People Magazine

Your employee onboarding process might be costing more than you think

Onboarding process
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 Onboarding checklists avoid poor onboarding processes and therefore high costs.

Creating a solid onboarding process is important. Learn why.

Learn about the real costs of onboarding.

How are you ensuring that your latest onboarded employee was a good investment?

You don’t necessarily want to think about people—and your employees—as “investments,” but in a way they are. It can cost a tremendous lot to onboard. According to Hundred5, it was reported to cost over $4,100 to onboard a new employee, but keep in mind that’s an average. The more challenging or higher-paying the position, the higher the onboarding cost.

These costs can be added to by advertising, although having reputable HR software like Aqeed People, can help defray these costs. But not all costs are overt and so easy to gauge. For example, poor onboarding processes could be driving up costs to you.

Onboarding checklist on fleek

One of the best ways to lower the costs of onboarding is to have an onboarding checklist. This can and should be part of your HR software.

It’s also imperative to have employee onboarding best practices. These will vary based on your company and the job description. However, a few general guidelines include:

  • Have an updated training program. Training programs (also called orientation or induction sessions) should be customized for each job description. They can be very formal with corporate videos or a more informal training led by an HR representative. No matter how the training takes place, make sure it’s regularly updated.
  • Build feedback into the training. Are you sure the new employee is “getting it?” There are many types of learners, and if the training just doesn’t resonate with them, it won’t be effective. Get feedback, perhaps from mini tests after each training, to make sure everyone’s on the same page.
  • Assign new employees their own buddy. Having the support of a seasoned employee who can be their go-to person (who isn’t their manager) can help smooth the transition of a new role.

Non-tangible costs of onboarding

Onboarding is a delicate time for everyone. If you want to make sure it’s worth the cost, it’s vital to have a solid onboarding process.

Some of the costs of onboarding are obvious, such as fees related to training employees. Others aren’t so obvious, such as:

  • Lost time and resources. Training an employee takes the time and resources of many people, including the new employee, that otherwise might be spent elsewhere. The HR person conducting the training is being taken away from other tasks, even though training is part of their job description.
  • Room space. Using or renting space for training is another onboarding cost. Most of the time, this space would otherwise not be rented, or it would be used for another activity.
  • New or updated materials. If you need to buy a new computer or chair for the employee, or any other material, those costs can be quite high.
  • Benefits. As a small business owner, when you onboard a new employee you will also need to start preparing to have them enjoy your benefits. This means an increase in workers’ compensation coverage, health benefits, and any other perks. You will also have to plan to lose income on their vacation or sick days.

Onboarding can come with a slew of losses and costs, and what happens if that new employee doesn’t stay? If they were a good fit and you “lost” them, the total costs can be enormous. They perhaps had the potential to take your company to the next level, making the cost losses astronomical. Proper onboarding is the best thing any small business can do to not only save money but make it in the long run.


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