Onboarding: The Cost of Doing Nothing
If your company doesn’t have an onboarding process in place, you could be losing thousands of dollars every year. A report from Australian software company Cornerstone shows that “80% of Best-in-Class organisations—those with the highest profits and returns—begin onboarding new hires before day one.” These companies understand how to create a well-rounded staff by implementing smart training and ongoing support.
Employee Onboarding vs. Orientation
Standard orientations provide new hires with the bare bones of what they need to know to do their jobs. Most new hire orientation is typically spent filling out paperwork and sitting through canned presentations about the company history and the basics of the new position. Employees come away with only a vague notion of how their jobs contribute to the organisation.
A productive onboarding process should go deeper with customised programs that immerse employees in the nuts and bolts of their work. Companies should explain to employees how their job contributes to the overall goals company and how they can be a contributor to the company culture. Support should be easily accessible for skill development and social engagement throughout the company.
Increase Employee Retention Rates
Companies that take the time to create these programs foster:
- Greater job satisfaction
- Lower stress levels
- Increased commitment
- Better performers
These perks likely stem from the fact that going beyond standard orientation helps employees understand why their jobs are important. Without this connection, turnover rates skyrocket and profits plunge. Josh Bersin of Bersin by Deloitte notes that turnover in certain industries may be as high as 30 to 40 percent and adds that “studies show that the total cost of losing an employee can range from tens of thousands of dollars to [two times their] annual salary.”
Ignoring the Onboarding Process?
Despite the potential to improve productivity and retention, some companies shy away from implementing training programs due to the initial cost. Studies have found that “spending just $800 per employee can make a big difference in engagement, retention, and profits.” When compared to the long-term benefits, this relatively small investment more than pays for itself. The same report shows that companies without a good onboarding process see a performance reduction of 50%.
This significant difference in profits, performance and happiness stems from a very easily corrected lack of initial connectivity and education. Unhappy employees create a poor working environment, and discontentment undermines a company’s ability to maintain the strong, cohesive culture necessary for growth.
Creating an Effective Program
Beginning the process of employee onboarding as early as possible lays a firm foundation for individual and collective success. According to the Australian Institute of Management, companies need to focus on:
- Explaining core values
- Making employee productivity information available to hiring managers
- Welcoming new hires into the company culture
- Providing opportunities for learning and development
Failure to include these elements in initial employee training increases the odds that new recruits will leave within the first three months.
The onboarding tool from Cornerstone gives you a solid platform for creating an employee management program that engages new hires as they become acclimated to the work environment of your company. Use this onboarding software to manage forms, set up training, assign tasks and connect new employees with the rest of the organisation. With Cornerstone, your business should see greater productivity and retention and enjoy a stronger company culture that supports success.