Best Practices in Onboarding and Employee Orientation Michael Moretti Sr. Staffing Analyst HR.com email@example.com Introduction Definition of Onboarding & Orientation Case Study Designing the Process Mechanics of the Process The Return on Investment Top Ten Objectives Summary & Wrap-up Q&A We will go through an introduction and a definition of onboarding and orientation. We will take a brief look at a case study on actual onboarding itself and designing the process, the mechanics of the process, the return on the investment, some of the objectives that you should consider when you are looking at an onboarding and orientation program as well as a summary and a wrap-up. So before we get started, looking through some research on onboarding and orientation, I found something that might be interesting. How many of you have been through an orientation or an internship or an introduction to a company that included this kind of a conversation – "You pay me for the privilege of working here." Not the kind of introduction you want to give a new employee. Especially in this day and age when they are being that much more discriminate about where they decide to work. In January 2003 a survey of 5643 workers conducted in the U.K. found that 4% of new hires had such a disastrous first day that they never went back. -Reed Executive Consider: How fast do your new employees become key contributors? Does your organization proactively build relationships with newly hired top talent? What distinction does your organization make between on boarding and orientation of new hires? We looked at a number of different surveys and studies. One interesting study that we found was done by Reed Executive back in 2003. Of 5,643 workers who were surveyed, 4% of new hires had such a disastrous first day that they never went back. For those of you who follow our Thought Leader Series, we recently had a conversation with Coleman Peterson, who used to be the Global VP of Human Resources for Wal-mart. When we started talking to Coleman about some of the orientation that they had put Wal-mart employees through, they found out that when people first come through the door, one of the first issues that they assess is what kind of environment people are looking to work in. They did a study when they realized that a large chunk of their turnover was actually due to the fact that 60% of the people who left in the first year left within the first 90 days, which speaks directly to an onboarding and orientation program. So, they set up an exercise where they gave each of their personnel managers a stack of yellow sticky notes and they were asked to write down each orientation function that they have introduced during the process. While they were doing this, they placed those sticky notes at which step during the orientation process they actually introduced this information to new hires. They found that the majority of the information that they were feeding new hires came at them in the first 90 days. Within that, 95% was in the first week, so if you can imagine the information overload within the first week of working at a place like Wal-mart, it would certainly turn people off an employment situation. They realized that they had to spread out the orientation and onboarding program over a period of weeks, and follow up with an orientation program that led them over a course of a couple of months. They dramatically reduced the amount of turnover within the first 90 days. In many instances that exercise was very much credited with allowing Wal-mart to grow to the point where they are now, where they can actually keep their new associates on board for longer than the 90-day period. In fact, they have a lesser number in actual turnover, so when we speak about volume of people who leave within the first 90 days, Wal-mart is a great example of the kind of information that can get loaded on to somebody in the first week. Consider how fast your new employees become contributors. How does your organization proactively build relationships with newly hired top talent? If you are dumping information on their lap within the first week and then basically ignoring them for the rest of the first three months that they are there, what kind of impression does that leave? What distinction does your organization make between onboarding and orientation of new hires? Is there a differentiation in your environment? Definition of Onboarding Onboarding is the process that starts with the first contact of a potential new hire - building and establishing engagement earlier in the employment stage and continuing after the traditional orientation program ends. When we talk about actual onboarding, we are talking about the step right from the preoffer stage through to the offer stage, and we will look at that shortly. Definition of Orientation The Orientation program is a part of or one stage of the more comprehensive on boarding process. The is the stage designed to educate new hires about your company and more specifically about their job functions. These programs need to be consistently applied to all new employees and are usually spread out over a number of days. There are actually programs in place that need to be consistently applied to all new employees and they are usually spread out over a number of days, over the course of three months with follow-up and so on. It is important to make sure that that kind of information is disseminated over a period of time and not just lumped on people’s desks as they start with the new company. In other words, we do not want a situation like the one we see in the graphic here. New Peon Orientation, hardly the right title. My boss is great. My boss is great. My boss is great. Not necessarily the kind of message that you want to send to new employees in their first couple of days or first couple of weeks. Case Study 150,000 employees 35,000 hires HR discovered the attrition problem could actually be traced to employees' very first days on the job. The result was a renewed respect for the orientation program that ultimately led to a vast overhaul of the organization's existing program and the development of new tools that would better equip managers to welcome new hires. Here’s a quick case study. This organization actually was in a pretty precarious situation. They had 150,000 employees, 35,000 hires. HR discovered the attrition problem could actually be traced to the employee’s very first few days. So, they actually developed a new respect for orientation program and it ultimately led to a vast overhaul of the organization’s existing program and a development of new tools that would better equip managers to welcome new hires. Strategy Task force dubbed Strategies and Tactics to Achieve Reduced Turnover (START). Task force consisted of 65 to 70 people ranging from directors to managers to hourly workers. Within the broader framework, START was divided into approximately a half-dozen subgroups, each charged with examining a different aspect of the employment experience, such as recruitment and hiring, training and development, pay and rewards, rewards and recognition, and orientation. As we look at the strategy here we can see that they actually developed a task force. They called it Strategies and Tactics to Achieve Reduced Turnover or START, for an acronym. The task force actually consisted of various groups of people from directors to managers to hourly workers right across the board and in various departments, so the task force was just that, people from across the organization that were able to input specific information about specific departments and their needs when it came to actually developing an orientation program. Within the broader framework they actually divided it into about six subgroups, each charged with examining a different aspect of the employment experience. When we talk about recruiting, hiring, training, development, pay, rewards, recognition and orientation, we talk about that from various angles within an organization whether it is production workers, salary workers, somebody in the marketing department, or accounting department. Each department has its own unique situation to deal with, so it is important that this task force be spread out over the organizations. If you are in a smaller company, with perhaps not as many employees, and you have a Marketing and Sales Department, Finance and so on, it is still important to have an individual from each one of those groups contribute to this kind of a program because we want to make sure that it is a unique program for each person, and not just one broad brushstroke for the entire new employee population because, again, there are specific needs for specific departments. Designing the Process Have you actually designed a process? The above graphic is a little hard to look at in any sort of great detail, but it gives you a sense about the top stages, the stages of onboarding in its entirety. Steps 1 through 5 look at the various aspects of the orientation program and the post orientation, but the first two stages are pre-offer. The actual extending of the offer itself is something that we will not look at here as we are examining the orientation and onboarding process. So after job description, performance matrix, contracts, policy and procedure hand books, videos and mission statements, the offer is accepted. From the start of the first day, people get things like a password, a desk and equipment and get introduced to their peers and mentors. They get details on parking, security issues, and the lay of the land as far as where different departments are. Once we start that process, we are talking about the orientation program. We will look at that right through to the actual evaluation process. Mechanics of the Process Stage One – “The Pre-Offer” Earliest stage in the onboarding process First impressions are being formed Make a positive and realistic impact on the employee’s understanding & expectations of the company Involve a variety of people in the interview phase Actively manage candidate’s expectations and communicate clearly Give candidates a realistic overview of their role As we look at the next step of the process here, we look at the mechanics of the process. Stage 1: The pre-offer: Is the earlier stage in the onboarding process and the first impressions are being formed here. Imagine, going through the process with somebody talking about a specific salary amount and actually getting to the point where you are starting to think about making an offer to this person. Making sure that those discussions are healthy and productive and not confrontational, obviously is very important, but also ensure that you are as informative as possible about every possible aspect of employment - whether it be compensation, the actual structure itself, benefits and so on. Those kinds of conversations are very important, especially in today’s marketplace where it is that much more competitive, and candidates are really taking their time to investigate and educate themselves on the companies that they plan on working for. It is not as simple as making someone an offer any more. Making a positive and realistic impact on the employee’s understanding and expectations of the company are so important. You certainly do not want to be in a situation where you over promise and under deliver because that could just as easily turn into that hire that does not show up within the first week. It’s important to make sure those conversations are very clear, concise and to the point. Involve a variety of different people in the interview phase to make sure that they understand who their peers are, who their direct supervisors are, who those supervisors reports to and how the infrastructure works within the organization. Make sure that they get a really good overview of the organization and all of the intricacies involved in working there. Managing expectations is just as simple as it sounds. If somebody is coming and expecting to work a 40-hour week, and you know for a fact that the minimum is a 44- to 48-hour week, have an in-depth conversation about why it is important to consider a 44-hour work week, and why your company is structured that way. People appreciate the honesty and do not become disillusioned within the first two weeks of working there. It is probably the biggest complaint of people who leave employment after the first week or two - they were oversold on a position. Give candidates a realistic overview of their role. If in fact they are going to be doing very menial, administrative tasks, explain that to them. If there is a possibility for the role to evolve past that, explain that to them as well, but do not leave them with expectations that really it is a minor part of the job, and that they can expect to be doing greater and bigger things. Eventually people are going to realize that they are stuck in the same situation that they thought they would be able to get out of after a week or two, and again, disillusionment with their expectation level is one of the biggest factors for people leaving that early. If we look at examples of specific documentations and subjects that should be addressed with the pre-employment package, look at things like equal opportunity employment standards, WSIB forms or any sort of other legal or benefit forms that may be pertinent to the position. Issues may include safety clothing, if there is a probationary period, union memberships, all sorts of contracts and perhaps initiations that they have to go through. Let them know if there is a news bulletin board that provides them with up-to-date information or what is going on in the organization or with their position. Job posting locations, if it is a retail environment, may provide an opportunity to work in three or four different stores within a region. Make sure that they are aware of that. Holidays and vacations is pretty much standard but again is often an issue that people cite as a reason for leaving because the information was miscommunicated. Let them know if there is any sort of training around safety or first aid that they have to go through. Discuss the attendance situation and proper reporting on attendance. In many instances people are not aware of exactly what they have to do when it comes time to actually reporting extra hours worked or projects that were worked on and so on. Important telephone numbers, internal and external, should be shared to make sure that they are able to communicate within the organizations effectively. Things like cafeteria, dining facilities, parking facilities, you can read through the list. It goes on and on and on. All of these things are very important parts of the process so that people understand exactly the kind of situation that they are getting involved in. This by no means is meant to be a completely comprehensive list, but it gives you an idea as to how detail oriented you should be when you are providing this level of information. Stage Two – “Extending the Offer” Provide detailed and relevant company information to candidate Customize the new employee package to the specific job family – should include information on benefits, insurance policies, practices, job description of the role and an employee handbook Provide a site tour to show where they will work and introduce them to their new colleagues Stage 2 is explaining the offer - providing detail and relevant company information to the candidate. You know if your company is about to go public, if your company is about to get de-listed, if the company is in some sort of a financial situation. They need a detailed explanation as to why the situation is the way it is as opposed to hearing it second hand. There is nothing worse than being told that the company is in great financial shape and then all of a sudden through the grapevine you hear that the company is losing money or is about to be sold. Be honest with people. They understand that the situation is the way it is. They can make an educated decision as to whether or not to start as opposed to going through the offer stage, having them show up for the first day or two never to be seen again. It actually ends up costing you more in the long run. New employee packages are also very important – and being able to customize new employee packages to specific job family, and by job family. Perhaps if you are pay grade or above, your benefits change because you are entitled to a better package. Whether or not that is the case with the organizations or not is something that somebody should know. All the little details are still vitally important to make sure that people get a sense as to what the culture is of the organization. Of course, job descriptions and the role of an employee should be clearly defined in a version of a handbook that is tailored to a specific role and a specific function. Also important is the site tour, so that they will understand where they are working within relation to other departments, or other people in the organizations, what their workstations may be like, and what their office environment may be like. They like to understand that there is a certain culture within the organization and a certain protocol that is involved in actually working in an environment and being able to interact with their colleagues. Some people are very much all about open door policies and being able to mingle and have a conversation at the water cooler. Some companies are very strict about those sorts of things and people need to know the kind of environment that they are stepping into. Again, make sure that nothing is left to chance, so that everybody understands exactly what they are stepping into. Stage Three – “The First Day” Take advantage of a new employee’s enthusiasm Ensure they leave at the end of the first day, week and month with the same level of enthusiasm DO NOT cram too much information into the first day Introduce the new employee into the company and their role e.g. plan an informal breakfast or lunch meeting to welcome the new candidate by existing staff Stage 3 is the first day. Take advantage of a new employee’s enthusiasm. They are never going to be any more excited about their new job than they are on the first day or so. Make sure that you take full advantage of all of that enthusiasm and participate in as many lively conversations with them as you can to make sure that they feel comfortable, and believe that this is in fact the right place for them to work. That sort of a relationship building process can carry you a long way, especially if there are issues that come up within the first week. Ensure that they leave at the end of the first day, week, and month with the same level of enthusiasm. Again, many people get dumped on within the first day or two or week or two weeks within the organizations and then basically get forgotten. You need to make sure that when we introduce people to a new organization that we keep the momentum going within the first 30 to 60 to 90 days. If they lose any of that enthusiasm, and start to sour on the situation they are in that is when turnover really starts to rapidly increase. Do not cram too much information into the first day, especially. There is nothing worse than having information overload and your head buzzing and not knowing which way is up by the time you are done your first day. The amount of retention that actually happens within the first day is limited to begin with because of the excitement involved in a new environment, so be sure that you spread that kind of information out over the course of a week or two instead of jamming it all into one session. You can also accomplish this if you are a one-person shop. Develop a multi-department team of people that can actually work on this process over the course of the first week or two, so that it is not all one person’s responsibility. If you have a number of people in a department who are responsible for this step in the process, you can take turns or build out a schedule so that you are alternating every other hire or every other day. This allows you to continually build on that enthusiasm that developed over the first day or so and maintain that over a month. Retention levels actually shoot up when you can get past that 30- to 60-day process of introducing somebody to a new employer. Introduce the new employee into the company and their role in a form of breakfast or a lunch meeting of some sort. This gives them a chance to meet a number of different people in the organization. Sometimes, the actual person responsible for the orientation may not click with them for whatever reason. Give them an opportunity to click with more than one person, so that they do not get turned off with the organization simply because they have been turned off by one person. employees to the better off you are. The more people that you can expose new Stage Four - “The Orientation Program” Structure a comprehensive tour Educate attendees about your company Provide a well designed series of learning modules Divide the orientation program into 2 sections: Organization - Everyone Elements of the job – Specific to the role Solidify organizational goals and familiarize new employees with company terms Stage 4 is the actual orientation program. Structure a comprehensive tour, and by this we do not just mean the lunch room and perhaps the office space, but whether there are other facilities, satellite offices, other locations, or whether it is a regional or global company. Give somebody the lay of the land so that they understand exactly the scope of the organization as a whole and not just the components. Educate the attendees about your company. Have a number of different people from a number of different departments educate them about the history of the company, the financial performance of the company, the marketing initiatives of the company - perhaps explaining a new product, or explain a new R&D development that is going to eventually bring your company into a new light within the verticals that they serve. Perhaps there is a new initiative by your organization that is about to be introduced to the market that is really going to change the way the company is perceived in the marketplace. Provide a well-designed series of learning modules. The orientation program is very important in two phases. The first one is based on the organization. The second one is really getting down into the nitty-gritty elements of the job. It is one thing to understand where somebody sits within an organization and how they contribute to the bottom line, but to really understand the overall responsibilities and not just basic understanding of their job description is very important. As they move through their learning curve, they find that there are obviously different aspects of the job. If they are made aware of the overall responsibilities, nothing comes as a surprise to them and they are ready for whatever comes their way. Really solidify organizational goals and familiarize new employees with company terms, so that there is no mistaking what certain terminology is. Unfortunately, we have evolved ourselves into an economy that lives in buzz words and every single company out there has a marketing department that has come up with a new way to describe the same thing over and over again. Sometimes the language can throw people off when you are really talking about widget, but you call it gadget, and it can be as simple as that. People need to understand your terminology, need to understand exactly what language you are using and sometimes it is just a matter of having a conversation in simple English about the actual terminology means, to have them familiarize themselves and feel comfortable with exactly how your company describes what you do best. Stage Four Continued - “The Orientation Program” – The Organization Comprehensive Tour might include: 1. Company Vision 2. Introduction to the Structure, Executive Team and Key Personnel 3. Company Approach to the Market 4. Client Success stories and project highlights 5. Marketplace trends 6. Human Resources policies, procedures 7. Training and Development 8. Functional Responsibilities As you move through the stage 4 orientation program, we also see that there are various other components that you can include in a comprehensive tour. One may be a discussion with the senior level management or senior management in the organization to discuss the company’s vision, where they are and where they are going - the introduction to the structure, the actual executive team, the key personnel, who reports to whom and how that all fits into how their responsibilities actually interact with each other. The company approach to the market. Very different companies have very different approaches to different marketplaces. McDonald’s and Burger King and various other companies may all sell the same sort of products, but all take very different approaches. Discuss how your company approaches the markets that you serve, why you serve the markets and why the messaging is the way it is. It’s very important for people to understand the overall culture and the vision of the company to be able to fit in properly. Client success stories and project highlights - if there are specific examples that you can provide to new employees on how perhaps other people in their current position or future position have actually contributed to the overall well-being of the organizations, it really gives them a chance to feel good about the opportunity that they are taking on and perhaps we will consider ways that they can also contribute in bigger and better ways to the organization. It is always important to make sure that they understand that the clients that you have are actually happy with the products or services that you are providing as well. It always gives people a great sense of accomplishment to know that their product and services are being appreciated and they are working for a company that is well regarded within the marketplace. Discuss trends. Perhaps there are trends that are going to affect the way that your company does business. Perhaps there is a change in the oil prices – that will affect how people view energy services that you are providing, as an example, or perhaps the change in gas prices has affected the pricing involved in the trucking service industry that you are in. Obviously, spending a lot of time on human resources policies and procedures is very important. Being able to give them a detailed overview of exactly how certain aspects of the employment process works within your organization is key. Discuss training and development and how your company approaches that. Whether or not it is an internal process, an external process, or a combination or blending approach to learning and training and development is important for people to understand. Perhaps the people prefer to be in a classroom situation when they are going through training. Others may actually prefer to be Web-based or online when they go through a training process. It is always important to make sure that they understand those expectations. Functional responsibilities - everybody likes to know that they have a very good handle on what their day-to-day responsibilities are, and that there is no miscommunication so that they are not stuck in a situation where they are assuming that somebody else is responsible for something that they actually should be taking responsibility for. Stage Four Continued - “The Orientation Program” – Specific to the Role Tour Modules might include: 1. Department responsibilities 2. Role responsibilities and accountabilities 3. Specific skills required – technologies, methodologies…etc. 4. Specific knowledge required 5. Career paths and opportunities We talked about an orientation program and how it is specific to the role. The actual tour that we’re talking about - the comprehensive tour - would also include departmental responsibilities. Which departments are responsible to which departments and within those departments, what are the role responsibilities and accountabilities? Are there dotted line responsibilities to departments other than the ones that they are reporting to? Are there specific skills required, technologies, or methodologies? If you work in the finance department, how do you build a table within an excel spreadsheet? How does a product get assembled on an assembly line at an automotive plant? Every single organization has its own specific technologies and methodologies to actually produce whatever product or services that they are responsible for. It is important for someone who has come from the automotive manufacturing environment to understand your company’s approach to manufacturing as opposed to the company they were at. There is a very big difference between the way Ford actually assembles a car and the way GM assemble a car and in the way Toyota assemble a car. So, if you are going from Ford to GM, it is important to understand the difference between the two company’s methodologies and how you actually build a car. That is an example of how you should never assume that because someone is coming into your company with specific industry knowledge that they necessarily understand all of your methodologies and technologies. So, really spending time on that is important in so many industries. In some instances, the biggest turn off for some people - and that is why they leave organizations - is because it is a very different process to what they are accustomed to. Any kind of specific knowledge that is required - whether there is specific formula or tabulation used to calculate a product that you are developing or whether it is the way that you actually ask somebody to push a broom in a warehouse – must be communicated to the new employee so they have a better understanding of exactly what is expected of them on a daily basis. Career paths and opportunities: If they are going to be stuck in a finance position, doing excel spreadsheets for the rest of their life may be what some people will be interested in doing. They may be looking for just that opportunity because that is the kind of approach they take to their work life. In some instances people may want to know that they can achieve something beyond what they are doing now within the next three months, six months, a year, two years, five years whatever the case may be, but making sure that those opportunities are very clearly communicated and understood is vital to make sure that a comprehensive tour is completed with the new employee. Stage Five – “Post Orientation” Onboarding process continues Clearly define and communicate the post-orientation stage Pay close attention to the new employee and provide ongoing care, concern and a sense of security Clearly monitor performance against role expectations Actively demonstrate commitment to the new hire Extend this stage until employee’s first year anniversary Post orientation is actually the continuation of the onboarding process - making sure that they understand exactly what is involved in this step of the process is important. Pay close attention to the new employee and provide ongoing care, concern, and sense of security. In many instances people may start to feel a little insecure because they may not have zeroed in or keyed in on exactly what they should be responsible for within the first day or two or week. They need to understand that you are not necessarily going to cut them loose because they have not figured out how to actually put a price tag on a product on a shelf in a department store. If that is not the case, make sure that they understand that. In many instances a lot of the reasons why people leave in the first few weeks or months of a position is because they feel that they are not being either adequately retrained or not getting what they need to perform and, for fear of being fired, would actually quit before the company has the opportunity to fire them. So make sure that they understand that you are not necessarily going to cut them loose if they are not figuring out how to pack a widget within the first week. Clearly monitor performance against role expectations. So, for every single position, you should have some level of expectations as to when their time to contribute should start really kicking in and being able to monitor their performance if you have certain expectations within the month. Do not just walk away and expect to go back in a month and do a performance appraisal and find that everything is not the way you might have expected. It is important to follow up after the first, second, third, and fourth week and so on to make sure people are progressing to a position of responsibility as opposed to being stuck in a situation. Make sure that you have extended the stage until the employee’s first year anniversary. Many people might find it surprising that you need to follow somebody long until their first year anniversary, but again, if you think about most situations where you are dealing with turnover in your organization, if they have not left within the first 30, 60 or 90 days, they are probably going to end up leaving within the first year, if they’re going to leave at all. You should be able to constantly focus in on a new employee in some shape or form. Keep a close eye as to what their situation is, how their performance is improving and whether they are actually growing into their position and are satisfied. What better way to continually improve your orientation and onboarding process rather than to find out from somebody within the 30-, 60-, or 90-day period, or the six-month or nine-month period how things are going. And find out, based on the information that you provided to them when they first started, what they think of the organization now. How has that opinion changed? What has changed? Is there anything that has been missing from the orientation program that you could include based on their suggestions? Perhaps the onboarding process needs to be a little bit more definitive when it comes to roles and responsibility. That is the best time to get the feedback within the first year. After the first year, you probably lost them and you are probably not going to get that kind of information in return. The Return on Investment Consider: How do you measure your ROI? $ Cost Avoidance $ Cost Reduction $ Increased Revenues How do you measure ROI? Is it through cost avoidance, cost reduction, and increase in revenues? 1. Streamlined Cost and Time Efficiencies Large variable costs associated with implementing onboarding & orientation programs 1. Cost of time spent by recruiters and hiring managers “selling” the company, the vision and future opportunity to candidates 2. Cost of time spent by trainers and managers to be involved in the programs preparing and transferring knowledge 3. Cost of travel, accommodation and meals when new employees meet centrally to engage in this program Here is a streamlined look at some of the ways that you can actually work on ROI. It is a pretty simple formula, but there are a couple of things to consider. There are a lot of variable costs - and some of them are very comprehensive variable costs - that implementing onboarding and orientation programs can run into. If done efficiently and effectively with a good deal of forethought, the cost of time spent by recruiters and the manager selling the company vision and a future is actually time well invested because you will start to see the return in the reduction of turnover within the first 30, 60, 90 days, even up to a year. What is the cost of time spent by trainers and managers to be involved in the programs preparing and transferring knowledge? Imagine being in a situation where you have actually developed all of the content up front and can continually improve the effectiveness of that information, as opposed to reinventing the wheel every time a new employee starts. The investment of time that you have put into it from the beginning will eventually start to pay off because you will find that you are spending less and less time actually looking for ways to provide information and increase your effectiveness when it comes to retention. The cost of travel, accommodation and meals for the new employees to meet centrally to engage in this program is an issue if you are a regional employer and you have multiple facilities. In many instances, we often get asked, “l have only got one or two employees starting in this facility, but we have 10 facilities within a 30-mile radius. Are we expected to have a separate orientation program for each of them?” In many instances companies will wait a week or two until they have had a number of new hires and do one program for everyone. Or, you can actually develop various stages of the program that allow people to step into the process at various locations, so that they get a better sense of the various locations and what they are all about as opposed to being stuck in one situation. If that does not accommodate your needs, companies will rent hotel space for a day or two or a week and centrally locate everybody from disparate locations within a state or a region, and accomplish the orientation program in that manner. 2. Maximized new employee performance Increase quality and effectiveness of the process Accelerate an employee’s learning curve Reduce the number of days it takes them to become “productive” to equal an average tenured employee Increased quality and effectiveness of the process, accelerating an employee’s learning curve: In many instances a new employee’s learning curve will not actually see itself through to fruition and in many instances these new employees will leave before their learning curve is actually completely experienced because again, we do not have a comprehensive program and we are not painting the expectations properly for them. Allowing them to actually accelerate the learning curve is when you really start to see the benefits of a program like this. Reducing the number of days it takes for them to become productive to equal an average tenured employee: Again, if you are developing a performance chart, you can typically work out a time line when you can expect somebody to be productive. If they are meeting those time lines, then you know that you are going in the right direction. If you are falling short of those a little bit then obviously there are ways that you can continually improve the process. Go back again and ask people who have been through the process what is missing, what has not been defined appropriately, and where they could be learning the position in a more rapid, more effective manner. All of these inputs of information should be going back into the original onboarding process to again continually optimize it and develop a continuous improvement process so that at some point you can determine to almost within days when somebody can become a productive employee. There are people who have actually accomplished this within days. They can target say, 35 days, as a time for contribution for a specific skill set of worker and they are actually meeting those targets and exceeding them in some ways because they developed a comprehensive orientation program. For example: 120 The traditional number days to reach the average performer level: - 105 Less ‘new’ number of days to reach the average performer level -------------------------------------------------------= 15 Equals number of days ‘saved’ (productivity improvement in days) $150 The average cost of employee for one day (based on $40K/yr) x 15 multiplied by the number of saved days ---------------------------------------------------------= $2,250 - $1,000 Less employee onboarding costs ---------------------------------------------------------= $1,250 Equals the ROI (125%) Looking at the example above, if we start at the top, we look at 120 as the traditional numbers of days to reach an average performer level. So, if we look at subtracting 105, that is less the new number of days to reach the average performer level, that is a differentiator of 15 days. In essence, you have saved 15 days as it relates to time to productivity improvement in actual days itself. If we look at an average base salary of $40,000 what does that 15 days mean? If somebody is contributing at an average performer level 15 days sooner because of an effective Onboarding and Orientation Program and the average cost for the employee for one day based on a $40,000 salary is $150, you multiply that by the savings of 15 days. That equals $2,250 and minus $1,000 less employee Onboarding costs, as a general rule, it is roughly that number. We can look at an ROI here of $1,250 or 125% and that is per one employee for 15 days. One hundred and twenty days is the traditional amount of time that they actually become an average performer, but if we are going to try and save by performing an excellent Onboarding and Orientation program here, 15 days after that total number brings us down to 105; so 120-105=15 days saved. Those 15 days saved equals $150 per day based on a $40,000 salary equals $2,250 - $1,000 that it would cost you for the Onboarding cost. That is an ROI of $1,250 or 125%. 3. Reduced Turnover Design the process to address the needs, concerns and interests of your new top performers Bring on new employees in a positive way and keep them happy and motivated Internally market and promote company Replacing employees is costly (Based on $40K per year) There aren’t many solutions out there, including talent management systems, which can give you an ROI of 125%. This is something to seriously consider when you are talking about Onboarding orientation: the retention issues, the time to productivity issues - all of these numbers - no matter which way you slice them this is certainly a worthwhile project to consider if you don’t have an Onboarding and Orientation program at this point. Conclusions A comprehensive, extended onboarding process is essential to ensuring your new hires become effective – faster. Recognize the distinction between Onboarding and Orientation. While talking about really developing a comprehensive extended Onboarding Process, it is essential to ensure that your new hires become effective that much faster, recognizing the distinction between Onboarding and Orientation obviously being a key. Make sure that you maximize the use of technology. There is nothing worse than having to manage this process manually. Any way that you can actually facilitate this process will make life that much easier. Thankfully, in the last couple of years, companies like Recruitmax, Webhire, Virtual Edge, and also a couple of independent organizations like Direct Personnel, offer orientation and onboarding programs that you can actually purchase from them separately. Generally speaking, if you are looking at an application such as a Recruitmax, Virtual Edge or Webhire, the general range is probably anywhere between about 20% and about 35% of whatever cost you foretell of management system for the actual onboarding tool itself. Those prices may vary depending on the vendor situation and how they package the actual module itself, but the good news is that there is automated help for the onboarding and orientation programs that you are putting out there. It is not all just manual labor that has to be accomplished to make these things successful so investigate, look around, find one that is best suited to the way that you would like to approach the orientation program and typically you will find a vendor that is able to accommodate whatever program you decide to put in place. Summary & Wrap-up Goals of an effective Onboarding process Engage new employees in a reinvented process called onboarding Engage new employees in comprehensive orientation programs Measure value to the organization in terms of: 1. 2. 3. 4. Reduced costs Faster productivity Return on salary costs Increased employee retention The goals of an effective Onboarding process are to engage the new employee in a reinvented process called Onboarding and make sure that you engage new employees in a comprehensive orientation program. There is a very distinct difference between Onboarding and Orientation and measuring the value to the organization in terms of things like reduced costs, faster productivity, return on salary costs and increased employee retention. We did not delve into things like background checks and assessments. Obviously, they are parts of any hiring process and in many instances things like assessments can go a long way to make sure that you are effectively assessing the appropriate things that you need to during an orientation program. You can certainly find out during the Onboarding process whether or not that is an effective process. Using that information to go back and reassess things like an assessment program or background check becomes an integral part of the overall approach to staffing any organization. So if we look at the overall value there is very little that can provide as good an ROI and certainly it will impact your company in perhaps many more ways than you first expected when you developed an orientation program.