The Business Case for Onboarding
HR Departments have been struggling for a long time to clearly state Business Cases for many of their activities. Privacy concerns over data, interdependencies of HR initiatives with other changes, or simply the lack of analytical skills and a lacking sense of urgency are all reasons we have encountered working with our clients. Still, HR will continue to struggle to become the integral part of strategic decisions they need to be if they cannot clearly state their contribution to the overall business success.
In our experience, onboarding is one of the areas where communicating a Business Case can actually be quite easy. In many organizations, onboarding is still seen as the administrative and logistical process of providing an employee work environment while complying with legal regulations.
We believe onboarding needs to be much more than that. It is a key process to ensure the professional and social integration of an employee into the organization – a process that starts the moment an applicant has accepted a job offer and should end once the integration is completed – typically around 6 months after joining the organization.
Why is that such a key process?
During the first 6 months, most employees will make up their mind on their work attitude:
- Be fully engaged
- "Swim with the stream"
- Leave the organization alltogether
At the same time, the organization needs to decide on the details:
- How and where to integrate the employee
- Whether the person was the right choice
- How to derive the maximum value from the employees contribution
We use design thinking workshops to develop the onboarding experience that delivers the maximum value for both the new joiner and the organization. It is always enlightning for the HR observers to experience what drives the onboarding experience: very often seemingly little things that make it easy for the new joiner to connect with his new work and the social environment around him. Very often they are simple, pragmatic but highly effective activities that are quick to implement and cost little.
Engage new joiners before the first day – a conscious attention to connecting employees to their social environment starting before day 1 – careful and continuous monitoring and feedback on performance and development are some of the typical activities.
Now let’s look at the financials in onboarding. Apart from the salary of the new hire during the first 6 months, there are a raft of other cost components involved. Opportunity cost while the new joiner cannot yet fulfil the role (which should actually be higher than the employment cost), the cost of hiring a new employee, the cost of the onboarding process, the risk of a voluntary leaver because of a bad first impression, and the risk of the probably worst case scenario of integrating somebody into the organization who is not willing to fully engage. The difference between a good and a bad onboarding process can easily add up to the economic equivalent of an annual salary of the new joiner.
Especially in a time of tight talent pools, investing in onboarding is an investment with a clear business case, and a good way for HR to demonstrate the contributions they can make for the business. And designing the onboarding experience through a design thinking approach will ensure that you can achieve effective and efficient results, fast.
Written by: Andreas Letto