June 6, 2019

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 will help companies retain their people and increase productivity.

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. However, when an organization makes the onboarding process easier and more seamless for a new employee, it makes all the difference.

 

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.

 

Here’s one reason why: according to O.C. Tanner, if new hires have a great, well-structured employee onboarding experience, the majority (nearly 70%) are more likely to stay with that organization for three years. Conversely, as much as 20% 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.

 

The importance of employee onboarding

New hires typically have a favorable impression of a company as they have already 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. 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 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 effectiveness of the processes used to source, select, orient, and assimilate new employees directly influences how likely retention is. Additionally, employee 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 leave before his or her one-year mark comes around.

What’s more, O.C. Tanner reported that 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, when new employee onboarding is done correctly, it can lead to:

  • Reduced employee 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 employee onboarding and transboarding experience for employees, you will be better positioned to make the changes needed to improve your existing program.

 

Strategic employee onboarding improvements

Researchers have found that companies can focus on both job role and social environment elements of employee onboarding to maximize their onboarding success and increase overall employee performance. One of the ways you can ensure you build a successful employee onboarding program is to focus on the six C’s:

  • Congratulations – Timely congratulations after accepting a job offer
  • Compliance – Helping employees understand legal and policy-related rules and regulations by completing necessary documents
  • Clarification – Helping employees understand their new role, responsibilities, and expectations
  • Culture – Providing employees with a sense of organizational norms, and familiarizing them with company values and vision.
  • Commitment – Setting employees up for success by providing them with all the right coaching, learning opportunities, and providing continuous feedback
  • Connectivity – Integrating employees by encouraging networking and building interpersonal relationships

 

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. One great way to do it right is by leveraging Human Capital Management 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 employee onboarding experience for everyone.

 

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

 

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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