Onboarding: The Secret to a Profitable Business

onboarding Aug 07, 2019

You never get a second chance to make a good first impression. In the world of work, this principle applies to both the employer and the new employee.

In fact, one in four new employees resign within the first 12 months.

Taken in a wider context, the latest Australian Bureau of Statistics survey into job mobility and participation show that 8.5% (1.1 million) of Australian employees changed job in the twelve months up to February 2019 which is an increase in the churn rate up from 7.9% in 2015. [1]

People are increasingly looking for better pay and better workplace conditions.

If your new hire is left to ‘sink or swim’, or you have an inconsistent approach to their first weeks at work, don't expect them to stay.

Financial Benefits

As an HR professional and consultant, I have worked with many Australian businesses to improve their retention rates.

In the following series of posts about onboarding best practices, I want to share with you the simple and proven ways you can put a plan in place, starting today.

But first, let’s explore why investing in an onboarding process is a crucial part of creating a profitable business.

Reduce Employee Turnover

Hiring costs money. Every time someone leaves, it can cost you up to 75% of their salary. In Australia, that equates to approximately $54,250 per employee (based on an average wage).

Faster Time to Productivity

With a roadmap for guidance, employees get up to speed in less time. Once your process is in place, it’s easy to make it more efficient as your business grows.

Boosts your Bottom Line

Companies adept at onboarding achieved 2.5x the revenue growth over organisations that reported being the least capable. [2]

This surprising result came out of a worldwide study of 4,288 different businesses by the Boston Consulting Group. [2]

A diverse group took part in a unique survey, mapping the links between HR capability and financial performance. Each business rated how well they did in managing people based across 22 HR activities, from recruitment through to restructuring an organisation.

Out of the top ten HR activities, onboarding ranked second as having the biggest impact on revenue and profit margins. [2]

Your Competitive Advantage

In 2017, Gallup found that just 14% of Australians and New Zealanders rated themselves as engaged in their jobs. [3]

Which leaves a huge percentage who took part in the study who are completely disengaged in the workplace.

It’s a missed opportunity to ensure your employees are engaged and productive at work from day one.

You can leapfrog your competitors by positioning onboarding as part of your unique employer brand.

If you’d like help with your onboarding process please feel free to reach out to me by email on [email protected]

In my next post, I’ll reveal the simple formula used by Fortune 500 companies to create a ‘best in class’ employee experience for your business.

Footnote & Source References

[1]. ABS: Participation, Job Search and Mobility, Australia, Feb 2019
https://www.abs.gov.au/ausstats\[email protected]/0/49A83FBC3DF528CACA257FD800129321?Opendocument

[2]. BCG: From Capability to Profitability – Realizing the Value of People Management.
R. Strack, J. Caye, C. von der Linden, H. Quiros, and P. Haen. July 2012
https://www.bcg.com/en-au/publications/2012/people-management-human-resources-leadership-from-capability-to-profitability.aspx

[3] State of the Global Workplace Gallup Report 2017
https://www.gallup.com/workplace/238079/state-global-workplace-2017.aspx

Iolanda Hazell

Iolanda Hazell is Head of People & Culture at Pulse Software - 18+ yrs of HR experience supporting small-large companies in sectors such as financial, professional services, technology & government.