November 25 , 2017

Without Metrics, Weak Onboarding Will Neutralize Your Recruiting Results

Think about it for a minute. You devote thousands of dollars and hundreds of management hours to recruiting, and as a result, you land a great candidate. But all that is for naught if the new hire gets off to a bad start and soon after quits because the onboarding program lacked goals and metrics. If they do stay, the new hire is frustrated because they struggle to get answers, build their internal network, learn the ropes, and reach their productivity goals. As a result, they make errors that impact customers and coworkers. It’s a sad but common result from weak onboarding.

After studying onboarding for over 20 years and even writing a book covering onboarding actions, I have found that the key reason why most onboarding fails is that the process is not managed with data, there are no measurable goals, and no hard metrics to assess the onboarding effort. If you want to shift to a data-driven onboarding model, here are the metrics that you should use.

Strategic Impacts — the Only Onboarding Metrics That Matter

The key to metric success is to split your metrics into two categories. The first includes strategic metrics that you report to executives. And the second group, continuous improvement metrics that you use only within the onboarding function. There are only three strategic onboarding metrics, and they are:

  • New-hire time to minimum productivity — the primary purpose and goal of onboarding is to get a new hire up to the minimum level of productivity much faster than if they were left to learn on their own. One onboarding survey found that 77 percent of new hires take eight months or more to become fully productive. So decreasing that time to productivity will have a major business impact. Start by setting the minimum productivity level for each job family. And then measure the percentage of days before or after that standard that it takes for each hire to reach their productivity target. (Example — new hires in sales jobs reach their minimum productivity level 18 percent faster than the standard).
  • New-hire retention rates — the second-most important onboarding goal is to get new hires to stay. An Equifax study found that 56 percent of new-hire voluntary turnover happens within a year of a new hire’s start date. Start by setting the retention target time at either 6 or 12 months for each job family. Then measure the actual turnover rate against that standard. (Example — the voluntary turnover rate of new hires in sales jobs was 10 percent better than the standard). In some cases, you might also want to keep separate metrics covering turnover in high-priority positions and for diversity hires.
  • The dollar impact of great onboarding — if you expect managers and executives to fund onboarding fully, set a goal to quantify in dollars the business impact of faster time to productivity and high new-hire retention rates. Work closely with the CFO’s office to determine what methodology you should use. Then report the total dollar impact to your executives. (Example — an 18 percent improvement in productivity and a 10 percent improvement retention rate for 14 sales new hires resulted in a positive business impact of $128,000).

Save Yourself Some Time and Focus on Already Measured Jobs

You don’t need to measure the onboarding success for every job. Instead at the very least start by only measuring the jobs where performance is already quantified. Those jobs often include sales, development, collections, call centers, and customer-service jobs. For the remaining jobs, you should measure turnover rates. But if you want to measure time to productivity, you will need to work with hiring managers in order to develop a method for measuring new-hire outputs.

Continuous Improvement Metrics for Onboarding

After you’ve developed your three strategic metrics, the next step is to develop your continuous improvement metrics. These tactical metrics should only be used internally within the onboarding function. The continuous improvement metrics that I recommend fall into two categories: satisfaction with onboarding, and whether each of the onboarding sub-goals was met.

Satisfaction with onboarding metrics

  • New-hire rating of their onboarding experience — the percentage of new hires, that when surveyed after six months on the job, rank corporate onboarding as a “major contributor” to their startup performance. Also, assess new-hire satisfaction with “team level” onboarding.
  • Hiring manager rating of onboarding — survey hiring managers to gauge their satisfaction level with corporate onboarding.

Metrics covering onboarding’s sub-goals

  • Percentage served — the goal is to provide onboarding to all new-hires, so measure the percentage of new hires that completed the entire onboarding process.
  • Startup tools provided — new hires can’t be productive until they get all of their required tools. So measure the percentage of new hires that had no trouble receiving their first paycheck, IDs, receiving benefits, as well as receiving their workstation, telephone, and computer equipment.
  • Training is available — the goal is to have the needed training for each new hire available immediately after they start. So measure the percentage of times that the prescribed development and training classes were available to the new hire within two weeks of their hire date.
  • The information is remembered — if you overwhelm your new hires during onboarding, they won’t remember any of the provided information. So periodically test a random sample of your new hires after 30 days to determine the percentage of designated “essential information” that they actually retain.
  • New-hire referrals — if you ask new hires for referrals, track the number of referrals made by new hires during onboarding that is hired by the organization within three months of their starting date.

Onboarding Design Features That You Should Consider

After you’ve completed your list of metrics, the next best way to guarantee amazing onboarding results is to modify the program’s design so that it includes the most impactful features. Some of the most powerful program features to consider include:

  • Manager-driven onboarding — after the corporate-level onboarding is completed, there needs to be team-level onboarding run by their manager. Although it is less formal, this team-level onboarding can have the highest impact. The metrics-driven firm Google found that hiring-manager-driven onboarding can reduce new-hire time to productivity by a whopping 25 percent faster (which can be two full months earlier for most new hires). The five critical onboarding steps that managers should implement include:
  1. Have a role and responsibilities discussion with your new hire.
  2. Match your new hire with a peer buddy.
  3. Help your new hire build their internal social network quickly.
  4. Schedule onboarding check-ins once a month for their first six months.
  5. Encourage an open dialogue between the new hire and the manager.
  • Provide FAQs  one of the most powerful approaches simply assumes that new hires will be afraid to ask questions. So instead provide them with a list of frequently asked questions with answers from previous new-hires.
  • Gather program feedback from new hires — a great way to improve onboarding is to gather feedback from new hires. So survey a sample of your new hires and ask them “what worked,” “what didn’t work,” and “what needs to be added.” Ask them to reveal any barriers that prevented them from reaching their productivity level earlier.
  • Provide a written onboarding plan – onboarding is more effective when each new hire has a written onboarding plan. And because the needs of every new hire are unique, onboarding is more effective when that plan is at least partially personalized to the new hire’s needs.
  • An immediate start for onboarding — any delay of starting onboarding beyond the new hire’s first week can have a disastrous impact. Also, firms like IBM have found that preboarding (which begins before their start date) can have a dramatic impact on new-hire retention.
  • Offer “get to know you” events — a study by SelectMinds revealed that 74 percent of new hires found that “get to know you” events were the most beneficial in getting up to speed.
  • The hiring manager is present on the first day — nothing can be more frustrating than not having the hiring manager present on the day that the new hire starts. If necessary, change the starting date of the new hire so that the manager is there to greet them.
  • Bad hires are identified — the best onboarding programs include an assessment mechanism that identifies and warns managers about any new hire who may be a bad hire.
  • Add a feedback mechanism — onboarding can’t improve unless they know when and why new hires fail. As a result, there should be a feedback loop between the onboarding function recruiting, retention, and the exit interview process.

Avoid These 20+ Most Common Onboarding Program Errors

In addition to the positive program features, it’s equally important to avoid the most common onboarding errors. Those errors include:

  • Not measuring time to productivity and retention rates
  • Onboarding program decisions are not based on data and past errors
  • Letting the program be run 100 percent by the benefits function, which almost guarantees “death by form”
  • Hiring managers don’t feel like they own the onboarding process (rather than HR)
  • The job doesn’t match what was promised, and that causes retention issues
  • The onboarding plan is not personalized/customized for each new hire
  • The process is too short in duration, and it is not extended to at least 30 days
  • Information overload and “death by form” gives new-hires a mind freeze
  • The start of onboarding or training is delayed more than a week
  • There is primarily one-way communication (versus two-way)
  • The new hire has no control or input into what they need to learn
  • They are kept too long from starting their work, so they become frustrated
  • Assuming that automating the process will improve its results
  • New hires are not provided with their performance appraisal and KPI goals
  • The new hire for whatever reason doesn’t ask questions or get answers
  • The hiring manager is not present the first day
  • The new-hire gets no help in building their internal network
  • An over-reliance on videotapes and slideshows, with little time for interaction
  • Not having a “local component” of onboarding at the departmental level in addition to the corporate component
  • It is not part of a manager’s performance appraisal and bonus process
  • Failing to reward the onboarding program manager based on program performance
  • Onboarding is not integrated with preboarding, recruiting, training, and retention
  • The process is not unique, so it provides no competitive advantage for their firm

Final Thoughts

I have found that across all corporations, onboarding is weakly managed at best. As a result, most onboarding programs have few measurable goals and very little is measured. And what is measured is tactical rather than strategic. The first step in increasing onboarding effectiveness is to shift to a data-driven model. Then use that data to change the program design, so that the expected productivity is reached faster and turnover rates for new-hires plummet. And finally, quantify the impact of great onboarding so that executives will be more than willing to fully fund any new onboarding initiatives. Onboarding is simply too impactful to be run by intuition, emotion and what feels good.

As seen on ERE Media, July 10, 2017.

Image: rawpixel

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About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.