What’s the Real Value of a Great Employee Onboarding Program?
What’s it worth to your organization to have well-trained, productive employees who love their jobs, stay in them longer and are more likely to mentor future employees?
The answer is: a lot!
The onboarding process guides new hires from Day 1 to job productivity. The process encompasses learning the knowledge, skills and behaviors (KSB) required for the role and putting them into action. During new hire training, your newbies learn how to become productive team members and begin investing emotionally in their jobs, the company and their colleagues.
So, what’s the real value of a great employee onboarding program? Here’s a good starting point:
- Retention: Sixty-nine percent of employees will likely stay for at least three years.
- Productivity: New hires become proficient four months faster.
- Growth: A five-percent increase in employee engagement is linked to a three-percent increase in revenue.
Reduced Employee Turnover
SHRM reports that turnover costs represent more than 12 percent of pre-tax income for average companies and up to 40 percent for companies with the highest turnover rates. Replacing an employee costs up to 60 percent of his or her annual salary, while total job turnover costs can be 90 to 200 percent of annual salary. Expenses add up—fast! Churn is costly, and it’s a cost you incur over and over again. (Here’s a turnover calculator if you’re curious how much employee turnover costs your organization.)
A well-planned onboarding program doubles as a great retention management strategy. Retaining top talent enhances organizational morale and productivity. Top producers possess accumulated knowledge and are valued contributors; you want them to stick around!
According to O.C. Tanner, when provided with a great onboarding experience, 69 percent of employees are more likely to stay with a company for at least three years. In addition, Chanin Balance wrote for Training Industry that retention rates increase by 25 to 60 percent when onboarding involves e-learning, compared with 8-percent to 10-percent retention rates for traditional training methods.
Faster Speed to Competency
In an interview with Recruiter.co.uk, Ian Creamer, vice president of human resources for Informatica, noted, “If we can reduce the time it takes to get sales people effective by three to six months, this could mean half a million or a million dollars’ worth of revenue coming into the business earlier.”
That makes speed to competency even more urgent. The longer a position is vacant, or the longer a new employee is unproductive, the more money flies out the door. Getting employees up to speed faster halts your job vacancy revenue bleed.
Good news: According to O.C. Tanner, “New hires in companies with longer onboarding programs report being more proficient in their roles four months sooner than in companies with short onboarding programs.” Four months of additional productivity per new hire adds up!
A longer, more comprehensive onboarding program incorporates various modalities that help information stick, including e-learning, instructor-led training, interactive workbooks, videos and animations.
Higher Employee Engagement
Employee engagement is the gateway to increased retention, job satisfaction and higher productivity. These factors intermingle, leading to success. Aon’s 2015 Trends in Global Employee Engagement Report links a five-percent increase in employee engagement to a three-percent increase in revenue growth the following year.
How do you measure employee engagement? It can be convoluted, but there’s an elegant solution. Aon’s 2016 report presents a model for employee engagement measurement called Say, Stay, Strive. Employees are asked if they:
- Say positive things about their organization
- Intend to stay in their jobs for the foreseeable future
- Strive to add value and help the organization succeed
What’s the most important onboarding factor that enhances employee engagement? Culture, culture, culture. By incorporating your unique culture into onboarding training, you will help new hires absorb that culture while learning the KSBs that make them productive. This comprehensive approach represents the main difference between off-the-shelf training and training created specifically for your organization and its critical roles. Custom training provides an efficient solution that engages employees while increasing speed to competency.
Ready to Get Started?
Well-onboarded new hires become a new breed of employees who are engaged, competent and confident. They form leadership strata in the team. Well-trained, more engaged employees positively impact the organization: You can’t grow a team if employees are not confident and competent. But when they are, you almost can’t stop it from thriving.
The better someone is onboarded, the more likely they are to be a champion of the organization who advocates and spreads value. It’s an intangible piece of the organizational pie: emotional connection, engagement and inspiration to improve—soft skills that make people excited to come to work every day.
Now you know what’s at stake. Ask yourself: Are you satisfied with your current onboarding program, or are you ready to take it to the next level to amp-up employee retention, productivity and engagement?
Dave Romero is a co-founder and the chief product officer at Unboxed Technology. With over 20 years of senior-level training and sales experience, Dave drives Unboxed’s custom training and sales enablement teams to create innovative ways to train employees and sell to customers.