Onboarding (organizational socialization) is the process that includes interviewing, hiring, orienting, successfully incorporating new employees into a company and supporting them in their career development. Unlike payroll processing, group benefit administration, training and recruitment, onboarding is one of the few HR services that cannot be successfully outsourced. Onboarding is a critical hands-on and in-house responsibility. Onboarding is about setting up the employee AND the business for success. It is essential that it become a key component of any company’s culture.
Onboarding is not only a talent initiative, it is a business initiative. These programs are not limited to just new recruits. Onboarding has become an additional pivot piece in the Retention Process and overall Talent Development Strategy. It includes a process for providing a range of integrated, well-planned, and highly tailored support for both external new hires and internally promoted employees. Employees are given the opportunity to refresh their knowledge and skills and re-immerse themselves in the culture thereby promoting consistently high productivity and engagement levels. Unlike the traditional one-time “orientation” session, “onboarding” is a much longer-term process that ensures greater success in supporting and guiding new staff to full productivity and successful integration.
ONBOARDING is NOT ORIENTATION
• Support structures
• Conducted by administrative and operational staff
• “Lay of the land”
• Accelerates ability to perform and contribute
• Performance objectives
• Senior level staff and coaches
• Internal networks
• Transition competencies
Onboarding encapsulates each organization’s unique culture. The quicker a new recruit fits in and understands their role, the quicker they can start working and adding real value to the business. Impactful onboarding strategies alleviate new employee anxiety and provide the tools needed to understand the role while the performance expectations are being set. There is a strong correlation between all employees’ sense of unity and performance.
Today we are dealing with the most multi-generational workforce in history, with 70% of organizations still hiring baby boomers, in addition to Gen X and Y employees. Although onboarding is a powerful way of quickly absorbing employees into the business, it is not confined to knowledge and skills development. It’s a holistic process where the employee is immersed in the business’s vision, mission, strategy and values – often even before they arrive for their first day of work.
The Aberdeen Group, a well-respected Human Capital Management company, published Onboarding 2012: The Business of First Impressions. This report indicates that the vast majority of Best-in-Class organizations have effective and consistent onboarding programs. One of the key findings in the report was that 77% of employees hired in the last year met their first performance milestones due to diligent onboarding practices. On the other end of the spectrum, ‘laggard’ organizations (poor or non-existent onboarding strategies) saw only 41% of new employees meeting their first performance milestones on time. Additionally, the same research concluded that Best-in-Class organizations retained 86% of their first year employees compared to the laggards that were able to retain only 56% of their first-year employees.
The results in a second recent survey indicated that in companies that do not use a formal onboarding practices:
- Almost 30% of companies reported that it takes a year or longer for a new employee to reach full productivity
- 25% of companies said their onboarding program did not include any kind of training
- 60% of companies indicated they don’t set any milestones or goals for new hires
It only seems logical that one of the first ways to solve the “attracting and retaining talent” challenge is to focus on the onboarding process. If you’re wondering where to start, here are a few suggestions:
- Know how long it takes for an employee to become productive. The purpose of onboarding is to give employees the information they need, when they need it and get them up to full capacity as quickly as possible.
- Find out why people are leaving the company via exit interviews. Not just why an employee left but what caused them to go looking in the first place. And don’t just file away the information; use it to create change!
- Ask employees what they like about working for the organization. These are the things you want to make sure new hires to know and understand.
There is such a strong case for onboarding programs that it is critical that the Executive Leadership be included. Obviously it would be great if there was an unlimited budget devoted to onboarding but we all know that’s not realistic. Although the execution of onboarding is not 100% the responsibility of the HR department, it is the HR team that creates the policy, monitors the implementation and ultimately has ownership of the Employee Services Budget. Since the HR Department often reports into a financial decision maker, it is HR’s responsibility to secure the support for onboarding and employee retention services. Tracking the “metrics” of will help them successfully achieve this initiative.
- What is the cost to replace/hire a new employee?
- What are the savings when a new employee ramps up and adds value to the business more quickly?
- What is the average length of employment for new hires?
- What is the real cost of an employee resignation?
Bottom line: Today organizations strive to identify business improvements that generate real value and results. As an element of an organizational talent management strategy, conducting a well-designed, continuous and consistent onboarding process will have clear and significant benefits to the business by:
- Ensuring successful assimilation into the organization’s culture
- Hastening time to productivity
- Creating higher employee job satisfaction
- Reducing employee turnover and maximizing contributions
- Providing compliance – lowering processing costs and reducing process variances
- Delivering better service levels to Hiring Managers
- AND attracting more Top Performers to the organization
The competition for top talent is in full swing. On a daily basis companies are struggling to find the quality candidates they want to add and keep on their teams. It would be a shame to hire your next company rock star only to see them leave…or worse, stay and be unproductive. For your information, the online York University Onboarding Guide may provide more insight. Closing thoughts – Offboarding Is just as important as onboarding – but we’ll leave that for another blog…….
“No company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it.”
~Jack Welch, former Chairman and CEO of GE