How Onboarding Drives Employee Retention

A well-planned and well-executed onboarding can bring an organization a wealth of long-term benefits. Among them: higher employee retention, greater engagement, and… better productivity!

Why is employee retention tied to the onboarding process?

Every organization has its own way of onboarding new employees. Not everyone, however, realizes how important this process is — exposing the organization to losses caused by poorly run onboarding. It is an easy way to lose promising or key people.

According to the Employee Experience in Poland 2017 report (Great Digital and Hudson), only one in three employees said they could count on support from their manager and coworkers during their first months on the job. What is more, as many as 24% felt left to fend for themselves. One in five judged that the onboarding process did not prepare them for the work at all and failed to integrate them with the company.

Poor onboarding can carry enormous consequences. It has a negative impact on brand image, satisfaction, and engagement. It generates costs tied to hiring new people for the team. Retention drops, too. All of the above can pose a serious challenge for HR, the team, and managers alike.

In our latest ebook “Onboarding Reimagined: how to onboard employees to keep up with a fast-changing reality”, we put it this way:

Onboarding works like the first domino in a chain of events. Done well, it increases an employee’s loyalty, effectiveness, and engagement. Done badly, it destroys morale and generates losses for the business.

It is hard to disagree with that when you look at the research on onboarding’s impact on organizational results — especially on a high or low retention rate.

Effective onboarding and employee retention

91% of employees decide to stay with an organization longer when they receive onboarding support.

Source: Aberdeen Group

High employee turnover — frequent departures from the company — not only hurts organizational culture but also generates high costs tied to onboarding and recruiting replacements. The Society for Human Resource Management (SHRM) estimates that the average cost of replacing a salaried employee runs from six to nine months of their salary.

A well-run onboarding process can make new hires stay with the organization longer. An effective onboarding process means better employee retention.

Importantly, onboarding that starts on the first day of work is not enough! It is worth gradually onboarding a new colleague from the moment their candidacy is approved and both sides decide to work together. That process is preboarding. It is an important part of onboarding a new employee, especially in times of remote work. It can even influence whether a person shows up at the office on day one at all. We write more about it in our ebook “Onboarding Reimagined.”

Onboarding’s impact on employee effectiveness and engagement

Employees who took part in a well-organized onboarding are 50% more effective.

Source: SHRM

A well-run onboarding is not only about higher retention. As the SHRM research cited above shows, onboarding also has a significant impact on employee effectiveness. Positive experiences from the start foster a positive attitude and shape the months — even years — that follow in the organization. A high level of support from the company translates into greater engagement at work. From a manager’s perspective — into higher effectiveness and productivity. What is more, onboarding is also a chance to connect new people with the company’s mission, vision, and values.

High engagement, in turn, brings further benefits for the organization — and not minor ones! It enables better business results, including a lower turnover rate. It also helps reduce absenteeism and even improves the brand’s image on the job market.

Onboarding, first impressions, and employee loyalty

After their initial onboarding experience, 1 in 5 new hires would probably not recommend the employer to a friend or family member.

Source: Digitate

In onboarding, we should not forget about making a good first impression. How often have you felt a dissonance between your idea of a place or company and your impression on first contact? The exact same thing happens to candidates joining a new company — and good onboarding can prevent it.

The first impression is crucial, just as it is with a customer. It directly affects engagement at work, as well as how an employee will speak about the job to others. Right in the onboarding process you can create a WOW effect and quickly turn a new employee into a brand ambassador. Thanks to positive reviews from new employees, you increase your chances of attracting the best talent in the industry. A bad hiring experience, on the other hand, leads new employees to draw early, usually unjustified conclusions — for example, that your organization is poorly managed, which is hardly the impression you want to make on a new person. Both your peace of mind and your retention rate suffer for it…

The WOW-effect theme comes up in one of the webinars we run as part of the Onboarding Academy. It is worth joining!

How does the stress of a new job affect employee retention?

One in five (22%) employees feels lost during the onboarding process.

Source: Digitate

When new employees have the tools and all the knowledge they need about the organization, office rules, the team, projects, and their responsibilities from the start, they can begin doing their work quickly and comfortably. That reduces the risk of needless stress caused by a lack of information about important aspects of their daily work. If they know from the start what is expected of them, they are more likely to complete tasks on time and to company standards.

How do you raise the employee retention rate in your company?

Granted, there are the basics: job security, competitive pay, good working conditions, generally high employee morale, and a good atmosphere. But the onboarding experience has just as big an impact on the retention rate. After all, it is those first weeks and months that decide how an employee sees their future in a given workplace. So what does the onboarding process need in order to keep employees at the company?

What in onboarding will help you strengthen retention?

A well-managed preboarding

As we mentioned, preboarding is an invaluable bridge between recruitment and the first day of work. It matters all the more the longer the notice period binding the candidate to their previous employer. Preboarding covers all the actions aimed at staying in touch with the no-longer-candidate-but-not-yet-employee — for example, sending a welcome message and first information about the company, contact from the manager, handling formalities, or sending a welcome pack.

Recruitment aligned with onboarding

Job interviews have their own dynamics. Sometimes, on being hired, a candidate carries an idealized vision of the new workplace — one that then collapses like a house of cards on contact with reality. That is why it is so important for recruitment and onboarding to form a coherent whole and work for one another.

Met employee expectations

When designing onboarding, think about the needs and expectations of new employees at different stages of the process. Then try to stay one step ahead of them. In practice, that means, for example, providing new hires with FAQ materials answering the questions that most often come up during onboarding.

A friendly onboarding experience

Friendly, meaning one where all the seams are hidden and the elements that create the WOW effect are highlighted. Building such an experience is made much easier by anchoring the process on a platform that automates onboarding and gives the employee one convenient interface guiding them through the entire process.

Support from the manager and buddy

You win the hearts of engaged employees through well-tended relationships — especially in that difficult early period. That is the domain of the manager and the buddy. They should actively support the new person, answer their questions, and help them join the team.

Employee satisfaction surveys

Thanks to satisfaction surveys, an employee feels they have a say in how things go in their new job, that someone wants to hear their troubles or remarks. Pulse-check surveys should accompany new employees throughout the onboarding process. Why? Because at different stages, new hires run into different problems, different questions arise in their minds, and different emotions in their hearts.

How do you measure employee retention?

Like turnover, the retention rate is worth measuring at various stages of the onboarding process:

• after the preboarding stage (i.e., effectively the first day of work),
• after the first week,
• after the basic training stage,
• after the first month,
• after the first quarter (i.e., after the main phase of role-specific onboarding),
• after six months (if the employee is still with us and not going anywhere, we can speak of onboarding success).

At each of these stages, retaining employees will mean something different. This way you will be better able to identify onboarding problems and successes — gaining insight into what needs fixing as soon as possible and what is a real strength of your company.