How Does Employee Onboarding Impact New Hire Retention and Turnover Rates?

Posted in Best Practice Research

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 you if are doing the right thing by your staff, because, of course, unhappy employees don’t tend to stick around.

 

 

Studies have found that up to 20% of all new hires actually resign within the first 45 days of their role (sometimes called the “honeymoon” period), representing an enormous loss in terms of the time and money expended on recruitment. 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
  • Poor or overbearing management
  • Limited opportunities for self-development
  • Other reasons leading to dissatisfaction or discomfort with their new role

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.

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.

What is emotional momentum, and how does it apply to new hires?

To help managers and companies understand what’s happening here, let's look at the concept of emotional momentum.

When speaking of new hires, “emotional momentum” refers to maintaining their excitement and positive feelings towards the prospect of working for your organization.

 

 

In particular, as they journey from candidate to new employee to seasoned staff, how do you keep up that level of engagement and maintain their emotional momentum?

If that holistic approach to the employee's journey reminds you a bit of EX, you're on the right track. Being aware of, and maintaining emotional momentum, will stave off disappointment and disillusion, and hopefully convert them into a long-term, genuine advocate of your organization.

So what kills emotional momentum, and turns a potential advocate into a detractor?

Silence. Disengagement. A disconnect between the promises during the recruitment stage and reality.

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.

Maintaining momentum: why engaging onboarding works

Good onboarding is all about that emotional momentum. The very nature of employee onboarding is such that it addresses all of the emotional and intellectual reasons why an employee would stay with you, so as to minimise attrition from all angles. It essentially gives emotional momentum a big push, and keeps pushing it in the right direction until it is stable enough to carry on mostly unaided.

 

 

Although there is always a place for onboarding to help keep your employees rolling forward, it’s during the earliest days of each employee’s tenure, and even before they start their role, when maintaining that emotional momentum is most critical.

Engaging pre-boarding: the hidden opportunity

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".

Best-in-class companies are 53% more likely than others to undertake pre-boarding, by starting the employee onboarding process before Day One.

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.

Making Day One unforgettable

Starting a new job can be daunting for anyone, even for veteran employees who have experienced their fair share of new beginnings. Thankfully, there are plenty of things you can do to make their first day memorable, and help them feel welcome and valued.

Note: Some of these ideas may need info about the employee that you could easily gather as part of the pre-boarding process.

 

 

Here are a few examples of what you can do:

  • Send an introductory welcome email to all relevant people in your organisation informing them of who the new hire is, where they have come from, what job they will be doing, and perhaps one or two pieces of appropriate personal information about the hire
  • Make sure their desk is ready for their arrival. Go beyond simply setting up their computer and phone – we're fans of sprucing it up with a theme that reflects who they are as an individual
  • Find out their preferred coffee order and include them in the morning coffee run. (Add a croissant or muffin to really make their day, just check they don’t have any food intolerances first!)
  • Thoroughly plan out their first day to make sure they are not at a loose end. Include meetings with relevant staff members, and organise a team lunch or afternoon tea to help them interact with other employees
  • Assign them a buddy or mentor and encourage the new hire to ask questions both big and small – from “How do I work the printer?” to “Who has the corporate knowledge to help me with this project”?
  • Hold an Amazing Race through your office to help new hires get familiar with their new joint

As possibly the most essential item, also remember to book plenty of one-on-one time between the new hire and their hiring manager. In a recent study by LinkedIn, 72% of respondents listed one-on-one time with their direct manager as the most important part of any pre-boarding or onboarding process. It’s critical that the new hire’s direct manager has time blocked out during Day One to spend time with and welcome them, and to ensure the manager is accessible and involved with the ongoing onboarding experience.

Winning at employee onboarding beyond Day One

Whew! Your new hire didn’t ghost you on Day One. But you didn’t think that was the end of the story, did you?

Talent acquisition is as much about finding the perfect fit as it is about keeping the new hire interested and engaged so they don’t depart your organisation for another opportunity.

According to the 2017 Brandon Hall “Evolution of Onboarding” study, 51% of organisations report that most new hire attrition occurs during the first six months of employment.

That's why most HR leaders today see onboarding as covering a period beyond the first few weeks. In fact, organizations that are classified as world leaders in onboarding distribute onboarding activities and learning well beyond the end of the probation period, and even beyond their first year anniversary.

 

 

Using the same approach to pre-boarding and Day One, it’s good to set milestones, reminders and nudges for both the new hire and their manager to ensure:

  • Regular check-ins with the new hire occur so that engagement is maintained
  • A constant cycle of feedback, performance evaluation and progress tracking
  • Activities and one-on-one time to encourage strong relationships between the new hire, their manager, their peers, and the organisation as a whole

When integrating these systems, it helps to approach the project from both ends, encouraging both the line manager and new hire to take ownership and initiative over the process. And although it’s great to use automation and technology to your advantage, it will be the human connection that ultimately counts. All the systems, technology, and planning in the world will still fall flat if that human sense of real engagement is not delivered.

If you do succeed in getting your employee onboarding right, you’ll know it, because your employees will stay with you, and your retention and turnover metrics will outperform those of your industry.

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 build awesome onboarding experiences, 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.

Ready to rock onboarding?