Onboarding: Worth the
Investment
(By Melinda
Pittman)
You’ve heard it called different
names—new employee orientation, employee onboarding,
retention before the fact. Onboarding is a
process by which employers orient and acclimate new
employees into their company so they become productive
more quickly and hopefully enjoy their experience so
much that they’re likely to stay with the organization
for a long time.
Whatever you want to call it, since
the average stay at a company is now less than two
years, onboarding is becoming more and more of a
pertinent subject for companies. As you ponder the
possibilities of onboarding, two questions emerge.
First, is it really worth the
investment? And second, how do
you accomplish it? We’ll answer the first question
in this month’s issue of the newsletter, and then we’ll
tackle the second question next month.
The cure for costly
turnover
Employers have a right
to be preoccupied with today’s turnover rates. The
Institute of Management and Administration (IOMA)
reports that 95% of organizations now express serious
concerns about company turnover. And when
replacement costs can range from 30% to several times an
employee’s salary, the concern is a valid one. In
addition, there are start-up costs associated with each
new employee that can run into the tens of thousands of
dollars when you factor in training, orientation, and
productivity. So again, is developing an onboarding
process worth it?
Let’s look at a few companies that
have developed this process and see what their results
have been. Ceridian recently reported that
Corning’s well-structured onboarding program indicated
69% of employees were more likely to remain with the
company after three years than those who did not attend
the program. In another instance, Hunter Douglas
experienced a turnover rate reduction of 70% to 16% as a
result of its onboarding program. Furthermore,
Designer Blinds reduced its annual turnover from 200% to
1%! Impressive numbers.
Why does onboarding work? Think
back to a time when you had some difficulty adjusting to
a new job. If the company had made you feel more
welcome, if they had done simple things such as made
certain you had a desk and computer, given you your
parking pass, taken you to lunch with your future
co-workers, would it have helped? Your onboarding
process doesn’t have to be bulky and complicated—which
is something we’ll talk about next month. However,
a good, systematic approach will help in many ways,
including the following:
- Reduce the likelihood that your
future new employee will take a counteroffer
- Begin building rapport with the new
company and colleagues
- Reduce misunderstandings
- Build an optimistic attitude towards
the company
- Build motivation and job
satisfaction
- Reduce new employee anxiety
- Decrease the learning curve
- Give employees a sense of purpose and
make them feel as if they’re adding value more
quickly
What decision did they
make?
After all, isn’t a new
employee who adjusts well and reaches quick productivity
levels what you want? Think of it this way:
onboarding is an integral part of your overall retention
program. In fact, onboarding can help you to build
a comprehensive retention program that
decreases your turnover rate, just as it did for
Corning, Hunter Douglas, and Designer Blinds.
What’s important to remember is that onboarding is a
process that starts immediately, and by that I mean even
before the offer is extended. That may sound a bit
extreme, but what it boils down to is the chance to make
a great first impression—and a first impression that
serves two practical yet crucial purposes.
First, the employee
will subconsciously decide that they made the right
decision in accepting your offer. When people
first start a new job, they’re looking for signs that
they either made the right decision or the wrong
one. Onboarding will help assure them that joining
your company was a smart move.
Second, armed with this positive
affirmation, the employee will tackle their new position
and responsibilities with vigor and enthusiasm, further
ensuring that they’re successful as soon as possible and
that they stick around for a long time.
So, the questions you might want to
think about are these—what impressions are you giving
your new employees, and could an
onboarding program enhance those
impressions?
(Next month, we’ll discuss the how
and when part of the onboarding equation. There
are many solutions, ranging from onboarding software to
human resources consultation to some very simple
procedures that will improve this time of adjustment for
your new hire. We’ll explore these solutions in
the August issue, with an eye toward helping you to
create a customized program that will fit the needs of
your company.)
