Improve Retention With Better Onboarding

Employee Turnover Costs More Than You Think

Employee Turnover Costs More Than You Think 2

The Problem Employee turnover costs money. A lot of money. Money that you can’t

afford to lose. Just how much money are we talking about? Check out

these statistics:

Some studies predict that every time a company replaces a

salaried employee, it costs 6 to 9 months’ salary on aver-

age. For a manager making $40,000 a year, that’s $20,000

to $30,000 in recruiting and training expenses.

But others predict the cost is even more and that losing a

salaried employee can cost as much as 2x their annual

salary, especially for a high earner or executive-level employee.

Source:http://www.zanebenefits.com/blog/bid/312123/Employee-Retention-The-Real-Cost-of-Losing-an-Employee

Employee Turnover Costs More Than You Think 3

These large numbers make sense when you break down the actual total costs of losing an employee. These costs include the following:

Source: http://www.linkedin.com/today/post/article/20130816200159-131079-employee-retention-now-a-big-issue-why-the-tide-has-turned

• Customer service and errors:

(given the assumption that new

employees take longer and are

often less adept at solving probl-

ems).

• Training: Over 2-3 years you

likely invest 10-20% of an em-

ployee’s salary or more in train-

ing.

• Cultural impact: Whenever

someone leaves, others take time

to ask “why?”

• Hiring a new person: Factor in

the costs of advertising, interview-

ing, screening, hiring, etc.

• Onboarding a new person: Cal-

culate the costs of training, mana-

gement time, meetings with other

coworkers, etc.

• Lost productivity (if the new per-

son takes 1-2 years to reach the

productivity of an existing person)

• Lost engagement: Other employ-

ees who see high turnover disen-

gage and lose productivity.

Employee Turnover Costs More Than You Think 4

A Balancing Act Praised for its physical benefits, like toning and working out your core muscles,

paddle boarding is probably harder than it looks. You get to kneel or stand on an

object that’s basically a big, wobbly surfboard and then try to keep your balance

while you push yourself forward with a paddle the length of an oar.

The first hurdle is just getting on board. Once on

board, the only way to remain steady and not fall off

is to keep your balance with unsteady equipment.

Unfortunately, too many companies have onboard-

ing/orientation programs that are a lot like paddle

boarding: difficult and unstable.

Employee Turnover Costs More Than You Think 5

Direct Impact Getting “on board” is a difficult balancing act whether or not you’re standing

on a surfboard. Onboarding, the formal business process of orienting new

hires to an organization and giving them the necessary knowledge to be pro-

ductive and effective, is one of the primary keys of employee retention.

A report published by the Aberdeen Group (On-

boarding Benchmark Report: Technology Driv-

ers Help Improve the New Hire Experience)

says that although onboarding has evolved into

more of an integrated experience than simply

a checklist, many more companies need to

enhance this process.

And why is that? Because your orientation

procedures directly impact your employees’ desire to stay.

Effectiveonboardingis one of the primary keys of employee retention.

Employee Turnover Costs More Than You Think 6

“Although 90% of companies believe that their

employees make their decision to stay at the

companywithinthefirst6months, many of these

companies do not recognize or acknowledge how

onboarding impacts retention rates and time to

productivity. Instead, they rely on paper-based

solutions that create added costs and often leave

abadfirstimpressionthatnegativelyaffectsthe

company brand. Thirty-six percent of companies

still do not use any technology for their onboard-

ing solution.”

~ Aberdeen Report

Employee Turnover Costs More Than You Think 7

In other words, once hired and “on board,” many em-

ployees are still left to balance unsteadily in their new

jobs. The transition from recruitment to becoming an

established employee is often as insecure as standing

on a wobbly surfboard in the ocean. Most employees

won’t want to balance there for long.

Employee Turnover Costs More Than You Think 8

The ChallengeNew hires quitting is not a new problem. A recent survey by the Society for Hu-

man Resource Management says that one of the top three challenges fac-

ing HR professionals in the next ten years is retaining and rewarding

the best employees.

This means that if a company’s onboarding process is indeed a key factor in

retention, more companies and HR professionals must examine their current

internal communication practices and improve them if necessary.

TheAberdeenReportalsopointsoutthat,“howeffectiveacompanyis

at its onboarding process determines how successful that company is

at retaining its employees, yet many companies do not recognize this

connection.”

Employee Turnover Costs More Than You Think 9

Applying SolutionsBecause acclimation and engagement are key factors in employee retention, on-

boarding needs to be clear, proactive, and engaging.

According to the Aberdeen Report, companies who recognize this are improving the

new-hire experience by doing the following:

• eliminating paper-based processes

and spreadsheet procedures

• researching and investing in

technology

Employee Turnover Costs More Than You Think 10

Researching and investing in technology to enable their new

hires to have a smoother transition from the recruitment stages.

Why? Because automated solutions can help companies address

pressures to improve retention rates, improve time to produc-

tivity, and improve the company brand.

Eliminating paper-based and spreadsheet procedures and con-

sidering web-based technology solutions. These tools propel

companiestowardreducingcostsandstaffturnoverandcreat-

ing faster start times.

Companies that are serious about improving their onboarding

programs are doing the following:

Employee Turnover Costs More Than You Think 11

Check out the next section for 5 onboarding best practice tips.

Employee Turnover Costs More Than You Think 12

As soon as the candidate accepts the position,

start sending multimedia materials, such as

welcome messages from the leadership team,

to get your new hires excited about their new

job.

Source: http://www.workforce.com/articles/19977-onboarding-tips-and-best-practices-for-bringing-new-workers-on-board)

1Onboarding Best Practice Tips

Employee Turnover Costs More Than You Think 13

Adopt electronic solutions that automate the

completion of forms both before a candidate

startsandon theirfirstday to reduce ineffi-

ciency, costs, and extra time associated with

paper-based form completion.

Source: http://www.hreonline.com/pdfs/10022007Extra_AberdeenReport.pdf

2Onboarding Best Practice Tips

Employee Turnover Costs More Than You Think 14

Create new-hire portals and social networks

for new employees to learn about company

culture, complete trainings, and socialize/

connect with other coworkers to make new

friends. These portals should basically provide

anything a new employee would need to more

productive and engaged.

Source: http://www.workforce.com/articles/19977-onboarding-tips-and-best-practices-for-bringing-new-workers-on-board

3Onboarding Best Practice Tips

Employee Turnover Costs More Than You Think 15

Keep track of a new hire’s progress using task

management tools. A number of these tools

also provide automatic reminders when em-

ployees fail to progress with their onboarding

tasks at the desired pace.

Source: http://www.workforce.com/articles/19977-onboarding-tips-and-best-practices-for-bringing-new-workers-on-board

4Onboarding Best Practice Tips

Employee Turnover Costs More Than You Think 16

Trust your employees to “serve themselves”

using their own technological capabilities.

“Self-service HR has become so invaluable

that a September 2006 Forrester Research re-

port termed it ‘an essential core application’

for businesses.” Self-service HR has the added

benefitoffreeinguptimeforHRmanagersto

concentrate on more pressing issues.

Source: http://www.allthingsworkplace.com/2010/03/overcoming-top-myths-in-hr.html

5Onboarding Best Practice Tips

Employee Turnover Costs More Than You Think 17

So what’s the bottom line?

Employee Turnover Costs More Than You Think 18

Employee turnover costs more

than you think.

Improve your retention rates

with better onboarding!

Employee Turnover Costs More Than You Think 19

Ving is an engagement tool that en-

sures your most important messages are

understood and acted on.

With Ving, you create and share multi-

media messages that capture real-time recipient interactions viewable on your

engagement dashboard.

Businesses and organizations use this

dynamic communication tool to:

► Streamline onboarding procedures

► Communicate policy updates ► Increase employee engagement ► Enhance compliance training ► Improve management

communications

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