Why Do So Many Hires Fail? Because the Onboarding Process Needs to Be Improved

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Every step in the employee journey has its own unique challenges and opportunities. Onboarding, however, occupies a uniquely critical position in that journey.

Consider that nearly half of all senior outside hires fail within their first 18 months on the job. Consider, too, that the cost of replacing one of those failed employees can range from 50-200 percent of their salary, depending on their specific role. An effective onboarding process can prevent these expensive disruptions from happening.

And yet, according to Gallup, only 12 percent of employees think their employers do a “great” job onboarding new employees. Furthermore, a 2015 Harvard Business Review article  reported 22 percent of employers didn’t even have formal onboarding programs at the time.

If your onboarding process could use some improvement, you’re not alone. Below, we’ll take a look at why a strong onboarding process is worth investing in — and how to ensure your program is effective.

Effective Onboarding Boosts Productivity

According to a report  by Brandon Hall Group, a positive onboarding experience improves employee productivity by 70 percent.  That’s because effective onboarding provides an employee with the education they need to understand company processes and complete the tasks assigned to them.

Some organizations try to minimize time spent on the onboarding process, believing it’s better to get new hires working right away. However, that shortsighted approach comes with a price: Employees who have not been properly onboarded will end up costing you more down the line when it turns out they don’t fully understand how to fulfill their roles.

In truth, new hires will reach full productivity faster if they go through a comprehensive onboarding program first. Employees can’t be fully productive without first learning the processes and systems of their new employers. Assuming a new employee will understand how to be instantly productive because they did a similar job at a previous company is a big mistake.

An effective onboarding process shouldn’t be rushed. Managers and trainers need to take their time, using continuous coaching and follow-up to ensure new employees are truly absorbing and understanding the information being imparted. Quickly overviewing company processes once is not enough to really sink in.

You may also want to consider implementing a mentor program for new hires. Employees can learn a lot from their coworkers, and employees with mentors are more likely to be satisfied with their jobs.

Effective Onboarding Improves Retention

A positive onboarding experience has been shown to improve employee retention by as much as 82 percent, according to the Brandon Hall Group study cited earlier. On the flip side, employees who have a negative onboarding experience are twice as likely to look for a new opportunity in the near future.

You only have a short period of time to make a meaningful impact on your new hires. Onboarding can leave a powerful first impression that affects employees in a positive or negative way, which is why it’s so important to get onboarding right.

Part of getting onboarding right is knowing when to discontinue it. As mentioned above, shortsighted employers often aim to end onboarding as soon as possible, and more than 60 percent of companies stop onboarding after an employee’s first month on the job. However, extending the onboarding process to two, three, or more months might be a better choice.

With a more extensive onboarding process, you can dive deeper, giving new hires the opportunity to participate in more hands-on training while really getting to know the company and their role. If you stick to the quick, check-the-box approach many companies take, you are subtly telling your employees you want them to figure things out for themselves. This, of course, will make the employee feel lost when challenges arise, which does not bode well for retention. It will also affect time to productivity, because the employee won’t have any guidance on the techniques that have worked in the past.

Ensuring Success With Your Onboarding Program

An effective onboarding program will make employees more productive, cut time to productivity, and boost retention. To ensure your onboarding program delivers those benefits, start with this checklist:

  1. Establish a formal onboarding process, if your company does not currently have one.
  2. Create consistency in onboarding processes across the company so that every new hire learns the same way to talk about and perform company procedures.
  3. Utilize mentorship during the process to supplement formal training and boost employee satisfaction.
  4. Find immersive ways to train employees, such as through hands-on training or even virtual reality job simulations.
  5. Track the effectiveness of your program through employee surveys to ensure new hires are getting everything they need from your onboarding process.

So much depends on a successful onboarding program. Organizations cannot afford to treat this piece of the hiring process as an afterthought. If your company does not have a program in place yet, now is the time to change that. If your company does have a program, look for ways it could be better. There is always room for improvement, and you’ll reap the rewards in the form of increased productivity and retention.

Greg Kihlström  is president and chief experience officer at Cravety  and the author of The Center of Experience. 

By Greg Kihlström