Study of New Employees Confirms Impact of Onboarding

HR Articles - General

Study of New Employees Confirms Impact of Onboarding

 

Most employers and Human Resources professionals would agree that a new employee’s first days with a company are critical, but just how big of an impact can an effective (or ineffective) onboarding program have? In other words…

How does the performance and behavior of new employees who feel this way…

-        “It's difficult to describe what they did - you are thrown in, sink or swim.”

-        “I spent an hour filling out forms, sat in the lobby for two hours waiting for my new boss, who then told me to go meet with a few people. That was it!”

-        “The entire first month was unstructured and lacking focus.”

-        “I still don’t feel connected to the company or other employees.”

Differ from new employees who feel this way…

-        “There was a lot to learn. Luckily, there was a plan.”

-        “There was a great orientation guide which helped me through it.”

-        “The structure of the orientation bolstered my confidence in the company.”

-        “I knew exactly what was expected of me… this way I was able to fulfill those expectations.”

To answer this question, Novita, a firm specializing in new employee development, conducted a study to determine how well companies are integrating, assimilating and empowering new employees.

The results (the above are actual quotes from the study) help demonstrate that a formal and well-developed new employee onboarding program not only impacts the new employee but the organization as a whole – both directly in terms of productivity, employee referrals, and retention, and indirectly, as far as employee satisfaction, culture, and safety. These can provide significant return on investment and contribute to both dollars gained and dollars saved.

Unlike most surveys of its kind, Novita surveyed new employees, not employers. Approximately 400 new employees participated in the study, from over 200 companies.

 

How are Today’s Companies Onboarding New Employees? 

From the data, it appears most companies’ efforts are focused around what might be considered traditional activities, such as administrative, group or individual sessions with Human Resources, and a facilities tour. The majority of onboarding is taking place within the first week, with most programs containing social aspects, such as taking the new employee to lunch.

Information is mostly being provided in a print form. Somewhat surprising, technology (defined as online content, e-learning, webinars or email) is not currently playing a prominent role in onboarding. 

A large number of new employees answered that they integrated into the company on their own. “This is not necessarily a bad thing,” says Robert Bilotti, Principal Partner of Novita. “Provided the company is set up for what we call self-service onboarding.”

The survey also indicated that many new employees consider their manager and new co-workers chief sources of information. “Again, not a bad thing,” says Bilotti. “The question to ask is are your managers and other employees properly trained, and providing consistent, accurate information?”

 

How Effectively are New Employees Being Onboarded?

When asked to rate their overall onboarding experience, the results resembled a bell curve, peaking at a “neutral” response - a strong indication of room for improvement. 

Why the dissatisfaction? According to the results, onboarding in a majority of companies is an “informal” process, rather than a defined plan. Managers received the lowest marks of the survey, with 54% of respondents disagreeing with the statement: “My manager knew the proper way to orient me.” Given the aforementioned significance of manager’s involvement in onboarding, this presents one of the biggest opportunities for improvement and impact. 

On a positive note, respondents felt their companies are effectively supporting them and responding to their needs. When asked how they felt after the onboarding period, half indicated they are satisfied with their decision to join the company, though “disorganized” was the top answer in terms of their impression of the company. Some even revealed that they quit or were considering leaving the company based on events that began during onboarding (“After 8 months, I am ready to leave due to the lack of management that began from the beginning.”; “After my experience, I decided to resign after 9 months.”)

 

What’s the Impact of an Effective Onboarding Program?

The significance of the data comes into focus when you begin to compare the new employees from companies with a highly-rated onboarding program versus those with a poorly-rated program. The chart illustrates just how far-reaching and considerable is the effect. Bilotti says, “Most people assume the impact of onboarding is felt only by the new employee, but it touches everyone: tenured employees, managers, executives – for example, counter-productivity, which is how a new employee can negatively affect others – they can potentially upset things.”

 

New employees of companies with a highly-rated onboarding program are…
Productivity:	59% more likely to achieve 61 – 100% productivity during the onboarding period.
Time to productivity:	15% more likely to achieve 100% productivity within three months.
Satisfaction:	115% more likely to feel satisfied with their decision to join the company.
Retention:	23% more likely to make the decision to remain at the company within six months.
Employee Referrals:	58% more likely to recommend the company to a friend or colleague looking for a job.
Innovation:	85% more likely to contribute their ideas for improvements.
Compliance:	52% more likely to understand the desired conduct of an employee.
Safety:	107% more likely to know what to do in case of an emergency, and other security information.
Loyalty:	48% more likely to feel a strong sense of commitment to help the company be successful.
Culture:	95% more likely to feel part of a team working towards a common goal.
Learning:	207% more likely to feel the company was committed to their learning and development.
Impression:	481% / 51% / 65% more likely to have an impression of the company as organized / dynamic / caring.

 

In terms of R.O.I. (return on investment), the impact can be quantified by the dollar value of new employees achieving greater productivity, choosing to remain at the company, committing fewer errors, violations and accidents, and referring other candidates – not to mention innovation. Bilotti urges thinking beyond productivity in terms of the return. “Think about the financial outcome of fewer accidents, fewer lawsuits, less calls to the company’s help desk, more referrals, higher retention, even one more great idea, and you really start to see the ripple effect that onboarding has.”

 

What does an effective onboarding program look like?

“Companies and new employees are so different,” says Bilotti. “But as this survey suggests, there are common features that the highly-rated – and therefore highly impactful – programs share.” Things such as:

ü       A defined plan and formal process.

ü       A manager trained in the proper way to orient a new employee.

ü       A workspace properly configured for the new employee to begin working immediately.

ü       The ability for the new employee to find answers as well as locate tools and resources on his or her own.

ü       Opportunities for socialization.

ü       A company responsive to the new employee’s needs.

ü       Learning from others (knowledge sharing).

Such features offer a blueprint to a successful program, but as far as the components upon which to build your program, the data did not reveal any magic pill. Many highly-rated programs had the same set of components as poorly-rated programs. “Quality is the factor,” Bilotti says. “You may have a New Employee Guide, but if it doesn’t answer the new employee’s questions, it’s not effective.”

Bilotti says the objectives you set for your onboarding program and your employees’ needs and preferences should lead you to the appropriate components to include.  The data revealed that certain components led to different “types” of impact. Some scored higher for retention, while others increased employee referrals. Above all, the data indicates there is no one solution or tool or even technology that addresses all needs or is a “one size fits all” onboarding solution. “Onboarding may seem simple but if your company numbers even a hundred – to do it right – is a complicated and involved process involving large amounts of information and numerous people within different parts of the company – it is truly cross-functional.”

 

First Steps to Improved Onboarding

Like any successful initiative, it begins with a comprehensive analysis. “Smile sheets at the end of the first day won’t suffice,” says Bilotti. Because of a disjointed effort, many companies don’t even know what’s being done for new employees. “We deal with clients all the time where HR is doing one thing, IT is doing another, training has their own thing going on, and the manager isn’t doing anything.” 

It’s one of the benefits of having outside assistance. An outsider can bring all these people together, and get them thinking strategically and objectively. What’s more, improving onboarding is a time-consuming effort usually lumped onto a department’s already full-plate and limited headcount. Says Bilotti, “Like everything, it comes down to how much is your time worth?”

And then adds, “With all the research out there including this study, it surprises me how onboarding continues to be regarded in organizations – like an afterthought or a nice to have.” The results of this study could help to demonstrate that an effective onboarding program is a mission-critical strategic goal, and that any investment in your new employee onboarding returns that investment many times over.

For more information or to request a copy of the executive summary report, contact info@novitaunique.com

 

About Novita: Novita’s goal is to “accelerate new employee development” and offers services and programs addressing the needs of all those involved in new employee onboarding from “both sides of the desk”, including services targeted to assist Human Resources and T&D, training for managers, and workshops for new employees looking to make an impact of their own. Visit www.novitaunique.com to learn more.

 

Robert Bilotti is Principal Partner of Novita, and has previously served as Training Manager for a consumer packaged goods company. With an extensive background in instructional design, training strategy and organizational development, he is a requested speaker on the subject of new employee productivity, as well as manager and employee development.