The Hidden Costs Of Inadequate Onboarding

A study published by job portal CareerBuilder found that a staggering 36% of business organizations do not have a structured onboarding process in place. At the outset, inadequate onboarding has one clear impact on business – an unproductive use of the employee’s time. Employees who do not have a clear picture of their role or have not been trained for their job are less productive and are thus a liability.
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However, this is not the only cost. Inadequate onboarding can be a lot more expensive to organizations. In this article, we look into the real cost of not onboarding your employees adequately and how this can be prevented.

What Constitutes Inadequate Onboarding

Before we consider the costs associated, it is important to understand what constitutes inadequate onboarding. This arises from a failure to acknowledge the two sides to business productivity – understanding the objectives of the role from the employer and the employees’ side.

From the employer’s perspective, onboarding includes adequate communication of the roles and responsibilities of the employee along with bringing them up to speed with the rest of the organization. Besides job-related tasks, this also includes training the employee on the work culture in the organization.

From the employee’s side, it is important for onboarding to be personalized based on the learner’s capability and expectations. One size does not fit everyone. It is thus important to invest in learning management systems that can personalize the training process and also break the lessons into chunks that are more effectively learned. In addition to this, onboarding should also include assessments that can help the employee test their learning retention in order to make sure that they are ready for the role they have been hired for.

Loss In Productivity

As noted earlier in this article, loss in employee productivity is the most obvious impact of poor onboarding. Unfortunately though, this loss is not always apparent to the management. An organization with no structured onboarding process in place will have a workforce that is uniformly less productive. The opportunity cost of this is not apparent unless the employee level productivity is benchmarked against competitors.

One of the best ways to fix the situation is by bringing in external consultants to assess your onboarding programs and measure employee productivity. These experts come with a perspective that is often invisible to people within the organization, and are thus a better judge of onboarding effectiveness.

High Attrition

Inadequately onboarded employees do not have a clear view of their roles and responsibilities. Not only does this bring their productivity levels down, but it also has a direct impact on their morale and job security. Not surprisingly then, a survey revealed that nearly a third of all new hires who were insufficiently onboarded look for a new job within the first six months while about a quarter quit before a year on the job.

Not only does employee turnover contribute to high hiring costs, it also has a cascading effect on employee productivity since it takes time to hire and bring the new employee up to speed with business needs.

Fixing this situation is pretty straightforward. It is imperative for managers to conduct monthly or bi-monthly feedback sessions (that include anonymized surveys) to understand an employee’s views on their organization. This helps an organization understand employee morale and their feeling of security in their role.

Employee Loyalty and Work Culture

At an organizational level, poor onboarding and the subsequent rise in attrition means that an employer may not be able to establish a work culture. Building a brand among workers and instilling a sense of pride can only happen when you have employees who stay with an organization for years. When there is a uniformly high attrition across departments, there aren’t enough ‘role models’ for new employees to take inspiration from.

This may seem like a catch-22 situation since you need loyal employees to build a work culture, but such a culture only happens when there are enough loyal employees. The way to establish a work culture is by building one from the top. Incentivizing managers to establish better work routines among their workers and establishing better onboarding practices at a team level is essential to create a company-wide change in loyalty and employer brand perception.

Author: Editorial Team

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