How Does Employee Onboarding Affect the Company Bottomline
When it comes to the company’s financial bottom line, one key thing that management cannot overlook is its people, which includes new hires. Even with technology, people are the key to making companies work like a well-oiled machine, and when people are not aligned with the company and with each other, then company profits are affected. This is especially true for new hires who need onboarding in order to be integrated with the rest of the team.
Employee onboarding ensures that new hires know what they have to do and their part in the organization; it also makes them feel comfortable knowing the basics of the company and who they have to turn to in case of any questions. This process can settle in the new hire quickly, increase their engagement with the company, and help them become productive in a shorter amount of time.
Without onboarding, employees can get confused and disgruntled even from little things, like not knowing where to get a cup of water or coffee. It makes new hires feel like the company doesn’t care about them and that it is a chaotic organization. These thoughts not only disengage new hires, but it can also lead to a high rate of turnover.
What is employee onboarding
At the heart of it, employee onboarding is the process that employees go through for smooth integration, by getting the right tools and information they need to become a productive member of the team.
The onboarding process makes sure that new hires are more prepared to perform the tasks they were hired to do. This can mean getting them acquainted with other departments other than their own, helping the new hire adjust to the way the team does things. This reduces clashes and reduces unproductive time of employees trying to figure out what to do and how they fit in.
Employee onboarding and the company bottom line
Done right, employee onboarding will not only make your employee and department happier, but it will also make your shareholders happy as they see profits increase.
How can onboarding affect the bottom line of the company? As stated earlier, people are the heart of the company – the machine that runs the entire organization. And that includes new hires. Aberdeen gives some fact-supported reasons why employee onboarding matters to your company:
- Employee onboarding increases retention by up to 91%
- Of the new hires, 62% met performance milestones on time in the first year
- Company hiring manager satisfaction increased by 33% year-on-year
- Customer retention has a 16% year-on-year improvement
So what do these statistics tell companies? It’s that first of all, companies save on turnover costs. With new hires staying and even performing better than industry averages, the contributions result in a 17% improvement in revenue per full-time employee.
Moreover, with turnover rates low, companies can divert funds from hiring costs to increasing productivity of its workers. According to the HR Exchange Network, this means that companies that hire 2,000 new employees per year could save an average of $2 million from a good onboarding process.
At the end of the day, employees need to be engaged with the company from the very first day to increase retention and productivity rates. Employees who are on-boarded well tend to remain loyal, resilient, and more dedicated to their work, which is why investing in an onboarding program is a requirement for any company.
