Onboarding is the process of integrating a new employee with a company and its culture, as well as giving them the tools and information needed to become a productive team member. For example, at the Austin-based company, Cirrus Logic, new hires learn about the company’s award-winning culture through immersion in a culture camp called the School of Cirrus Rocks. At the camp, participants first learn about company values through storytelling. They then break into groups and create a story in the form of a song about working at the company. Later, they meet at a local bar with local musicians to perform their songs and get cheered on by their teams and supervisors.

While many organizations prefer a more structured approach to onboarding, others follow a sink-or-swim approach, where new employees are on their own to navigate roles and expectations. Whatever form onboarding takes in your workplace, onboarding sets the tone for the employer/employee relationship and is essential to jump-starting employees’ productivity, engagement and satisfaction. Notably, employees who feel their onboarding was exceptional are nearly twice as likely to be fully prepared for their role and 2.3 times more likely to find their job meets or exceeds expectations.

The Impact of Poor Onboarding

Most organizations recognize the importance of effective onboarding, yet few do it well. For example:

• According to Employ’s 2022 report, “Dynamic Motivations of Modern Workers,” 30% of employees leave within the first 90 days.
• A 2022 Paychex survey, “The Effect of Poor Onboarding on New Hires,” found that 80% of workers feel undertrained after onboarding.
• In the same survey, among employees planning to leave their current employer soon, 64% of workers described their onboarding as a fail.

Poor onboarding takes a massive toll. Replacing high-performing employees who leave within their first six to twelve months can cost a company between one-half to two times the employee’s annual salary. Assuming the average salary of $50,000, replacement costs can be from $25,000 to $100,000 per employee.

Even if they stick around, employees who experience poor onboarding are several times more likely to be disengaged, which can deplete team morale and business performance. With so much on the line, how can we tell if our onboarding process is truly effective?

Measuring the Effectiveness of Onboarding

Metrics are needed to track how well your onboarding process contributes to the employee experience, job performance, and retention and recruitment.

Common metrics can include:

1. Employee satisfaction and feedback. One of the simplest and most direct ways to measure onboarding success. Satisfaction surveys, often conducted at the end of the onboarding period, can provide valuable insights.
2. Manager and peer feedback. Management check-ins during a new hire’s first few months can reveal how well onboarding prepared new hires for their responsibilities. Peer feedback also plays a role in understanding how well a new hire is assimilating into the team.
3. Employee turnover/retention. Retention can be a powerful indicator of onboarding success since new hires who feel engaged can be more likely to stay. Monitor retention rates at key intervals (e.g., 30, 60, 90, 120 days) to see if employees are leaving prematurely due to issues related to onboarding. Maximizing retention helps stem the high cost of turnover.
4. Retention threshold. Tracking the point where most employees leave the organization (e.g. 50 percent tend to exit within the first 90 days of hire) can suggest when and where employees’ assimilation may be breaking down and can provide timelines and tactics for proactive intervention.
5. Time-to-productivity. Time-to-productivity refers to the amount of time it takes for a new hire to become fully productive in their role. Track how long it takes for employees to meet performance goals or take on projects without supervision. A shorter time-to-productivity suggests that onboarding effectively equipped employees with the necessary skills and knowledge to perform their tasks and contribute to overall business performance.
6. Employee engagement and sentiment. Using tools like the employee net promoter score (eNPS), which asks employees if they would recommend the company, can provide early indicators of engagement levels. Engagement scores, during or shortly after onboarding, can identify the extent to which employees are excited about their roles and feel aligned with the company’s values, culture and work environment.

Use It or Lose It

Collecting data is only valuable if you analyze and act on it. For best results, you should:

• Use a mix of qualitative and quantitative data. Combine quantitative metrics (e.g., retention rates, time-to-productivity) with qualitative feedback from surveys and interviews.
• Implement regular check-ins. Don’t wait until the end of onboarding to measure success. Regular check-ins with both managers and new employees provide real-time feedback and allow for needed adjustments. Sample follow-up questions can include:
  • Does the job description during hiring align with your new role?
  • Did you feel a sense of belonging from day one?
  • Did your direct manager help with onboarding during your first 90 days?
  • Were you provided tools to do your job effectively?
• Benchmark against industry standards. Compare your onboarding metrics with industry benchmarks to set performance milestones and progress measures.
• Iterate and improve. Continuously refine your onboarding process based upon the insights you gather. Small improvements made regularly can have a significant effect on long-term impact.

Putting it all Together

Companies that integrate well-designed metrics with their onboarding processes can see an increase in productivity and proficiency, reduced turnover costs and up to a 20 times increase in employee commitment. Since onboarding is a continuous journey rather than a one-time task, metrics should emphasize ongoing improvement, driven by regular data reviews and continuous feedback.

What measures are you taking to set your new employees and your business up for long-term success? How you treat your new hires from preboarding to onboarding, the first 90 days and beyond can really shape your brand and culture.