How Effective Onboarding Accelerates Business Performance

15 Jun, 2021 | Bill Peatman

As much of the world returns to work, a battle for talent is heating up again. "Labor shortages are making a comeback,” The Conference Board announced in May. “Large segments of the economy continue to open at the same time, and labor supply is constrained, resulting in shortages which are likely to remain for the better part of 2021.”  

Onboarding Makes Businesses Better  


Business leaders looking to hire and retain top talent need to look at the first step in their new employee engagement process: onboarding. Good onboarding doesn’t just keep employees from leaving (which it does). It accelerates your business and your employees’ performance. 
 

Well-onboarded employees are:  

  • 18x more committed to the company.  
  • 38 percent more effective at their jobs.  
  • 33 percent more engaged at work.  

Companies with committed, engaged employees earn 147 percent more than their peers.   

The High Cost of Poor Onboarding  

According to Kronos and The Human Capital Group, “Onboarding is critically important but fundamentally broken — Some 76 percent of HR leaders say onboarding practices are underutilized in their organization.”   

Their study also found that:  

  • 76 percent of HR leaders say onboarding is underutilized.  
  • 57 percent of managers said they don’t have time to onboard.  
  • 55 percent of companies to measure onboarding effectiveness.  

Poor onboarding can be extremely costly.   

  • One-third of employees that quit their jobs in the first three months told Bamboo that the onboarding process, or lack of one, contributed to their departures.  
  • Onboarding software maker Edify found that the total cost to replace a $98,000/year junior employee is a whopping $350,000.  
  • New hires that receive structured onboarding are 69 percent more likely to stay at their companies for more than three years.  

That’s just the beginning of the bad news about bad onboarding. “The effects of employee onboarding last way beyond when a new person starts working and impact your whole company,” said Status Page founder Steve Klein. “If your onboarding isn’t effective, in just 1 or 2 generations of hiring, you’re dealing with a team that’s shockingly less productive than it could be — and costing you a lot of money.”  

Getting it Right  

When the pandemic hit, businesses faced a new onboarding challenge—doing it remotely? Onboarding takes on a different flavor with remote employees. With millions of employees now working remotely for the first time, getting onboarding right for them is even more critical and challenging. Business returning to the office will likely do both remote and on-site onboarding.  

Start Early  

The most common onboarding mistake is to be unprepared for the new employee’s arrival. It is very demoralizing for employees to show up on the first day of work, and no one knows what to do with them. It’s even more demoralizing when the employee is sitting at home alone.   

Starting early means:  

  • Document your processes for everything from how to set up email signatures to Zoom and Slack etiquette. This should happen well before onboarding and is critical to keeping teams aligned. It also allows asynchronous access to processes for remote employees and puts everyone on the same playing field for access to the information. Make sure the documentation is simple and easy to navigate.   
  • Ship computers in advance, ideally preloaded with all necessary internal applications and programs.   
  • Assign an owner to welcome new hires in a video call and to make sure that they have everything needed to get started.  
  • Have onboarding sessions scheduled in advance of day one so that the newbie knows the organization is eager to get them working.  
  • Over-communicate. When you’re not all in the office, you won’t pass them in the hallway and say “hi,” read their facial expressions, or have that “watercooler talk.” Being mindful of your communication channels is essential. Managers should check in on new hires frequently and hold more team meetings in the first few weeks.   
  • Use playbooks. Speaking of playing fields, new players would get a playbook if you were a football team, right? Having a central source of truth with standard procedures for all essential functions will help teams move faster. These include organizational charts, contact lists, guides for commonly used tools, workplace setup, software tutorials, anything that requires step-by-step instructions.  

Remember the Goal: Engagement  

The first weeks and months at a new company are when employees often decide if they belong there. Belonging has little to do with job skills and alignment. It has everything to do with finding a connection with its leadership, direction, culture, and people. Strong onboarding fosters the engagement that gives you that 147 percent more revenue than those that do it poorly.  

Onboarding company Roundtable Learning lists these outcomes of good onboarding:

  • Impression – the first impression where employees think, “I made the right choice” because you’ve organized a process to welcome and empower them.  
  • Introduction – introduce new employees to peers and other stakeholders in the role, such as adjacent department heads, to clarify the importance of the function across the business.  
  • Integration – new employee sees how they contribute to their team, how critical that contribution is, and how their team adds value to the organization.  
  • Immersion – cover the functions, processes, and skills needed and the criteria for success in their role.  
  • Independence – at the end of the process, the new employees should have everything they need to succeed, and you should both know that you made the right choice.  

Combine Information with Inspiration  

Successful onboarding programs immediately engage and educate new hires around team processes, standards, culture, and performance expectations. Ensure that the information new team members need to be successful is documented, practical and relevant.  

It is also essential for you to connect new employees to your team’s aspirations. The information explains what you do and how you do it. Inspiration comes from understanding and connecting with the “why” of your work practices. Employees want to feel like valued contributors to a remarkable team working for an amazing company. Don’t assume that “you had them with the offer letter.”  

What Onboarding is Not  

Orientation is not onboarding. Filling out forms for benefits and getting logins are necessary but are not what onboarding is for, though they may occur in parallel. And training is not onboarding. The training imparts skills.  

Competitive Advantage  

“It is a competitive advantage accessible to every firm willing to invest in the strategic design and deployment of a new hire experience,” Kronos and The Human Capital Group said. “The monetary investment required can likewise be quite minimal, offering organizations with small talent management budgets the occasion to make a dramatic impact.”  

Effective onboarding is critical for business growth. For more tips on how to lead your business forward, download the ebook, “7 Skills of Highly effective SMB Leaders.” 

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About the Author: Bill is Prialto's senior content marketing manager and writes about the future of work and how businesses can be more productive and successful. His work has appeared in the World Economic Forum Agenda blog and CIO magazine. 

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