April 18, 2017

The Impact of Good and Bad Onboarding Experiences

Paul Jelinek

Paul is Director of Product Management and has over 18 years of experience in human capital management. He has worked for several SaaS companies, where he managed countless products and the development of major solutions such as global HR, benefits enrollment, performance management and compensation management. 

As a recent new hire at Ceridian, I’ve gained a whole new appreciation for everything that goes into bringing a new person into an organization. From my perspective this included a lot of details, such as completing all of the required paperwork, registering for training, ordering my computer equipment, enrolling in benefits, learning about the company’s values and policies, getting to know where I could go to for answers to my questions, and so much more that doesn’t even include learning my new day-to-day tasks. I can truly say from experience that when an organization makes this process easier for a new employee, it makes all the difference.

Researchers say that onboarding is one of the most important functions of HR, as it plays a critical role in an employee’s engagement, commitment, and retention. They are so right.

Here’s one reason why: according to O.C. Tanner, if new hires have a great, well-structured onboarding experience, the majority (nearly 70 percent) are more likely to stay with that organization for three years. Conversely, as much as 20 percent of turnover occurs within the first 45 days of an employee’s start date. Clearly, what happens in those first few weeks and months is crucial to a staff member’s long-term success within the organization.

Understanding the impact of bad onboarding experiences

It’s important for employers to not confuse onboarding with orientation – as the latter is just one component. Onboarding refers to the entire experience of hiring, welcoming, orienting, and engaging a new hire and helping them become acclimated and integrated into the corporate culture. The effectiveness of the processes used to source, select, orient, and assimilate new employees directly influences how likely retention is. Additionally, onboarding should be a priority throughout the entire first year an employee starts a new job, not just the first few weeks.

Consider that, according to the Harvard Business Review:

  • Almost 33 percent of new hires start looking for a new job within the first six months.
  • Twenty-three percent leave before his or her one-year mark comes around.

What’s more, O.C. Tanner reported that nearly 90 percent of new hires decide within the first six months on the job whether they want to leave or stay. High turnover is a major issue due to its ability to hamper productivity and engagement. Plus, the average recruiting cost to find a replacement can amount to 20% of the job’s base salary.

These findings indicate how delicate the first six to 12 months can be for new hires – and how onboarding can be the difference between a turnover and top performer. Keep in mind these same principles and concepts can – and should – be applied for transboarding, which is a word constructed out of merging transfer, off- and onboarding, and includes the transfer or promotion of an existing employee. Just because an individual is not new to the organization doesn’t mean he or she doesn’t need the same treatment and experience to help adjust and settle into a new role.

The benefits of effective onboarding

For all the research out there today highlighting the negative effects of bad onboarding experiences, there is just as much underscoring the wide range of benefits that can be realized through a well-structured program. For example, when new employee onboarding is done correctly, it can lead to:

  • Reduced turnover
  • Decreased stress
  • Higher engagement and job satisfaction
  • Long-term loyalty and commitment
  • Increased speed to full productivity

I was lucky that my onboarding experience at Ceridian was fantastic, but I know what can and does happen if a company doesn’t take onboarding seriously or if they don’t have the technology to facilitate the process. If not done correctly it could mean that an employee spends the first few days completing paperwork, waiting for equipment, confused and not knowing where to go to for what and more.

Once you understand the importance and benefits of optimizing the onboarding and transboarding experience for employees, you will be better positioned to make the changes needed to improve your existing program.

Strategic onboarding improvements

One of the ways you can ensure you build a successful onboarding program is to focus on the six C’s:

  • Congratulations
  • Compliance
  • Clarification
  • Culture
  • Commitment
  • Connectivity

Developing, implementing and maintaining a strategic and successful onboarding program can be difficult. From managing all the paperwork and processes required for regulatory compliance purposes to making sure the new hire feels comfortable and empowered to work effectively – there’s a lot of ground to cover. One great way to do it right is by leveraging HCM software. With these systems, HR managers can feel confident knowing they won’t let certain things slip through the cracks.

These platforms make it easy for the new hire to access all the tools and resources needed for their job functions, both internal and external, and even help facilitate better communication and collaboration. The result? A successful onboarding experience for everyone.

Thank you!

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