How to Reduce Employee Turnover with Better Onboarding

Posted on

September 14th, 2021


The employee onboarding process has far-reaching effects within an organization. Effective onboarding improves productivity, boosts employee retention, and reduces absenteeism. If a company is struggling to retain its workforce, an ineffective onboarding experience may explain the churn of new hires.

Onboarding and Productivity

An unsatisfactory onboarding experience can hinder productivity and diminish a new hire’s performance. On average, it takes eight months for a new employee to reach their full productivity potential. Unclear objectives are part of the reason for such a long timeline to proficiency, as 60% of organizations don’t set goals for new employees. Meanwhile, 35% of companies lack an onboarding process altogether, while 63% don’t extend the onboarding process beyond the new employee’s first month with the company. Most organizations stop the onboarding process after just one week.

The focus of the onboarding process often compounds the productivity problem as well. Fifty-eight percent of companies report that their onboarding process concentrates on paperwork and administrative tasks rather than helping new employees learn their job. In addition, one-third of employees experience inconsistent or reactive onboarding. The result of these issues is a discouraged employee without a clear understanding of their role.

Onboarding and Employee Retention

Replacing an employee is a costly process. Businesses must spend money on recruitment, training, benefits, and more. It can take up to half a year or more to see a return on investment with a new hire, so companies can’t afford to have a retention problem.

Studies have shown onboarding has a direct correlation with how long an employee will stay with their company. One-fifth of employee turnover occurs within their first 45 days on the job, and nearly a quarter of new hires leave within the first year of their employment. In contrast, 69% of employees are more likely to remain at their organization for three years if they have a satisfactory onboarding experience. In addition, 58% of employees are more likely to stay at their job beyond three years if their company has an efficient onboarding program.

Onboarding and Absenteeism

An employee’s onboarding experience sets the tone for their tenure with an organization. A great experience improves retention by 82%, while a poor one makes new hires twice as likely to seek alternate employment. However, turnover isn’t the only problem associated with poor onboarding. A negative onboarding experience can leave new hires disengaged and unmotivated to perform. Unhappy employees are more likely to have attendance problems, such as arriving late, leaving early, or failing to show up to work at all.

If productivity is lagging or turnover is surging among a company’s new hires, their onboarding process may be to blame. Problems with attendance are often an early warning sign that an employee is dissatisfied and considering looking for a new job. Tracking the frequency and type of absences can help companies identify struggling new hires. Businesses can use this information to offer new hires support and reduce the likelihood of turnover. Contact the experts at Actec to learn more about our absence reporting solutions.