How Does Onboarding Impact Your Bottom Line?

22nd Jun, 2020 | Resources

Starting a new job is never an easy task.

It can be especially daunting if there is no one to show you the ropes. Without the proper education, this first-day fear can extend. This leaves new starters unsure of their place in delivering organisational goals and without the intellectual and physical tools to produce results! 

This interruption to productivity means that your new hire could be costing the business money, rather than helping make it. In this way, the quality of your onboarding process can directly impact your bottom line.

What Is Onboarding?

Onboarding is the process of providing new employees all of the information and resources they need to do their job effectively.

It usually involves a series of clearly outlined meetings, presentations and resources that allow a new team member to understand the organisation, its aims, culture and where team members fit with respect to achieving business goals.

Quite simply, it allows your new employees to get in sync with the work environment!

Onboarding and Productivity

While many staffing managers may view the onboarding process as extra admin or a waste of time, best-practice onboarding has direct links to productivity and may reclaim the man-hours taken to deliver the onboarding procedure.

On average, it takes three to eight months to get a new employee up-to-speed with their role. When they are left to understand their place within a business themselves, it can take up to 1-2 years before they become fully productive.

Without a proper understanding of business decision-makers and intellectual property holders or organisational needs and expectations, new starters face a series of hurdles in understanding and executing their role.

Effective onboarding processes allow them to clear these hurdles and give them an unobstructed view of the pathway to results. By helping them see the course they need to run, businesses can allow staff to reach full productivity as soon as possible!

How Productivity Losses Translate To Business Losses

Your employees should either be actively generating income, or supporting those who do. 

However, if one or more employees is unable to perform at capacity, then they are slowing down this revenue chain. This means the business is not operating as effectively (and in many cases, making as much money) as it should.

For this reason, the three-plus months it takes a new starter to reach capacity can present quite a cost to the business. When you factor in recruitment costs, new starters begin their role already having to make up productivity to offset this outlay. In this way, the speed of a new starters’ ramp to productivity either leads to revenue losses or increased costs – thereby impacting your bottom line.

Better Onboarding Can Boost Your Bottom Line 

So, if low productivity impacts your profit and losses and best-practice onboarding allows new hires to reach full productivity sooner, then your onboarding has a significant relationship with your bottom line.

Through effective onboarding, you are actively assisting a new starter to reach full productivity and begin helping the business generate revenue rather than contributing to business costs – bolstering your bottom line.