Onboarding Part 2: Retaining New Hires

by Nancy Ordman

Forty percent of staff turnover takes place within the first months of employment. Another 10 percent leave before their first year at a job.

Equifax Workforce Solutions compiled these dismaying statistics in 2013, before the U.S. unemployment rate dropped below 4 percent. In the current business environment, where recruiting technical talent is difficult, retention gains even more importance.

Fortunately, employers can take control of new-hire retention with effective onboarding practices. The IEEE Jobsite recently reported on several common-sense actions to help ease a new employee through the first few days in a new office. Multiple studies of employees who quit jobs after a few weeks or months on the job reveal several often-neglected steps employers need to include in a comprehensive onboarding plan.

The Manager

A Microsoft team writing in Harvard Business Review singled out a one-on-one meeting with their new manager as the most critical component of onboarding. New employees that had this experience had larger internal networks, higher-quality meetings and three times more team collaboration. In other words, these employees became part of their organizations and gained respect faster, creating a positive direction for the future.

Checking in with a new hire provides continuity and ongoing opportunities to add to the employee’s knowledge of the job and the company. Serving up a fire hose’s worth of information the first week is counterproductive; start with the most important information and expand on that base over time. Encourage ongoing communication by asking the employee whether they understand their job, their team’s activities or anything else that is relevant.

The Job

When a new employee starts a job they need to know details that are not covered in a job interview. First, the new hire must understand their role as part of the organization and the specific responsibilities the job entails. Tell them how to execute on the responsibilities and where to go for help.

Equally important is a roadmap spelling out priorities and focus areas for the first weeks and months and why these are important.

Employees also need to know their position’s authority. Do they manage a budget? How are expenses approved? What kinds of decisions need approval from management? Who can answer questions about authority?

The Organization

Does the new employee understand the business mission and strategy? Chances are they did some research as part of interview preparation, but often useful information is proprietary and unavailable prior to joining the company. Provide current financial data and link overall mission and strategy to the person’s individual role and that of their team.

An interviewee gets some sense of an organization’s culture during the interview and the new hire will learn more in day-to-day transactions. If some behaviors could be grounds for dismissal they need to have that information as soon as possible. Spelling out the importance of showing up at the monthly birthday party or the need to respect “quiet time” in an open office up front will prevent embarrassing faux pas.

Explaining how, when and with whom to communicate is an essential component of onboarding. This discussion should cover communication up through management, across to colleagues and team members and down.

Bottom Line: Onboarding Pays Off

Companies with effective onboarding programs increase new-hire retention by 50 percent compared to companies that lack such programs. Proper onboarding costs money but protects the investment required to recruit and hire new talent. Per-hire estimates vary; the Society for Human Resources Management calculated a cost of $4,129 in 2016. Compare this to the costs of losing a great new employee, estimated by Mellon Financial in 2005 to total between 1 percent and 2.5 percent of total revenues. As Ben Franklin’s saying goes, an ounce of prevention – a sound onboarding program – is worth a pound of cure.