So, does this sound familiar?
You’ve been through the hoops of struggling to recruit.
Candidates who you thought would be great were offered other roles in other businesses before you had the chance.
You’ve wasted hours of your limited time coordinating interviews going back and forth, back and forth over emails.
Offers that you have made have been refused.
Finally…you have now hired (and the contract is signed!) ‘someone’ — and they are the perfect ‘someone’ in every way. They’ve made the ‘hell’ (or close to) that you have been through trying to find them worth it.
As a result the job is DONE!
Your business will grow.
Your team will collaborate and solve problems together.
You will trust people and using their smarts, they will just do amazing things.
You can just get on with what you are great at.
The rest will now take care of itself.
[Happy sigh]…All will be good with the world.
Enjoy that relief for a second… because I’m sorry to say, it won’t last long if you think that hiring this amazing ‘someone’ is the end.
Actually, an accepted offer is just the beginning. Now starts the hard work.
Research by Nintex states that ‘Despite the time and resources employers invest in hiring, 20% of new employees quit within the first 45 days, and 31% quit in the first six months.’ One in five quit within 45 days! Almost one in three quit in the first six months! This is soooo expensive for businesses, demoralising for teams and not to mention probably an horrific experience for the individual themselves.
Here are just three more (and there are plenty of others) scary numbers that should cause your jaw to drop…
- 69% of employees are more likely to stay with a company for three years if they experienced great onboarding (source)
- New hires in companies with longer onboarding programmes report being more proficient in their role 4 months sooner than those with short onboarding programmes (source)
- 50% of all outside senior hires fail within their first 18 months (source)
So, really engaging, clear and integrative ‘onboarding’… it’s pretty darn important!
What is Onboarding?
Put simply, Onboarding is the process by which a new hire gets to grips with the business and their role in order to add value.
Most businesses look at onboarding as a task or a checklist that involves making sure that the kit is ready and set up and that the newbie has had introductions to members of the team.
There may also be an ‘induction’ where they get a high-level introduction to the business, high-level goals, etc. That is often pretty much it. As explained in this article on onboarding,
“In many companies [onboarding] refers mainly to completing the required documents, allocating space and resources, and providing mandatory training, usually in technical areas such as compliance”.
After these first day ‘chores’, at this point, many people are then left alone to figure it out — sink or swim. After all, ‘we hired someone bright and experienced to minimise the ramp up time. They should know what they are doing.’
But it doesn’t work that way. If, for just a brief moment, we turn onboarding away from its impact on people to something cruder, i.e. money, it can really help to highlight the importance.
I call the following Newbie ROI. This is the point at which a new team member finally breaks-even against your investment. When referring to your investment, I am talking about costs and time to recruit; costs and time to develop any training materials; productivity loss in current members of the team in supporting the new person’s development and more obviously the new person’s salary and benefits plus additional op costs that you incur as a result of additional headcount.
The graph below is a representation of Newbie ROI. There are two rough and ready assumptions made as part of this. 1 — performance is linear; and 2 — performance continually increases at least to 12 months.
At a push, Newbie ROI hits at somewhere between 6–9 months (the stats can vary significantly on this with some reports even saying 1–2 years). From an adding value perspective, many A-players will do so early on, but that doesn’t mean that they are yet returning on their investment. (This is important — adding value does not necessarily that they are yet returning on their investment — adding value means that their work is having some positive impact.)
Regardless of the exact timeframe (it will be different for each business) it takes longer than it should!
I find this super interesting (hopefully it isn’t just me)!
When you take time to reflect on this and its impact, and when taking the whole People Experience (PX) journey into consideration, you will find that many people are then expecting a pay rise in the months following. As an employer, if you are increasing pay at 12 months (or thereabouts), ensuring that Newbie ROI happens sooner rather than later becomes crucial, unless of course, you are happy to throw money away.
The purpose of onboarding then, the true business goal, needs to become: integrate each individual so well that you decrease their time to Newbie ROI and in return increase retention. Good for the people; good for the business.
In addition, the indirect benefits of strong onboarding shouldn’t be underestimated. These include:
- greater levels of motivation and engagement across the business,
- less ‘carrying’ of new team members,
- higher business performance and productivity,
- development of stronger psychological contract between your newbie and the business and, amongst others,
- your new team members will become strong employer brand ambassadors circling around to then reduce cost of recruitment.
Great, so what are some practical ways that I can make onboarding happen?
Firstly, rather than just a checklist of things to do (although you can turn what is below into one) consider onboarding as a layered approach and align it with your business goals. Here are some ideas to consider:
1) Make the first day exciting, so start onboarding day 1.
- In many businesses, the first day is filling out paperwork (on- or off-line — it is still just as boring — unless of course you gamify it :) **Hint). Don’t make day 1 about paperwork, setting up some tech, and / or a few awkward introductions. Get this stuff out of the way before they even have their first day in the business. Surround it with great comms and you can have something really engaging making your new hire antsy with anticipation and excitement rather than nerves.
- Add your soon to be new starter to whichever HRIS system you use before they start. Set up their email and give them access early so that they can complete everything they need to before day 1. This would include sending copies of necessary documents (or why not meet them for a coffee to get this stuff prior to their start?)
- Share the company handbook, key policies, your culture deck or your internal wiki. Give them links to relevant places where they can find out more information about who you are as a business.
- Share recent strategy presentations/company goals or anything that you can in advance of day 1. All of this will help them understand more about the business and feel more engaged before they start.
If they aren’t starting for a while, drip feed it to keep maintain communication and excitement ahead of that first day.
- In the week prior to them starting, send them something. A little care package is always great — beers or wine, flowers, chocolates, etc — at the very least a card. The delight and immediate engagement that ensues from this far outweighs the cost. Creating “wow” moments is impactful!
- If you can, make sure you invite them to team drinks or a lunch, or even a ‘town-hall’ or ‘all-hands’. They don’t need to be put on for that person. Invite them to one you are already having — one that is on prior to them starting. This means that they get to know people that they are going to be working with before they start in a more social environment. This reduces first day nerves significantly and immediately makes someone feel part of the team.
- Let them know whether they should bring a pack lunch on their first day, whether or not someone will take them for lunch or they will be expected to buy lunch in the local area. It seems silly, but there won’t be any clarity around things like this for a new starter. Absolutely no point in having this in their mind — leave their mental capacity free for the important things! Knowing simple things like this, including what time to show on day 1, who to ask for, etc, takes those little niggly stresses away. Your new starters feel armed with necessary knowledge and therefore feels more confident.
On day 1:
For when they arrive, have their desk set up and ready with company stuff (mug, notebook, pen, laptop, branded ‘gumf’), access keys or cards, any kit they require, etc
Show them where the toilets are, how to make tea, or coffee (gets complicated in tech businesses :) )
Their manager should sit down with person and go through an onboarding document which includes:
The Why — vision, mission, strategy, company goals
Don’t let this wait. If you haven’t shared it prior to starting, share it. Regardless, day 1 you should go over it. You cannot over-communicate this stuff. Make sure the person is super clear. Then cover:
The How — how the business/ team works, the culture, the values
The What — goals! What is the person expected to achieve in their first 30, 60, 90 days. Also what is expected in terms of behaviour.
This meeting will be one of the most valuable meetings you ever have with a new starter. For them, walking away with clarity around what they need to succeed and what is expected of them in terms of ways of working will reap rewards for you as a manager. And, if you ever need to have a difficult conversation, you have a ‘hook’ to hang it on. With clarity of expectations comes clarity of performance.
Weeks 1 & 2:
Ensure that in the first 2 weeks (ideally week 1) your newbie has spent time with as many people and as many teams as possible. Not just finding out about what they do and how they do it, but really understanding their role and how it can impact theirs and vice versa.
The right people will want to make things happen straight away. They will want to prove their worth and start adding value. Rightly so.
But… Hold them back.
Ask them to get a real understanding of how things work and why we do things the way we do first. One week will be fine for that (depending on the size of your business).
For week 2 make sure that they build their plan for the next month/ two months/ three months now that they are armed with the knowledge. Your role will be to help them make sure that their initiatives to achieve their goals, and business goals are well prioritised — i.e, they are focussing on the most important things first.
In addition, provide your newbie with training. Be their mentor, be their coach — absolutely — but train them about your clients, your industry and market, any internal processes such as recruitment and sales, and so on. If you expect someone to know something, then teach them!
Then let them run with it — checking in weekly during their first few months. Having spent time with them in the first 2 weeks, you will have developed a trusting and open relationship, meaning that they won’t hesitate to come to you if they need to.
Managing performance is a different and very large topic that I won’t get into now. Saying that, know that the way you manage someone’s performance in their first few months will not only impact their longer-term success, but also the relationship that you have. Better to get it right now, then have to change your ways of working. So, here are a few little pointers:
- Catch them doing the right thing and calling them out on it. Talk to them openly them if something could have gone better or didn’t go as well as it could have. Having the opportunity to reflect on any mistakes will ensure learning takes place.
- Don’t feel that you can’t have honest conversations about what is working and what isn’t working just because they are new. They will be keen to make a great impression — so help them. Your role as a manager is to set them up for success. Be honest with them, talk and most importantly, listen.
- Don’t ‘sandbox’ management just because someone is new. The great management habits that you use during this time will be what will be deemed ok as time moves on. Plus, people want to perform well and they want to know when they are. There is very little more motivating than knowing you are working for a purpose, that you are adding value through being autonomous and owning it, and that you are mastering your role — thank you Daniel Pink (read his book Drive, if you haven’t already!).
So yes, if you hold them back, it will be week 3 before they are doing real work. But, um… week 3 isn’t month 3. The difference is that with the intense ‘get to know you’, ‘how you do things around here’ and ‘why you do what you do’ — they will get to Newbie ROI faster and are less likely to make significant career defining mistakes and / or leave.
So all in all…
Onboarding is a far bigger topic than most people give credit to. Beyond onboarding into a business, it is also just as important to onboard into a new role (in the same business) or an evolved role.
Although your ‘newbie’ is likely to not be so new (into the business), when moving into a new role there is a skills and knowledge gap that needs bridging. This is the purpose of onboarding into a new role. This may be around getting to know the new team or different stakeholders, having some formalised training, getting to know the ‘localised’ versions of ‘how we do things around here’, any specialised tech requirements, tools and so on. In particular, if the new role has a different manager, then clarifying expectations between both people becomes critical for relationship building and establishing trust.
In addition, when considering that ‘change is the only constant’, and ‘change at lightning speed’ is the norm for startups, the role that a person starts in is rarely (arguably never) the same 12 months later. Making sure that the time you spend onboarding them into the business is thorough and focuses on true and genuine integration will be time well spent. It will enable the building of a strong, trusting and open relationship and as such, all changes — expected, enforced or otherwise — will be managed with far greater ease and with higher engagement.
Don’t dismiss the importance of onboarding once you have done the hard work to hire someone. It could be the amount of time that you spend that reaps the greatest rewards — not just for the long term, not just for people, not just for the team and for retention but additionally from a financial perspective.
As Benjamin Franklin once said, “An investment in knowledge pays the best interest.”