Getting Onboard

It’s no surprise then that 76 percent of firms now have a formal onboarding process, up from 40 percent in 2005. HRM gets the thoughts of Aberdeen’s Madeline Tarquino on the new buzzword in human capital management.

So you’ve worked extensively with the head-hunters, screened your potential candidate pool, and then gone through a raft of competency based interviews. You’ve finally got a yes from your preferred executive. Breath out and relax. . . Or maybe not. Getting talent in is only half the challenge. Once you’ve recruited, the focus shifts to retaining your new hire.

First impressions last, as Madeline Tarquino, Research Analyst in Aberdeen’s Human Capital Management division, explains: “A new employee that feels engaged in the company on their first day of work will have a greater incentive to stay at that company.”

Put like that it sounds obvious, but not every company heeds the lesson. “Future-looking companies recognize that the first impression a new hire makes of their work environment is critical to improving retention rates and improving the company brand,” says Tarquino.

What are the implications for companies that don’t put effort into onboarding? In its research Aberdeen segmented companies into three categories: best in class, industry average, and laggards on the basis of increased retention rates, and increased productivity. Best in class companies were defined as companies that experienced an increase of 20 percent in retention and productivity, industry average companies saw retention and productivity rates remain static on increased below 20 percent, while laggards saw a decrease in retention and productivity.

When comparing the segments, some stark differences emerged with respect to onboarding:

• Nearly 30 percent of best in class companies extend onboarding to the first six months compared to less than 10 percent of laggards.
• 55 percent of best in class companies have a manager responsible for the onboarding process compared to 39 percent of laggards.
• 90 percent of best in class companies incorporate socialization compared to 75 percent of laggards.
• And 91 percent of laggards have a reactive, emergency driven onboarding process, compared to 56 percent of best in class.

So, the research suggests that onboarding can increase productivity and retention rates, but what does it actually entail? How do you get away from the reactive, emergency driven processes that categorize so many companies, especially laggards?

“In today’s environment, support for new hires is not only executed in the recruitment efforts but more importantly, in a well defined, formalized on-boarding process,” says Tarquino.

Onboarding encompasses the variety of tasks and requirements involved with acclimating and engaging a new employee in the company. “Its no longer the new hire ‘orientation’ of the past,” Tarquino argues. “The checklists associated with onboarding have evolved into an integrated experience.”

In its research, Aberdeen Group defines onboarding as a process involving: forms management, tasks management, and socialization in the company culture. “Companies that incorporate these three components are those companies that will achieve optimal ROI from their onboarding process,” says Tarquino.

Aberdeen argues that in order for employees to feel engaged and acclimated in the company, onboarding needs to be proactive and clearly defined. One-way companies are looking to improve their new hire experience, is through investment in technology to enable their new hires to have a smoother transition from the recruitment stages.

“Automated solutions can help companies address pressures to improve retention rates, improve time to productivity and improve the company brand,” says Tarquino. And, if executed correctly, technology can also address some of the perennial business pressures, such as eliminating extra costs, facilitating the forms process and improving customer satisfaction.

Broken down, the three key components of onboarding are described by Aberdeen in the following ways, each of which can be facilitated by better technology:

Forms management: This includes all of the new hire data and electronic completion and tracking of forms. “Technology that enables forms management can include tools to automate the completion of candidate forms both before they start and on the first day,” Tarquino explains.

Tasks management: This involves the workflow tasks including the notification and tracking of activities required to prepare for a new hire. “An example of technology that enables task management includes automated requests and reminders that notify the individual of the needs of the employee,” says Tarquino.

Socialization: This is the process of delivering information about the culture and history of the company. “While not every solution offers this component, it is critical to making employees feel more engaged and connected to the organization,” says Tarquino. “An example of the technology that enables socialization would be new hire portals.”

It all sounds simple enough, but there are challenges for companies. “Technology is not the panacea for onboarding,” Tarquino says. “Although it creates efficiency, cuts costs and reduces turnover, it is not the magic wand for onboarding”. Indeed, Aberdeen found that 36 percent of companies do not use any technology at all.

Challenges technology doesn’t help with include defining exactly the onboarding process, handing off the new employee from the recruiting manager to the hiring manager, and integrating different aspects of the onboarding process.

As Tarquino explains: “Companies need to look to the future by defining the onboarding process, creating an onboarding roadmap, and investing in strategic long-term workforce planning that integrates their onboarding with the pre-hire stages and the post-hire stages.”

And even the best performing companies – that have successfully created an onboarding roadmap, and have ensured that their employees have a positive experience after joining the organization – face future challenges. As Tarquino explains, even best in class companies need to move to the next level by establishing “clear ownership and integrating onbarding with the hiring management process.”

The research quoted is from Abedeen’s Onboarding Benchmark Report: Technology drivers help improve the new hire experience published in August 2006, and quoted with kind permission. The data is derived from a survey conducted in partnership with the Human Capital Institute and interviews with senior executives in the human capital management community. For more information on the report or Aberdeen’s research see www.aberdeen.com.

Madeline Tarquinio is a Research Analyst in the Human Capital Management division at AberdeenGroup, Inc. Tarquinio focuses her research on the employee life cycle, including candidate recruiting, performance management, assessment, career development and retention. Prior to joining Aberdeen, Tarquinio worked as the head of research at Linkage, Inc.