The Cost And Benefits Of Employee Onboarding For Small Businesses
Dan Levenson February 02, 2017
For small businesses, onboarding new employees is a central part of building a core staff that is productive and successful.
In order to continue to grow your business, you must always be on the lookout for new talent. But it’s not as simple as hiring a few good people and hoping for the best. To truly get the most out of your employees—and to make sure they have the resources to feel like their new job is worthwhile—you must give them the opportunity to catch up to their colleagues in terms of familiarity with your company.
Ask any HR professional and they will tell you that employee onboarding is a rigorous process, but also a highly beneficial one. This post will look at the cost of employee onboarding and its key benefits.
The Cost of Employee Onboarding
Hiring a new employee comes with several different costs, many of which you might not even realize.
There are the pre-hiring recruitment costs, which include running job advertisements, time spent interviewing candidates, and providing testing should the position call for it. Once a candidate has been hired, there are additional costs including training, orientation, and providing the employee with the materials needed to do their job, including uniforms and equipment.
You must also account for the amount of money spent to print out training packets for new hires, as well as processing their paperwork. If your company performs drug screenings and background checks, these are also an additional expense. And don’t forget the amount of money it takes to pay your administrative or HR staff to handle the onboarding process.
When all of these factors are added up, the average cost to onboard a new employee is roughly $400 depending on the nature and industry of your business.
The Benefits of Onboarding Employees
While $400 seems like a lot to spend on a new employee who has not yet proven their loyalty to your company, a successful onboarding program can produce a huge ROI in the long run.
Here are just some of the ways that investing time and some money in a new employee can benefit your bottom line in the long run.
1. Loyalty to Your Organization
By going through a successful onboarding process, new employees are able to understand how their role fits into the success of the organization. Your onboarding program should clearly define your company’s goals and values, as well as how each role works together for the common good of the business. By explaining all these factors, new hires will feel a greater sense of commitment to your organization and be ready to face the new tasks at hand.
2. Increased Job Performance
One of the main goals you want to accomplish with employee onboarding is clarifying roles. When new hires understand the expectations of their position, they are able to perform more efficiently. When there are fewer ambiguities about their responsibilities, productivity will increase and the employee will feel more comfortable about expressing his/her own creativity and ideas within the parameters of their position.
3. Reduced Stress
When your company has an employee onboarding program in place, new hires have the opportunity to interact with their new colleagues from day one. This will help them feel more accepted in the social atmosphere, and more confident about their ability to perform the tasks assigned to their position.
4. Higher Job Satisfaction
When employees understand the goals of their company and how their job plays a role in accomplishing them, they are more likely to find success when completing tasks. When employees have these feelings of accomplishment, they have a higher rate of job satisfaction, which means a lower turnover rate for your company.
5. Higher Retention Rate
All of these factors play into your company maintaining a high retention rate. A successful employee onboarding program can increase job satisfaction, reduce stress, and play a key role in an employee’s understanding of the expectations of their position. When your employees are well-informed and happy, they are loyal to your organization.
While employee onboarding does incur several costs, its benefits are well worth it. This is a small, but important part—in addition to other perks such as a great benefits program—of helping your growing staff understand their value to you as their employer.