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Nicholas Roi

SilkRoad UK

Managing Director

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Onboarding: what’s in it for me?

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Successfully integrating a new employee into an organisation is critical for maximising staff productivity and therefore profitability. Yet centralised and thorough onboarding practices are regularly ignored by businesses for reasons including the perceived expense or the time it takes to implement them. Other businesses, while initially committed to following an onboarding strategy, fail to put the proper checks and measures in place to check its success, or end the process after a matter of days. Letting onboarding fall to the wayside can be a costly business mistake because, while it is the employees who initially feel the most benefit, it is ultimately the HR team and the business owners that stand to profit most.

For strategic onboarding to succeed companies need to dedicate time to bringing each new staff member into the company, teaching them company processes and making them feel a part of the corporate family. An employee that feels they have received sufficient attention from their new employer will feel motivated and engaged in their role. And an engaged workforce can have a positive effect across a business.  

Reduced administration = increased profitability

The first day in a new role can be slow and boring. Often it is spent filling in forms and reading policy documents or contracts. It is a task that can take each employee hours or even days, with senior employees and those working in regulated industries often affected more than others.

Of course it’s not just the new employee burdened by unnecessary administration. Every hour they spend signing forms is an hour in which HR teams lose valuable time. And paperwork is hardly engaging, for the HR team or the new worker.

Reduced staff turnover = increased profitability

Put simply, a properly managed onboarding program reduces staff turnover. And turnover is expensive. In fact, the cost of replacing an entry-level employee can be as much as 30-50 % of that person’s annual salary (at senior level this figure rises to an astonishing 400 %).

According to research by analyst firm Aberdeen Group, 86 % of people believe that a new hire’s decision to stay with a company in the long-term is made within the first six months of employment. It’s a statistic that demonstrates just how important an employee’s initial months in the role are; onboarding needs to continue throughout this time, not be abandoned after two weeks. A worker that feels their new employer was fully prepared for their arrival will likely remain longer than someone who turns up on day one to find themselves with no desk, no email address and no one to introduce them to the business or their colleagues.

If onboarding starts early and is checked regularly, HR directors will find that their recruitment budget diminishes much slower – higher retention levels may mean there is even budget left at the end of the year. In this case it can be redirected into other areas of talent management such as staff and business development.

Increased productivity  = increased profitability

The influence of onboarding goes further than infusing personal and job satisfaction into new employees and reducing administration. It also allows staff to get to grips with the ins and outs of their new position quickly, instructs them in the basics of their role, integrates them with the company culture, and teaches them the business’s objectives, as well as the part they play in helping the business achieve said objectives. Onboarding is therefore vital for progressing a hire from inexperienced starter to fully productive and confident employee in the shortest possible time.  

On the flip side of this, the longer a person takes to settle into their role, the more they will cost their employer. An IDC report once stated that new employees who don’t understand their role cost US and UK companies approximately $37 billion every year!  

Effective onboarding can even help you attract new staff. It can facilitate an environment in which team members go home and boast about their role and company to friends. If this starts happening you will find your reputation as an employer growing rapidly and people will begin knocking on your door in order to request work. And when you consider this alongside its other benefits, the decision to pursue a strategic, formalised onboarding plan becomes obvious – it’s the choice to boost business profitability.

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Nicholas Roi

Managing Director

Read more from Nicholas Roi
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