Company culture is one of the most potent differentiators an organization has. Competitors can adopt the same strategies and sell similar products and services, but no two cultures are identical. Organizations that rank in the top quartile for culture in McKinsey & Company's Organizational Health Index generate 60 percent higher returns than those that rank in the middle two quartiles—and 200 percent higher than those in the bottom quartile.
"Company culture" can be defined as a collection of shared employee habits and beliefs—it's how people do things and why they do them that way. Human capital is one of the most important factors in establishing corporate culture. That means CHROs can and should play a key role in building high-performance cultures—and they should start by looking at new employee onboarding.
Onboarding is where new employees learn the company's culture, and they'll carry these lessons into their roles. By designing effective onboarding programs that reinforce the right values and practices, CHROs can help create and maintain strong company cultures.
The Benefits of Best-in-Class Onboarding—and the Downsides of a Subpar Process
Best-in-class onboarding has a host of proven benefits.
- Increased retention: A Click Boarding study found employees are 58 percent more likely to stay with a company for three years if they have a structured onboarding experience.
- Increased productivity: The same study found new hires are 50 percent more productive when they go through standardized onboarding.
- Higher employee engagement: A Gallup report found employees who had a great onboarding experience are 2.6 times more likely to be "extremely satisfied" at work.
- Shorter time-to-productivity: Effective onboarding can shave months off a new hire's time-to-productivity, according to a SHRM Foundation guide.
On the flip side, subpar onboarding can lead to problems. Employees need onboarding to properly acclimate to their new work environment. This process is critical for retention because 91 percent of new hires say they will quit a new job in the first month if it doesn't align with their expectations.
How Does a Strong Onboarding Program Drive Culture?
Best-in-class onboarding programs include the following features:
- A long-term, structured journey.
- Alignment between onboarding culture and company culture.
- Experiential learning.
- Team-specific experiences.
- Continuous refinement.
Let's take a closer look at each feature—and how CHROs can use them to support strong company cultures.
1. A Long-Term, Structured Journey
The most effective onboarding processes go beyond simple orientation. They are multi-stage formal journeys, typically lasting a year. The journey should have two key aims: giving new hires the basic tools and information they need to do their jobs and providing continuous support so that new hires can reach their full potential.
Culture is part of both of these objectives. New hires need to know the culture to navigate the company, and cultural engagement drives employee success. According to one study, employees who feel like they belong at work can see a 56 percent improvement in job performance.
Onboarding activities can vary, but here's a brief example of what might happen at each stage:
- Preboarding: The new hire receives a welcome video from the CEO and an e-mail with instructions and helpful tips for their first day.
- First day: An orientation session covers practical matters such as company policies and benefits. The new hire meets with their manager to discuss their role.
- First three months: The new hire is paired with a mentor who helps them adjust to their role and the culture and gets them involved in team activities. The new hire has regular check-ins with their manager.
- First six months: Mentorship transitions to a weekly or monthly check-in. Management check-ins also become less frequent but don't disappear.
- First year: The new hire and manager meet to review progress and create a career plan for the employee moving forward.
2. Cultural Alignment
The culture employees experience during onboarding should reflect the one they'll experience each day. According to Debi Chernak, CHRO at Intrado Life & Safety, based in Longmont, Colo., the key to cultural alignment is ensuring that the tone and delivery of the onboarding process match the company's culture.
"If we say that we are a company that values open communication and collaboration, and then we sit new hires by themselves in front of a computer for onboarding, we're not supporting our culture," Chernak says. "For a culture like that, you need a live onboarding process, with welcome gifts and employee introductions."
New hires should engage with executive leaders in some capacity, such as a meet-and-greet or welcome address. Leaders are responsible for shaping much of company culture, so having them act as a model for new hires can be particularly impactful.
Honesty is also vital. Companies may want to gloss over their challenges to present the best picture of themselves, but doing so could lead to cultural misalignment. New hires may grow disillusioned when onboarding ends and reality sets in.
3. Experiential Learning
It's easy to default to documents and slide decks, but employees are more engaged when they learn about the company through experiences.
At Intrado, for example, there's a heavy emphasis on live onboarding events that bring in participants from across the organization.
"We involve executives, we involve managers and we keep the sessions open to everyone in the company," Chernak says. "Anyone who wants to sit in on a session is welcome to, whether they want a refresher or to meet the new employees." These events often mix celebrations of company and employee milestones with practical onboarding activities like live IT tutorials.
Distributed teams might find live events impractical, but Bickle recommends using new technology like virtual reality to mimic the experience. Bickle also suggests prioritizing interactive, ongoing communication over one-way, one-time information dumps.
"At one company, we had a special Slack channel for everyone that had joined in a given quarter," Bickle says. "There was one person whose role was to post questions daily like, 'Have you found this? Do you know how to navigate to this?' It created a kind of cohort experience for us. It gave us a chance to ask questions and get feedback, and it made everything more approachable."
The company also used these touchpoints to keep new hires updated on activities around the campus, so employees were always aware of the live learning and development opportunities they could join.
4. Team-Specific Experiences
As important as company culture is, every team also has its own cultural nuances. The onboarding process needs to help new hires acclimate to both the broader organization and their teams' habits. HR can be a resource here, helping each team create an individualized onboarding experience that still reflects the wider company culture.
"Responsibility for team onboarding should largely reside with the team—but with input from HR," Chernak says. "HR knows the overall systems and overall best practices, so they can make sure there is some consistency across the organization. If one team has a three-month onboarding system and another has a three-week one, that may be too much of a disconnect."
Managers are an essential part of team-level onboarding because of their role in employee engagement. According to one study, they account for 70 percent of the variance in engagement across teams. Managers can act as new hires' mentors, helping them plan their career paths and access the resources they need to reach their goals in onboarding and beyond. For this reason, CHROs should keep a pulse check on how managers across teams are handling their onboarding.
5. Continuous Refinement
Best-in-class onboarding is not static. CHROs should continuously refine it by tracking key metrics. Quantitative metrics, like average time-to-productivity and new hire turnover, are important, but qualitative measures can often be more helpful when it comes to cultural matters.
"There's a tremendous opportunity to do some employee listening," Bickle says. "Send a survey to new hires after onboarding and ask them to reflect on what it has felt like to join the organization. Ask about what aligned, any disconnects and any questions they still have about the culture."
Bickle recommends that CHROs review this data at least twice a year. She also suggests that CHROs periodically sit in on the onboarding process to experience it firsthand.
Onboarding Through a Culture Change
Cultural change is a matter of introducing new habits to employees, and onboarding is a natural avenue for cultivating those habits. But cultural change can lead to cultural misalignment, where new hires learn a different culture from the one current employees have experienced. How can CHROs avoid that problem?
"It all comes down to storytelling," says Megan Bickle, global head of culture, employee engagement and employee listening at Western Digital, headquartered in San Jose, Calif. "You have to pay homage to where the company was and set the stage for where it's going."
That might mean telling new hires about the values you set in the past, introducing them to the values you're setting for the future and explaining the thought process behind the change.
"In general, helping new employees connect to the history of the company is important," Bickle says. "You should share the journey you've been on because the journey is continuous. Culture is constantly evolving."
Addressing Common Causes of Weak Onboarding
Creating a best-in-class onboarding process isn't easy, but it's not as hard as many organizations might think. Here are three of the most common reasons onboarding processes fall short—and how to fix them.
1. Limited resources: Many organizations feel they don't have the time, money or personnel to spare for a yearlong onboarding process. The truth is that onboarding doesn't require much after the first month or so.
"I know everyone is insanely busy, but all it takes is a 30-minute meeting once a quarter," Bickle says. "If the CHRO meets with every new employee once a quarter, that sends a powerful message. And it's an amazing opportunity to ask about what's going well, get some fresh eyes on the company and culture, and offer support."
2. Lack of leadership support: In some organizations, leadership feels that the resources invested in onboarding could be better used elsewhere. But onboarding can have an excellent return on investment if done right.
For example, a poor onboarding experience leads to higher employee turnover, which in turn leads to higher recruiting costs. Investments in onboarding can save the company money.
"If the CHRO is struggling to get investment from the executive team to make the onboarding experience more modern, go back to the data," Bickle says. "You just spent how much money to recruit this great talent, and now you're losing it?"
3. Pressure to perform: When teams are stretched thin and in desperate need of new talent, they may be tempted to skip comprehensive onboarding so new employees can get right to work. In reality, new hires tend to reach their full potential faster if they go through formal onboarding, whereas throwing them into the deep end sets them up for failure.
An insufficiently onboarded new hire could tax the existing team even further because seasoned employees may have to take time out of their already overburdened schedules to fix the new hire's mistakes. Far from a luxury, setting aside time for onboarding positions the new hire to give the team the support they need.
How Better Onboarding Helped Microsoft Boost New Hire Retention, Collaboration and More
In the late 2010s, Microsoft took a step back to re-evaluate and revamp its onboarding process. By digging into the data it had collected, Microsoft was able to pinpoint two key interventions that improved onboarding outcomes: ensuring each new hire met with their manager at least once in the first week and assigning an "onboarding buddy" for each new hire.
These seemingly small tweaks had powerful benefits. New hires who met with their managers scored 8 percent higher on Microsoft's intent-to-stay measures, reported a stronger sense of belonging, and spent triple the time on collaborative work with their teammates.
New hires who were paired with buddies were 36 percent more satisfied at work, and 56 percent of new hires who met with their buddies at least once reported they reached full productivity more quickly. The more often new hires met with their buddies, the more likely they were to get up to speed faster: 97 percent of new hires who met with their buddies more than eight times in the first 90 days said they reached productivity faster.
Onboarding Sets the Tone
Effective onboarding can reduce turnover, increase productivity and drive engagement. Perhaps most importantly, onboarding is how a company sets the cultural tone for new hires. Those first few days, weeks and months on the job shape the habits and values employees will carry through their tenure.
Bickle likens onboarding to greeting guests at a dinner party.
"Imagine we have this beautiful home and we're hosting a dinner party," Bickle says. "With ineffective onboarding, it's like we're inviting people into our home and leaving them to fend for themselves: They don't know if they should keep their shoes on. They don't know where the bathroom is."
On the other hand, effective onboarding invites people to sit down and make themselves at home. That sets the tone for everyone, regardless of how long they've worked for the company, to work together effectively
"A company spends all this time and money wooing a candidate, convincing them to join," Bickle says. "Don't kill their excitement on day one."