Imagine that you get a new phone, the best way to begin the new version would start with the beginner’s guide. Of course, you will get to know how it works when you spend more time with it, a quick start will always be helpful to maximize the functions and shorten the time. Similarly, a new job journey will be easier for both employees and employers when the beginner’s guide is introduced at the right time, that refers to “on boarding”. Now let’s explore this concept of onboarding.
What is onboarding in Human Resources?
“On boarding” is a program, launched by Human Resource department and targeting at new employees. This approach of on boarding allows new employees feel of being at ease like current employees. More specifically, that means understanding every aspect of the position, assimilating with colleagues, emerging in the company’s culture, and generating the sense of belonging and being valued.
Why is onboarding important?
A successful onboarding program starts with developing an onboarding mindset throughout the entire company, not just in the HR department. Well-designed onboarding will cultivate unwavering employee productivity and stable retention rates.
In the perspective of productivity, on boarding program helps in three ways:
- New employees are trained and integrated into the tasks more quickly and this contributes to the business performance more efficiently;
- The existing employees’ productivity is increased since the new hires compensate the loss productivity in a short time;
- New hires perform higher engagement before the work day by the on-board program involvement and extended after the first day of work by helping them to integrate quickly. This directly boosts employee retention level.
One study found that companies with a formal onboarding program retain over 90% of new employees as compared to just 30% at organizations without a formal onboarding program.
The higher retention rate brought by the on boarding program can be showed financially as well, which turns to the ROI of onboarding program.
The investment part is addressed by the license costs of onboarding program.
For the return part, they decompose it into two parts:
- One is the productivity of new employees: the loss of productivity when there is no on boarding program is regarded versus the gains when there are programs.
- The other part comes from avoiding unnecessary hiring cost with the higher retention of employees.
- Shortly: ROI = Lost productivity × total revenue + higher retention rate[1] × average hiring cost[2] × numbers of new employees/ yearly license cost of on boarding program
This method of ROI calculation is provided by TALMUNDO one of the leading companies in onboarding programs.
How to successfully on board?
Four elements lead to success: compliance, clarification, culture and connection.
- Compliance: from setting up direct deposit and benefits to creating logins for email and other company tools needed for the job.
- Clarification: clarify performance expectations and responsibilities both for the new hire and for his/her manager and team members.
- Culture: teaching employees the spoken and unspoken “rules of the game” at your organization.
- Connection: Carrying on team building activities for all employees to help new hires feel like a part of the family. These four elements should be presented in an entire on boarding program approach. Let’s take a glance at how it works:
The onboarding process will continue in the future months until new employees are assessed to be fully adaptive to the new company. A good onboarding program wins the hearts of new employees and this directly leads to better working performance and higher retention rate. And you invest in future employee ambassadors through onboarding!
Pierre MAURIN Partner ALHAMBRA International
Tiantian XIONG Consultant ALHAMBRA International
SKILFI Employee Experience Solutions
[1] Consider that without on boarding program, nearly 4% of new employees leave their new jobs after a terrible first day, and 33% decide to leave after the first 30 days.
[2] Average hiring cost for one employee is from €2800 and €17,000, including posting jobs, reviewing applicants, pre-screening candidates, interviewing, and the investment you will make in job listing services, software, and other recruiting tools.