HR Technology

By Derek Moscato Apr 1, 2005
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HR Magazine, April 2005Technology can help reduce the time it takes for a new hire to get up to speed.

It takes an average of six months for a mid-level manager to get up to speed in a new job, according to experts. That’s a good chunk of time during which productivity is reduced, co-workers are burdened by picking up the slack and morale is diminished. Multiply those effects across the number of your newly filled positions, and it becomes clear: Your organization is not operating at full capacity.

Companies recognizing this problem are increasingly investing in “onboarding” programs. Successful onboarding programs quickly integrate new employees and not only help them become familiar with corporate policies, procedures and culture, but also help them identify their responsibilities and figure out how to fulfill them in the new environment. Between corporate acclimation, administrative details, training and every other component of the new hire’s position, the process can be a time-consuming burden for all involved.

Companies that can reduce the onboarding time will find themselves at a competitive advantage because employees will reach full productivity sooner, will have higher morale and will be more likely to stay on the job.

Recruiting Roundtable, a membership of senior recruiting executives from leading companies, believes that investments in automation-based onboarding models will be one of the most important steps in driving quality of hire over the next decade, improving retention. Today’s knowledge-intensive company is looking to retain talented workers, improve workplace morale and efficiency, and reduce expenditures through tools that accelerate a company’s ability to bring new employees into the company fold.

Overcoming First Day Frustrations

For many companies without a formal onboarding program, the hiring and integration process is potentially frustrating and time-consuming. It is complicated by the involvement of many different players within the company, including the recruiter, the hiring manager, IT people, HR managers and other administrators. In some cases, new hires feel overwhelmed, possibly even disappointed, because of the perceived lack of order and cohesion within their new workplace.

“Informal interviews with recent new hires may reveal nightmare tales of systems taking weeks to be set up, people not being greeted on day one or being greeted only to be given a manual or a binder while the manager works on other priorities,” says Mark Kuznicki, vice president of business development at Toronto-based Enboard, an Internet-based onboarding platform.

What happens to these frustrated employees? As much as 4 percent of new employees leave their new jobs after a disastrous first day, according to industry statistics from a study by London-based Reed Consulting. Such situations often result in a significant loss of time, money and other resources spent on that lost employee, not to mention a potential demoralizing of staff and management affected by the departure.

Software can help by coordinating and housing the stream of onboarding-related paperwork and e-mail correspondence—which may deal with everything from contract approvals to salaries to benefits programs to training—all in one place.

That was the goal of Atlanta-based Randstad North America, which puts 200,000 people to work across the United States and Canada and integrates another 700 to 800 employees annually into its workforce. With an annual turnover rate of 48 percent, the company turned to human capital management software Cornerstone, produced by Los Angeles-based CyberU, to enable its onboarding program to help speed up the acclimation process and hopefully to improve retention, says Vince Eugenio, chief learning officer at Randstad.

Software programs like Cornerstone help organizations seamlessly integrate their recruiting and core human resources systems to other onboarding activities, including payroll, performance management and compensation planning. In turn, new hires can become more productive, and more confident, from day one.

According to Eugenio, Cornerstone has enabled Randstad to clearly delineate a sophisticated onboarding process that includes 16 weeks of job shadowing, training, performance reviews and knowledge tests, among other things. In addition to creating reports on the new hire’s progress that go to the individual manager of the new employee, the software provides data on four to five key indicators that each new hire uses to rate the onboarding process.

“We’ve linked onboarding into our overall performance management system,” Eugenio says. “We’re providing onboarding data to executives of the company so that they can manage the people part, getting their new hires up to speed.”

Randstad took its previous paper-based onboarding strategy and married the process to a software application. “What we’ve done is taken a successful model used previously and kicked it up a notch,” says Eugenio.

A Gartner Research report, Focus on Human Resources Applications, predicts that automated onboarding tools that bridge the recruitment and retention processes will soon become key. “Self-service is taking off as HR organizations aggressively pursue coordinated techniques for delivering information, benefits, forms and context through corporate intranets and other electronic channels,” says Diane Morello, vice president and research director at Gartner, an IT research firm in Stamford, Conn.

At Randstad, the company is using the automated onboarding model to measure three key metrics—retention, gross margins and sales volume.

How It Works

Last July, Ponte Vedra Beach, Fla.-based Recruitmax launched an onboarding solution called Aloha. Aloha is, according to Recruitmax, a completely configurable application “that empowers new employees with the knowledge, tools and support they need to become effective in their job immediately.”

“Many organizations have never considered the benefits of a consistent and thorough onboarding process,” says Michael George, vice president of product strategy at Recruitmax. “Aloha drives those best practices and enhances the way employees are brought into an organization, which in turn drives a positive employment brand for organizations using this solution.”

Through an automated approach, Aloha grants network access, distributes copies of the company’s employee handbook, and manages the administrative and training aspects of onboarding tasks. “Through flexible workflows, intuitive process tracking interfaces, automated e-mail prompts and triggers, this collaborative application ensures that each new hire can focus on adapting to their new position on their first day of employment—not days or weeks after hire,” George explains.

Enboard’s Kuznicki notes that the Internet has become a key driver of onboarding programs because a common platform based on web standards and easy-to-use user interfaces allows all the various company players and systems to be integrated into a cohesive package.

For instance, Enboard’s platform helps ensure legal and policy compliance by tracking an organization’s practices with online compliance checklists. It also improves the consistency of management practices by giving hiring managers just-in-time prompts and reminders on how to manage new employees. And it automates existing processes by reducing manual administrative work associated with coordinating, tracking and following up on onboarding tasks.

Implementation costs vary considerably based on the size of the organization, the scope of the solution and the degree of integration with other systems, according to Kuznicki. “For small to medium-sized companies, we offer a hosted solution at Enboard.com on a monthly subscription basis that is priced according to the size of the organization. For larger enterprises, we offer Enboard Enterprise as an installed and/or hosted solution.”

Getting Manager Support

The important thing to remember, Kuznicki says, is that “onboarding and orientation is really a process of managing knowledge transfer. The goal of the process is transforming the tacit and explicit knowledge of the organization into tacit knowledge that is internalized by new employees.”

Can this approach be used at all levels of the organization? According to Kuznicki, the answer is yes. “The key is ... adapting the content to the needs of different parts of the organization. Onboarding is a dynamic part of living, breathing organizations that are constantly evolving.”

Involving managers in the process can help. Different levels of management are highly engaged in the onboarding process of the new hires at Randstad. The individual’s manager—not the HR person—must be involved as the primary driver of the program, according to Eugenio. Eventually, the performance numbers, which are tracked by the software and measure how successful the new hire is in terms of sales and performance, are rolled up to the manager’s manager. That’s why both levels should be and are involved in the process. “Our workers are more deeply connected to their managers in the company, because their managers are so engaged in the onboarding process,” he says.

Results

Randstad estimates that the Cornerstone software has reduced its onboarding time, and the company is analyzing data to determine by how much. Eugenio believes he has saved $100,000 alone in annual printing costs of employee manuals, orientation information and training material.

“Onboarding is something that companies should be paying attention to, particularly in industries where there’s constant turnover,” says Eugenio. “They should be focused on how to get these people productive ... because the longer it takes to bring them up to speed, the more it costs the company in terms of lost opportunity.”

Kuznicki echoes that sentiment. “Every new hire provides the organization with an opportunity to improve itself and shift its organizational culture to create more value from its investments in people. These opportunities shouldn’t be wasted.”

Derek Moscato is a Vancouver-based business writer whose credits include Asia Inc., TheStreet, BC Business and the South China Morning Post .
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