Page 29 - Successful Onboarding

18 • Successful Onboarding

It’s one thing to talk about adding value, and quite another to provide
hard numbers and explain exactly where those numbers originate. This
chapter builds a quantitative business case for dramatically enhancing and
broadening the way firms bring new hires into the fold. It begins by exam-
ining the economics of onboarding, quantifying typical returns that can
be expected. It then describes in more detail the specific business objec-
tives and results firms can achieve with a strategic program in place. But
this is only part of the story. The second half of the chapter attacks the
problem from the employee’s viewpoint by examining the new hire’s per-
sonal needs. Employees who are enthusiastic about their work and their
careers are usually strong and productive, and a well-designed onboard-
ing experience satisfies them far better than an inconsistent, haphazard
one. The chapter closes with a detailed and thorough economic analysis
across industries. Using benchmark data from 25 leading companies across
six industries, the prospective impact for your company and your share-
holders is measured and illustrated.
It is hoped that this chapter will provide change agents inside organi-
zations with the business case they need to spark serious discussions about
onboarding with senior decision makers. If most leaders today believe their
firms can’t afford an effective onboarding program, this chapter’s material
is designed to convince them of the very opposite: Their firm cannot afford
not to invest in one.

The Economics of Onboarding
The first step in building the case for onboarding is to estimate the hid-
den value that typical firms can hope to recover via a strategic program.
To arrive at some hard numbers, we took a sample of Fortune 500 com-
panies across six major industry sectors.
We assessed the impact of attrition of new hires on the overall cost
structure and its impact on profit. Based on our research, on average
across industries we believe that companies experience approximately
13% attrition of new hires in the first year, and some of that constitutes
“regrettable” attrition (productive recruits with great prospects who
choose to leave) as opposed to “non-regrettable” attrition (unproductive
and low prospect workers leaving the firm). We asked ourselves, what if