- Over one-third of companies do not have a structured onboarding process.
- The focus of onboarding is often orientation, instead of the longterm productivity and success of the employee.
- Poor onboarding is a major cause of employee turnover, which can cost a company 100-300% of the employee’s salary in total.
Getting your new hires started off on the right foot requires more than just offering them a quick tour of the office and sending them on their way. Giving employees the best chance at future success requires a thorough onboarding program, according to a 2017 study from CareerBuilder.
Unfortunately, a number of employers aren't taking those steps. The study found that 36% of organizations do not have a structured onboarding process in place. Research from Kronos and the Human Capital Institute also revealed that 76% of HR managers believe onboarding is under utilized. Additionally, 57% of those surveyed stated that lack of manager bandwidth was a barrier to proper onboarding.
If you want to retain your employees, you’ll need to invest in a quality onboarding program. Here's what it should — and shouldn’t — entail.
Consequences of poor onboarding
Not having any process in place can cause a number of negative consequences for both the employee and employer. Specifically, 16% of HR managers said it lowers their company's productivity, 14 % said it brings on greater inefficiencies and 12% said it leads to higher employee turnover.
Lower employee morale, lower levels of employee engagement, lower confidence among employees, a lack of trust within the organization and missed revenue targets are among the other negative impacts of not having a thorough onboarding program.
"While onboarding is a critical component of setting new employees up for success from day one, this study shows some companies are neglecting fundamentals in the onboarding process – and running into serious consequences that can impact the bottom line," Rosemary Haefner, chief human resources officer at CareerBuilder, said in a statement.
Is the impact of poor onboarding underestimated?
From an employee perspective, 69% of employees who have a positive onboarding experience are more likely to remain with the employer for three years. Companies that focus on onboarding retain 50% more new employees than companies that don’t. Standardized onboarding also results in a 50% increase in productivity.
Clearly, onboarding has a huge impact on the success of the organization. 8 months are needed for an employee to reach their maximum productivity. One-third of new employees begin searching for a new job before they have been with the employer for six months, and 25% leave before they have been there a year. This gives them little to no time at peak productivity.
Companies spend approximately 20% of an employee’s salary to replace them, further adding to the costs of high turnover. The total cost of turnover is 100-300% of the employee’s salary.
The study discovered employers use varying strategies when it comes to their onboarding process. Nearly half of those surveyed provide an overview of their process and how things work; 45% offer individual, ongoing training; 43% introduce new hires to key employees, and 42% provide an introduction to the company culture. [Welcoming in a new employee? How to get them off to a good start.]
Additionally, more than 30% have a team welcome, ensure the new employee's workspace and technology are ready before they arrive, and have goals and expectations for the employee’s role with defined milestones and success metrics. Some employers also provide detailed information on the company and growth opportunities and assign a mentor to the new hire.
Focus on orientation instead of onboarding
Often, the focus during the onboarding process is on orientation and acquainting the new hire with the companies culture. Sixty percent view integrating the employee into the company culture as the main focus of onboarding, but it only makes up 30% of successful onboarding.
Orientation is often confused with onboarding. Paperwork, reviewing rules and regulations, and familiarizing the employee with the building and workstation are viewed as the most important parts of onboarding by 75% of respondents.
The importance of factors that can maximize the employee’s success with the company is often overlooked. Peer mentoring can help create bonds between employees and increase employee satisfaction and productivity. However, it is only seen as an important part of the onboarding process by one-third of HR managers.
The availability of self-paced training is viewed as important by less than half of respondents, and assessment of future training needs is also undervalued.
Automation in onboarding
The research revealed that HR employees would benefit from including more automation and technology into their onboarding systems. More than 40% of the HR managers surveyed who don’t capture onboarding information electronically spend three hours or more per employee manually collecting and processing the data, while 16% spend five or more hours.
Those who collect all the information manually say they suffer from heavier workloads and higher stress levels. In addition, it leads to missing information, delayed start dates and candidates who end up walking away from the job because the process took too long. Given that over half of managers don’t have the bandwidth they need to do their job properly, this could improve their effectiveness and give them more time for onboarding.
"Employers need to establish a comprehensive checklist for every new employee and incorporate more automation to provide a better, more efficient experiences for employees, their managers, and HR," Haefner said.
Overall, one-quarter of employers have an onboarding process that lasts just a day, or less, with 26% having programs that last about a week. Twenty one percent have an onboarding process that lasts one month, with 11% extending it over the course of at least three months.