Effective Onboarding: Forget the Company Mugs & Pens!

Giving new employees a free mug filled with candy and company pen is a meaningless gesture if there is no solid plan to onboard them properly.

I was having a conversation with a client recently about the troubles her workplace was having because of higher than acceptable employee turnover. Their employee engagement surveys for the past two years showed that engagement was lowest among employees who had been there five years or less. After analysis the lack of engagement was due to new employees feeling ill-prepared for the assignments they were being given. My client sadly chuckled that one of the leading ideas to solve the problem was to present each new hire with a company mug filled with candy and a set of company pens at the end of their 2-hour orientation with HR.

Upon further conversation I learned that for the past year or two staff workload was so high that new employees were often asked to jump in during their first day or two on the job. Hiring was just keeping up with staff turnover, so experienced staff worked with new staff in tackling the work to be done. The experienced staff complained that the process never seemed to end or improve. Sounded like a vicious cycle: turnover precipitated by disengaged staff who were not thoroughly onboarded before being expected to carry their weight. By the end of their first month or two, new hires were on their way to becoming disengaged, ultimately leaving to be replaced by a new person who repeated the cycle.

The Cost of Failing to Consider the Cost of Hire

Some employers have come to accept that employees will have a limited working life before they leave. There’s a belief there is only a nominal cost associated with hiring and replacing people, and hiring means lower payroll costs for less tenured staff. Yes, I’ve heard these very arguments multiple times!

I believe this is a very costly delusion. In her recent article on the cost of hiring a new employee, Annie Mueller pointed out that there are several factors among those included below in those which contribute to the cost of hiring and replacing an employee:

1. The cost of recruiting candidates – includes any advertising; fees and time spent in sourcing, interviewing and selecting candidates; hiring costs such as background checks, pre-hire testing; and managing applicant flow. Mueller believes this cost can easily exceed several thousand dollars.

2. The cost of training – includes costs such as training programs; the soft costs of the trainer’s time; lost productivity if using an experienced person to train instead of him/her performing their regular assignments; and the non-productive hours where the new hire was not able to produce at full productivity.

3. The cost of salary and benefits and occupancy costs – includes actual salary, taxes, and benefits paid to a new hire prior to them being able to produce at an acceptable rate. If the new hire leaves before becoming productive, much of the cost is lost and will have to be spent again to recruit the his or her replacement and being him/her to full productivity.

4. The costs of occupancy and integration – the cost of tools, equipment, and materials required to perform the work; the cost of the physical workspace and what’s required to maintain it; and undoing mistakes made by a new hire. If customers are adversely impacted, the costs can include fixing mistakes and replacing customers who leave.

5. The cost of negative engagement – when someone is disengaged, it tends to rub off on co-workers who are negatively impacted by that individual’s disengagement. Disengaged employees produce less, so there is co-worker resentment at having to pick up the slack. A general fatigue with the situation sets in. Where three highly trained and engaged people might be able to perform the full workload while maintaining high quality, it might take four of five less engaged people to do the work.

6. The cost of replacing more experienced people with less experienced ones. The thing about experience is that it takes time to get. In most cases the knowledge and expertise lost when an experienced person leaves is not quickly recovered.

The total cost of making a hire can easily exceed 1X annual compensation. Replacing employees is not plug-and-play. It is more likely to be plug-and-PAY!

Proper Onboarding is the Key

A significant percentage of people who quit their jobs point to a lack of onboarding as a key factor that directly or indirectly led to their leaving. I learned this first hand early in my consulting career in an assignment to understand why the last 175 people voluntarily quit my client. Statistically, 73.8% of the people I interviewed cited a failure during their first few weeks that contributed to their eventual leaving.

What’s the solution? A good onboarding plan! Such an onboarding plan contains these areas, typically covering the new hire’s first 30 to 90 days on the job:

1. Preparation before the new hire starts, such as the new hire’s workspace made ready; equipment installed (phone, computer); staff notified of the new arrival; new hire paperwork and benefit packages assembled; and the supervisor scheduled to be with the new hire on his or her first day.

2. A First Two Days’ Events checklist, which includes activities such as meeting coworkers; meeting key company staff and management; a facilities tour and observation; policy and handbook review; overview of how the company is organized to serve its customers; orientation with HR; and being issued a copy of the onboarding plan.

3. Meetings for the new hire’s first 30-90 days are scheduled with an itinerary given to the new hire. This includes a series of supervisor touch-base meetings that start out as a daily occurrence for the first week or two, and become less frequent as the onboarding progresses.

4. All training sessions for the new hire’s first 30-90 days are scheduled with an itinerary given to the new hire. Training objectives are spelled out, and those doing the training are given an understanding of the objective for each session. Reading assignments are included in this plan.

The Bottom Line

While getting a couple of chachkas at the start of a new career can make a new hire initially feel welcome, it is only through the investment a supervisor and organization makes in thoroughly onboarding that will communicate real commitment to the new hire.

Properly onboarded new hires get up to speed in about two thirds the amount of time it takes, versus a “toss them into the water and let them swim” approach. They are more engaged, make a greater contribution to the organization, are more likely to take on greater responsibility faster, and will remain an engaged employee longer as a result of proper onboarding.

Author’s note: this article was built upon the principles and tools provided in Leading Through People, the author’s acclaimed training program employed by clients on four continents. To view more articles like this one, please visit my blog.

Hank Boyer of Boyer Management Group works with some of North America’s top employers to help them become more successful. For employers and individuals, we offer the world’s finest training and assessments to measure an individual’s knowledge and awareness of current and emerging best practices in leadership, sales, customer service, and conducting an effective job search. To find out more, please visit us at www.boyermanagement.com, email us at info@boyermanagement.com, or call us at 215-942-0982.

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