September 17, 2020

The impact of good and bad employee onboarding experiences

Onboarding has the potential to set employees up for success, and if done poorly, can increase turnover. Optimizing the employee onboarding experience can help companies retain their people and increase productivity – both fundamental as businesses continue to face disruption and change.

Employee onboarding typically includes a lot of moving pieces, such as completing all the required paperwork, registering for training, ordering computer equipment, enrolling in benefits, learning about the company’s values and policies, getting to know coworkers, and so much more that doesn’t even include learning new day-to-day tasks. This can often be overwhelming for new hires, especially with the added stress of starting a new job, which today, looks a lot different than it did several months ago.

Researchers say that employee onboarding is one of the most important functions of HR, as it plays a critical role in an employee’s engagement, productivity, commitment, and retention. In fact, as much as 20% of turnover occurs within the first 45 days of a new hire's start date. What happens in those first few weeks and months is crucial to an employee's long-term success within the company.

Once organizations find the right talent, it’s crucial that they’re doing everything they can to keep them on board and engaged. Employers will also need to focus on hiring and getting people up to speed faster to align with changing business demands. This can be difficult in today’s world of work as employers are introduced to new challenges brought on by a dispersed workforce as a result of the pandemic.

As the pandemic continues to shake up traditional ways of work, organizations need to take this opportunity to rethink how they welcome, train, and engage new employees today and in the future. Additionally, companies will need to remain compliant by having the right paperwork completed on time and stored properly. The right technology is critical to onboarding success – both for companies and their people – as employees are desiring a more seamless and consistent experience and employers are prioritizing time-to-hire and time-to-productivity.

The importance of employee onboarding

New hires typically have a favorable impression of a company as they have just accepted the job offer. Onboarding an employee is a pivotal time for companies, because they need to focus on maintaining a good impression by making new hires feel welcomed, valued, and prepared for what’s to come. Employee onboarding initiatives should reinforce the new hires’ decision to join the company and ensure they don’t get feelings of “buyer’s remorse” after accepting the job offer.

Effective employee onboarding ultimately provides employees with all the tools, resources, and information they’ll need for success. A key part of this is helping new hires build social capital — networks of people and information which help them learn, grow and get their work done. Social capital can contribute to an employees’ sense of fulfillment, builds positive relationships, and provides the opportunity to learn from colleagues. When done well, onboarding has the potential to drive productivity and job satisfaction, and yet according to Deloitte, few companies question whether their onboarding programs are even effective.

Understanding the impact of bad employee onboarding experiences

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. It’s important for employers to not confuse onboarding with orientation – as the latter is just one component.

The onboarding process is the first chance employers have to make a great impression on new hires which is why it’s critical that companies are getting it right by removing friction points and creating a more seamless experience. In fact, the effectiveness of the processes used to source, select, orient, and assimilate new employees directly influences how likely retention is. 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% of new hires start looking for a new job within the first six months
  • Twenty-three percent of employees leave before their one-year mark comes around

What’s more, nearly 90% 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 employee 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.

Related: Growing without leaving: Integrating “new” employees with successful transboarding

The benefits of effective employee onboarding

For all the research out there today highlighting the negative effects of bad employee onboarding experiences, there is just as much underscoring the wide range of benefits that can be realized through a well-structured program. For example, research has shown that a strategic onboarding process brings new employees up to speed 50% faster, which means they’re more quickly and efficiently able to contribute to achieving company goals. Other benefits of effective employee onboarding include:

  • Reduced employee turnover
  • Decreased stress
  • Higher engagement and job satisfaction
  • Long-term loyalty and commitment

In an increasingly virtual world, leading companies are realizing the benefit of investing in smarter onboarding technology that supports business continuity and helps prevent disruption to their hiring processes. These systems can help companies digitize manual, paper-based processes, more easily hire for business-critical roles, such as IT or payroll, and can adapt to meet their changing talent needs as business models pivot in the years to come.

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

Strategic employee onboarding improvements

Researchers have found that companies can focus on both job role and socio-environmental elements of employee onboarding to maximize their onboarding success and increase overall employee performance. This involves providing the right resources and technology needed to learn cultural norms and values, the fundamentals of the business, how decisions are made, and whose support the employee will need the most. To accomplish this, employers can focus on the six Cs of an effective onboarding program:

  1. Congratulations: Give timely congratulations after accepting a job offer.
  2. Compliance: Help employees understand legal and policy-related rules and regulations by completing necessary documents.
  3. Clarification: Help employees understand their new role, responsibilities, and expectations. During the pandemic, people are relying more heavily on their companies to help make sense of information and put it into context relevant for the company. This is especially true when employees are new. Consider moving quarterly meetings to a monthly cadence or holding your twice-monthly staff meeting weekly, so you can provide frequent updates and make yourself more available.
  4. Culture: Provide employees with a sense of organizational norms and familiarize them with company values and the vision. This is especially important in the absence of in-person onboarding or for a dispersed workforce, to help employees understand and feel part of the culture. Introduce new hires to clubs, affinity groups, and professional networks. Give them plenty of information about how to get involved. Even if an interest group won’t be their passion for the long term, the chance to join early is a critical step in getting assimilated.
  5. Commitment: Set employees up for success by providing them with all the right coaching, learning opportunities, and feedback. Providing mentorship and coaching programs in conjunction with succession planning will support employees’ growth trajectory within the company. As well, organizations with effective succession planning programs are more likely to use mentoring and coaching initiatives. 
  6. Connectivity: Better integrate employees by encouraging them to build interpersonal relationships. This will help them create a personal network for support or assistance when needed. Leveraging technology in the onboarding process can help establish this connectivity early on.

Read next: How to convince your company to invest more in onboarding

Developing, implementing, and maintaining a strategic and successful employee 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. To elevate your current onboarding program or develop a new one, organizations will need to provide new hires with the right resources, information, and technology at the right times.  

Employee onboarding software can help HR managers onboard employees efficiently while providing a consistent experience across the workforce. This technology reduces friction points and makes it easier for new hires to access all the tools and resources needed for their job functions. As well, the right solution can facilitate better communication and collaboration so employees can work better together, faster. The result? A successful employee onboarding experience for everyone.

Watch our recent webinar, Reduce time-to-hire and time-to-productivity to learn more about developing an effective onboarding strategy for the virtual world of work.

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. 

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