Onboarding: Worth the Investment

By Dan Simmons

You’ve heard it called different names—new employee orientation, employee onboarding, retention before the fact.   Onboarding is a process by which employers orient and acclimate new employees into their company so they become productive more quickly and they’re likely to stay with the organization for a long time.

Whatever you want to call it, since the average stay at a company is now less than two years, onboarding is becoming more and more important for companies.  As you ponder the possibilities of onboarding, two questions emerge.

First, is it really worth the investment?  And second, how do you accomplish it?

The Cure for Costly Turnover

Employers have a right to be preoccupied with today’s turnover rates.  The Institute of Management and Administration reports that 95% of organizations express serious concerns about company turnover.  And when replacement costs range from 30% to several times an employee’s salary, the concern is a valid one.  In addition, there are start-up costs associated with each new employee that can run into the tens of thousands of dollars when you factor in training, orientation, and productivity.

Ceridian recently reported that Corning’s well-structured onboarding program indicated 69% of employees were more likely to remain with the company after three years than those who did not attend the program.  In another instance, Hunter Douglas experienced a turnover rate reduction of 70% to 16% as a result of its onboarding program.  Furthermore, Designer Blinds reduced its annual turnover from 200% to 1%!

Why does onboarding work?  Think back to a time when you had some difficulty adjusting to a new job. If the company had made you feel more welcome, if they had done simple things such as made certain you had a desk and computer, given you your parking pass, taken you to lunch with your future co-workers, would it have helped?

A good, systematic approach will help in many ways, including the following:

  • Reduce the likelihood that your future new employee will take a counteroffer
  • Begin building rapport with the new company and colleagues
  • Reduce misunderstandings
  • Build an optimistic attitude towards the company
  • Build motivation and job satisfaction
  • Reduce new employee anxiety
  • Decrease the learning curve
  • Give employees a sense of purpose and make them feel as if they’re adding value more quickly

What Decision Did They Make?

Onboarding can help you build a comprehensive retention program that decreases your turnover rate, just as it did for Corning, Hunter Douglas, and Designer Blinds.  What’s important to remember is that onboarding is a process that starts immediately.  What it boils down to is the chance to make a great first impression.  Onboarding will help assure them that joining your company was a smart move and armed with this positive affirmation, the employee will tackle their new position with vigor and enthusiasm, further ensuring that they’re successful and that they stick around for a long time.

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