Employee turnover can be a huge drain on your business. Depending on the cause of departure, it can cost your organization millions in lost revenue. This includes direct costs like rehiring and training and indirect costs such as displaced salary expenses. The best way to reduce these costs is to invest in strong onboarding. Here are some of the many benefits of a solid onboarding program.
Increased Customer Satisfaction
A comprehensive onboarding program can help new employees feel like they’re part of the team, an important element of building company culture and encouraging retention. A good onboarding platform helps new hires get login information, learn internal systems, and get up to speed on projects.
Frequent turnover increases the costs of attracting, hiring and training new talent. These costs include ad placement and fees, interviewing time for HR professionals, and training resources for senior employees to teach the new hires the ropes. In addition, these increased recruiting and training costs can distract managers and staff from their regular work responsibilities that contribute to earning a profit.
This can result in missed revenue opportunities and customer satisfaction issues that impact the entire business. A well-designed onboarding process can improve the customer experience and increase your brand’s overall satisfaction. Satisfied customers stay longer and purchase more products and services, increasing customer lifetime value.
Increased Retention Rates
A company’s employee retention rate is important, as it can have direct and indirect costs. The most obvious direct prices include hiring expenses, such as resources spent on job ads and interviewing candidates.
Other indirect costs include productivity loss as projects are put on hold. At the same time, new hires get up to speed and the opportunity cost of displaced employees, who could have been working on other critical business objectives.
A platform can reduce the risk of high turnover by offering a smooth onboarding experience that promotes a positive culture from day one. It can also help managers prioritize training for new hires and communicate expectations.
This can include outlining clear career paths and growth opportunities and providing a thorough introduction to company-wide policies, procedures, and processes. It can also include information on benefits, incentives, and other perks that can make a difference in retaining new employees.
One of the biggest costs associated with turnover is lost productivity. When a team member leaves, colleagues must pick up the slack and work overtime to complete tasks previously handled by their counterparts.
An effective onboarding process equips new hires with the knowledge and tools to reach full productivity sooner. This can also help them connect with their teammates more easily, which is especially important for remote employees and interns/graduates.
The ROI of onboarding doesn’t just show up on your budget spreadsheet and affects employee engagement and morale. As a result, reducing employee turnover shouldn’t be an HR-only task but a company-wide initiative that considers the many hidden costs associated with it.
Reduced Turnover Costs
It’s well-known that employee turnover is expensive for companies. It costs more than just the salary of the departing team member; it also includes sunk costs such as time and money spent recruiting, onboarding, training, and re-orienting their replacement. It also results in lost productivity, knowledge loss, and company brand damage.
A revolving door of employees depletes the morale of existing teammates and increases the load on the remaining team members. This can lead to missed deadlines and a general lack of quality work. A streamlined onboarding process can help new hires accelerate their learning curve and get to work faster.
This means providing them access to key tools or sharing flowcharts of current operations. Ongoing support and check-ins can also help new hires become more comfortable and develop a stronger connection to the company culture. It can be easy to overlook the importance of a strong onboarding process and its long-term impact on your business.