Proving ROI of Onboarding Transformation: a Cheat Sheet

So… you’re fully onboard with onboarding but you’re struggling to galvanize support from the C-Suite. This resource is for you.

It’ll help you prove onboarding isn’t an initiative but a strategic imperative. Forward it; memorize it; slice and dice it into your own presentations – whatever’s useful to help build your case.

Scroll to see how onboarding:

• Slashes HR admin by 75%
• Accelerates time-to-productivity by 265%
• Increases first-year retention by 203%
• Saves millions in turnover costs
• Improves quality-of-hire by 1000%
• Increases engagement by 1/3
• Decreases compliance risk profile by millions

ROI of Onboarding Transformation

Slash admin time by 75%

Paylocity and Deloitte data revealed in March 2021 showed HR teams spend 130+ hours each month on applicant tracking, recruiting and onboarding. Even a conservative estimate puts onboarding’s share at around 45 hours/month – around a week.

If you’re not currently using dedicated onboarding platform to consolidate, integrate, digitize and automate your processes, you could accelerate onboarding by ~75%. That’s more than a day/week HR are saving.

Then there’s hiring manager time. For example, Compass Group’s onboarding was fragmented across 12,000 heavily distributed real estate agents. Best-in-class onboarding saved every agent 2.5 hours each week.

Related secondary ROI:

• Decrease hiring manager admin
• Increase HR team engagement
• Improve HR team retention
• Increase HR bandwidth
• Decrease HR staffing costs

Accelerate time-to-productivity by 265%

Aberdeen Group’s influential research measured time-to-productivity by examining the percentage of new hires that meet their first performance milestones on time.

They found companies with best-in-class onboarding saw 62% of new hires successfully hit their first performance milestones. Compared to only 29% amongst companies with average onboarding and only 17% amongst the laggards with worst onboarding.

That’s 265% more new hires hitting their early targets from laggard to best-in-class.

Related secondary ROI:

• Slash team time-lost to training
• Increase team productivity
• Improve collaboration
• Decrease risk of team burnout
• Decrease team turnover 
  

(95% of HR leaders identify burnout as a major cause of turnover. And 32% of burnout can be attributed to unreasonable workloads and another 32% to too much overtime.

More productive new hires mean fairer workload distribution, helping minimize team burnout and decrease turnover.)

Increase first year retention by 203%

That same Aberdeen Group research found companies with best-in-class onboarding retained 91% of first-year employees. Compared to 70% amongst companies with average onboarding and a woeful 30% amongst laggards.

That’s 203% improved retention from laggard to best-in-class.

Lots of studies echo those findings. For instance, Hays found 22% of new hires would definitely look for another job if onboarding let them down – and another 41% would consider it.

Related secondary ROI:

• Increase team engagement
• Strengthen team culture
• Improve collaboration
• Decrease risk of burnout
• Lower recruitment costs
• Protect employer brand

Save millions in turnover costs

There are heaps of stats out there but even the most conservative estimates say the cost of turnover is avoidable.

For example, in 2019 Gallup stated turnover could be costing an 100-person organization with an average salary of $50K and average turnover up to $2.6M annually. 

To quantify exactly how much strategic onboarding could save you in avoidable turnover costs, use our detailed turnover cost calculator.  

Related secondary ROI:

• Strengthen company culture
• Protect employer brand
• Improve organizational trust
• Improve resilience and agility
• Ensure continuity for customers
• Protect corporate brand

(High turnover erodes organizational trust – which in turn drives turnover. Plus organizations with high trust enjoy better outcomes across productivity, engagement and profitability. For example, high-trust companies are 2.5x more likely to be high-performing).

Improve quality-of-hire by 1000%

Quality-of-hire is notoriously hard to measure but hiring manager satisfaction is an excellent indicator. More satisfied managers speak to higher performing, more engaged, better fit hires.

Aberdeen Group found companies with best-in-class onboarding enjoyed a 33% year-on-year improvement in hiring manager satisfaction with new hires. Compared to an 11% improvement amongst companies with average onboarding and a 3% improvement amongst laggards.

That’s an 1000% difference in manager satisfaction between laggards and best-in-class onboarders.

Related secondary ROI:

• Strengthen company culture
• Improve engagement and productivity
• Decrease turnover
• Cement employer brand
• Decrease recruitment costs
• Accelerate time-to-hire

Increase employee engagement by 1/3

Better onboarding drives improved engagement – and improved engagement drives the hard business outcomes that matter most. There are heaps of stats.

For example, Hays found that 91% of employees believe onboarding is an important or very important engagement factor. And 51% would go above and beyond for their employer if they’d had an engaging onboarding experience.

Likewise, organizations with effective onboarding have 33% more employees who feel engaged compared to those with ineffective onboarding.

Related secondary ROI:

• Increase profitability
• Improve customer satisfaction
• Improve productivity
• Decrease turnover
• Decrease absenteeism
• Decrease safety incidents and mistakes
• Improve organizational trust
• Improve resilience and agility
• Cement culture of inclusion
• Progress diversity agenda

(These positive outcomes are reinforced by the stats time and again. For example, Gallup’s well-known findings – for example, that organizations with high employee engagement have 22% higher profitability and 65% lower turnover).

Reduce compliance risk profile by millions (if not billions)

Compliance isn’t as glamourous as other headline areas. But sloppy HR processes don’t just hurt people metrics. If your processes aren’t proactively designed to collect and give all the right info, in a fair and consistent way, you majorly increase your compliance risk profile.

For example, in the US:

• Employers pay $1Bn/week in compensation for non-fatal workplace injuries
• A data breach costs a company an average of $8.19M
• The average employment lawsuit costs $250K – but 10% cost $1M

Digitizing and automating onboarding means new hires sign the right documentation, get the right security and safety training and are treated without unconscious bias or discrimination.

In other words, a consistent, automated onboarding process decreases your exposure by decreasing your margin for error.

Related secondary ROI:

• Protect consumer brand
• Protect employer brand
• Protect profitability
• Progress diversity agenda
• Protect organizational trust 

Onboarding is a strategic declaration of commitment to your people

Global enterprises increasingly recognize – fueled by major players like Gallup and their influential year-on-year research – that business success hinges on your people practices, processes and policies.

Few of those practices, processes and policies are as mission-critical as onboarding. Commitment to onboarding plants a flag in the ground, marking your ongoing commitment to your people. It sets the bar for all future interactions that employees have with your business.

Transform Your Onboarding! See how T-Mobile improved new hire experiences, boosted engagement, and retained top talent through innovative onboarding practices with Enboarder.