From start to finish, the hiring process can be lengthy and complex with so many steps, people, negotiations, and costs involved. When a new hire is finally set up with a start date, many may think the hiring process has finally ended, but ideally your process should continue to another essential phase…onboarding.

The Case for a Solid Onboarding Process

Why should you be concerned about a solid onboarding process?

According to Dave Dart, Managing Partner of the Morisey-Dart Group, “This is where you set the tone, positive or negative, for a new hire’s career with your organization. All of the time, energy, and costs that were expended during the hiring process are at risk if your company doesn’t have a proper onboarding process–especially when “top talent” is involved.”

Dart continues, “It doesn’t make business sense that a company would go through the expense to hire someone, pay them a salary, and then lose them because they didn’t start the relationship off on the right foot.”

If a new hire doesn’t stay with your organization because his early impressions were less than stellar, your investment is gone–not to mention you now have to start again. The more advanced the position and its relative responsibilities and salary, the higher the cost in time, productivity, and revenue.

Partners at Connect the Dots Consulting, Erika Lamont and Brenda Hampel, cite some new hire failure rate statistics in their blog post titled, Onboarding–A True Partnership between a New Leader and the Organization (Source: Human Resources Sources website, March 30, 2012).

“46% of new hires leave their jobs within the first year.” (Source: eBullpen, LLC)

“50% of current employees are actively seeking or are planning to seek a new job.” (Source: Deloitte)

“58% of the highest-priority hires, new executives hired from the outside, fail in their new positions within 18 months.” (Source: Michael Watkins)

“Only a 19% success rate–one out of five of the process output can be classified as unequivocal successes.” (Source: Leadership IQ)
Lamont and Hampel refer to Dr. John Sullivan, strategic talent management expert, regarding his thoughts and findings when it comes to a correlation between poor new hire retention rates and weak or non-existent onboarding processes. “…onboarding is the process that can have a significant impact on these failure numbers. So it follows that implementing a successful onboarding process can reap big benefits for your organization.”

Recruiting, onboarding, and retention

In Dr. Sullivan’s own website article titled, Retention Problems Begin During the Hiring Process, he says that most companies tend to view recruiting and retention as two separate processes and this leads to failure.

Sullivan says, “I estimate more than one-third of the factors that drive future turnover have their roots in the recruiting, hiring, and onboarding process.”

When it comes to the direct impact that orientation and onboarding have on future retention, Sullivan continues, “The first few days on the job have a dramatic impact on future retention…new hires subconsciously judge whether the organization meets, exceeds, or fails to meet the expectations they have based on how they were treated during the first week and month.”

Dr. Kathleen A. Dodaro, Executive Director at Healthcare & Consulting Services, published a whitepaper titled, Retention is Key, where she discusses the importance of onboarding and how an effective onboarding program has three interrelated functions. Dr. Dodaro states, “It ensures that the new hire feels welcome, comfortable, prepared and supported. It enables the new hire to make a positive impact within the organization both immediately and over time.”

Dr. Dodaro continues, “The employee’s success leads to satisfaction and retention, which allows the organization to continue to meet its mission, vision and goals.”

Dr. Dodaro also cites a retention statistic that drives home her point that effective onboarding is key to success, ” ‘New employees who went through a structured onboarding program were 58% more likely to be with the organization after three years.’ ” (Source: The Wynhurst Group)

Once you’ve spent the time, effort, and money to find top talent, it only makes good business sense to continue with a solid onboarding process. It will help your new hire get acclimated and established within the company so that productivity can begin faster. Then you’ll start to see the return on your investment, both monetarily and through retention.