Onboarding Key to Retaining, Engaging Talent

By Roy Maurer Apr 16, 2015
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Onboarding new hires at an organization should be a strategic process and last at least one year to ensure high retention, say staffing and HR experts.

Many companies approach onboarding as something that stops “when all paperwork is signed and the employee’s first day is complete,” said Ben Peterson, CEO of BambooHR, an HR technology company. “We in HR think we’re done, but the reality is we’re just getting started.”

How employers handle the first few days and months of a new employee’s experience is crucial.

“While onboarding isn’t new … this critical period in the employee life cycle is more important than ever,” said Amber Hyatt, director of product marketing at SilkRoad, an end-to-end talent management solutions firm.

That’s because spending time can mean saving money. “Replacing talent runs as high as two times annual salary,” said Peterson. “And it’s not just about dollars. Culture and job satisfaction is hugely impacted, as well as morale, productivity, lost insider knowledge. It’s painful to lose people.”

Hyatt defined the onboarding process as a systematic and comprehensive approach to integrating a new employee with a company and its culture, as well as getting the new employee the tools and information needed to become a productive member of the team. “A well-designed, fun and engaging onboarding process has a significantly greater effect on employee engagement and retention when compared to the old-school mentality of one-day orientation,” she said.

“It’s not a single event. It’s an ongoing talent strategy,” Peterson stressed.

First Impressions Matter

Many new hires aren’t fully invested when they start a new job. A 2009 study by the Aberdeen Group of senior executives and HR staffing and recruiting functions found that 86 percent of respondents felt that a new hire’s decision to stay with a company long-term is made within the first six months of employment.

Correspondingly, one-third of approximately 1,000 respondents to a February 2014 survey by BambooHR said they had quit a job within six months of starting it. Between 16-17 percent of the respondents left between the first week and the third month of starting their new job.

“That means the average company is losing 1 in 6 of their new hires each month for the first three months,” said Peterson.

Of those respondents who left within the first six months, 23 percent said “receiving clear guidelines to what my responsibilities were” would have helped them stay on the job. Twenty-one percent said they wanted “more effective training,” 17 percent said “a friendly smile or helpful co-worker would have made all the difference,” 12 percent said they wanted to be “recognized for [their] unique contributions,” and 9 percent said they wanted more attention from the “manager and co-workers.”

About one-third of the new hires who had quit said they’d had barely any onboarding or none at all, and 15 percent of respondents noted that lack of an effective onboarding process contributed to their decision to quit.

Onboarding Objectives

A 2007 study from the Wynhurst Group found that newly hired employees are 58 percent more likely to still be at the company three years later if they had completed a structured onboarding process.

Effective employee onboarding programs also increase employee performance by up to 11 percent, said Peterson. Employees’ discretionary effort increases by more than 20 percent when they are onboarded effectively, he said, citing data from the Corporate Leadership Council.

“In addition to teaching new hires about the mission, vision, values and culture of the organization, proper onboarding ensures that new employees fully understand their roles and how they relate to the organization’s big picture operations,” said Hyatt. “New employees learn what’s expected, how to deliver, and how and when they will be evaluated.”

The Aberdeen Group reported that 66 percent of companies with onboarding programs claimed a higher rate of successful assimilation of new hires into company culture, 62 percent had higher time-to-productivity ratios, and 54 percent reported higher employee engagement.

Before implementing a formal onboarding program, employers should answer some key questions to attain team and upper management buy-in, said Hyatt:

  • When will onboarding start?
  • How long will it last?
  • What impression do you want new employees to walk away with at the end of the first day?
  • What do new employees need to know about the culture and work environment?
  • What role will HR play in the onboarding process? What about direct managers? Co-workers?
  • What kind of goals do you want to set for new employees?
  • How will you gather feedback on the program and measure its success?

Creating an Onboarding Program

The Aberdeen survey showed that 83 percent of the highest performing organizations began onboarding prior to the new hire’s first day on the job.

“If we don’t worry about onboarding before the employee starts, then we’re way behind,” said Peterson. “Rather than having a stack of papers waiting for their signature, send them out to the employee beforehand, for electronic signature. Give them their benefits selection. Find the technology to help you automate the paper-pushing process.”

As soon as new employees receive a job offer, they can also receive access to the company’s online onboarding portal, said Hyatt. “Here they discover content that’s designed to engage them, like a friendly note from their manager, first-day information, welcome messages and photos from new teammates, a glossary of company acronyms, a virtual copy of your employee handbook as well as other details about the new hire’s department and job responsibilities,” she said.

New-hire portals also benefit HR through dashboards that can organize and track tasks that need to be completed and managed electronically, such as W-4 or I-9, benefits and payroll forms, Hyatt said.

In addition to having new employees fill out new-hire paperwork online, consider providing the answers to questions they may have, such as where to go on day one, who to ask for upon arrival and what to wear, she said.

Set up new hires’ desk, phone, computer and password logins before they arrive, said Peterson. “The worst thing for a new employee is being wooed through the recruiting process and then arriving on the job and the receptionist isn’t even expecting you or your office isn’t set up,” he said.

The First Day

The two main goals on the first day should be setting expectations and introducing objectives. Employees need to have crystal clear ideas about what their job duties and responsibilities are on Day 1, Peterson said. “New employees need to get to know the job and get to know their new co-workers. Social interaction is critical. You want them back on Day 2, right?” he asked. New employees at BambooHR are taken out to lunch on the first day. “We cared enough to hire them, we want them to know we care enough to build rapport,” Peterson said.

Aligning expectations is critical. “Organizations that don’t focus on acclimating new employees to their corporate culture are at a significant disadvantage,” said Hyatt. “Employees who know what to expect from their company’s culture and work environment make better decisions that are more aligned with the accepted practices of the company.”

To keep existing team members from resenting a new employee, make sure roles and responsibilities are outlined for the entire team, Peterson advised. “Sometimes existing team members could feel threatened that someone new could take over their responsibilities. So it’s a good idea to clarify the position of the new hire as well as [the positions of] other team members whose work is closely related, how they’ll interact with each other, and how projects will run,” he said.

The First Month

It’s important for HR to have a one-month check-in to make sure that that the new employee is comfortable, happy and engaged, said Peterson. “Reviewing and giving thoughtful feedback on your new hire’s early contributions are also important during onboarding,” he said.

According to the BambooHR survey, three-fourths of new hires said training during the first week on the job is most important to them. Meanwhile, 41 percent of HR professionals felt they needed to update training in onboarding. “If you aren’t communicating what new hires are supposed to be doing and arming them with the tools to do it properly, you’re setting them up to fail,” Peterson said. You also don’t want to inundate your new hires with way too much information. “While it’s important to get your new hire ramped up and productive quickly, you also need to make sure you provide on-the-job training in a manageable flow,” he said.

Hopefully new hires have picked a mentor by the end of the first month, Peterson added. Fifty-six percent of respondents in the BambooHR study said that having a buddy or mentor at work was very important when getting started.

The Aberdeen Group report found that high-performing organizations are nearly two-and-a-half times more likely than lower-performing employers to assign a mentor or coach during the onboarding process. “Mentoring programs can be as simple as assigning a new employee a go-to person or having an elaborate team of mentors for any questions that might arise,” Hyatt said.

The First Three to Six Months

Peterson advised HR to conduct another check-in between three and six months, depending on the employee and the role. “Unfortunately, only 15 percent of companies continue onboarding after six months,” he said. Remember, nearly 90 percent of employees decide whether to stay or go within that first six months. “You have a huge impact on that choice. Sometimes you just have to show that you sincerely care,” he said.

The First Year

Only 2 percent of companies extend onboarding beyond one year, according to the Aberdeen Group. “An employee’s performance at the end of the first year will prove if they’re fully productive,” said Peterson. “Now you can plan for future development. Show them what their career looks like at the company. Sadly, sometimes they don’t belong there,” he said.

The end of the first year is when traditional onboarding transitions into retention and employee satisfaction. “Shift from on-the-job training to continuous development. It’s also a great time to have the compensation conversation,” Peterson said.

“Your new hires will thank you for setting them up on the path to success and your company will be well on its way to turning those new hires into seasoned employees.”

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy

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