Why we need a sound onboarding process?

The onboarding process can be designed on these categories.

- Structured vs. Unstructured Processes.While developing the onboarding process, it will help HR managers to understand what works best for their company. Structured onboarding processes would entail comprehensive written down policies, procedures that help the employee in the social and functional aspects of the job. Pre- determined tasks and procedures help a new hire to quickly learn and equip himself with the demands of his new role. The process is also structured to make the new employee feel welcome and socially committed and connected to his team and task.The informal onboarding processes lets the new hire pick up cues, on the job, learning things as they go. It can include shadowing, one on one coaching and meetings with colleagues and managers. These could include loosely organized activities that settle the new hire into his role.
  Research has shown that organizations that engage in formal onboarding by implementing step-by-step programs for new employees to teach them what their roles are, what the norms of the company are and how they are to excel in their role, are more effective than those that do not. The Aberdeen Group benchmarking studies have shown that organizations considered “best in class” for onboarding have formal onboarding programs.

- Nearly 30% of organizations work on a passive onboarding program that are functional but not systemic
- Only 20% of organizations work on a strategic human resource approach to onboarding

Why do we need a sound onboarding process?

Employee turnover is expensive, and weighs on employee costs, ultimately affecting the bottom line. Recent surveys have shown how tricky handling new hires is, and how crucial it is acclimating them into the new organization.

- 13% of companies lose half or more of their new hires in the first year
- 23% of hires leave companies before the first year
- 27% of companies report that it takes more than a year or more for new hires to be fully productive
- 33% of new hires look for a new job within six months on the job.
- 50% of senior outside hires fail within 18 months in a new position
- 50% of all hourly workers leave new jobs within the first 120 days. Finding a replacement is not just time consuming, but a very expensive proposition. The cost of employee turnover is estimated to range between 100% and 300% of the replaced employee’s salary.

Whilst a structured and formal onboarding processes can directly impact some of the key figures in employee engagement and retention.

54% higher productivity in new hires with standard onboarding processes
50% increase in new hire retention with a formal onboarding process
58% new hires are likely to stay with the company after three years with a formal onboarding program.

Intensive Onboarding at Zappos- Case Study

One organization that engages in intensive onboarding during orientations is Zappos.com (acquired in 2009 by Amazon.com, Inc.). Zappos managed to move from 23rd place on Fortune magazine’s “100 Best Companies to Work For” list in 2009 to 15th place in 2010. New employees at Zappos learn about the organization’s values and procedures in an intensive five-week training course, during which new hires are offered $2,000 to quit if they feel they are not a good fit for the organization. To date, only about one percent of trainees have taken this offer. This might be why even though Zappos has more than 1,300 employees, the company has been able to maintain a relatively flat organizational structure and prides itself on its extreme transparency.

– from Bauer, T., & Erdogan, B. (2010). Organizational Behavior. Nyack, NY: Flat World Knowledge.