5 Metrics to Evaluate the Effect of Employee Onboarding
Employee onboarding is the process of integrating the new employee into the company's culture, processes and work environment. The goal of it is to increase the productivity of the new employee, improve the retention rate and reduce the costs associated with high employee turnover.
While there is no universal approach to effective onboarding, there is definitely value in being consistent in measuring its effectiveness and making tweaks along the way. This article will provide some ideas on how to go about evaluating the effectiveness of your onboarding program.
Table of contents:
How to evaluate an employee onboarding program
Identify the objectives of employee onboarding
Introduce meaningful KPIs and metrics
Training/onboarding completion rate
New-hire turnover (voluntary/involuntary)
Identify challenges and make tweaks
What is employee onboarding?
Employee onboarding is a combination of several activities that contribute to the successful integration of the employee into the company's culture and work environment. This process typically includes the following:
An official welcome from the company's executives and managers;
Scheduled activities with HR representatives and colleagues (e.g. lunch, social events, etc.);
Training on the company's policies, processes and procedures;
Health & Safety training
Training on specific software and systems (e.g. travel system, expenses system, company intranet etc.)
Establishing relationships with colleagues including mentors/sponsors, etc.
Employee onboarding should be seamlessly integrated into the employer's recruitment process and not treated as a separate process by itself. Holding onboarding events a week after someone’s official start date is not really beneficial and creates a poor first impression of the employer.
Onboarding vs. Off-boarding
While this article focuses mainly on evaluating onboarding, it’s worthwhile to take a moment to consider how you’re treating the off boarding process as well or to make sure you have one at all! How we treat leavers is just as important as how we treat new comers, as it all reflects on our employer branding.
Offboarding is a process that is designed to ease the transition of outgoing employees out of the company. It helps leavers to focus on transitioning their knowledge to the next generation of employees, while minimizing disruption and at the same time ensuring they do not take proprietary information with them. As part of the off boarding process we need to make sure we collate feedback in the form of exit interviews and offer leavers to also join a company’s alumni programme, if one exists.
How to evaluate an employee onboarding program
1. Identify the objectives of employee onboarding
When measuring the effectiveness of onboarding, there are many factors to take into account. First, you'll need to consider the objectives of the onboarding programme. Do these objectives align with the employee's expectations and priorities? Do they align with the company’s objectives and overall goals? What is the main outcome we seek by introducing an employee onboarding programme? If a newcomer was expecting an in-depth training and insight into the company’s products and they merely got a general presentation on the history and operating markets, then there’s clearly a misalignment that may lead to disappointment on the employee’s part.
It’s important to take time and define the objectives of the programme first, while taking into consideration what your newcomers want.
2. Introduce meaningful KPIs and metrics
Once you know what you’re aiming at, it’s easier to define how to effectively measure it.
KPI: Key performance indicators. KPIs evaluate the success of an organisation or of a particular activity (such as projects, programs, products and other initiatives) in which it engages. They help you make decisions based on analytical data, so that you can focus attention on what matters most.
Here are 5 metrics you should consider measuring in relation to your onboarding programme:
Ask employees to share their immediate thoughts after completing the onboarding process or a part of it (depending how granular you want to go). This is essentially the equivalent of "happy sheets" we hand out at the end of a training. They're meant to assess how the new hire felt about the process and to voice out any concerns. Some questions you might want to ask:
On a scale from ... to ... how would you rate your overall onboarding experience?
Was adequate time spent on each topic?
Which topics did you find the most valuable?
Was there a topic that was missing?
Is there something you would change about the onboarding process?
Training/onboarding completion rate
Whether someone has completed their full onboarding programme or not could be an indicator about how useful and worth the time investment it was for them. There are other factors to consider here, of course, i.e. whether they were allowed sufficient time to complete it, whether they faced any technical issues, whether they were encouraged/discouraged by their line manager etc. A well-designed programme, which is supported by management, is crucial for employee engagement, getting people up-to-speed quickly and as a result - saves the company money by enabling employees to be productive quicker.
New-hire turnover (voluntary and involuntary)
Voluntary turnover measures the number of employees who decide to leave of their own accord. It is an important metric to keep an eye on, because a high new-hire turnover might indicate there are issues with the onboarding process, expectations of the role, the manager-employee relationship or just the overall employee experience. Look for patterns: whether certain departments or job roles get higher new-hire turnover than others and make steps to correct issues.
Involuntary turnover could be the result of redundancy or the manager not finding the new hire to be fully fit for the role. In the case of the latter, it could be an issue of poor recruitment practices that lead to not bringing on board the right talent. It could also be an issue with less-than-optimal onboarding. Either way, it's an issue you need to investigate, as it's potentially costing the company a lot of money in hiring. It's been estimated that new hire replacement could cost between 6-9 months' salary.
New-hire retention (per manager)
Retention measures how many of you new hires decide to stay with you after a certain period. To calculate retention, SHRM suggest taking the number of individual employees who remained employed for the entire measurement period (this could be a year or less, up to you) divided by the number of employees at the start of the measurement period. You then multiply the number by 100 to get a percentage. This metric is best to be looked at per department, or better yet - by manager, because this will help you see whether there are issues in certain areas of the company or with a certain supervisor, where retention is really low.
New-hire engagement rate
When calculating employee engagement rate, there are a number of other metrics to look at: absenteeism, retention, eNPS (Employee Net Promoter Score - i.e how likely someone is to recommend you as an employer to someone else), plus there are a number of drivers to consider: how aligned is the employee with the company's strategy, how recognised they feel for a job well-done, whether there are opportunities for career growth etc.
The easiest way to measure new-hire engagement rate is if you already have an annual or pulse survey in place that collects that data for you. There are many companies that offer excellent engagement survey options - OfficeVibe, Glint and Peakon, to name a few. Alternatively, you could design one in a survey platform like SurveyMonkey or similar.
3. Identify challenges and make tweaks
The biggest challenge to evaluating onboarding effectively is the lack of standardized onboarding approaches across organizations. If your company operates across different countries or even continents, then it’s very likely each business unit will have their own onboarding practices. While a blanket approach is never a good answer where differences need to be considered, think of ways to introduce a standardised process, as much as possible.
Having a formal employee onboarding process identifies what's expected of employees, helps them understand how the organization works, and clarifies the roles of managers and their new hires.
Not having a formal employee onboarding process means that new employees have to figure things out for themselves, which has a greater chance of negatively impacting them, their projects, and the organization as a whole.