The TRUE Cost Of Employee Onboarding
Do you understand how much employee onboarding really costs?
Let's start with some cold, hard facts:
- The average cost-per-hire in the UK is £3,000
- When making a decision on where to apply for a job, 84% of employees/job seekers say the reputation of a company as an employer of choice is important.
- 93% of employees/job seekers say it is important to be thoughtful and informed about all aspects of a company (e.g. culture, values, mission, business model, future plans, pros and cons about the workplace) prior to accepting a job offer.
- When it comes to completing the application process for your open job, 35% of employees/job seekers said one of the most important factors to them is the company culture.
- The average overall employee turnover rate in the UK is 19%
- It costs employers, on average, 33% of a worker’s annual salary to hire a replacement if that worker leaves.
First impressions last. When companies fail to standardise their onboarding process and socialise new hires in the company culture, performance, retention and engagement suffer. Organisations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. Companies with weak onboarding programs lose the confidence of their candidates and are more likely to lose these individuals in the first year.
The best onboarding programs:
• Utilise tools and technology that enable new hires to succeed. The most effective programs leverage advanced learning tools to enable success on-demand rather than relying solely on classroom learning. These companies are 300% more satisfied than their lower-performing peers with the technology they’re using to support their onboarding programs, which correlates with significant gains achieved in time-to-proficiency and new hire retention.
• Emphasize assimilation. In order to ensure swift and lasting assimilation of new hires, two in three high-performance programs include formal mentorship and coaching in their onboarding.
• Foster new-hire socialisation. The most effective onboarding programs understand the power of connections. 33% of high-performance onboarding programs build social networking into new hire onboarding.
Lack of data
As recruitment becomes more complex, organisations need data to make decisions around talent. Data can provide some objectivity and should be available at every stage of the recruitment process, including data on the sources they are leveraging, and data on performance and data on the interview process. Unfortunately, many organisations are unclear where they can find this data and how they should interpret it, which can often lead to a bad hire. This goes back to not having consistent strategies, processes, and procedures for all aspects of the hiring process. Organisations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. Companies with weak onboarding programs lose the confidence of their candidates and are more likely to lose these individuals in the first year.
To avoid making bad hires, companies should understand what mistakes they might be making and rethink the strategies and technology options that they have in place. They must take steps to guard against a bad hire during every phase of talent acquisition, not just once a candidate is on board.
58% of organisations say their onboarding program is focused on processes and paperwork
Gallup found that only 12% of employees strongly agree their organisation does a great job of onboarding new employees. That means 88% don't believe their organisations do a great job of onboarding, and that leaves a lot of room for improvement!
It’s no surprise that only 12% of employees think their organisation does a great job onboarding when HCI found that more than half of organisations focus their employee onboarding on processes and paperwork. Furthermore, one-third said their onboarding program was informal, inconsistent, or reactive.
The best employee onboarding programs are structured and strategic, rather than administrative, with a focus on people, not paperwork.
Most companies only focus on one week of onboarding
HCI states that most organisations stop their onboarding process after the first week, leaving new hires feeling confused, discouraged, and lacking resources. Again, it’s no surprise organisations aren’t doing a great job with onboarding when all activities are completed so quickly. A week is hardly enough time for a new hire to become acclimated to their company, culture, and role. The best employee onboarding programs extend throughout the employee’s first 90 days—and may even extend out for a full year—to ensure new hires are fully supported as they ramp-up to full productivity.
A negative onboarding experience results in new hires being twice as likely to look for other opportunities
According to Digitate, employees who had a negative onboarding experience are twice as likely to look for other career opportunities in the future.
With a negative new hire onboarding experience, your new hire could walk out and effectively double your cost and time to hire. Once you take into account the cost of vacancy lost productivity, and the impact on morale, losing an employee so soon after they’ve been hired is actually much worse than it appears on the surface.
The average new hire onboarding experience consists of 54 activities
Sapling reported that new hires typically have over 50 activities that need to be completed during their onboarding period.
The average new employee will be assigned 3 documents to sign, upload, or acknowledge, and 41 administrative tasks to complete, such as desk set-up. They will also have 10 outcomes, which are achieved learning goals around the company culture, market knowledge, and role alignment. This variety of activities ensure the new hire is fully acclimated and integrated into their new role.
So how do we mitigate the risk?
If you’re struggling to nail your onboarding experience then get in touch with us and we’ll work with you to create a bespoke experience for your brand new employees that will blow them away!
Sapling HR and HCI
The True Cost of a Bad Hire ©2015 Brandon Hall Group.