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The importance of the onboarding process

What is Onboarding?

Onboarding is the process by which companies welcome and integrate their newly hired employees. Integration implies that the process extends beyond the first week of an employee.

Let’s not confuse onboarding with orientation though. Orientation is just a step of the onboarding process where new employees get a feel of the environment (office), meet their new colleagues and get accustomed to their job duties.

A Forbes article reports that 25% of new employees leave the company within the first 12 months with the cost of losing one person equal to 2 years of his/her salary, and thus having this process is critically important.

When we take into account the costs and the importance of retaining talent, it becomes obvious why this process is imperative to have in every company. 


Why it is important? 


Given the statistics above an effective onboarding can improve a company’s employee retention. According to iCIMS turnover can be reduced (statistically) using an automated onboarding process from 44% to 14%.


It is estimated that with a good process productivity can increase to 54% and two times the level of engagement from their new employees. An estimated cost of around $37 billion every year is spent by US and UK businesses to keep unproductive employees who do not understand what they have to do. The longer the onboarding the better the productivity of the employee, with a year of the process being the appropriate period in order to avoid turnover.

Cost savings 

One in four CFOs say that turnover accounts for 25% to 50% of labour cost according to Forbes. This cost includes the loss of productivity, sales and the additional costs of recruiting and integrating an employee.

An automated process could cut the costs down. Forbes reports that General Electric has managed to improve productivity, and reduced costs. The system named GE Hire has produced an estimated ROI in the first three years of 665%.

Beyond cost savings the data generated from this system can be valuable as well.

Some (final) thoughts shape-1

Before implementing an onboarding process it is vital to know how to create one, so a good documentation beforehand is essential, unless you decide to opt for system already existed.

If you decide to develop your own system, a great way to share all the ideas and documents is to use Knolyx.


This article is part of a bigger topic called Onboarding Process


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