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Could not resist this picture. It’s too hilarious. via Spitefully on Flickr.

How Employee Onboarding can increase Productivity and decrease Turnover to create Profits

Eric Jorgenson
Apr 6, 2015 · 13 min read

A High-Leverage Way to Improve a team

Onboarding a new employee isn’t tremendously hard, but it is high-impact. Done well, it will decrease turn-over, improve team-work, and give employees a sense of belonging. Done exceptionally well, it can create a cult-like devotion to a company. This makes it one of the highest-leverage ways to increase the effectiveness of a team.

  • Why Onboarding is so easy to get wrong
  • The most crucial things to get right
  • Tips, Tactics and Tools

Why is Onboarding so Important?

The process of incorporating a new employee into the culture and progress of a company, as a whole, determines how effective they are going to be, and how long they’ll remain with the company. These two variables will determine the ROI of an employee’s total contribution — and better onboarding is a good way to improve both of these variables and therefore, improve the business.

How much does it cost to replace an employee?

Jason Evanish wrote a great post, Why replacing a good employee will cost you $65,510, that shows the basic math of the full costs of replacing an employee. Read his post for the full methodology and breakdown, but here is the essence of it in one glance:

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Avoid Making Employee Progress Impossible

It is not a given that adding more people to a team increases it’s productivity linearly, let alone gaining any incremental advantage. In some cases, adding employees actually decreases the productivity of the current team. This, as Kate Heddleston calls it in her post, is ‘Team Debt’. Team debt is similar to technical debt, defined as the “eventual consequences of poor system design.”

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Everything we need to know, we learned secretly from Dr. Seuss.

Onboarding as a Competitive Advantage

For most businesses, the earnings are based on the quality of the work produced by employees. In order to dominate your competition and grow, you must attract and retain the best employees possible.

“You need to weaponize your HR process.”

This is the focus of this post on First Round Review, Employee Onboarding at Startups is Broken — Here’s how to Fix it. A fantastic post full of observations about the role of Onboarding in the business, as well as specific tactics to employ. Don’t lose sight of that fact that employees don’t begin their first day bought in 100%… you have to keep selling!

An easy thing to get right (or Wrong)

New Employee Onboarding is an easy thing to get right. It’s not overly complicated or difficult. There isn’t any magic formula that evades us. However, it’s also easy to do wrong— why is that?

  1. It rarely receives good feedback, as it’s victims are new to the team and unwilling to criticize their new employer on the first day. So visibility into the process is low.
  2. Often, the responsibility of onboarding is spread across multiple people. Distributed ownership leads to confusion and poor organization.
  3. Consequences of poor onboarding practices are non-obvious and often delayed until months or years later, when it’s harder to connect to onboarding as the cause.
  4. Onboarding is difficult to parse out as a causal factor for a failure in personnel. Often the hiring decision is blamed, or is conflated with other factors such as management, culture fit, etc.

How to get Onboarding Right

Which pieces of this process are most important to nail in order to get employees settled in happily and working quickly? Let’s look at the most important pieces of the onboarding process…

Full List of Stuff to Address through Onboarding

There are quite a few lists out there that purport to catalog the different things that new hires need to learn to be an independently-functioning agent within the organization. The most complete list that I found was from The Oxford Handbook of Organizational Socialization:

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It’s all written so Oxford-y.

Take the broad view of the Onboarding Process

Want to cut your voluntary turnover rate by nearly 50%? You can follow the process laid out by First Horizon National in 2008, and broaden the scope of employee onboarding.

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Sourced from http://hr.gsu.edu/files/2014/03/Case-Study-6-to-9-month-approach.pdf

How Medallia Reprograms it’s New Hire’s Brains

Some Onboarding processes go far beyond educational and into transformational. Medallia claims a ‘life-changing’ experience for it’s employee’s first week on the job. Medallia invests deeply in it’s onboarding process — 9,360+ working hours, in fact.

  • They take NPS Scores on their onboarding process to get feedback.
  • Medallia teaches various new subjects, like design thinking. This investment in them early on is a meaningful signal to new employees.

Tips, Tactics and Tools for Onboarding

So who else is doing it right? Here are the great ideas that we can borrow for our own companies — if you find more or know of some that aren’t listed, just comment with them here!

Create a Document with schedules, to-dos, & FAQs

This lovely little piece of content marketing from Trello called Onboarding New Hires with Trello, does a great job of breaking down what they found was important to include in their process, from office questions to first day to-dos. This is great because of the repeatability of it, for those hiring rapidfire.

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Wow. That’s a big book cover. Life-size!

How is Whole Foods like the show ‘Survivor’?

Whole Foods has a genius mechanism where, 90 days after a new hire has started, their peers get to anonymously ‘vote them off the island’, or basically fire them. This is a great system because it gives the team the ultimate veto power (if it is in consensus), without taking a ton of time and requiring snap judgements with minimal information in the hiring process.

Use the Buddy System

One common (and empirically useful) tactic is to use the buddy system. Many challenges for new hires are questions that anyone can answer, but people hesistate to pester their manager for. Buddies can be great for all the little things, lunch dates, and company history. Having someone designated to ask is a small but significant way to lower the barrier of access to the organization.

Geek Squad’s Branding isn’t just for Customers

If you think that the Geek Squad is dressing up in it’s classic skinny ties just for the customers, you’re not seeing the full picture. Robert Stephens, founder of Geek Squad, fully understands the power of belonging. He knows that the uniform conveys a sense of being on a team together.

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Photo courtesy of TechCrunch.

Open Questions

For the curious who want to keep pondering this process and see how much improvement they can squeeze out of it…

  • How can you socialize new members as quickly as possible with a broad selection of the company?
  • What traits do you want in your employees that can be ‘programmed’ in by onboarding experiences? How?
  • How can you create initiation rituals that reinforce a sense of team-work and belonging?
  • What are truly the first and last steps of your onboarding process?
  • Are you able to personalize the process based on the employee’s personality to ensure a good fit?

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Thank you

Massive appreciation for all contributors to this Edition of Evergreen: Aaron Wolfson, Jason Evanish, Teddy Zetterlund, Matt Frost, Karsten Thomann, and Matt Donovan.

Never Enough

As my Father always says: “There’s always room for the best.” There’s always a better resource out there. These collections can always get better, and I hope that they do. If you can think of anything that was missed, I welcome you to share it.

If you liked this, check out other Editions of Evergreen:Building and Managing a Team:How to Find and Recruit the Team you Need
How Not to Hire like a Clownshow
Compensation Rules Everything Around Me
Why Employee Onboarding is holding you back
How to Boost Employee Retention
How Performance Reviews are being Reinvented
Secrets to Perfecting Organizational Communication
How to Manage Scale, and Operate in Scaling Organizations
How to Fire an Employee
What you actually need to know about Company Culture
How to Interview Prospective Hires
Strategy and Competitive Advantage:How to Master the Craft of Strategy
Competitive Advantage: How to Build a Winning Business
The Power of Network Effects
How Cost Leadership Builds Powerful Businesses
Why the Best Brands Stand Out
Scale as Competitive Advantage
Barriers to Entry are Confusing
Flywheel Effect: Meta-Competitive Advantage
Building the Business:How to get good business Ideas: Mental Alchemy of Ideation
How to Choose the Right Business Ideas
Product/Market Fit: What it really means & How to Measure it
How to Failure-proof your business with Customer Development
How Strategy and Psychology Work Together to Perfect Pricing
The Most Important Equations in Business - CAC (Part 1)
The Simple Math Behind Every Profitable Business - CLV (Part 2)
How Psychology behind Word-of-Mouth Works
The Secret Core of Every Successful Business--Distribution
The Most Important Lessons in Sales
Why Value Creation is the Foundation of Business
Why Value Capture is the most important idea you haven't read about
The Misunderstood and Underestimated Genius of Advertising
How to be a Great Human:How to Start a New Job: Handling Career Transitions like a Boss
How to Master the Discipline of Product Management
The Ancient Origins of Storytelling, and how to Apply Them
I've also written about How & Why we started Evergreen:How a prototype's failure created the next iteration
Mission & Method of Evergreen
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Eric Jorgenson

Written by

Read and write. Listen and speak. Think and unthink. Fixing the biggest broken market in the world at Zaarly. Twitter: @EricJorgenson Site: EJorgenson.com

Evergreen Business Fortnightly

Timeless Wisdom on Business Topics, created from the best resources suggested by our readers. Each week there’s a new topic and a new Edition of Evergreen Business Weekly. Become a member at Evergreen.instapage.com

Eric Jorgenson

Written by

Read and write. Listen and speak. Think and unthink. Fixing the biggest broken market in the world at Zaarly. Twitter: @EricJorgenson Site: EJorgenson.com

Evergreen Business Fortnightly

Timeless Wisdom on Business Topics, created from the best resources suggested by our readers. Each week there’s a new topic and a new Edition of Evergreen Business Weekly. Become a member at Evergreen.instapage.com

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