress situation every single day, and expected to exceed expectations from the moment she was hired. Sara, if you’re reading this, I’m sorry! The company did you wrong, and I wish I could’ve rebuilt the entire onboarding process to make your learning and development a confidence builder instead of a scary experience.
Unfortunately, this kind of story is extremely common, and results in a very high rate of turnover. Turnover costs organizations a LOT of money. Restarting the hiring process, searching for talent, and the revenue lost during times of reduced productivity all adds up to bug bucks. Instead, why not invest in a comprehensive onboarding process that will allow new members of your team to develop their skills based on their own milestones, not by what is automatically prescribed?
An effective onboarding process is flexible, understands the unique approaches each individual has to the job, and is able to accommodate them. By focusing on the confidence of the new hire in their abilities, as well as building a solid foundation in the organization itself, leaders can create a confident employee with social connections, a drive to succeed, and someone who finds joy in coming to work!
So, we see the benefits in creating a work environment that supports and benefits employees, and that this starts with onboarding. How does this benefit the organization as a whole?
One of the biggest impacts onboarding has on organizations is financially based; it’s expensive to hire new people, and even more so to keep doing it over and over. Typically, the main costs we see associated with and around the onboarding process are the compensation, cost to hire, and training costs, as laid out by the Brandon Hall Group. Compensation covers the wages of the new hire, cost to hire looks at what typically falls under recruitment costs (like HR orientation, leadership creating job postings and conducting interviews, etc.), and training costs encompass the mentors, leaders, and trainers that show the new person the ropes. This is just the standard approach, however, and many organizations have additional financial areas that are impacted by the onboarding process.
Another area for organizations and leadership to be aware of is the loss of business due to reduction in team productivity, a vacant position like a sales rep gone so no one is selling, or reduced performance in general. Losing manpower translates into a loss of business; when people aren’t around to do the work, let’s face it, you’re losing money. This can lead to a loss of customers as well. Lost productivity doesn’t reflect well on a brand, and reduced performance can impact an organization’s public opinion for longer than anticipated. Looking at turnover rates isn’t a bad idea either. If organizations are constantly experiencing high rates of turnover, they won’t be able to develop an effective, cohesive team, and that’s going to seriously impact team performance and productivity. Looking at financials again, high turnover translates into high rehiring costs, and the cost of integrating a new person will be repeated each time that turnover occurs.
The onboarding process demonstrates to your new hire that the organization values them and their individual needs during the time to get their new position mastered. It also creates opportunities for connection, which is essential for success in a new position. Giving new hires a chance to ask questions, be vulnerable, and develop their competency in a supportive environment helps them to become team members that can ask leaders for clarification without fear, approach issues with confidence, and turn to their team when they need support. In work environments like this, people are more engaged with their work, and overall, happier with the work they’re doing! Happy teams are productive, creative teams, taking initiative and approaching issues with efficiency and innovation. They’re also loyal; creating a workplace and culture that values people, promotes open and honest communication, and encourages creative problem solving allows team members to stretch their wings and find passion in their work. This leads to stronger employee retention, a great reputation among the workforce, and can even increase your organization’s appeal to new talent!
Integrating a strong, flexible onboarding process into your organization’s approach to hiring provides more than just a positive impact on the workplace, it’s a strategic move that will benefit the organization as a whole. The financial implications of effective onboarding are clear, with some aspects affecting your top line, like improved productivity, and others impacting your bottom line, like improved retention. A strategic approach to onboarding can help reduce employee turnover, increase productivity and job satisfaction, and create confident, competent employees, all while building a strong base of knowledge and communication to stand on. When you crunch the numbers, caring about your people is always worth it!
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