Why Employee Onboarding Programs Fail (and How to Fix Them)

Onboarding programs are constantly critiqued, but often overlooked. Even while turnover rates soar and engagement rates plummet, one of the last places organizations look to make improvements is their onboarding programs.

Even as onboarding programs remain the last retention strategy rock unturned, it’s widely-understood that organizations who fix their onboarding programs will have a true edge in a competitive talent landscape full of labour shortages.

The Costs of a Failing Onboarding Program

The bottom line is that your onboarding program impacts your profit. When your onboarding program is failing, symptoms include:

  • Turnover rates in excess of 10%
  • Turnover taking place early in employees’ tenure – before 3, 6, 12, and 18 months
  • Low engagement, productivity, and job-function competency levels
  • High rates of absenteeism

As we mentioned in our article Stay Interviews: The Secret to Your Successful Retention Strategy, employee turnover can cost between 50% and 200% of an employee’s annual salary. With an average churn rate of 25% of employees each year, these costs can accumulate very quickly. 

Why Your Onboarding Program Might Be Failing

The reason your onboarding program might be failing isn’t always obvious. With some investigation, most commonly we can pinpoint a challenge with technology, leadership, and data.

Your HRIS is an off-the-shelf product, and not a customized solution designed to elevate the new-hire experience. A classic “fitting a round peg into a square hole” situation, this can lead to onboarding becoming an afterthought because it is simply too difficult to make existing software work for onboarding needs.

We often identify a lack of senior leadership sponsorship or buy-in into onboarding as an obstacle. They might not consider it to be a priority, and so the necessary resources simply aren’t allocated to fix onboarding issues. This includes the lack of designating a dedicated internal resource to solve onboarding from start to finish.   

Finally, there’s the dilemma of data. The data itself can be the problem, with the financial impact of poor onboarding being buried in other line items such as recruiting and training costs, or expenses arising from delayed and canceled projects. Or there’s the lack of swapping notes and data between departments. Like when HR knows the turnover rate and Finance knows the cost, but they aren’t coming together to identify the impact. 

The Benefits of An Effective Onboarding Program

Enough of the bad news! Let’s talk about the immense benefits of an effective onboarding program.

These include:

  • Turnaround tricky turnover rates
  • Give your organization a leading edge in attracting talent in an ultra-competitive labour market; this is especially prevalent in industries like manufacturing and food service 
  • Foster a more engaged and dedicated workforce

According to a study by Brandon Hall (commissioned by Glassdoor), effective onboarding programs can boost new hire retention by 82%, as well as increase productivity by 70%+.

The ultimate benefit? Huge cost savings as your organization mitigate churn through better onboarding programs and practices.

How to Fix Your Onboarding Program

To fix your organization’s onboarding program, you first need to start with calculating and tracking the cost of churn. To gain a comprehensive understanding of churn at your organization, check out Benefi’s Employee Churn calculator. 

Once you start chipping away at churn data, just like when you’re renovating a room in your house by taking it back to the studs, you might reveal some unexpected problems in the process. This is where First30 can help. Our team can guide you through not only fixing, but optimizing your onboarding programs.

The First30 process starts with us conducting an onboarding audit for your organization. From there, we’ll equip you with a robust portfolio of resources and we’ll design and then launch your new, optimized onboarding program!

If your organization is ready for better outcomes than your competitors, it’s time to do something differently, and it starts with overhauling your onboarding. 

To start critical conversations at your organization about the importance of improving your onboarding program, feel free to click here to “steal my slides” and use them as a conversation starter.

If you’re interested in First30’s onboarding services, feel free to send us an email any time!

First30 specializes in employee onboarding and outplacement. To learn more about our onboarding programs, click HERE.  
Planning layoffs? We also offer cost-effective (and excellent!) outplacement services. Download our outplacement brochure with pricing here.
To speak with a member of our team, contact.