Economics of a Great Onboarding Plan (or Not)

Onboarding Plan for Economics

After recruitment and selection, one of the main challenges faced by organisations today is reducing time to competency among new hires. As research and conventional wisdom show, most new hires require 90 days to prove themselves in the job. It can take just as long for an employee to feel fully acclimated to the environment. One Aberdeen study found 86% of new hires decide their future with the company within their first six months.

The bottom line is that the process of engaging and developing employees should extend well beyond the “new hire” phase to ensure the individual employee becomes, and continues to be, a productive contributor to the company.

Consider that ……

  • Half of all senior outside hires fail within 18 months in a new position (Brandon Smart, Topgrading).
  • Half of all hourly workers leave new jobs within the first 120 days (A.D. Krauss, SIOP 2010).
  • The cost of turnover is 14 times the base salary for those earning under $100K (Michael Watkins, The First 90 Days) and 40 times base salary for those earning between $100K and $250K (Brandon Smart, Topgrading). This includes both direct and indirect costs, such as missed opportunities and lost productivity.

But the good news is ……

  • New employees are 69% more likely to stay longer than three years if they experience well-structured onboarding (Aberdeen).
  • A manager’s ability to develop deep relationships with their new hires can drive greater employee productivity and retention (Bersin by Deloitte).
  • 80% of organisations say they offer some form of onboarding, either formal or informal (SHRM).

While approaches to onboarding may differ among companies, the goal remains the same: transform new hires into dedicated employees and get them excited and engaged, connected to the company culture and productive in the shortest time possible.


According to researchers like Dr. Tayla N. Bauer, the building blocks of any successful onboarding program must contain the Four C’s:


Compliance: Teaching employees basic legal and policy-related rules and regulations.

Clarification: Ensuring employees understand their new jobs and all related expectations.

Culture: Providing employees with a sense of organisational norms – both formal and informal.

Connection: Vital interpersonal relationshops and information networks that new employees must establish.

Some studies also suggest including Coaching, Communication and Check-ins.

Regardless of your strategy, it is important to be mindful of the impact your onboarding approach will have on the new hire, other employees and the overall business.


Results from May 2013 Survey:


What you consider to be the most critical onboarding practice for ensuring the success of newcomers.

  • 51.6% – Communicating to newcomer regularly, to set clear expectations and reduce anxiety;
  • 19.4% – Providing newcomer with a well-matched mentor;
  • 16.1% – Conducting welcoming activities (focused on integrating and socialising employee into organisations culture);
  • 12.9% – providing training (to facilitate the systematic acquisition of skillls and knowledge by newcomers).





Focus Areas: Talent Management

Solutions: Predictive Index; PI Management Workshop

Focus Areas: Employee Retention and Development

Solutions: PI / PRO; Additional Solutions.

Categories: Insights, Newsletter

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