Onboarding and Retention: The Key to Loyalty in a Competitive Talent Market

Summary. New hire turnover is costly, with a failed hire potentially costing up to $50,000, and is the #1 challenge for 29% of HR leaders.

This often stems from unmet expectations or broken employer promises. Effective employee onboarding, which begins from the point of role acceptance, is crucial for retention and enhancing the overall employee experience. Engaging pre-boarding with personalized messages and early resource access prevents “ghosting”. Automated, AI-driven platforms deliver adaptive, personalized onboarding experiences, significantly improving productivity, engagement, and retention. Brands fostering strong belonging see employees 6x more engaged, 94% more productive, and a 50% reduction in turnover risk. This strengthens employer branding and attracts top talent.

A new hire joins your company – they’re talented, and they’re going to bring performance to the next level! A few months later, they’ve resigned. What on earth happened?

The early resignation of a new hire is both expensive and demoralizing – for everyone involved.

Now you have to go through the whole recruitment process, again. And meanwhile the team has to pick up the slack.

All the while doubt creeps in – why did the new hire fail to see things through? This can leave the other team members, and your managers, questioning their own roles.

It’s little wonder then that new hire retention and turnover are two essential metrics of the talent acquisition process. These basic metrics help to tell if you are doing the right thing by your staff, because, of course, unhappy employees don’t tend to stick around.

Studies have shows high attrition during onboarding is the #1 challenge for 29% of HR leaders. This impacts retention and productivity, with a failed hire can cost up to $50,000. It’s also not uncommon for new hires to be lost even before Day One thanks to “ghosting”.

Either they accept another job offer, or simply do not turn up to their first day of work, without giving notice. If you are a growing organization or simply hiring new people to replace natural attrition, you cannot afford to ignore the issue of new hire turnover.

Cue onboarding (ta-dah!). As you are hopefully aware, employee onboarding is the process of engaging with and preparing your new hires right from the point of role acceptance, and maintaining that engagement through their critical first day of work, and on into the foreseeable future. Beyond that, onboarding is also an opportunity to make your new hires feel valued, respected, and appreciated, all crucial components of positive employee experience (EX).

Engaging onboarding is the key to massively improving those two metrics of new hire retention and turnover, and thereby minimising the loss that comes with attrition. We’re pretty adamant about this one; the importance of effective employee onboarding really cannot be overstated.

Why new employees quit

There are numerous reasons why new hires might cut their time short.

• Unmet expectations created during the recruitment phase
• Alack of clarity about their role and connection to their team
• Poor or overbearing management
• Limited opportunities for self-development

This is more serious than may be immediately apparent. In fact, Glass Door reports that 84% of employees would consider leaving their current jobs if offered another role with a company that has an excellent corporate reputation.

What does this mean? Is loyalty a thing of the past? What about all that investment you’ve sunk into them?

Richard Branson probably has it right.

Train people well enough so they can leave, treat them well enough so they don’t want to http://t.co/QHONOZYXEy

– Richard Branson (@richardbranson) March 27, 2014

Once we stop thinking of employees as numbers or statistics, and realise they are people with their own feelings, expectations, hopes, and imperfections, and we become realistic about the impact of our business processes upon those people, it’s a bit easier to see why they may not stay with us. Once dissatisfaction sets in, and disappointment lingers, the call of better roles in greener pastures can be hard for them to ignore.

The broken brand promise

Another important concept here has to do with the employer brand promise.

When a company first engages with candidates during the recruitment phase, it can be tempting to paint an overly-rosy picture of the organization and the role.

But does reality match up with the promise?

• Do you tell new recruits that employee development is a key focus, but deny them learning opportunities?
• Do you tout work-life balance to hires who are parents, but show reluctance in allowing them to leave early to attend to their children?

Broken promises, unsurprisingly, breed discontent.

When employees don’t have the experience they were promised, they will likely make their unhappiness known – in obvious and not-so-obvious ways. They may start looking for new job opportunities, or they may become actively disengaged employees, meaning they develop such a distaste for their organization that they take deliberate steps to undermine its progress.

– Gallup, State of the American Workplace

Importantly, Gallup goes on to state, the seeds of animosity or advocacy are sown from the very first interactions – that is, the attraction, recruitment, hiring and onboarding stages. Each and every interaction affects the strength of the connection between employee and employer.

The solution here is a dose of honesty. There is no short cut here, no “fake it till you make it”.

Start asking the hard questions about how your company is perceived. Are you puffing up your own image out of a fear of losing the talent war? Are you making promises to your new hires you can’t keep, just to get them through the door in a competitive hiring environment?

Giving candidates a clear picture of who you are and what your EX is really like is better in the long run than attempting to bluff. Unmet expectations only create disappointment, which leads to attrition.

If you’re finding it difficult to make your employer branding appealing without being transparent with your candidates, then it might be time to think of how you can genuinely improve your employee experience.

Onboarding and Retention by the Numbers

According to Zach Lahey from Aberdeen Research, the period between accepting a job offer and the first day at work is a great opportunity for “new hires to become engaged and excited by immersing them in the company culture before they formally start”.

Brands cultivating strong belonging see employees 6x more engaged, 94% more productive, and a 50% reduction in turnover risk.

Here are a few examples of good actions to take from some very compelling pre-boarding programs we’ve observed:

• Send the new hire personalised messages from their manager, welcoming them on board
• Send a video introducing them to the organization and the team
• Connect the new hire with peers and experts internally so they can ask questions and prepare themselves for the role
• Provide early access to the company intranet so the new hire can start to consume relevant onboarding content
• Offer a virtual office tour via video, or even 360 video
• Allow the candidate to choose their equipment using an online survey
• Use electronic signing and document systems to get those payroll, tax and insurance processes settled in advance
• As Day One approaches, explain any expectations and relevant logistics for the role so the hire is as comfortable as possible when they finally arrive

By fostering a new hire’s sense of connection with the organisation and their new team, companies that use pre-boarding are able to maintain their new employee’s enthusiasm and excitement, greatly decreasing the chance that they will “ghost” on their first day.

Additionally, automating the pre-boarding process allows you to literally quantify the new employee’s level of engagement. You’ll know if they are opening your messages, clicking through to the resources provided, and providing the answers you need. Through these measurements, you will have a solid idea of just how prepared the employee will be for that first day. On the other hand, a low engagement rate at this stage is an alert for your hiring manager to reach out personally to ensure everything is still on track.

How Automation Enhances Retention

Enboarder is redefining onboarding with an agentic AI platform that combines both AI Agents and AI Assistants to deliver adaptive, personalized experiences across the candidate-to-employee journey.

• AI Agents create and adapt role-specific 30-60-90 day onboarding plans for each new hire, track progress, and automatically adjust journeys based on behavior, feedback, and manager input.
  
• AI Assistants bring those plans to life by engaging directly with new hires, managers, and HR at the right moments in the journey. Unlike generic chatbots, Enboarder’s assistants are:
  
  • Context-aware — they know where someone is in their journey.
    
  • Adaptive — they can be prompted to behave differently at each interaction.
    
  • Cross-stakeholder — they can converse with multiple people in the journey (new hire, manager, buddy, HR) with context of what’s already been discussed.
    
• Together, this ensures new hires feel supported, managers get structure, and HR gains visibility and automation across the entire onboarding lifecycle.

Unlike legacy HRIS checklists or static workflows, this combination of proactive agents and contextual assistants enables truly fluid, human-centered onboarding — with measurable outcomes in productivity, engagement, and retention.

How O.C. Tanner Achieves $150k+ ROI Annually by Improving Employee Experience With Automated Onboarding

You may even find yourself approaching corporate nirvana when your company achieves a positive feedback loop, whereby the best talent is attracted to your organisation through improved and genuine employer branding, which in turn is founded on superb employee experience, underpinned by effective onboarding processes. And so the cycle continues, all thanks to getting that one thing right: engaging employee onboarding.

If you want to know how to integrate employee onboarding solution with your current HR tech stack check out our FREE guide, Onboard New Hires Like an HR Rock-Star – The Master Guide to Employee Onboarding. You’ll be glad you did.