How Does Onboarding Affect Your Company?

Onboarding is an essential part of new hire success, and yet many companies overlook it. The hiring process can be costly, and most businesses want new employees to be up and running as soon as possible. Onboarding doesn’t directly generate profits, which puts it on the backburner in the eyes of some business owners.

New Hire Onboarding vs. Orientation

All business owners should know what onboarding is and how it differentiates from orientation.

Orientation is usually a single event that formally introduces new hires to the company. You’ll likely discuss your mission statement, vision, goals, values, and culture. You may also go over any guidelines or rules and other company-wide details. This is usually conducted within the first few days or a week of starting employment.

It’s helpful because it gives your employee a better understanding of who you are, what you do, and what their role will be in the company.

Onboarding is more involved. It allows a new hire to get better acquainted with their team or department. It creates opportunities for managers or supervisors to check in with them. They may also be given starter projects to ease them into their role.

Orientation is a one-time introductory event. Onboarding is a plan to help new hires build connections with coworkers, set goals, and get comfortable with their day-to-day tasks. The recommended length of time for onboarding is at least three months. Some HR professionals suggest onboarding throughout the first year of employment.

Onboarding Increases Employee Retention

On average, companies lose 25% of new employees within the first year. Considering the amount of money and time spent hiring and training candidates, that can amount to a considerable financial loss. Up to 20% of turnover occurs during the first 45 days.

Retention can be a problem at all levels within the company. Approximately half of all external senior-level hires fail within the first 18 months.

The price of hiring an employee will vary based on industry, company size, job role, and other factors. The cost to replace an average employee can range from $3,000 to $18,000.

Businesses with at least a standard onboarding process see 54% more new hire productivity.

Employees at companies with the longest onboarding programs reach full proficiency 34% faster than those with shorter programs. And 77% of new employees who reach their first performance milestone went through formal onboarding training.

High retention rates save businesses money and keep morale high. Seasoned employees add value because of their experience. They can fix more issues and help the operation run smoothly. Fewer problems mean that you are less likely to lose customers or profits.

Finances Online has some great onboarding statistics on their website as well.

Onboarding Raises Employee Satisfaction

Onboarding programs have an impact on the overall workforce. Employees who are given all the tools they need to be successful are more likely to stay. In fact, when your staff feels that they are learning and growing within your organization, you will be less likely to lose as much as 60% of your workforce over the next four years.

Workers also identify the importance of a good onboarding system.

Around 70% of employees say that having friends at work is crucial to their happiness with their job. And 50% of those with a best friend at work reported feeling a strong connection with the company.

A lack of camaraderie can hurt productivity. Around 58% of men and 74% of women stated that they would refuse to take a higher paying job if it meant that they would not get along with their coworkers.

You can’t force friendships, but you can create opportunities to build them through an onboarding program.

Onboarding Automation Allows for More Connections

Many LMS platforms include onboarding tools that automate tasks. This frees up time for managers and supervisors. Instead of wasting hours on basic activities like benefits enrollment and employee forms, managers can use that time to interact with new hires.

Being present is the first step to building a good working relationship. It also makes new employees feel valued because it shows that the managers care and are available to support them.

How Do You Onboard New Hires?

If you already have an onboarding program in place, now is a good time to re-evaluate your process. Around 60% of companies indicated that they do not set milestones or goals for new hires. This is a big missed opportunity and should be a part of onboarding.

Approximately 30% of organizations use passive onboarding, which usually involves a checklist of unrelated tasks and little else. Around 20% use proactive onboarding which includes a more strategic approach with the help of human resources.

A total of 50% of companies use high potential onboarding. This means that some connection and culture mechanisms are in place, but they do yet have a systemic method.

There’s always room for improvement, which is why 49% of companies are currently working to update their onboarding programs. A successful process should include:

  • Clearly defined expectations and objectives introduced on the first day
  • Regular HR check-ins to make sure the new hire is thriving
  • Information shared at a reasonable rate to avoid overwhelming employees
  • A mentor or buddy system to give new hires someone to help support them
  • All necessary training that may change over time based on employee skill and need
  • Social elements like chat, wellness activities, and groups to encourage connections

A great onboarding program can have a profound impact on your company’s long-term success. Employees working at companies with a solid process in place are 69% more likely to stay there for at least three years.

Onboarding features are common among today’s LMS platforms. Visit LMS.org to read reviews and find a learning management system that can support your onboarding program.