Onboarding statistics paint a picture for employers about the importance of a strong onboarding process for worker engagement and retention.
How good is your employee onboarding program? Based on onboarding statistics, business managers might have a very different opinion than employees. According to Gallup, only 12% of employees strongly agree that their company does a great job of onboarding new employees.
Your onboarding processes and programs are the steps you take to introduce employees to your company and their coworkers. The process includes making sure all the new hire’s paperwork is filled out and all formal onboarding training is completed. Arranging these steps in a logical and effective order can help your employees reach their maximum productivity. In this article, we’ll look at employee onboarding statistics that show the importance of this process and indicate how good businesses are at it.
Cost of hiring new employees vs. employee retention
Did you know that it can cost a company between half of an employee’s annual salary to double that amount to hire and onboard their replacement? This statistic shows how important it can be to retain employees. What’s even more concerning is that up to 20% of new hires quit within their first 45 days, according to a Harvard Business Review article.
If you want to prevent unnecessary employee turnover, it’s best to have a formal onboarding program in place. According to that HBR article, companies with a formal onboarding program experience a 50% increase in long-term new hire retention. Furthermore, those new hires are 62% more productive than their counterparts at companies without standardized onboarding.
Onboarding and retention statistics
According to an article by SHRM, 1 in every 6 new hires (17%) quit their new positions within the first month. Of them, 23% said having clear guidelines regarding their duties and responsibilities might have kept them from leaving. SHRM also reported that 33% of respondents to a survey said they received little to no onboarding upon being hired.
It seems logical that good onboarding strategy would include beginning quickly. Also, effective onboarding could help with employee retention by front-loading substantive information. It seems clear that the average new hire would appreciate clear information about duties and responsibilities along with their onboarding tasks. Here are a few other statistics on the timing of the employee onboarding process:
- The most effective organizations (83%) start onboarding new employees prior to their first day.
- 85% of businesses fail to continue structured onboarding after the employee’s first 6 months.
- 98% of companies do not continue onboarding after the 1st year.
Manual onboarding’s effect on HR executives
It’s important to understand that the onboarding process starts before the employee’s first day, at least as far as human resources is concerned. HR professionals must perform background and reference checks and schedule drug tests to ensure the employees are suitable and eligible to be hired according to labor laws and company policies. Then, they must collect all the required documentation from the employee.
When the process of onboarding new hires is done manually instead of through software or a third-party onboarding solutions provider, the results can be stressful and costly. A survey of HR managers by CareerBuilder found:
- Heavier workloads for HR (37%)
- Higher stress levels for HR (35%)
- Required documentation, like compliance-related forms, were missing (28%)
- Delayed started dates (22%)
- No record that the employee read and acknowledged company policies and other information (17%)
- The candidate ended up walking away from a position because the process took too long (9%)
It’s no surprise that the managers would report a greater workload and more stress. However, these onboarding statistics reveal that automating onboarding tasks could reduce errors in documents and delays in hiring.
Problems caused by a lack of onboarding
According to that same CareerBuilder survey, 36% of employers do not have a structured onboarding process. However, some of them do recognize it as a problem:
- 16% of those employers believe that not having an onboarding program or having an ineffective onboarding program is damaging productivity.
- 14% believe that the lack of a structured onboarding program is creating inefficiencies within the company.
- 7% believe that a poor onboarding experience is causing missed revenue targets.
Benefits of a good onboarding process
According to Career Builder, companies that use a structured onboarding process can expect a 49% better employee engagement rate. In the survey, employers said 45% of employees expressed a greater trust in the organization. Plus, 38% said there was higher morale at the company because they have an effective onboarding program.
These statistics on the benefits of onboarding are not surprising when you consider that great onboarding programs also include training and sometimes mentoring, which is known to give new employees a better chance at achieving success within their position.
Using onboarding statistics
Preventing a negative onboarding experience can be as simple as planning ahead. Each time you hire a new employee, make sure your onboarding process is up-to-date on the simplest ways to handle administrative tasks. That includes tasks your HR professionals must accomplish and those that your new hires must do.
There is a significant body of statistics indicating that a positive onboarding experience can increase engagement and productivity and give you the best chance of retaining that employee long-term. It can also help you avoid creating disengaged employees who could harm your company’s profitability. Just remember: the best employee onboarding programs ask new hires about their onboarding experience and welcome suggestions for improvements.