Employee Engagement Begins with the Onboarding Process

October 18, 2022

onboarding turnover engagement

Employees meet during the onboarding process

With the Great Resignation driving concerns of turnover and retention, we wanted to take a closer look at one particular aspect that may be having a surprisingly large impact on your bottom line. Specifically, we wanted to dive deeper into the issue of New Hire Turnover, some of the causes, and how you can address it.

What is New Hire Turnover?

Employee turnover is presented as a percentage, and is defined as the number of people who leave a company in a given time period (usually a year), divided by the total number of people that worked in the company during that year. For example, if your company employed 200 people in a year, and 47 left during that year, your turnover rate would be 47/200 or 23.5%.

Contrasted against employee turnover, new hire turnover focuses specifically on new hires, and the percentage that leave within a specified number of days from their start date. For example, if you hired 100 people, and 10 left within their first 30 days, your new hire turnover rate would be 10/100 or 10%. Companies define the time period differently, ranging from 30 days to 1 year.

New hire turnover is probably more common than you would think. According to some studies, up to 20% of new hires leave within the first 45 days of employment!

Voluntary vs Involuntary Turnover

Turnover and new hire turnover can be further dissected into two categories: voluntary and involuntary. As the names imply, voluntary turnover is when employees decide to leave on their own. Involuntary turnover, on the other hand, is when employees are terminated for cause and the company initiates the turnover process.

Involuntary turnover generally points to potential optimizations in your hiring process and can be helped by better screening techniques like pre-employment testing or structured interviews.

The causes of voluntary turnover are more complex because employees may choose to leave for any number of reasons such as personal issues, better opportunities, poor management, uncomfortable fit, career advancement, and many more. However, with voluntary new hire turnover, there is a narrower range of reasons because there’s a shorter time period.

The Causes of New Hire Turnover

There have been many studies looking at the reasons why new hires turnover. Across these studies, there are some common reasons that appear most often. These reasons are:

  1. Misaligned culture fit
  2. Misunderstood responsibilities
  3. Mishandling of the onboarding process

As you can see, these reasons largely point to a mismatch in expectations between the employee and the company. Before we look at some potential solutions, we need to quickly address why it’s important to address these issues.

Turnover is Expensive

When trying to understand the total cost of turnover, Josh Bersin lays out some of the factors which include both monetary and psychological costs, including:

  • Recruitment costs
  • Onboarding costs
  • Loss of productivity
  • Loss of engagement
  • More errors
  • Training costs
  • Negative impact on culture

Factoring in all of these costs, studies estimate that on average, it costs 6 to 9 months of an employee’s salary to replace that employee. That’s the average. Technical employees can cost more (12 to 18 months salary), and high-level executives can cost even more (24 months salary)! For hourly employees, it can cost $1,500 on average.

The Importance of Onboarding

During the hiring process, it’s important to be clear about your company’s vision and mission, and to be clear about the job’s specific requirements, and your expectations of the role. This little bit of prevention can go along way in addressing some of the misunderstandings before an offer is made.

Once an employee starts, your onboarding process becomes incredibly important. By providing a structured onboarding process, you can be sure to align your expectations with your new hires’ expectations. You should also provide additional support to ensure that new hires feel like they are part of the culture, and fully understand your company’s mission, and how their role fits in to that larger vision.

An important step in a successful onboarding process is collecting feedback. It’s a good idea to measure employee engagement early and often so you have the opportunity to address issues before they spiral, and you’re faced with the costs of addressing new hire turnover.

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