Employee onboarding begins as soon as a candidate accepts an employer’s offer and continues as they become “onboarded” into the company as an employee. Onboarding tasks range from completing new hire paperwork to learning the company software and systems, meeting the team, setting new hire performance goals and everything in between!
Updated: January 2018
What is the Average Cost of Onboarding a New Employee?
How to Find the Best Onboarding Software for Your Company
What You’ll Learn In This Guide
- What employee onboarding is
- Employee onboarding benefits
- Average cost of employee onboarding
What is Employee Onboarding?
Employee onboarding begins as soon as a candidate accepts an employer’s offer and continues as they become “onboarded” into the company as an employee. Onboarding tasks range from completing new hire paperwork to learning the company software and systems, meeting the team, setting new hire performance goals, and everything in between!
Onboarding software is used to facilitate this process and can be a module within a larger HR technology system. Often, onboarding software features a digital dashboard that allows talent acquisition teams to easily communicate with one another and track the progress of each hire as they move through the onboarding stage of employment. This includes:
- I-9 verification
- compliance insight and tools
- integrations for payroll
- benefits administration
Onboarding Deconstructed. A great onboarding process will include some, or more ideally ALL of the below:
- Post-Offer Nurturing
- New Hire Orientation (Payroll, Verification, Benefits Administration, EEOC, and other compliance checks)
- Human Resources and New Hire Paperwork
- Job and Performance Expectations (Goal-Setting)
- Scheduled Check-Ins
- 30-60-90 Day Performance Milestones
- Managerial Communications Plan
- New Hire Training
- Mission, Vision, and Values Alignment
- Feedback Loop
- Performance Management\Professional Culture Dissemination
- Productivity Parameters
- Mentorship Plans or Programs
Onboarding is the process whereby your candidate becomes a new hire and your new hire matriculates into a productive, engaged, and values employee. Onboarding involves your new employees gaining the culture insights, skills training, and work habits that will not only make them successful within your organization but allow them to reach their full potential as members of the workforce.
Top 3 Reasons to Invest in Onboarding
- Increase retention and decrease employee turnover.Onboarding Definition
- Build employee engagement from before Day 1.
- Create better productivity and performance in your organization.
Why is Onboarding Important?
Onboarding either makes or breaks your new hires. Did you know that companies without an onboarding plan only have a 1 in 2 chance of retaining the new employee? Having an onboarding plan pays off because employees are 58% more likely to be with the company for at least 3 years if they went through an onboarding plan.
Companies should have an official onboarding plan if:
- Bringing a new hire onboard causes the HR team to spend most of their time sending, tracking, checking, and filing paperwork instead of welcoming and working with the new employee
- You work in a compliance-heavy industry
- You’re experiencing onboarding hiccups (for example, forgetting to send a background check or missing the I-9 deadline)
- You have high turnover
The truth is, if your company has more than 20 people in it, an onboarding plan is crucial. This list isn’t exhaustive, but it is a great indication of some common issues faced by a company that will benefit from employee onboarding software. If your organization is facing exponential growth, it might be time to start exploring your options before these issues begin.
Don’t Have Time to Read the Whole Article Now?
Enter your email and save the PDF for later.
3 Best Practices:
- Reflect the Company Culture Honestly
- Invest in a Paperless Onboarding System
- Partner New Hires Up With Veteran Employees
Employee Onboarding Best Practices
Successfully onboarding new employees plays a vital part in new hire retention. In fact, companies lose 25% of their new hires in the first year, making those first few months crucial for companies to make a first impression, start engaging and start setting up new hires for success. Try these 7 tips to keep your new hire onboarding on a smooth path to success:
1- Reflect the Company Culture Honestly
96% of job seekers say it’s important to work for a company that embraces transparency. Any hint of dishonesty or misrepresentation is going to impact their decision to stick around once they’ve landed a job. So stop trying to be something you’re not and embrace your true culture. Don’t like what you see? Work with your executive team on a triage plan to fix it.
2- Invest in a Paperless Onboarding System
Do an inventory of what processes can be automated (hint: there are many!) and research which paperless onboarding software best suits your needs. This is a well-spent investment that keeps the new hire onboarding process consistent and frees up time to spend on more pressing onboarding matters such as training and development. It also makes it easier for your new hires. Think back to your first day on the job. Was filling out onboarding papers in triplicate your favorite memory? NO! If your company had a paperless onboarding system, you probably have fonder memories of decorating your desk, meeting your new work friends, and exploring the office, which is how onboarding should be.
Did You Know?
Close work friendships boost employee satisfaction by 50%!
Introduce new hires to the team right away. This familiarizes them with everyone and gives them a chance to learn about what each person does. Understanding the big picture and moving parts of the department will immerse them in the culture and engage them in their job right off the bat.
Did You Know?
As many as 60% of workers are now asked to take workplace personality assessments.
3 - Partner New Hires Up With Veteran Employees
One survey found 56% of employees felt having a mentor at work was very important when first starting. Explain how managers above the new hire are there to ensure they are on track and confident. Assure them, and their colleagues for that matter, that the success and happiness of the team is a top priority. Half of employees stated they didn’t feel their manager helped remove obstacles and it affected how successful they were at attaining job goals.
It’s partly because personality assessments are a great way to help a team bond. They give new hires an inside look into how their team members work and help them easily identify people they can connect with. Knowing the company culture also helps new hires to understand how their team and company work as a whole, and to know what’s expected of them as an employee.
3 More Ways to start the onboarding process off right.
Executive Onboarding Best Practices
Many companies create a 100-day plan for their executives. One survey found that organizations with standard onboarding processes see 54% greater new hire productivity and 50% greater new hire retention. Consider a pre-boarding planning stage. You will keep your new hire in mind when developing pieces, but the majority of your attention should be drawn to:
- Identifying the executive’s leadership and those who are key stakeholders in their development and success.
- Preparing the business strategy relevant to the executive’s KPIs and goals.
- Outlining the performance management process the executive will follow and be held to.
- Outlining any performance management tactics the executive will deliver and hold reports accountable to.
- Building the introductory period plan that will facilitate relationship development between the executive and his or her subordinates.
- Aligning the boundaries for the executive’s position, both in terms of the employees’ and leaders’ rights.
First impressions are huge and onboarding is a great chance of providing the first impression that keeps leaders and employees around. Having these pieces organized before the executive steps foot into your organization will help your team better understand candidates who will fill the role well while allowing transparent communication after a job offer is extended and accepted.
Develop a Unique Welcome Process
When it comes to onboarding an executive, this first glimpse into company culture can be critical. To start integrating culture into your onboarding program, think first about what makes you so unique. Benefits and perks are great to highlight, but those are things that can be found within a handbook. You want to focus your attention on the intangibles like leadership’s open-door policy or company-wide social responsibility programs.
UNC Kenan Flagler Business School of Executive Development suggests HR get in on the action as well, working with the incoming executive by giving them key questions to ask their new bosses and colleagues:
- What is the guidance from your boss (your boss’ boss)?
- What are the informal keys to success here?
- Where is the strategy working well and where can it be improved?
- What are the organization’s strengths and challenges?
- What metrics does the organization use to track progress?
BONUS TIP: Use these tips when onboarding a promoted manager. Just because this individual has been working with your company and understands the job better than someone hired externally, doesn’t mean they don’t need an introduction to the role. There are some pieces of onboarding that might be redundant and therefore left out, but overall, promoted employees still need set expectations, support, and a friendly team welcome.
“On some level much of onboarding touches every single component in the employee life cycle. Yet, when it comes to manager onboarding, we do nothing or very little.” - Sharlyn Lauby (@HRbartender), HR & Management Expert
Lauby is right: onboarding truly touches every step in an employee’s time within the organization. When it comes to welcoming a new executive, the stakes only get higher.
Following the tips above can provide a more positive experience for new leaders. If you’re looking for even more guidance on developing an executive onboarding program that works head over to Onboarding New Leaders: 5 Tips to Help Executives Make a Smooth Transition.
Who is Responsible for the Onboarding Process?
In Their Shoes: Have you started a new job and asked these questions:
- So, when will I have a computer and desk?
- Should I be doing anything?
- Should I just go ahead, walk around and get my bearings?
- How do I get paid?
- Who am I reporting to again?
These are the questions an employee going through a weak onboarding process will probably ask. When it’s no one’s job, it doesn’t get done. Onboarding needs to have a charge, a manager, someone to take responsibility for the details. 60% of organizations surveyed said they needed to create a more efficient onboarding program in order to meet company growth objectives as a top pressure.
Onboarding Pain Points for New Employees.
What is the Average Cost of Onboarding a New Employee?
When calculating the cost of hiring, you have to include recruitment, training, lost productivity, administrative work, and operational costs. The cost of hiring and training a new employee can vary from 25-200% of annual compensation, making the average minimum cost of a new hire $16,177, according to Urbanbound.com. Some other startling cost statistics include:
- 22% - the average employee turnover rate for the first 45 days
- 46% - the average employee turnover rate for the first 18 months
- $3,500 - the turnover costs of an $8/ hr employee
Learn how you can avoid these costs with the right onboarding plan!
How to Find the Best Onboarding Software for Your Company
Adopting employee onboarding software reduces the risk of missing out on crucial steps in the process because it standardizes the program for each new hire while allowing customization for specific job titles and employment levels. What works for an executive hire will be completely different than that of an intern, but both will likely need new hire paperwork and an introduction to the company's mission, values, and culture. The best employee onboarding software does this by providing these features:
- Paperless System to Manage New Hire Paperwork
- Employment Documentation Compliance
- Background Checks
- Automatic Workflows
- Access to Employee Information
- Progress Reporting
- Quality of Onboarding Reporting
Quality of Onboarding Reporting is the mother lode feature. Managers can collect data from day one to track new hire performance and quality and discover inefficiencies in the employee onboarding process.
Explore these onboarding software key features more in-depth before making your decision!
See a full list of the awards ClearCompany software has earned, then click the button below to see a demo of the ClearCompany Onboarding Module.
Want to learn more about creating an awesome onboarding experience? Check out the rest of our blogs covering the onboarding process, onboarding best practices, and onboarding software.