Why Better Onboarding Improves Employee Retention
After posting job listings on multiple platforms, sharing great social posts on your company culture, and conducting multiple interviews, you’ve finally found a candidate to fill your job opening. But the next 90 days, the onboarding process, must be handled with care if you want to keep your new hire around.
What Companies Miss About Onboarding
Most companies allot time to train new hires, particularly in more technical fields, and think they have their onboarding covered. But according to Forbes, training, while important, is not the full extent of onboarding. While training is specifically about skills, programs, and day-to-day processes needed for the job, Michel Falcon, founder of Experience Academy, says “Employee onboarding is the design of what your employees feel, see and hear after they have been hired.”
A study in the Academy of Management Journal analyzed 264 new employees, and found that onboarding is pivotal to building rapport with the company, management and coworkers. Jack Fitz-endz in his book The ROI of Human Capital also noted a correlation between onboarding and retention, when a study of twelve people hired for a “mission-critical job group” revealed that the four hires who hadn’t gone through onboarding were the only ones to leave the position. 1 Considering the costs of hiring, that’s a lot to lose. So alongside training, onboarding is clearly crucial to help employees feel comfortable in their new position.
However, while a lack of onboarding is clearly not good for employees, the costs of ineffective onboarding are also high. U.S. and U.K. employees cost businesses an estimated $37 billion every year because they do not fully understand their jobs (an essential element to effective onboarding), and 45% of human resources estimates that over $10,000 a year is wasted on ineffective onboarding.
In the short term, proper, effective onboarding will reduce the costs associated with learning on the job and save coworkers and supervisors time training the new employee, increasing productivity in the workplace. Long term, the resulting increased engagement and reduced turnover will save a company so much time and money than would otherwise be wasted.
Effective Onboarding: Structure, Clarity, and Presence
Companies need to structure their onboarding process and go about it like any good business plan -- through time, effort, and attention to detail. Careerbuilder says managers and supervisors should have a written plan of employee objectives, responsibilities, and expectations ready to discuss on the employee’s first day. While a written plan may not be necessary, evidence suggests that transparency about manager values and the tasks involved is essential for engagement and retention -- as stated earlier, much of the cost of turnover comes from a lack of communication about what the job entails. This makes sense, since misrepresenting a job or company can destroy trust once the veil is lifted.
Additionally, the company culture and mission needs to be part of these conversations. It’s one thing to give an employee a task, but another to have them understand how their role adds to the overall mission. Red Branch Media emphasizes this, saying,
... we created a narrative that runs from the job advertisement all the way through to the new hire’s first day. We give them a reason to believe (we’re a family business and bootstrapped so the founders work as hard as the interns) and a map to what their future could be (we tell stories of our successful employees and the highs and lows that got them there).
Managers should also take care to prep for new hires by making sure their workstation is ready, that fellow teammates are informed and introduced to them, and that relevant paperwork is ready. This preparation to smooth the transition shows new employees you are grateful and excited for their arrival, making them feel welcome.
Beyond the first day or week, employers need to continue communicating and checking in with new hires. Every new job is a learning curve, but as the Academy of Management Journal study observed, “When support levels were high from the team and leaders, new hires often had more positive attitudes about their job and worked harder. When support and direction were not offered, the inverse occurred, leading to unhappy and unproductive employees who didn’t make it much further than four months."
If companies put systems in place to manage their onboarding more effectively, your new hires will last long after the crucial 90-day period.