What is onboarding?
Onboarding is the discipline of welcoming and integrating your new hires into the workplace. The definition is actually that simple. Organisations have always been doing it. Every organisation has an onboarding practice. But… not all are equally conscious about how they bring people onboard, and not all have invested equally in their onboarding design, content or practice. The increasing professionalism of onboarding is a more recent phenomenon, and the need for it is growing.
There’s a perception that nowadays that we change job more frequently. Actually, it’s not quite that simple. Some age groups do change their jobs more frequently than before, but others – including, maybe surprisingly, the younger generations - hold quite a steady tenure, especially in markets where labour demand has not been drastically increasing in the past decade. [i]
But, on average, our tenure is getting shorter. In January 2016, the Bureau of Labour Statistics reported the average employee tenure in the US was 4.2 years, down from 4.6 years in January 2014.[ii] So in most industries and professions, employers are having to spend more time and money on the attraction and retention of staff, and this area of expertise is increasingly coming into focus, with a greater emphasis on quality improvement and a higher level of efficiency. Turnover rates for white collar jobs in selected countries are set out below. These figures alone show the enormous extent of the potential demand for more effective onboarding activity.
*ILO 2015 (International Labour Organisation, agency of the UN). Employees in 'white collar' jobs
** Employee turnover rate, the percentage of employees who leave an organisation during 12 months CEPOS 2016 (https://www.cepos.dk)
Onboarding in the HR eco-system
Figure 1.1 The HR eco-system. The HR-field is an advanced eco-system, where onboarding appears to be the least developed discipline.
In the HR eco-system, right between the disciplines of attraction (employer branding, recruitment, etc.) and the disciplines of retention (engagement, performance management, career development, etc.), we find the discipline of onboarding. Onboarding is the vital link between the entrance of the new hire and his or her establishment in a successful everyday working life. In some companies, it’s a world-class link, highly developed and carefully nurtured. In others (and still in most, unfortunately), a missing link.
Where employer branding and recruitment have a long history of corporate focus – and of having tools, measures and integrated practices in place – onboarding has not had the same amount of attention or professionalization.
We learned long ago in the HR profession that a structured approach is probably the most important feature in our recruitment practice, in order to choose the right person to match the company, the job, and the expectations. Yet we do not seem to follow this learning through to the onboarding process, where in fact a lot is often left to chance in terms of what the new person will experience, how much support they will get and who will do what.
We have also known through the last decade that the hunt for talent must be turned increasingly into a hunt for potential since business changes so rapidly that it’s difficult to predict what talent will be relevant tomorrow. Yet we did not really integrate this knowledge into the onboarding process, where we still in many cases treat our new employees as if they just need to be uploaded with a stack of information and then use their own talents to create great results, without much further help.
As a result, when the process fails and the new employee chooses to leave us prematurely, we can have a hard time figuring out whether we are looking at the result of failed recruitment or failed onboarding.
Measuring onboarding readiness
For the past 4 years we have measured what we call an organisation’s onboarding readiness. We have learned that organisations have very different starting points when they decide to increase the professionalism of their onboarding. These starting points (shown in the diagram) form different stages of the onboarding journey. It is possible for an organisation to have components of several of the stages. The amount of work it has done at each stage has a big influence on the quality of the next stage.
Onboarding insight: Some organisations have a very clear picture of how many people they onboard per year, how many they retain, what their time-to-performance is, and how their new hires experience the onboarding process. Some don’t have this type of insight at all. Those who don’t, often end up creating onboarding programmes driven not by data and actual needs, but by corporate information needs or internal ‘darling’ actions and events. Our data show that only 16 percent measure the impact of their onboarding programmes; 13 percent measure the business value of their onboarding; 25 percent measure their time-to-performance. Once an organisation gets more data, its onboarding efforts become more measurement driven, their design changes drastically, often towards more simple solutions, and they have deeper impact.
Onboarding design: Some organisations have coordinated their onboarding ambitions and have consciously chosen the most important onboarding activities in a prioritized and structured design. Some don’t have an actual design but leave most of the programme to local managers and offer only access to information and rules, or requirements about how these should be presented. In our readiness data, 88 percent indicate that a structured onboarding design would support faster and better results in their organisation. Only 30 percent indicate that they have a structured design, and only 13 percent that they have a design which gets the best out of their new hires – in terms of both their previous experience and their potential. Once an organisation has a structured design, its central and local onboarding efforts go hand-in-hand, and the general onboarding experience, both the rational, knowledge-based experience and the emotional experience, starts to grow.
Onboarding content: Some organisations invest highly in their onboarding content. Colourful written materials, video-presentations, museums, intro-events, trained buddies, etc. The list can be very long, and over the past 4 years we have collected more than 200 concrete practices from around the world. In our data, 43% indicate that they have good onboarding content across different topics and needs. Once an organisation has invested in the right onboarding content, they experience greater corporate pride in the program, and a better and more fluent use of the materials globally and locally.
Onboarding capacity: Some organisations have trained their local managers and the colleagues who will ‘carry through‘ the onboarding activities and processes. In our data 50% indicate that their local managers have the skills and capacity to perform the onboarding processes well. Without the right skills or the right understanding of roles, any onboarding activity can lose its potential value. Once the skills and the right capacity are established, however, an organisation can actually do with very few planned activities, so long as they are carried out well.
Onboarding excellence: 50% indicate that they have the right administration and processes in place. This is contradicting the other findings and suggests that many organisations start at this end of the journey, establishing administrative resources before they have the design, the content or the capacity to be administered. Priority should be given to establishing the ‘right’ design. If not, you risk being highly effective at doing the wrong things.
Onboarding mindset: In our work we´ve found some organisations where onboarding is not only a ‘programme’ or a ‘process’ but has been integrated into the culture as a natural part of work, and where all members of the organisation participate in empowered ways in welcoming and integrating their new colleagues. Our data shows that 29% feel that onboarding is a mindset in their organisation. The few organisations that do succeed in creating a common mindset, understand three key principles: No. 1 – The new starts are already motivated; No. 2 – It´s about them, not the organisation; No. 3 – Onboarding is a transition.
We have seen, time and again, how becoming data-driven around your onboarding efforts can mean a positive revolution in the approach of organisations to their new hires. As stated above, there is a lot of value in figuring out how ‘ready’ your organisation is for onboarding, and there are also gains from evaluating the effects of particular activities you have put in place.
Our central argument, however, is that the most important element you should measure in onboarding is the emotional experience of your new hires. Onboarding Group has set out on a mission to create a global index for this experience. We use this measurement to help organisations understand what, in their specific context, culture, industry and structure, are the most important factors in the experience of their new colleagues. Below we share a few of the insights we have gathered.
In our collaboration with companies around their design efforts, we especially try to help them create a structured approach to onboarding. In our basic model, we have gathered three "onboarding tracks" (processes that a new employee goes through) and six key onboarding dimensions (areas of focus for enhancing the onboarding experience). The model can be used both to map where organisations have placed the current emphasis in their onboarding programme, and as a basic structure for measuring onboarding, thus creating clarity on what you are in control of, what is really important in your specific industry and where you would benefit from prioritizing your efforts.
The Onboarding Model - 3 tracks | 6 dimensions
Track One: Forming
People seek meaning, says motivational theorist Daniel H. Pink. We have a basic need to tell a coherent and meaningful story about ourselves and our lives. Therefore, we are also looking for the meaning of what we are asked to do in our work life. If the new employee is not helped to find his or her own story in the organisation's narrative, there is a basic human need that is not being covered. When the employee goes through the forming track, "meaning" and meaningfulness is therefore a good coordinate to navigate by. There are two dimensions to the forming track: culture and rules.
Culture is a problematic concept to define, but on the other hand is full of possibilities and symbolism. What matters is that new employees feel the organisation has a meaningful and inspiring story to offer. Not only on paper or on the history page of the website but reflected in the daily frames of reference and daily practice. Across industries, our measurements of culture indicate this is a key parameter in the first 1-3 months of the onboarding process.
Rules often take up a lot of space and focus in organisations and are often the focal point of many onboarding activities – but often mainly so that others in the company can feel "secure" that the new employee has been told what to do and what not to do. Many rules, however, are shaped and created by contexts that are complex and can be difficult to fathom for a new employee. Moreover, when the rules come in large quantities, they can be quite overwhelming, and potentially a source of meaninglessness. So, rules are a necessity, but they must be clearly presented in a meaningful and gradual way. Although there are obviously differences between industries, our data about how rules are introduced in onboarding indicates that, even though they might have some importance from day one, the rules usually become really central to the new employee's engagement after about 6 months.
Track two: Connection
The second key to human motivation is, according to Pink, an experience of having autonomy. People's commitment increases when they are allowed to do what they want to do, in a way they want to do it, and with those they want to do it with. In the organisation's goal-oriented reality one can never give full autonomy, but perhaps surprisingly, one can go a long way to support people's experience and sense of having influence on their own working life. Although it may seem counter-intuitive, one of the most important things to do to ensure autonomy is to connect employees with one another. There are two dimensions to the connection track: networking and collaboration.
New employees need to feel they are being helped to establish a base from which they can relate to others. The onboarding program should promote small local social spaces and affiliations. A complete overview of all connections and how they are created is difficult to get. Still, there is much to gain from becoming wiser about your employees' networks -- both the official and the unofficial, the work-related and the social. The data on networks shows that they are a central focus for a minimum of 6 months.
A bad environment for collaboration can scare away even the most dedicated new talent. The onboarding programme may need to help the organisation to become better at facilitating the team processes that take place when new people enter the pack. Collaboration has its own dynamics and its own influence on the new employee's transition. Some organisations are really good at preparing their managers for this facilitating task. The data about collaboration is less clear-cut but suggests wide variations in practice - and an area where one needs to be very close to catching any challenges.
Track three: Unfolding
We must unfold the potential of these new resources and talents we have got through the door in the shape of our new employee. And we must dare to push the unfolding process. People basically like to learn to master things (and it is rarely necessary to push employees by means of specific performance requirements, performance goals or threats). The drive for mastery and coping with the given tasks already exists. The unfolding or development track is about the organisation's opportunities to create good challenges and engaging development for the new employee. The track is divided into two dimensions: competencies and results.
New employees who feel they have arrived at a professional work place where they are both required and inspired to learn something, will become more engaged and will perform better. The competence dimension is about how the organisation uses resources to expand the knowledge and skills of its new employees, and how, through tasks and challenges, it can create an experience of mastery and competence for them. From our data it appears that the competence dimension is surprisingly important in the first 2-4 months. From an onboarding design perspective, it’s important to create an experience of career development from day one.
The onboarding data indicates that new employees who have the experience of delivering concrete, and preferably important, results during the first three months have a better transition, no matter who they are. The onboarding programme should help the organisation improve its ability to design and highlight good results. Results and competences are, of course, very closely linked. Some organisations tend to use "pseudo" challenges in the onboarding period. We are starting to see companies daring to risk a little more and give the new employees more important challenges. These companies usually also get more out of the onboarding.
The Onboarding Index – and the honeymoon effect
An important discovery arising from our data-collaboration with our customers is what we call the honeymoon effect.
Figure 1.4 The honeymoon curve. The honeymoon effect refers to the fact, that most new hires report a ‘dip’ or a ‘curve’[iii] in their emotional onboarding experience.
When new hires start in their jobs, there is a predictable curve in their emotional experience of the onboarding, going from high to low, to high again. The curve is based on data from an indicator we have created, called the Global Onboarding Index©, where we measure new hires’ experience on several measures of onboarding, and benchmark companies against each other in terms of their ability to create the best onboarding experience for their new hires. What the honeymoon effect and curve show is that new hires start with loads of expectations, and in general experience a positive energy and emotion around the time of starting in the new job.
However, the data also shows that new hires lose this sense of energy and momentum within the first three months on average. We could interpret this in several ways, but an obvious match with the experience from our onboarding work in practice is that during these months the new hires start to learn about the complexity of their job and role. This creates a sense of friction, which in turn erodes some of the hope and drive with which they started out.
Finally, the honeymoon effect tells us that it takes time for employers to re-establish the high emotional experience and energy. Knowing about the honeymoon effect gives an organisation several advantages. Firstly, we can learn something about when our new hires need support. If the dip happens in the second month, this is a strong hint that our onboarding activities should increase or change focus at this point. Secondly, if we start to learn about the steepness of the curve, we can become better at setting expectations and appreciating when and where we see new hires who climb the curve faster.
The highs and lows differ from company to company, but on average follow the visualization in the model above. What also varies is the point in time where the ‘dip’ in the score occurs. Investing in collecting this data gives a huge advantage – and most of the adjustments you must make accordingly as a company are basically done for free, as most of them are about spreading your design to match the curve.
Our data-collection for the Global Onboarding Index © has also provided strong evidence for the fact that, even though a company might, in theory, have ‘one’ onboarding program, there are huge variations in the internal effectiveness of the program, from department to department.
Table 1.1 Onboarding Index Variations across departments in a company’s Onboarding Index indicate that it is not always the overall design which determines the onboarding experience. Often local execution of the onboarding makes a bigger difference.
What these differences suggest is that the ‘local’ onboarding efforts can matter as much (probably more) than the centralized onboarding activities designed by headquarters. Again, several interpretations are available. Our key interpretation is that the impact of local leaders and their onboarding behaviour is one of the main factors behind the differences. No matter how well we plan onboarding, the relationship of the new hire to his or her local manager plays a key role in the onboarding experience. The potential gains of investing to make your local organisations more adaptable and readier to onboard are massive. Being able to narrow down investment in local leadership where it is most needed will benefit your onboarding success-rate significantly and learning across company borders about who does it and how, is not a huge investment.
Measurements lead to mobilizing
Even when an organisation has designed a good onboarding programme, it will of course only become successful if the organisation, managers and the new employee are fully engaged in its execution.
Having gathered data about onboarding in a wide variety of organisations, we note an increasing tendency for HR organisation to be concerned mainly with 'mobilizing' the resources of the organisation, rather than focusing on having a number of key happenings as the focal point for the onboarding process. We can also see that they are concerned with achieving better balance and better timing in the types of resources they mobilize.
High returns for a structured approach
By investing in onboarding, organisations immediately add value to their new employees. Better onboarding gives new starts a great experience as soon as they arrive. It helps to provide a sense of meaning in their job and add personal value. In the end it ensures a stronger commitment and a higher sense of loyalty.
Adding that kind of value to the new employees will have a positive effect on retention, reduce time-to-performance and help save costs that result from unsuccessful onboarding.
Onboarding of new hires is critical for success today. Employees expect more from employers, and if they don’t feel connected and onboard, they will leave for a new opportunity somewhere else. The following facts say it all:
- 25% of new hires leave their employer within 12 months
- 48% of new hires in their first job move on within the first 18 months
- The average onboarding time-to-performance is 6.2 months for new hires
- The cost of losing a new employee within the first 12 month equals 2 years of salary
- The average tenure for the new generation is less than 2 years, so you need to get your new hires up to speed faster than before
- Companies with structured and standardized onboarding processes experience 54% higher productivity from their new employees and twice as high a level of engagement
This selection of findings from our study leads to the obvious conclusion: There is huge potential for organisations to benefit by moving towards a more structured and professional approach to the discipline of onboarding.
[ii] How often do people change jobs?; Alison Doyle, October 17, 2018; www.thebalancecareers.com
[iii] Onboarding Group has developed the Onboarding Index ©, which is an instrument to measure the onboarding experience of new hires and a benchmark against industry and geography.