Why is the Onboarding Experience So Important?
You’ve invested significant time and effort into the hiring process and as a result, have scored a quality hire for your company. Yes, hiring a skilled candidate is a great accomplishment, but it’s not necessarily the final battle. The next obstacle to overcome is creating a culture of engaged productivity, which starts with the employee onboarding process.
Onboarding is the first interaction a new hire has with their new employer as an official employee. Much like a first impression with a new acquaintance, this first interaction lays the groundwork for how an employee perceives the company culture. If an employee has a negative onboarding experience, that negativity will likely color the new hire’s perception of the organization. Inversely, a positive onboarding experience has the potential to lay groundwork for a positive relationship between employer and employee.
What is Onboarding?
Employee Onboarding is the integration of a new employee into an organization by providing the necessary knowledge, skills, and behaviors to be successful in the role. The onboarding process usually starts with a background check and involves everything from filling out paperwork to meeting co-workers and understanding the company culture.
Ideally, onboarding should be a shared responsibility between HR professionals and your management and leadership teams, with neither party bearing sole responsibility. In order to ensure onboarding success, your entire organization should be on the same page and dedicated to creating an excellent new hire experience.
That being said, here are some parts of the onboarding process that HR can own:
The new hire experience should be the same for all employees. If HR creates a standardized template for what the onboarding program should look like, they can be sure that all employees are receiving a consistent experience, even if they’re not the ones executing each step of the process.
Training managers on best practices
It’s HR’s responsibility to be up-to-date on all onboarding best practices, and to effectively communicate them to everyone who is involved in the process.
Creating and executing an onboarding checklist
Part of your standardization should be to create a good onboarding checklist and ensure that it is being properly executed.
Compiling an employee handbook
All employees should receive an employee handbook detailing the processes and procedures at your organization. Since this will be distributed to employees in every department, HR should be the one to compile it.
Document verification and ensuring compliance
It also falls on HR to verify all new hire documents, ensure compliance, and make sure all forms and types of identification are securely stored.
Onboarding and Retention
According to SHRM, employee turnover can be as high as 50% in the first 18 months of employment. A Gallup poll found that an employee’s perception of an organization begins with the individual’s very first interactions with the company, including the sourcing, recruiting, and onboarding processes. Unfortunately, Gallup also found just 12 percent of employees feel their organization does a great job onboarding new employees.
For a growing business, onboarding new hires is a big responsibility. How well you onboard employees plays a key role in your employee retention efforts.
Put another way, the most effective onboarding programs are built with retention as an explicit end goal. But what exactly does that look like in practice?
Building an onboarding process with retention in mind
Ideally, an onboarding process should so thoroughly integrate a new hire into your company and prepare them for success that the employee decides to stick around for the long haul. To ensure your onboarding program achieves this, start by drafting a thorough checklist that covers every task involved in bringing on and ramping up a new hire. This list should include both items that need to be accomplished before the hire’s first day and tasks that will happen once the hire officially starts.
Crafting and following a comprehensive onboarding checklist ensures a consistent, streamlined onboarding process for each new hire. It also allows HR pros to better track the work and time associated with bringing on new employees. This data gives the company an easier way to identify and address inefficiencies in existing onboarding processes.
Onboarding Best practices
1. Onboard online:
As a cost effective practice, employers must learn to optimize employee onboarding. The first step to creating an efficient onboarding procedure is to take onboarding online with an HRIS. By taking onboarding online, you can eliminate the need for paperwork, and as a result, decrease the time it takes to onboard a new hire. Online onboarding also allows you to keep a record of your new hire documents without any added steps.
2. Have your new hires onboard before their first day
Onboarding online and before day one benefits both the administrator and the employee. The employee benefits because they don’t have to worry about the stress of onboarding paperwork on their first day. The administrator benefits because the employee can start learning his/her position sooner, which ultimately decreases time to full productivity.
3. Compile an employee handbook
In the onboarding process, employees should review and acknowledge a full employee handbook. This employee handbook should include sections on governing principles, operational policies, benefits, leave of absences and general standards of conduct. Your employee handbook should be readily accessible to every employee at all times. If you use employee onboarding software, attach this document to the onboarding process so that each employee’s acknowledgement of the terms are recorded.
4. Have an agenda ready
On your employee’s first day, you should have an agenda that lays out a timeline of tasks and goals and the steps to take to get started. These goals should start with understanding the position and cultural expectations within the company. This timeline of tasks and goals should extend for a significant period of time so that the new hire can begin time management from the beginning.
5. Define available resources
It’s easy for a new hire to feel overwhelmed when they start. In order to alleviate some of this stress, clearly define the resources available to them. These resources should include procedures, communication channels to use, and platforms through which information can be accessed. By clearly defining available resources, you can train your new employee to become self-sufficient—a skill set that will benefit them for the long term.
If you’re going to be putting the effort into optimizing your onboarding processes, you’ll want to know if you’re successful or not. That’s why it’s so important to measure and track different onboarding metrics.
Quantitative onboarding metrics
Voluntary Turnover Rate:
How many of your employees choose to resign from the company? A larger quantity of voluntary turnovers might indicate an issue with onboarding practices and securing employee buy-in.
How to calculate voluntary turnover rate:
# of Employees who left voluntarily / Average # of employees on the payroll X 100 = Voluntary Turnover Rate.
How long, on average, do your employees stay with the company? If you have a lot of people who wash out within the first year or less, this may point to an issue with their onboarding and setting expectations.
How to calculate the average employee tenure:
The sum of all months worked by current employees / # of Employees* = Average Employee Tenure.
*Make sure you’re only using current employees when calculating this metric.
Employee Net Promoter Score indicates if your employees would recommend working at your organization to a friend. If your eNPS is low, you might want to investigate how you’re setting expectations for employees, especially during onboarding.
How to calculate eNPS:
Total score / # of Participants = eNPS.
To calculate this metric, you’ll need to deploy an employee Net Promoter Score survey to your employees. Keep in mind promoters are considered anyone who answers 9 or 10, and detractors are anyone who answers 1-6.
How much does it cost for you to bring on a new employee? Is that number consistent over time, or are your costs increasing?
How to calculate onboarding costs:
Expenses / # of Onboarded Hires = Average Onboarding Costs.
To calculate cost per hire, tally all the expenses you spent on onboarding divided by the number of hires for the year.
How many new employees make it through your onboarding process? If you find a lot of new hires are not completing onboarding and are leaving the company, you’ve got a real problem.
How to calculate completion rate:
# of Employees who begin onboarding / # of Employees who complete onboarding= Completion Rate.
To calculate completion rate, simply divide the number of all the employees you started onboarding during a certain time period, and then divide by the number of employees who successfully completed onboarding.
This is a lot of information to keep track of! When it comes to calculating and tracking recruitment KPIs, an HRIS platform like BerniePortal can come in handy. Instead of having to track down these different numbers and headcounts, you can store all of this information in a single system, which will greatly decrease the time it takes you to pull these metrics and reduce human error when it comes to reporting.
Qualitative methods to measure onboarding success
Rely on Feedback:
During the onboarding process, HR should conduct focus groups with new hires to find out their feelings and impressions of their new role and company as a whole. This is a great opportunity to solicit feedback since new hires have a fresh set of eyes coming into your organization.
Administer Pulse Surveys:
Pulse surveys should be used to obtain quick feedback about an aspect of the onboarding process. They’re typically short and frequently sent to get a “pulse” on how the new hire is feeling. While this could be administered via paper, email, etc. here are a few ques8ons you might consider including:
- On a scale of 1-10 (1=definitely not, 10=absolutely), how likely are you to recommend working at the company to a friend?
- What was the best and worst part of your week?
While somewhat related to feedback, stay interviews are questions that ask employees why they stay with your organization. This includes how the onboarding process is going or has helped the employee. Managers typically ask these questions as part of one-to-one meetings.
Stay interviews address the reason why employees stay, but exit interviews are designed to find out why an employee started looking for a new opportunity. You, as an organization, have the opportunity to ask about onboarding to determine if your process is effective in preparing the employee for the role they were hired.
While these aren’t the only qualitative methods to measure onboarding success, you should take the results seriously and consider each and every opportunity for improvement—both short and long-term. Strategic onboarding processes are an investment that pays off over the employee lifecycle.
The I-9 Form is a document that must be completed by every employee in the United States that is used to verify each employee’s eligibility to work in the U.S. In order to complete the I-9, each employee must submit a completed I-9 Form alongside evidence of identity and citizenship. The employer is responsible for keeping record of each I-9 for three years after the date of hire or one year after termination, whichever date is later.
- Section 1 must be completed on the employee’s first day of work
- Section 2 must be completed by the employer no later than the employee’s third day of work.
- You can download form I-9 from the U.S. Citizenship and Immigration Services website (uscis.gov)
- New form released for mandatory use starting on May 1, 2020:
- Clarification on who can act as an authorized representative of an employer. Employers may designate anyone to be an authorized rep to complete Section 2, but the employer is liable for any violations committed by the designated individual.
- Clarifications pertaining to acceptable documents. When entering document information in the List A column, or alternatively List B and C, you will not need to enter “N/A” in the columns not being used.
- The new Form I-9 clarifies that the form’s List C documents establishing employment authorization doesn’t include a worker’s Employment Authorization Document (EAD). The List C documents include items like a Social Security card and a birth certificate, while EAD (Form I-766) providing temporary employment authorization to work in the US is a List A document.
The W-4 is a form that employees fill out so that employers can withhold the correct federal income tax from each employee’s pay. This form should be completed by each employee upon hire and also in the event of a major financial change such as marriage, childbirth or divorce. The Internal Revenue Service (IRS) advises that employers keep W-4 forms on file for at least four years after filing the 4th quarter for the year.
- All employees are required to fill this out
- Employees must complete sections 1 and 5
- You can download the W-4 form from the IRS website (IRS.gov)
- New form released:
- Employees hired after Jan 1 2020 will have to use the new form
- Employees hired before Jan 1 2020 can submit use either the old form, or the new one
- Steps 2-4 are not required, but help ensure federal income withholding more accurately matches one’s tax liability
State Withholding Forms
Some states impose income taxes in addition to the existing income tax required by the federal government (W-4 deductions). Each state that withholds this additional amount from each employee paycheck needs to administer a state withholding form to all employees. These forms are used to identify the additional amount of income that an employer withholds from its employees’ paychecks.
- States that do not require a State W-4: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
In order to stay compliant, employers should maintain record of all employee agreements, notices and onboarding forms. For each of these documents, employers should keep record of the following:
✔ Proof of document distribution
✔ A written procedure taken to administer documents
✔ A timeline of actions taken to comply with legal standards
✔ The final version of the document
✔ Employee recognition of the documents and acknowledgement to its terms
Reasons to maintain record of documents
“Good faith” can reduce penalties:
If your organization is not 100% compliant, documentation can still work in your favor. Through a legal principle called “good faith,” employers can significantly reduce the fines and penalties resulting from noncompliance. So what exactly does good faith mean? Good faith means that the organization made a true effort to comply with federal, state and local laws. Of course in order to prove good faith, an organization needs documentation of efforts made to reach compliance standards. One of the best ways to prove good faith is to conduct an internal audit, a full review of compliance.
Documentation can improve internal practices:
Documentation can also help improve internal practices. By reviewing a timeline of a company’s efforts to comply with various regulations, administrators have the opportunity to identify trends within their own organization. Once these trends have been identified, they can assess factors within their business such as: risk, efficiency and company culture. By taking this fine-toothed-comb approach, employers and administrators gain more insight on their organization and, as a result, can make improvements that facilitate growth.
With an online onboarding software solution, new hires can upload all their personal information, such as identification documents, Social Security numbers, addresses, emergency contacts and other details before they even begin working. Employers can provide company handbooks, benefit booklets, and other relevant hiring information.
These platforms ensure compliance, maintain records and allow the employee to complete all the necessary paperwork before their first day. As a result, HR is able to make in-office onboarding processes more valuable by focusing on training or other high-value activities. What should you look for in an online onboarding system?
First, you will want to compare all-in-one HR systems that include onboarding functionality to point solutions. Some organizations may have unique needs that require a standalone solution, but most will benefit from an all-in-one platform. BerniePortal’s all-in-one HRIS offers an onboarding feature that saves time, improves employee retention and enhances productivity.
The advantage of a comprehensive HR solution is that new hires only have to fill out their relevant information once when they onboard. These solutions also provide benefits administration and other HR functionalities, but because the employee’s information is already there, HR only has to deal with one system and information source.
Next, you will want to look for the following form functionalities.
Federal standard forms
For forms such as the 1-9, W-4 and W-9, look for a system that has these capabilities pre-built. Because every employee will have to fill out the information on these forms, the system should be able to collect them as part of its core functionality.
State withholding forms
Similarly, these capabilities will be required by enough users that any system you adopt should have these capabilities pre-built as well.
There are multiple types of needs when it comes to custom onboarding forms. Some groups may collect a variety of personal information that isn’t required to be printed onto a government form. Any HR platform that has customizable onboarding functionality should be able to collect information like this. Think workplace preferences, training information, or even shirt size.
A more complicated functionality is customizable forms that also need to be printed for compliance purposes. An example of this is a local withholding form, like those required in Lansing, Michigan. For forms like this, it’s unlikely that a platform will have this capability pre-built.
Rather, look for a system that prompts employees to enter the relevant information and maps responses onto the required form.
Why functionality is key
As with most software solutions, effective adoption is key to maximizing the user’s return on investment. If an organization’s onboarding system makes it difficult to upload and store the required information and forms, the benefits of moving online will be minimized . Looking for the above functionality will help small and mid-sized organizations find the right system and reap the advantages of online onboarding.
Art of Onboarding Course
Looking for additional training on how you can improve your organization’s onboarding experience? BernieU’s FREE HR course, The Art of Onboarding, will teach what you need to know in order to build and implement successful onboarding processes in your organization. We’ll cover everything from which onboarding metrics you should track, to leveraging technology, ensuring compliance, the nitty gritty details of employee’s first through 90th day and more.