Onboarding Statistics and Best Practices to Improve Employee Retention
It’s easier than ever before for employees to find new jobs. With the rapid advent of the remote worker, many newly created positions don’t even require them to shift from the crouch.
In all things related to employee retention, there is a critical mistake that all too many companies are making: they severely underestimate the value of good employee onboarding.
In the cold light of day, the onboarding statistics tell their own story, and it’s a derogatory one for those companies with weak onboarding strategies. New hires are expensive, early quitters exorbitant, and company culture is in the crosshairs.
Read on to find out why.
Onboarding Statistics and the Price of a New Hire
There’s a maxim that’s well established and known to every manager and member of HR alike. Come rain or shine; new hires aren’t cheap.
Calculating the cost of finding new employees is complicated and depends on a host of different factors. Even so, the average out-of-pocket expense of hiring talent across the U.S is staggering.
You’ve got to pay to advertise on job boards. You’ve got to pay your recruiters, whether they’re an in-house team or outsourced staff. You’ve got referrals to pay, background checks, and eligibility tests to get out of the way.
New hires will cost you upwards of $4,100.
That’s according to the Society for Human Resource Management’s Human Capital Benchmarking Report. That’s per employee, averaging around six weeks to fill an open position.
Now factor in the employee’s break-even point. That’s the milestone around six months into an employee’s tenure where their productivity has increased enough that the total value they’ve generated roughly equals the total expenditure.
If your expensive new hire jumps ship during those critical first months, the cost to fill your open position has just doubled.
And that’s not even considering the gut-punch your company will stomach if the unrelenting influx of new faces worms its way into the morale of experienced employees.
New employees are expensive. But losing good employees because the new ones won’t stick around long enough to be worth anything?
That costs a fortune.
The Cost of Bad Onboarding
There’s a lot that goes into finding a new hire. It’s so time-consuming and carries such a high price point that it’s easy to sit back, relax, and consider a job well done when a candidate review board finally comes back with a positive result.
The pesky truth, though, is that this is where the hard work begins. The impact of poor employee onboarding is often overlooked.
Early Onboarding mistakes will have severe ramifications over the long term—bad onboarding results in employees seeking other opportunities faster. Worse still, it prevents them from recommending an employer.
Around a third of employees start looking for a new job in the first six months of employment. In other words, during that costly period where they’re draining your coffers and giving little back in return.
25% leave within the first year.
Companies that focus their attention on onboarding employees retain 50% more of them in raw numerical terms.
In the worst cases, bad employee onboarding will erode company culture. Staff morale, trust in the organization, revenue targets, and confidence among employees will all take a nosedive.
Advantages of Great Onboarding
It’s pretty clear that bad onboarding is a snowball of catastrophe careening down a mountain slope.
Formal onboarding processes are notably lacking from around one-third of companies. That’s nothing short of a black hole of productivity and revenue loss.
On the flipside, great onboarding brings with it a multitude of benefits. A whopping 69% of employees are more likely to stick around for three years or more with great onboarding strategies, and that’s only where the perks begin.
What’s more, organizations with standardized onboarding procedures typically see around 50% greater productivity in their new hires.
That puts paid to the six-month sinkhole we mentioned earlier, during which your new blood isn’t pulling its weight.
The Most Common Onboarding Mistakes
By now, it’s crystal clear that great onboarding is a no-brainer. Yet, too many companies continue to make the same grave missteps.
Did you know that the average onboarded worker has to complete 54 tasks when starting a new job? There are documents to read and sign. The desk needs setting up. There are learning outcomes, training to be attended, and lectures to be given.
It’s pretty dry overall.
Many of the most common mistakes should come as no surprise.
Mistake #1: Focusing on the First Week
Many companies focus their onboarding efforts on the new hire’s first week on the job. This leaves them feeling as though they were thrown into the deep end and left to flounder.
Instead, a far better approach is to stagger the onboarding process and consider pairing up new hires with a mentor who can guide them through the process.
A week isn’t nearly enough time to get acquainted with company culture, let alone what’s expected of them.
Mistake #2: Inconsistency in Implementation
Whether it’s due to a lack of policy, oversight, or resources, insufficient implementation of onboarding strategies is one of its biggest challenges.
This can often result in a self-fulfilling spiral of bad practice. When the circle is complete, and an employee is promoted to manager (or becomes an onboarding supervisor), their negative experiences easily impact the quality of onboarding they deliver.
Onboarding that isn’t applied consistently is a strong sign that something is very wrong. Like the canary in the coal mine, it’s a signal that things will worsen as time goes on.
Mistake #3: Impersonal Approach
The heap of administrative tasks to complete with the onboarding process is sizeable, and mentors and supervisors are often strapped for time.
The inevitable result is that personal touches and relationship-building are the first things to be tossed overboard – even though they’re a crucial part of the framework.
Any company culture worth its salt values the happiness of its employees. Happy employees are ones with morale, a go-getter attitude, and a hunger to learn. Happy employees don’t shy away from the Christmas party.
Happiness begins with a sense of place. Impersonal onboarding only causes antagonism and animosity to gestate, and the last thing a company needs is for its employees to eye one another with suspicious disinterest.
Mistake #4: Too Much Paperwork
Too much paperwork is crammed into that same first week on top of everything else.
Sure, it’s necessary. Sure, it’s usually mandatory and legislated for. Yet much of that same paperwork needn’t be thrust into the waiting arms of a hapless employee on their first day.
Instead, it can be proffered to them digitally before they even start. In fact, the under-utilization of digital methods is a common factor across companies with bad onboarding pipelines.
Mistake #5: Relying on Traditional Methods
Speaking of digital onboarding, too many companies rely on outdated models for onboarding employees.
It’s 2021. We’re emerging out of the darkness of a pandemic into the age of the remote worker, and the nod-and-handshake, the show-you-to-your-desk approach isn’t going to cut it anymore.
Where the traditional run-up against the need for onboarding remote teams, inconsistencies, and shortfalls are bound to rear their ugly heads, an over-reliance on traditional methods will leave remote workers feeling like second-class citizens.
Nobody wants to be second-rate.
Mistake #6: Ignoring Crossboarding
Crossboarding refers to the onboarding of internal hires. Usually, this applies when an employee is promoted – though it is applicable equally where an employee switches teams or departments.
Crossboarding is, unfortunately, one of the tenets of onboarding that, all too often, is overlooked entirely. Internal hires are intimately familiar with company policies.
But that doesn’t mean they can be promoted or transferred on a whim.
In equal measure as new hires, they require guidance concerning their new responsibilities and learning outcomes to strive for. Without them, they will be left floundering in a new position – and reevaluating their employment at your company.
How to Improve Your Onboarding Pipeline
The good news is that well-designed HR practices can combat all of the shortcomings of the onboarding pipeline. Ultimately, this will result in improved employee retention over the long term.
Improvement #1: Implement a Long Haul Strategy
Short and cramped onboarding is bad. Instead, your strategy should focus on the long-term. New staff who feel that it is acceptable to make mistakes and ask for clarification over the first year of their employment are far more amenable to feedback.
In addition, a consistent micro-learning approach to onboarding will yield better results than dumping a boatload of information on new employees right away.
Improvement #2: Introduce a Mentor at the Outset
With the right mentors, new hires feel welcomed into the company with open arms.
Inexperienced rookies benefit from their colleagues who have years of experience, who can offer invaluable insight and address many of their difficulties from day one.
It’s a great opportunity for veteran staff to broaden their leadership and managerial skills, too. And as an added bonus, mentors will feel compelled to adhere to company standards.
Improvement #3: Migrate the Onboarding Process to Digital
Digital onboarding offers a wealth of advantages.
First and foremost, taking the procedure to the digital world means that staff members have instant access to teaching tools and policies at the drop of a hat.
A key advantage of a standardized virtual environment is that it’s nigh impossible to miss a critical part of the process. Because of automated to-do lists and checkups, your new hires will always be up-to-date.
The digital process is the only practical means of onboarding remote workers, too, making it almost indispensable at this point.
One example of a reliable software solution to virtual onboarding is WorkBright onboarding software.
Improvement #4: Define Measurable Outcomes
Tracking improvements is as important as making them. Otherwise, you will have difficulty identifying pain points and weaknesses in your onboarding policy.
It’s crucial to gather feedback from new and old employees alike on their experience with the onboarding process. This can then be contrasted with retention and loss metrics to define goals and targets moving forward.
Improvement #5: Create Positive Touchpoints
People want to feel appreciated at work.
Often, when swamped with the responsibilities of a new position, employees feel as though they’re in over their head – no matter how qualified.
If a supervisor rarely expresses gratitude or has little contact time with their new underlings, feelings of apathy or resentment naturally begin to fester.
Whether it’s a bi-weekly meeting to discuss learning outcomes, informal meetups on a casual Friday, or simply the odd down-to-earth bit of banter, positive touchpoints go a long way to building a fruitful relationship.
Improvement #6: Don’t Overload Newcomers
Understandably, any employer wants their new hires to be as productive as possible.
But this isn’t achievable while they’re still learning the ropes.
Poor or unfair workloads harm everybody and hurt company morale. As we’ve already stressed, productivity is low in an employee’s initial work period, and it’s important to respect that, too.
Overloaded newcomers will only be more likely to head for the door.
Improving Employee Retention Over the Long Term
The onboarding statistics considered here are brutally sobering, and the truth is plain and simple.
The onboarding process is one of the biggest challenges companies are faced with when looking to improve employee retention.
Raises, promotions, and bonuses are nice. But they too often are a bandaid slapped on a larger problem. Ultimately, employee retention begins and ends with good onboarding.
Everything that follows is the natural progression of it.
Employees bailing and checking out earlier than anticipated can usually be traced all the way back to their very first day.
Did you find our overview of the pain of onboarding helpful? If so, be sure to read more from our business category.