Understanding the Employee Onboarding Process: An In-Depth Guide


HR Insights for ProfessionalsThe latest thought leadership for HR pros

Wednesday, October 5, 2022

Did you know that 88% of organizations are getting onboarding drastically wrong? Here is a detailed guide on how to get your employee onboarding process right.

Article 14 Minutes
Understanding the Employee Onboarding Process: An In-Depth Guide

Employee onboarding is important for every business because it helps employees get the best possible start. The process of conscientiously integrating new team members provides them with the tools, support and confidence they need to hit the ground running. More importantly, onboarding nails effective engagement from the get-go, ultimately maximizing each staff member’s performance potential as they settle in, develop and grow in their role.

By creating a stronger employee experience, you can build a stronger company culture – one that makes it easier to attract and retain talent. When onboarding is done right, you can expect a great return on investment too, with Sapling’s research estimating ROI to be as much as $11,799 per new employee onboarded, with the biggest gains to be seen in productivity, culture and retention.

The benefits of having a solid employee engagement strategy are plenty, but more research by Sapling tells us that 88% of organizations are getting onboarding drastically wrong. So what can be done to improve employee engagement from the start, and how can you induct, introduce and integrate for success?

Our in-depth guide goes into detail about every stage of the onboarding process, the investment required, best practices and ways to measure effectiveness.

What is employee onboarding?

Onboarding is a process in human resources that uses strategies to introduce newly hired employees into an organization. Also referred to sometimes as “organizational socialization”, it’s designed to help new workers understand the requirements of their role, as well as integrate seamlessly into the company culture.

The entire process involves a variety of different activities, and can last anywhere from a few weeks to a few months or even a whole year. The idea is to help new team members navigate their new environment, build lasting relationships with their colleagues and receive all the support they need to perform better at their job.

Sapling’s research reveals that 58% of businesses focus on paperwork – but in actual fact, onboarding needs to be people-centric by nature, with structured and strategic planning in place, and certainly not an administrative exercise.

While paperwork is indeed as part of any onboarding program, other important activities include:

  • Policy training
  • Culture training
  • Practical job training
  • Optimal desk and work area setup
  • Employee benefits and rewards scheme education
  • Facility tours
  • Team introductions and bonding
  • Executive introductions
  • Coaching and mentoring

What are the 5 phases of onboarding?

In order to create an effective plan for new employee onboarding, it’s important to understand the key stages of what bringing new employees into the fold looks like.

Here are the 5 phases of your strategy:

1. Planning (preboarding)

This stage begins after a candidate accepts the job offer and will involve contracts, paperwork and the planning of schedules, training and induction days. During this phase, it’s important to ensure documents are signed and all the formalities are sorted.

2. Initial orientation

After the planning and paperwork is complete, this is when the official employee onboarding begins. This is a structured approach to introducing the new starter to the workplace, with several tasks such as setting up payroll and benefits, issuing equipment, IT and desk setup, as well as initial training and introductions. This phase can last days or weeks depending on the company or role.

3. Team integration and training 

The next phase helps new workers get to know every part of their role, including responsibilities, daily processes and other members of their team. Both job-based training and socialization are important here and trying a range of learning techniques (such as blended learning or self-paced learning) will be highly beneficial.

4. Mentoring and transitioning into the new role

After the core training and integration phase is complete, it’s all about growth and confidence-building. Assigning a mentor or coach can drastically improve performance outcomes – and simply having a work ally can foster better collaboration. For instance, some companies may initiate a buddy program to help new employees acclimatize socially.

5. Nurturing and ongoing development 

The last and final phase shouldn’t be overlooked. Onboarding programs shouldn’t come to an abrupt end, and companies should have plans in place to ensure ongoing development.

Most onboarding programs last from a few weeks to a few months, although some may be longer. The duration of your program will depend on the nature and complexity of the job role, the size of your team and the amount of collaboration needed from employees, as well as the size and location of your business. For example, if your new team member is required to work across multiple branches, the onboarding process may last longer than average.  

What is the average cost of onboarding a new employee?

The typical cost of carrying out an onboarding plan depends on a lot of different factors. The only way to know how much the process will cost per employee is to do your own calculations. Every business is unique and onboarding programs can take weeks or months depending on the size and nature of the business.

The best way to calculate the cost of onboarding is to break it down into the three main stages – preboarding, onboarding and the first month on the job – and factor in the activities, equipment and resources required for each stage.

As a guide, the Association for Talent Development estimates an average cost of $1,252 per employee when they first arrive at a company. This pays for training and development initiatives, but it’s also important to factor in admin time for your HR team as this can be a hidden cost.

The good news is that a good onboarding process leads to better productivity and reduced staff turnover – and with recruitment agencies typically charging 20–30% of the employee’s starting salary, investing in an onboarding program brings a much larger return in the long-run.

However, in order to ensure you’re getting the most out of your investment, it’s important to avoid some common onboarding mistakes.

Some of the biggest onboarding pitfalls include:

  • Skipping the pre-boarding step
  • Neglecting employee feedback
  • Not providing enough information for new starters
  • Not having clear goals and expectations
  • Not having procedures in place for remote workers
  • Forgetting to address cultural and generational differences in the workforce

These are some of the things that can negatively impact the employee experience, leading to unwanted staff turnover and costing businesses much more in the end.

The benefits of an effective onboarding program

A strong employee onboarding process is vital to every business because it delivers both short and long-term benefits. Here are some of the positive upshots of a successful onboarding strategy:

  • Better employee experience: Experience is everything – and the way that staff encounter your business or brand matters just as much as the way that customers do. By putting employee experience first, you can ensure that everyone is performing at their best.
  • Highly engaged teams: Get your employees engaged from the word ‘go’. The earlier you can heighten engagement, the more likely they’ll have a positive experience with your company in the future. Engaged employees are 17% more productive, and they’re more likely to work diligently and put more effort into their daily tasks.
  • Reduced staff turnover: If you can find ways to improve your onboarding process, you’ll save money on recruitment as employees are more likely to stick around than jump ship – even when challenges arise. In fact, a study shows that great employee onboarding actually boosts retention by as much as 82%.
  • Easier collaboration: Properly onboarded workers will find it easier to communicate with other team members, improving collaborative tasks across the board. Part of the onboarding process is to help new starters socialize and this is the foundation to all good workplace relationships.
  • Talent attraction: Do you want your company and brand to be more appealing to top talent? The first step is getting your reputation and company culture right – and that starts with excellent employee engagement from the moment they step foot in your door.

All of these benefits work together to improve general employee satisfaction and performance. Ultimately, this leads to greater productivity levels, a more unified workforce with the same goals in mind and opportunities for businesses to grow and expand. 

Onboarding best practices for new employees

Nearly 70% of employees are more likely to stay with a company for three years if they experienced great onboarding. However, only 12% of people agree that their organization does onboarding well. This means that a large number of businesses are missing out on opportunities to engage, retain and attract the talent they need in order to innovate and grow.

In terms of how to carry out the five phases of onboarding, here are some best practice guidelines:

  • Preboarding best practices

The planning, scheduling and paperwork stage can be very time-consuming for HR managers, with estimates of around 10 hours of admin per new employee. This makes it hard for HR teams to focus on the most important aspects of their role, which is to provide the human experience for new starters and ensure optimal people management from the start. By leveraging automated onboarding systems, companies can reduce manual paperwork, making preboarding and subsequent phases as seamless as possible.

  • Orientation best practices

At this stage, onboarding needs to be personalized as this will make new hires feel instantly valued. It needs to be highly interactive, with plenty of opportunities to enjoy socialization – even before the official team introductions and training kicks off. Furthermore, any confusion must be eliminated from the start so have job responsibilities outlined and make it clear who they report to from the outset.

A lot of consideration and planning also needs to go into effective probation management, particularly when bringing on board managers or high level executives. It’s vital to conduct regular meetings, encourage an open dialogue and have a two-way feedback loop.

  • Training best practices

Digital training platforms can be a great way to engage, particularly if you have remote workers or freelancers. It’s also beneficial to experiment with a variety of training styles, such as self-paced training, instructor-led training, hybrid learning and even gamification.

Corporate learning gamification is a new way of engaging today’s millennial and Gen Z workers – with as many as 33% preferring to have game-like effects in their training platforms, and a huge 83% of employees feeling more motivated after undergoing gamified training.

  • Communication best practices

When it comes to assigning mentors, coaches and ‘buddies’, effective communication needs to be a key priority. A good intranet is often overlooked, but having a system in place can keep new starters connected with news, events and activities happening in the rest of the organization. It’s also important to remember that remote or hybrid onboarding will continue to evolve, and harnessing a range of onboarding technologies will make remote communications easier.

  • Ongoing development best practices

The best initiatives continually grow, improve and develop – but this can only be made possible through honest feedback. Knowing how well new hires get on with the process, and what they like and what they don’t like about your company’s onboarding program, is the key to making it better.

An affordable and effective solution is the use of onboarding surveys, which can provide you with invaluable information about early employee experiences.

5 onboarding metrics you need to be measuring

In the age of remote and hybrid working models, it’s harder than ever to track and measure how well things are going for new employees.

By having a structured framework, harnessing technology, having clear records of every onboarding phase and setting a baseline for your KPIs, you can get a better picture of employee experience in those early months. Here are five metrics that could help you understand the efficacy of your new starter process:

1. Employee engagement

Employee engagement is a critical driver of company success, but few companies manage to get this right – and even fewer companies know how to measure engagement effectively. Some good engagement indicators are the employee Net Promoter Score (eNPS) or a simple 1-10 scale-based questions used in employee surveys. For instance, “On a scale of 1-10, how likely are you to recommend our company to other jobseekers?”

2. Job-based productivity

Effective onboarding creates happy workers, and happy people are more productive in their jobs. By applying productivity metrics, you can understand how effectively employee efforts and outputs achieve business goals. There are many different ways you can measure productivity, and you can also make use of technology to reduce manual workload across every department.

3. Turnover/retention rates

This is one of the most important metrics you can look at – both in the long and short term. Examine the turnover and retention rates based on different groups or graduating classes to understand what techniques and methods work best. It’s also worth looking at the turnover and retention rates based on different job roles. Are people jumping ship faster with one type of job role in your company? Remember – new hires will skip out when their role doesn’t meet their expectations, so having clear responsibilities outlined from the start is essential.

4. Performance measures

Be sure to track the performance of new starters throughout their probation period, and beyond. The easiest way to measure performance accurately is to compare different groups – for instance, Group A with only two weeks of onboarding compared to Group B with two months of onboarding. By doing this, you can see if there’s a measurable difference in performance based on the amount of time spent on structured integration and training.

5. General employee satisfaction

How happy are your staff members a few months into their role? Are they satisfied with how things are going and how well they’re managed? Do they feel confident, supported and valued? The easiest way to find out is to use regular, anonymous employee surveys. In addition to surveys, managers have to be ready to listen to informal feedback too. Small focus groups can often be a great way of encouraging open dialogue between team members, creating an honest workforce who feel comfortable to feedback their thoughts and feelings.

Final thoughts

In order to fully understand the state of onboarding right now, it’s vital that we look at where the missed opportunities are. Let’s review some of the statistics shared in this article:

  • 88% of organizations are getting their onboarding process wrong
  • And only 12% of workers say their company do onboarding well
  • However, great onboarding increases retention by 82%

There are plenty of positive stats showing how successful onboarding leads to better productivity, higher retention and happier staff. With so few businesses getting the process nailed down, it’s clear that a huge proportion of businesses are losing out on the opportunity to reap these benefits.

A better way of looking at it could be to understand the consequences of what could happen if onboarding is overlooked. According to more research by Sapling, a poor onboarding experience can double the likelihood of employees finding another position. Not only is replacing staff members a costly exercise, with high costs of recruitment, but it can create even more admin for your HR team.

For businesses interested in innovation and growth, it’s important to take a people-centric approach to human resources, and this starts as soon as a new hire accepts their job offer. How you deliver your onboarding could make or break employee experience, impacting how they see your company and brand, how well they integrate and perform and how likely they’re to stick around and carry out the tasks needed to hit your business goals.

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