Is there a return on investment when it comes to onboarding employees?
Tiaan Dwyer | HR Specialist
September 30 2021
Onboarding is a crucial time to guide the employee experience in a rewarding direction. As with many employee experiences that fall under the responsibility of HR, the potential financial advantages might not be obvious, but they are present.
You may very well know that the first day of a new job is often strange and uncomfortable. After our new manager departs with a cheerful (if vague), “Let me know if you have any questions!” we find ourselves stuck in the endless phone maze trying to get IT to reset our password which we haven’t even assigned yet, while our new colleagues trickle by to offer names and titles that we struggle to retain. We might feel a little confused, isolated, or even tentative about how we will fit in and what our future at this organisation holds. If this is the experience of a new hire at your organisation, it might be time to make some changes.
WHAT IS ONBOARDING?
Onboarding is usually confused with orientation. Orientation is the first step of onboarding, where new hires are shown around the office, walked through rules and policies, and so forth. Onboarding is a much longer set of activities which ramp people up to full capacity quickly and efficiently, rather than just getting them introduced to their new organisation at a surface level.
The process of onboarding can involve both formal education and on-the-job learning. Employees also get to immerse themselves in the organisation’s culture, understand their role in the organisation clearly, and have a chance to become invested in the vision and mission of that organisation. Expectations are set and norms of behaviour are learned during this time.
WHY DOES ONBOARDING MATTER?
It may be easy to brush off serious onboarding as inconsequential yet the first six months to a year that an employee works at a new organisation can make a big difference. In a 2015 study, it was found that over half of people who left a job in the last year did so in the first year of their position. The bulk of those new hires leave within the first six months! Any HR professional working right now can tell you how costly turnover is and speak to the importance of careful hiring. Yet attention is not lavished on that crucial sub-one-year time frame: only 37% of employers extend onboarding activities past a month, tapering off to just 15% at six months.
What do organisations stand to gain from improving onboarding?
Onboarding is an investment in the future returns an employee can provide, but it need not stop at improving their chances of staying. Among its cost-saving benefits, increased retention means less negative externalities to organisational culture and a strengthening of institutional knowledge.
Employees who go through effective onboarding become productive a lot quicker and put out more valuable work. Rather than spending months haltingly building connections and branching out at their own speed, they can be supported in exploring social circles which will help them solve issues and be collaborative. Onboarding can help establish an environment of cooperation which is more productive, and delivers more innovative results.
Clear expectations and norms of behaviour can be intentionally set during the onboarding process as well, which prevents misunderstandings and unnecessary waste later. It turns out, when employees have clear, comprehensible goals they are more likely to stick around and meet them. Having a solid understanding of their role through discussions with their superiors, new hires can move ahead with a level of autonomy, saving a manager’s time. Autonomy is also linked to increased satisfaction and productivity.
Over all, employees who go through a more attentive onboarding experience are more likely to be happy, industrious, enthusiastic about their organisation, and prepared to tackle challenges. This all translates to real bottom-line results, especially when we factor in increased retention combined with greater ongoing contributions. Employees who are onboarded well are set up with long term attitudes and behaviours that will aid them in continued success.
How can organisations improve their onboarding process?
A digital approach is an obvious place to start for the compliance piece of onboarding. Some organisations even have a pre-onboarding component to their digital onboarding process where new employees can complete their paperwork and learn about necessary rules and regulations in advance of their first day. This is a nice and streamlined experience, but also frees up some of the compliance burden on HR professionals so they can spend more time giving a personal onboarding experience.?
There are also digital tools available for key educational topics during onboarding. Of the new hires that “fail” or leave, only 11% are due to lacking technical skills. Because the interview process is typically effective at identifying technical proficiency, this is not surprising. Incoming hires may not need technical education, but may need to develop their emotional intelligence. 26% fail because they can’t accept feedback, 23% for inability to understand and manage emotions, 17% for lack of motivation to excel, and 15% due to temperament. That is a laundry list of emotional intelligence issues which could be aided with a mixture of digital resources and in-person work.
In addition, make the investment in encouraging new employees to connect through social events, but double down on that investment by incorporating organisational values and culture. Perhaps make a point of including new hires on a volunteer day for a relevant cause, or even a picnic where an executive gives a talk on the organisation’s vision.
New hires will get a better understanding and sense of belonging by socially integrating with their colleagues, while people who have been around longer will remain cognisant of the vision and mission driving their work.
As with any new initiatives, evaluate the metrics you already have available to establish a baseline and target specific areas of improvement. Get a feel for what costs your organisation is incurring by not making changes and then identify what tweaks will be most effective. You can start small and work towards building a complete onboarding plan for new employees.
For example, set a goal to have paperwork in order by day one, and increase awareness about the organisation’s mission among employees over their first six months of work.
If there is something I want you to know about me right away, it’s that I have a passion for supporting business owners. I believe in the future of South Africa and that there are so many opportunities out there to be successful and to make a change to our economy.
I want to be part of that change by providing businesses with core HR and Labour Solutions that will not only result in legislative compliance but actually positively impact their bottom line.
Over the years I have gained practical HR experience working in various sectors such as mining, construction, financial services, and corporate legal. As a business owner myself, I can relate well to businesses and what their needs are.