Where’s the Payback?

buy-in employee development employee engagement employee retention engagement onboarding process orientation recruiting retention team building what is onboarding Mar 17, 2022
Benefits of an Effective Employee Orientation Program

I don’t think it’s ever been much of a secret that turnover is expensive or that getting a new team member up to speed takes time, and both cost a lot more than most companies realize, but those certainly aren’t the only places we see the impact of our onboarding process - be that for good or for bad…

Not so long ago in our Leading At The Next Level program, I shared a lesson called When Employee Happiness Isn’t Enough where I referenced a Harvard Business Review study that showed “organizations with a high level of engagement report 22% higher productivity.” While I’m absolutely certain a strong onboarding initiative builds employee engagement, I don’t believe that’s the only way effective onboarding makes a positive impact on productivity!

Having just looked at a stats from Hireology showing that “33% of new hires look for a new job within the first six months,” I can’t think for one minute that at least some of their job search isn’t being done while they’re on the clock… And that’s definitely taking its toll on productivity, at least a little bit. But that same article called The Costs of Poor Onboarding went on to detail a few ways we can expect a well planned onboarding process to increase productivity:

  • 69% of employees who undergo effective onboarding are more likely to stay with an employer for at least 3 years, and 58% are more likely to stay on for more than 3 years.
  • Organizations that invest in an effective onboarding program retain 50% more of new hires than their competitors do.
  • A standardized employee onboarding process leads to 50% greater productivity than non-standardized onboarding.

The first speaks to the turnover numbers we’ve already looked at, but it’s significant. Having an employee stick around for at least 3 years wasn’t a big deal when I entered the workforce over three decades ago, but it’s not uncommon today to see candidates who list at least half a dozen jobs within 3 years; the world has definitely changed whether we like it or not! The second point is kinda more of the same, but show me just one organization that’s not at least a little interested in having that kind of edge on their competition, especially when they’re fishing in the same pond… The third point is the one that grabs my attention the most!

For close to 10 years, I had direct involvement with the Lean Manufacturing initiatives for a large production facility. Many of those projects rearranged work cells and sometimes even completely re-engineered a process, typically costing tens of thousands of dollars (or more) and requiring weeks of effort from everyone involved. Each project started with a specified goal for increasing productivity. That was usually to the tune of 5 to 10%, with an occasional stretch goal of 20-25%. And let’s be honest, very few hit their goal simply because the changes implemented required so much ongoing follow through. For what it’s worth, the payback was still there though almost every time…

So with it being fairly normal for a company to throw big bucks at projects like that for modest productivity improvements, why in the world do so few invest the time, energy, and resources into building world class onboarding processes - especially with data showing the potential for as much as 50% greater productivity? My thoughts: I believe most just don’t understand how simple it can really be to effectively onboard new team members and get these kinds of results, so we’ll start digging into that next time…