The Business Case for Investing in Onboarding Programs
Posted on August 10, 2017
Many companies treat onboarding as a two-hour orientation class for new hires, but that mind-set overlooks the importance of providing employees with a memorable start. In some cases, organizations treat onboarding as training, but there is a distinct difference. Onboarding is how you engage and nurture the relationship with a new employee.
As HR teams are focused on more strategic initiatives, HR leaders must communicate to the C-Suite why investing time and money in onboarding is a best practice for supporting bottom-line business goals through retention.
Here’s a look at the impact and importance of a thorough onboarding program.
What is onboarding?
Onboarding is the process of integrating new associates into an organization and providing them with the tools, resources and knowledge to quickly become engaged and productive. It starts with introducing a new hire to colleagues, providing a tour of the office, introducing policies and procedures and ensuring equipment is properly installed and ready for the new hire’s first day. This process actually begins well before—and extends much further beyond—mere orientation.
An effective onboarding program not only prepares an associate for his or her new role but also increases retention rates, productivity, employee engagement and performance.
The first 90 days on the job are critical to the success of new associates and to their commitment to an organization.
Why is onboarding so important? The numbers don’t lie.
- On average, the cost of losing an employee is nearly $20,000 per associate
- High turnover not only leads to additional recruiting and training expenses but also shows up as lower productivity for other associates who are picking up the slack during the gap of hiring a replacement and getting him or her up to speed.
- 46% of new hires leave a job within the first 18 months of employment
- Organizations with a strong onboarding process improve new hire retention by 50%, yet 35% of companies spend $0 on onboarding
- 58% of employees are likely to stay at a company for 3 years if they experience a great onboarding program
An effective onboarding program not only prepares an employee for a new role, but also increases retention, productivity, engagement and performance.
In addition to the impact of losing one employee, turnover can affect the morale of other associates. As morale declines, so too does the quality of work and how they treat your customers, thus tying directly to retention and other business metrics that affect profitability. The faster an associate understands the culture of your organization, the business operations and his or her specific role in meeting organizational goals, the more quickly the employee becomes engaged and productive.
As you review current practices and look to build on your current onboarding program, use this resource to create a great first impression for your new hires.
Sources: Fast Company, Forbes, HR Bartender, Impact Instruction, Interactive Services, UrbanBound