Page 30 - Successful Onboarding

The Business Case for Onboarding • 19

a strategic onboarding program could invert the common ratio of regret-
table attrition? That is, instead of having 65% of our attrition made up of
regrettable losses, what if we had 65% of our attrition made up of non-
regrettable losses?
We determined that an approximate 25% reduction in total attrition lev-
els was a reasonable goal and would represent a clear savings to a firm in
terms of the replacement cost the enterprise would have to pay to recruit
new employees. Yet this was only the beginning of the value effective
onboarding could bring in this model. To get a more complete measure of
this value, we also factored in the opportunity costs of regrettable attrition.
When you put a new hire in, say, a quality improvement job and she or he
doesn’t make it in the role because of poor onboarding, the loss includes
all of the improvements to your quality program that are not happening
during the failed ramp-up period, the departure period, and the new
search—value that is lost forever. This loss may show up as rework cost,
warranty cost, and a reduction in brand equity as customers grow frustrated
with your company’s products or services. Although difficult to quantify in
a simple analysis, these losses are significant, and they need to be reduced
through more effective onboarding.
As the preceding discussion suggests, onboarding does not just offer an
opportunity to reduce the overall attrition level. Rather, it also aims to
improve the overall attrition mix (regrettable versus non-regrettable loss,
as represented by Figure 1.1), which can have an even greater impact.
The objective of onboarding now includes retaining more of the peo-
ple you want to keep, and reducing the proportion of your head count
loss that is made up of regrettable attrition (i.e., retain more people you
want and lose more people you are happy to see separate). The most
exciting part of this attrition gain is that although it will affect the short-
term, day-to-day productivity of the organization, its larger impact will
be in the form of what the retained employees—who otherwise would
have been regrettably lost—will do for your business in years to come.
This is potentially a non-linear relationship, as some of these new hires
may provide a truly big impact down the road. This is the game you need
to be changing.
Another gain from onboarding relates to the productivity of all new
hires. Effective onboarding can shorten the time it takes for the average