People Management | 5 min

Onboarding: A big upfront investment, and a big opportunity to increase profitability

4 May 2018

It’s no secret that it typically takes employees some period of time to start adding value to the business when they start fresh in a new role or a new organisation.

In their first three to six months, new hires are trying to settle into their role. They have onboarding processes and relevant training of systems and procedures to complete, all whilst gaining an understanding of, and being entrenched in, a whole new set of company values, goals and culture norms. Even seemingly small things like learning their way around the building, getting to know coworkers or discovering the best places to get coffee nearby are all important steps that every employee must take to really feel comfortable in their new position.

The Learning Curve

The learning curve journey can take time, and you can expect that even the most experienced hire will still take some time to fully align themselves to their new organisation. During this period, the new employee is generally a direct cost to the business as they are not necessarily producing. Naturally, the simpler the role, the faster that productivity starts to happen. In knowledge-based roles, however, this journey can be extended over many months.

The graphic below demonstrates how employees typically progress from an initial investment phase to a point where they are generating returns for their organisation.

employee lifecycle performance curve — The Employee Lifecycle Performance Curve

Blog: How to generate ROI on your People + 3 quick win ROI tips for HR

Onboarding: an ROI critical control point

A successful onboarding process will shorten this initial investment phase allowing employees to reach their peak potential sooner. On top of this short-term benefit, the onboarding process is critical to an employee’s long-term retention in an organisation. Most new employees form a decision on whether they want to stay or leave a company within their first 90 days, so first impressions count. In fact, a 2017 study revealed one in five employees leave before even completing their probation period ^[1].

“one in five employees leave before even completing their probation period”

For this reason, it is vital that employees not only have a great first impression of working in your business but also that leaders are able to monitor how the new employee is going and if there are any early issues that need to be addressed. For organisations using intelliHR, new starters can enjoy a painless and paper-work free onboarding experience. Automated email reminders invite them to undertake all necessary tasks to get started from recording their qualifications, to entering their emergency contact details and even setting the first goal they want to achieve in their new position. With everything completed in an intuitive and appealing system, new hires can get set up for success in their new role straight away, without creating any additional work for the HR team or other leaders in the business.

Report: See how other organisations are improving their onboarding processes and learn how you can to in this report

If organisations lack these tools and new staff members are leaving before they’ve even entered the profitable performance phase, this equates to a lot of money out the door. That’s why intelliHR’s world class analytics and people management tools were developed to enable organisations to boost engagement in the onboarding process, maximise return on investment (ROI) and reduce attrition.

To understand how these outcomes look in your own organisation, it is a worthwhile exercise to understand the cost dimensions of time and speed to performance to truly understand the financial investment being made in every new employee.

Calculator: Discover the cost of employee turnover in your business with this free calculator

Empowered with this knowledge, we can influence a new hire’s speed to break even, acceleration to peak performance and how long their productivity level lasts. We can also help take it to new levels!

SOURCES

[1] People Management (2017). One in five employees have left a job during their probation period. https://www.peoplemanagement.co.uk/news/articles/employees-leaving-job-during-probation

Back to Blog

People Management | 5 min

Reconnecting with your workforce

Whether your team still plans on working remotely or returning to the office, it’s important to put the right steps in place for them to thrive. As some businesses start to begin their journey...

25 May 2020

People Management | 5 min

What you need to know about JobKeeper Payment Scheme

The government hasn’t made it easy for us HR people. It feels like we’re being asked to be codebreakers: deciphering the cryptic code and confusing laws around the JobKeeper Payment Scheme. It’s added stress,...

28 April 2020

People Management | 5 min

How you as a leader can effectively be managing remote teams

Just like many of you, we’ve shifted to fully remote working conditions. The territory comes with its challenges, especially for managers who have been asked to quickly adapt to a completely new way of...

23 April 2020