During onboarding, employers train new employees for several months to familiarize them with the company and their roles. Although this process takes a while, why is it important?
Why is the onboarding process important?
Onboarding is important because it acclimates employees to their role, the company’s philosophies, and what the company has to offer. It also engages employees, creating workers that are committed to the company’s success and helps retain new hires by making them feel like a member of the team.
According to a survey conducted by Careerbuilder and Silkroad Technology (nine percent,) or 1 in 10 have left a company because of a poor onboarding experience, and 37% percent of employees said their manager did not play a critical role in their onboarding experience support.
Without proper onboarding procedures increases in employee turnover and loss of productivity occur. This decreased employee engagement costs companies large sums of money every year.
When employees are engaged 87% of them are less likely to leave their company. Meaning they are 5 five times less likely to leave compared to unengaged employees.
When a company has great onboarding 69% of employees are likely to stay for at least 3 years.
This article will delve into onboarding, how it differs from orientation, and why onboarding new hires is essential for the success of a company.
What Is Onboarding?
Onboarding is when a business provides new employees with training and information to help them get acclimated to their new position. This helps them to quickly understand their role, their employer’s expectations, and the company’s culture.
If you’d like to learn more about onboarding and what it entails, watch the video below by Gregg Learning. In the video, Gregg goes over all of the information your new hire should receive during the onboarding process:
Who Does Onboarding?
Onboarding is done by the employer, a member of the HR staff, or a supervisor. Sometimes all of these people will contribute to onboarding by introducing the new employee to different aspects of the company.
It is common for the new hire to be assigned a peer mentor during the onboarding process. This can ease the learning process for new hires by providing them with a sense of comfort in their new work environment.
Employers should pick a peer mentor who will have a positive influence on the new hire as well as someone who exemplifies the characteristics they want the newbie to exhibit.
How Is Onboarding Different From Orientation?
Employers will generally provide their new hires with a few details about their position and the workplace during orientation.
However, the primary purpose of new hire orientation is to get the start date, necessary paperwork, and other routine tasks out of the way, such as assigning the new hire a desk. Orientation is typically over within a few hours or a few days at most.
Employee Onboarding, on the other hand, is an extensive process that can last up to 12 months. During this time, new employees are provided with training, knowledge, and resources to succeed in their new position fostering better employee engagement, job satisfaction, and greater new hire retention.
It Allows New Hires to Become Acclimated
Having an onboarding program for new employees is crucial because it allows them to get a head start and become acclimated with the company. Acclimation goes above and beyond, merely pointing out where the bathrooms are or indicating where the new hire can heat-up their lunch.
Acclimation is when the employer provides the new employee with a comprehensive overview of the company’s goals and philosophies.
Specifically, the employer and employee can discuss how the new hire can contribute to the company’s goals within their role. Explaining what the company expects from new hires helps set them up for success and builds trust!
Acclimation also informs new hires about what the company can do for them. Whether the organization has exciting career development opportunities, monthly dinners, or a mentorship program, acclimation provides the employee with a chance to understand and appreciate what the company offers.
Therefore, successful onboarding provides new employees with the tools, they need to become successful and productive members leading to greater new hire productivity.
New hires are left in the dark without onboarding since they aren’t given the guidance, training, and knowledge they require to understand the employer’s expectations and the company’s work culture leading to potential employee turnover.
It Makes New Hires More Engaged With the Company
Once employees learn the company’s viewpoint and understand what it has to offer, they are more likely to become engaged.
Engaged employees are individuals who are committed to their organization and their role within it. These are the kinds of people who give 100% each day because they genuinely care about their company and want it to meet its organizational goals.
The onboarding experience is vital because it demonstrates that the company is dedicated to them, which, in turn, creates engaged employees with a strong connection to the company. Taking the time to train new employees and make them feel at home makes them more likely to feel committed which increases employee retention.
According to Gallup, there is a correlation between the number of engaged employees and a variety of outcomes. Companies with more engaged employees have better results than companies with fewer engaged employees. Some of the positive outcomes associated with having more engaged employees include:
- Higher profits
- Lower turnover rates
- Better safety records
- Higher product quality
- Better customer evaluations
- Employees are absent for fewer days.
So, having an onboarding plan helps create engaged employees who can improve the company’s productivity, company culture, and overall organizational success!
It Helps Employers Retain New Employees
Onboarding is also crucial because once the new hire is acclimated and engaged with the company, they are more likely to stick around. Retaining employees is vital because high-turnover is hard on a company and is also very expensive.
How much it will cost the company to hire someone new depends on the position.
According to a study by the Center for American Progress, it costs 16% of low-wage workers’ annual salary to hire someone to take their place. For example, if someone makes $10 per hour, it will cost about $3,328 to hire someone new.
For midrange positions, such as a manager, it costs 20% to find a replacement. So, if a person makes $40,000 per year, it will cost approximately $8000 to obtain a new hire.
It costs the most to replace upper-level management. If a CEO makes $100,000 per year, it would cost $213,000 to find a replacement. That’s a lot of lost profits!
You may be wondering, “Why does it cost so much to replace an employee?”
According to an article by SHRM, there are many direct and indirect costs associated with finding a replacement.
SHRM found that 67% of the money goes towards soft costs, which are indirect expenses associated with rehiring. Soft costs include the amount of productivity, knowledge, and time lost every time an employer has to find a new employee.
The remaining 33% of the money goes towards “hard costs,” which are direct expenses associated with finding a new employee. Some hard costs include recruiting potential candidates, performing background checks or drug tests, and hiring people for temporary work.
So, in other words, losing employees is extremely costly. Whenever a company has to find a replacement, they are losing all of the knowledge and productivity the old employee had to offer. The company also has to spend valuable time and money, trying to find a candidate to fill their position.
Importance of onboarding statistics
Onboarding employees substantially increases the likelihood that new employees will stick around. A research study by Glassdoor found that companies with an effective onboarding process improved their new hire retention rate by 82%.
A report by Gallup found that only 12% of organizations feel their company onboards well.
Sapling states the average new hire has over 50 activities to complete when onboarding
According to the onboarding study conducted by Kronos of 350 companies, longer onboarding programs are associated with stronger talent and business outcomes such as employee engagement, business reputation, quality hires, and the percentage of diverse hires.
57% of the respondents a Kronos study said over tasked managers and lack of time for onboarding was their greatest challenge for an effective onboarding process. The next at 47% was lack of consistent application across the company and 38% said a lack of tools for measuring ROI or effectiveness.
Why Onboarding Matters
Onboarding matters because it integrates new employees into a company. The new hires are provided with the knowledge, training, and support they need to become productive members of the team.
Onboarding also helps acclimate, engage, and retain employees. Acclimating employees familiarizes them with the company’s expectations as well as its resources.
Once new hires are acclimated with the company and their roles, they can become engaged. This is important because engaged employees are more productive and have a higher likelihood of sticking around since they care about performance goals want the company to succeed.
Retaining employees means less time and money has to be spent on rehiring and retraining.
So, the central message of this article is that you should always onboard new employees to ensure company success. You’ll be thankful if you did.
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