Best Practices in Onboarding
and Employee Orientation
Michael Moretti
Sr. Staffing Analyst
HR.com
mmoretti@hr.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.