Avoiding the High Cost of Poor Onboarding

You’ve invested time, resources, and effort to find the perfect candidate for your team. You’ve meticulously shortlisted candidates, conducted multiple rounds of interviews, and finally found the perfect fit. But then, in just a few weeks, they leave, and you’re back to step one – or worse.

We all know good onboarding is important – at least in theory. A study by Brandon Hall revealed that 88% of organizations believe it’s essential for employees to align with their organization’s values during the onboarding process.

But recent research shows that onboarding goes bad more often than it succeeds. Only 43% of employees surveyed for O. C. Tanner’s 2023 Global Culture Report received more than one day of orientation and a folder with benefits information – and they have already associated subpar onboarding with 20% staff turnover in the first 45 days of employment. And a staggering Gallup study reveals that only 12% of employees believe their company does an excellent job with onboarding.

When onboarding crashes and burns, it’s not just disappointing, it’s expensive. According to the Society for Human Resource Management, a bad hire can cost up to 50-60% of an employee’s annual salary. And that doesn’t begin to account for the real damage to your culture, brand, and bottom line.

Here are ten costly scenarios you could be facing if with poor onboarding:

Cash Down the Drain

In 2022, U.S. businesses spent an average of $1,207 in training costs per employee – more than $100 billion in total training expenses. An ineffective onboarding process is like having a hole in your pocket, with more resources going into re-training new employees and correcting mistakes than is actually going into growing the business.

Revolving Door Syndrome

Your company’s starting to feel like a busy subway station with new hires zooming in and out. Bad onboarding can lead to high employee turnover, and before you know it, you’re spending more time saying goodbye than hello.

Sluggish Productivity

If onboarding is poor, instead of hitting the ground running, employees are more likely to hit a wall. Struggling to grasp their roles and responsibilities – without a strong sense of support – can be like navigating a maze without a map and grind productivity to a halt.

Disengagement Epidemic

Poor onboarding can be a gut punch for your engagement numbers. A lackluster welcome can turn excited, eager new hires into disengaged employees quicker than you can say: “7 a.m. Monday morning meeting.”

A Literal Painful Experience

According to research by MetLife, employees who do not get a strong understanding of their benefits are 3x less likely to be “holistically well” – meaning new hires who are poorly onboarded have lower levels of mental, financial, social, and physical health.

Know the saying, “Bad news travels fast”? In the digital age, it travels at the speed of light. Poor onboarding experiences shared online can give your company reputation a bigger hit than a clumsy cat in a china shop.

Culture Collision

Imagine being dropped in a foreign country without knowing the language or customs. That’s what new hires might feel like without a proper introduction to your company’s culture and values. Cue potential conflict, misunderstandings, and a less-than-harmonious workplace.

Missed Opportunities

Your new hires are brimming with fresh ideas, just waiting to be tapped. But without good onboarding, these nuggets of innovation might never see the light of day, causing a gold rush of missed opportunities.

The Morale Malaise

Existing staff watching new hires struggle or leave can feel like a cheerleader for a losing team. This could potentially knock the wind out of team morale and lead to further turnover.

Swinging and Missing

Without clear goals, new employees could be swinging at pitches in the dark. Missed performance goals might start stacking up, affecting your team’s overall scoreboard. By contrast, Atrivity has reported that a year-long onboarding program made new hires fully proficient in their roles 34x faster.

The Legal Landmine

Ignorance isn’t always bliss, especially when it comes to legal and policy-related information. Poor onboarding could lead to unintentional violations, and before you know it, your company’s playing a stressful game of legal dodgeball.

What Is Onboarding, Exactly?

Employee onboarding is the process of introducing new hires to your organization and giving them the tools and resources they will need to thrive. It is the mechanism through which they acquire the necessary knowledge, skills, and behaviors to become effective contributors to your business.

The process includes an introduction to the company culture, clarifying job roles and expectations, and providing tools and resources for success.

Besides incorporating new hires into your organization, onboarding can also serve in the case of employees returning from a leave of absence, maternity/paternity leave, or “boomerang” employees who are rejoining the company after a period of time. There is also “everboarding,” which goes beyond new hire experiences and focuses on continuous learning and development throughout an employee’s tenure.

The Power of Effective Onboarding

As bad as poor onboarding is, the benefits of robust onboarding are also exponential. Brandon Hall reports that organizations with a solid onboarding process improve new hire retention by 82% and productivity by over 70%. Similarly, a BambooHR study discovered that employees who had good onboarding experiences were 18 times more committed to their employers. Other research by Northpass highlighted that businesses with organized onboarding saw a 60% increase in revenue.

Anatomy of Great Onboarding

Great onboarding strategies are comprehensive, involving multiple facets of the organization and putting emphasis on human connection – which together create a comprehensive and effective process. Here are some of the key components of a good onboarding program:

Pre-boarding Activities

This part of the onboarding process should begin as soon as the job offer is accepted, if not as part of the candidate experience. It includes administrative tasks like paperwork, setting up payroll, and other HR systems. The new hire should be introduced to the team and the company culture – either virtually or through a simple email.

First Day Orientation

A structured first day is crucial for setting a positive tone – preferably one with a little bit of “wow factor.” This should include a welcome that makes your new hire feel like they matter as an individual and valuable member of the team. It’s also important to ensure that the new employee’s workstation is set up with all the necessary tools and resources.

Relevant Training

Good onboarding includes detailed training to help your new hire understand their role and responsibilities. You’ll want to provide easily digestible training in the specific tools, processes, and systems they’ll be using – in a way that is easy to consume and act on.

Creating Human Connections

Simply introducing joiners to people within your organization on a human level can be a game changer in driving belonging and connecting them to critical social and vocational supports. Assigning a buddy or mentor can help a new employee settle in faster – providing guidance, answering questions, and making the new hire feel more comfortable and connected.

Setting Expectations

Clearly communicate what is expected of the new hire in terms of job performance, team collaboration, your company culture, and more. This will give them clear objectives and goals from the outset.

Engaging Managers

Managers are critical to employee experience, and that starts with great onboarding. Unfortunately, many managers are overloaded and unable to be thoughtful and proactive about onboarding. They often need an assist to help ensure their new team members feel seen, welcomed, and valued.

Feedback and Check-ins

Regular feedback and check-in sessions for new hires are critical to 30-, 60- and 90-day retention rates. Managers should be encouraged to schedule regular meetings to discuss progress, answer concerns, and offer constructive feedback that reassures new hires.

Company Culture and Values

It’s important to welcome new hires into your company’s mission, values, and culture. This will help them align their own goals with yours and foster a sense of belonging.

Long-Term Training Plan

eLearning Industry research has found that 77% of new hires who hit their first performance milestone had formal onboarding training. An extended onboarding program should begin early and span several months to ensure continued growth and development.

Tools and Technology

Use technology to communicate, connect, elevate important information, keep records, solicit feedback, and continuously improve. Using more modern onboarding software can streamline the process, making it more organized and efficient. It will also help keep track of the onboarding journey and identify gaps or areas for improvement.

The Benefits of More Modern Onboarding

Companies today are investing heavily in their onboarding processes to meet the evolving demands of the modern workplace as more modern onboarding practices and trends – like the use of technology, personalization, focus on culture, and employee feedback – are reshaping how we welcome new employees.

How exactly does good onboarding change the game? Here are two examples from our Enboarder® archives:

Octave Health managed to scale its onboarding process as its hiring increased more than 10x, resulting in high employee satisfaction scores and a top-three engagement rate in HR programs among Enboarder customers.
Similarly, pharma and biotech company Lonza recently revolutionized its onboarding process for its 17,000 employees across 50 sites, achieving improved net promoter scores, positive onboarding experiences, and impressive engagement rates for new joiners, buddies, and people managers during onboarding.

Embracing Onboarding as a New Business Imperative

Investing in comprehensive, efficient, and engaging onboarding practices is more than just a good business decision – it’s mission-critical in the modern business landscape. As organizations strive to attract and retain top talent in a competitive market, the value of a great onboarding experience cannot be overstated. It can be the difference between an employee who merely works for a company and an employee who believes in what the company stands for and is prepared to go the extra mile.

Want to up the game on onboarding for your company and stop paying the cost of a subpar onboarding experience? Contact us for a tour of the Enboarder platform.