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 hopefully
enjoy their experience so much that 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 of a pertinent subject 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? We’ll answer the first
question in this month’s issue of the newsletter, and then we’ll
tackle the second question next month.
The cure for costly turnover
Employers have a right to
be preoccupied with today’s turnover rates. The Institute of
Management and
Administration (IOMA) reports that 95% of organizations now express
serious concerns about company turnover. And when replacement costs
can 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. So again, is
developing an onboarding process worth it?
Let’s look at a few
companies that have developed this process and see what their
results have been.
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%! Impressive
numbers.
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?
Your onboarding process doesn’t have to be bulky and
complicated—which is something we’ll talk about next month. However, 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?
After all, isn’t a new
employee who adjusts well and reaches quick productivity levels what
you want? Think of it
this way: onboarding is an integral part of your overall retention
program. In fact,
onboarding can help you to 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, and by that
I mean even before the offer is extended. That may sound a bit
extreme, but what it boils down to is the chance to make a great
first impression—and a first impression that serves two practical
yet crucial purposes.
First, the
employee will subconsciously decide that they made the right
decision in accepting your offer. When people first start a
new job, they’re looking for signs that they either made the right
decision or the wrong one.
Onboarding will help assure them that joining your company
was a smart move.
Second, armed with this positive affirmation, the
employee will tackle their new position and responsibilities with
vigor and enthusiasm, further ensuring that they’re successful as
soon as possible and that they stick around for a long
time.
So, the questions you
might want to think about are these—what impressions are you giving
your new employees, and could an onboarding program enhance
those impressions?
(Next month, we’ll
discuss the how and when part of the onboarding
equation. There are
many solutions, ranging from onboarding software to human resources
consultation to some very simple procedures that will improve this
time of adjustment for your new hire. We’ll explore these
solutions in the August issue, with an eye toward helping you to
create a customized program that will fit the needs of your
company.)
