Customer Experience

The surprising impact onboarding has on employee retention

employee onboarding

When does your relationship with a new employee begin? Much like relationships with customers, they begin long before you’re aware – from the first time the employee encounters your brand. From there, it’s a bit like a sales funnel as awareness increases, the prospective employee weighs their options, does some research, and finally decides to apply. The employee goes through the application and interview process, and – hurray! – they’re a great fit. They have a lot to offer you, you have a lot to offer them, they’re so excited to start their first day.

Fast-forward one year – that great-fit employee who was so excited to begin is gone.

What happened?

The issues that lead to employee turnover may have their source in your onboarding – those first few, very important weeks of a new hire’s job. It’s why new hires are at a higher risk of leaving within their first year.

When you get onboarding right, retention rates rise, turnover falls, and you’ll see the ripple effects of higher engagement and productivity. Onboarding is an investment that pays off again and again over the course of the employee lifecycle.

“The seeds of animosity or advocacy are sown from and individual’s very first interaction with a company. The attraction, recruitment, hiring and onboarding stages – along with daily experiences that continue after onboarding – each affect how a candidate or employee feels about an organization and its promises… Gallup data reveal that companies are faltering even in the earliest stages of the employee experience.” – Gallup, State of the American Workplace 2017

Why Few Companies Get Onboarding Right

Too often, companies confuse onboarding with induction – the paperwork and mandatory tasks required to start a new job. Onboarding is much more than that. It’s your opportunity to set your employee up for success with their work, and engage with your company’s mission – the big WHY behind what you do.

“12% of employees strongly agree their organization does a great job of onboarding new employees” – Gallup, State of the American Workplace 2017

This is one of the missing pieces in most onboarding practices – sharing your ‘why’ and showing your values as a company. How do you help people? What impact do you have on your customers’ lives?

Aligning employees behind a shared sense of purpose has been proven to raise engagement levels — and with them, retention rates.

Sharing your purpose and values with your new hire will lay the foundations for engagement, but that’s not all they need to be successful. To understand that, you have to understand why new hires leave.

Why New Hires Leave

New hires are at the highest risk of leaving within the first year and a half, with the highest turnover happening within the first 45 days. What happens during that short period of time to send them running out the door?

“22% of staff turnover occurs in the first forty-five days of employment.” – The Wynhurst Group

“46% of rookies wash out in their first 18 months” – Leadership IQ, in a study of 20,000 new hired employees over 3 years

In one survey, 26% of departing employees cited mismatched expectations between their interviews and their actual work as the primary reason for leaving – and that’s an onboarding issue.

Onboarding is a time to make sure managers and new hires establish a shared set of expectations – hopefully the same set of expectations that were set up during the recruitment and interview process. At minimum, that means:

  • A job description that accurately and comprehensively describes the position.
  • A statement of how the individual position contributes to the broader purpose of the business (ie. how it impacts customers, why it’s important)
  • A discussion of the new hire’s goals, and what support they can expect from management

But there’s also a crucial, and less tangible, factor during onboarding – does the company culture match the expectations set during recruitment? If the onboarding experience falls flat, it can undermine the new relationship and cast doubt as to whether the new starter made the right decision.

“When employees don’t have the experience they were promised, they will likely make their unhappiness known – in obvious and not-so-obvious ways. They may start looking for new job opportunities, or they may become actively disengaged employees, meaning they develop such a distaste for their organization that they take deliberate steps to undermine its progress.”- Gallup, State of the American Workplace 2017

Get Onboarding Right & Raise Retention Rates Substantially

When you lay the foundations for engagement, success and aligned expectations, employees have what they need to do well in their work and feel part of something bigger. And that is a recipe for retention.

“Employees who have a positive onboarding experience are 69% more likely to remain at the company for up to three years.” – SHRM, Onboarding New Employees: Maximizing Success

But those aren’t the only ingredients required. A positive onboarding experience gives employees a strong start, but you also need to follow through on those first impressions. Employees need to feel supported by management, able to connect their work to the company’s larger purpose, and feel like the company lives its values. It’s a relationship that requires care and feeding, like any other.  

“Employees are consumers of the workplace. They are drawn to brands they can connect with. And they stick with – even advocate for – brands that honor their promises.”- Gallup, State of the American Workplace 2017

In other words, a great onboarding experience only works to increase retention when companies follow through and live up to the hopes of their new hires.

How to get started:

employee onboarding

Download Enboarder’s white paper The Avoidable Problems That Cause Your Best People to Leave to unmask the primary culprit behind your turnover problem.

Microsoft, Google and Eventbrite reveal how they balance technology and the human element to keep their best people.

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