Why is effective onboarding so important for any organisation?

Today we will look at:

• What is Onboarding
• What are the benefits of implementing proper onboarding
• What are the costs of onboarding and the costs of not onboarding
• Who should be responsible for the process
• What are the stages of a properly conducted onboarding process

Let's start at the beginning - What is onboarding?

Onboarding, the process of introducing new employees, is one of the key elements of effective human resources management, regardless of the size of the organisation or the industry. Having supported onboarding processes in many companies for years, we see how the approach of employers in this area is changing, how the awareness of the importance of this stage is growing.

Well-conducted onboarding brings a number of benefits to the company, such as lowering recruitment costs, reducing employee turnover, increasing employee engagement and improving work quality and productivity. I will elaborate on the topic in more detail later and provide some compelling reasons why it is worth investing in the process, based on interesting research findings. To stay up to date with content on onboarding, I invite you to sign up for our newsletter and follow our blog.

Recruitment and implementation costs

The recruitment process is costly, both in terms of money and time. Therefore, effective onboarding allows you to quickly utilise a new employee's knowledge and skills and keep them in the company for longer, making the investment in recruiting them worthwhile, and it's not small money.

Take a look at the figures:

• Recruitment and onboarding costs - Glassdoor research shows that the average cost of recruiting a new employee is around 2-3 months' salary and the time it takes to find the right person is around 52 days (Glassdoor, 2019). The onboarding process reduces the time it takes to fully implement which contributes to a quicker return on investment.
• Costs associated with unsuccessful onboarding - According to a SHRM study, unsuccessful onboarding can cost a company as much as 30% to 50% of an employee's annual salary (SHRM, 2020), as unsuccessful onboarding often results in an employee leaving and the need to look for another person.
• Investing in onboarding pays dividends - A Boston Consulting Group study shows that companies that invest in effective onboarding generate 2.5 times more revenue than those that do not (BCG, 2018).

Employee turnover in the first year

High employee turnover in the first year is a challenge that many companies face. Onboarding helps to increase employee loyalty and reduce turnover, research shows.

• First impressions matter - According to research by the Aberdeen Group, 86% of new employees decide whether they will stay with a company for the long term within their first 6 months on the job (Aberdeen Group, 2017).
• Reducing the risk of resignation - According to SHRM, well-planned onboarding reduces the risk of an employee leaving in the first year by as much as 50% (SHRM, 2020).
• Cost of turnover - Employee resignation in the first year can cost a company between 30% and 150% of annual salary (Work Institute, 2021).

As you can see, it is definitely worth trying to ensure that a new employee has a good experience from day one in order to keep them with the company for the long term.

Engaging employees from the very beginning is crucial for their long-term motivation and performance. Gallup research shows that companies with engaged employees are 21% more profitable (Gallup, 2019), and new employees who undergo proper onboarding are more satisfied with their jobs, which influences their engagement and loyalty to the company (Gallup, 2020). Also, the SHRM study confirms that onboarding influences new employees to adapt faster, which in turn increases their level of engagement (SHRM, 2020).

Quality of work and productivity of new employees

Onboarding directly affects the quality of work and productivity of new employees, which in turn impacts the performance of the organisation as a whole. A study by Bersin by Deloitte found that employees who have undergone proper onboarding reach full productivity 60% faster than those who have not (Bersin by Deloitte, 2018). This is partly because employees know what is expected of them and how they are expected to perform their duties, which leads to a better quality of performance (BCG, 2018). Also, Glassdoor research shows that companies with effective onboarding processes achieve 70% higher productivity scores (Glassdoor, 2019).

We already know that a good employee induction can take our business to new heights. But who should do it and how?

The roles of individuals in the onboarding process

The HR department and the employee's supervisor are most involved in the onboarding process . They are jointly responsible for what, if anything, will be an effective process and a good experience for the new hire.

Managers (team leaders) play a key role in the onboarding of new employees. Their involvement can determine the success of the process. According to a SHRM survey, 72% of employees believe that a manager's involvement in onboarding directly influences their decision to stay with the company (SHRM, 2020). As we know, good communication is needed to build good relationships, so managers should talk to new employees regularly, give them regular feedback and ask them how they perceive their induction. This will allow employees to adapt more quickly to their new responsibilities (Gallup, 2020). The basis for success is for supervisors to provide clear goals and expectations, which helps new employees focus on priorities (BCG, 2018).

HR has a strategic role in designing and coordinating the onboarding process. It is the HR department that is responsible for creating a coherent onboarding strategy that includes all the necessary steps, such as training, administrative paperwork and social integration (SHRM, 2020). Also, the HR department should regularly monitor the progress of new employees and collect feedback on the onboarding process (Work Institute, 2021). It is also this department, albeit with the support of a manager, that takes care of ensuring that employees have access to the necessary tools, resources and administrative support, allowing them to focus on their work from the very beginning (Bersin by Deloitte, 2018).

Stages of a properly conducted onboarding

1. Preparation before the first day (preboarding) - Contacting the new employee and giving them all the necessary information before they start work, which reduces stress and makes it easier to get started (Aberdeen Group, 2017). We will write more about preboarding in future articles.
2. First day on the job - It is important that the new employee has the opportunity to get to know the team, his mentor and the key processes of the company. He or she knew where to go if they don't know something (BCG, 2018).
3. First weeks and months - Regular support in the first few weeks is key, allowing for a quicker introduction to responsibilities and the company culture (Gallup, 2020).
4. Evaluation and feedback - After the induction period, it is important to evaluate the new employee's progress and collect feedback on the onboarding process to continuously improve it (SHRM, 2020). Don't be afraid to ask our employees what they liked during the onboarding process and what was missing at some stage.

Effective onboarding is an investment that benefits both new employees and the organisation as a whole. It is worth ensuring that the process is well planned and that its key stages are carried out in line with best practice.