Why you need a stronger onboarding process

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Onboarding sets the scene for a new employee, but most companies are still struggling to do it right. The Access Group discusses why onboarding is important, and how to improve it quickly.

FROM THE moment a potential employee sends you their CV, the ‘employee experience’ begins – and just like individuals, employers won’t get a second chance at a first impression. With organisations worldwide facing a talent crunch, many employers have been revisiting their employee experience (EX). Whether it’s the recruitment process, a performance review or an interaction with HR, every encounter will shape how your employees feel about your business. However, many companies are still lagging behind in one of the most vital areas of EX – onboarding.

The Access Group is a leading provider of business management software to midsized organisations in the UK, Ireland and Asia Pacific. Supporting over 5,000 customers in ANZ and leveraging 35 years of payroll experience, Access solutions are designed to optimise your most valuable asset – your people – to deliver accurate, compliant and timely payroll every pay cycle, regardless of business size, organisational structure, industry or complexity of pay conditions. Improve productivity, control costs and ensure compliance with end-to-end visibility across your workforce.

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“When you come in as an employee, the employer often needs to capture all of the really dull things: your TFN, your super, signing compliance forms, and so on. These things can either be easy, or they can be a challenge”

Stephen Duncan, The Access Group

When it comes to talent retention, the importance of a good onboarding process can’t be overstated. Research from Brandon Hall Group found that a strong onboarding process improves the retention of new hires by a huge 82%. However, a Gallup poll found that only 12% of employees thought their organisation did a great job of onboarding – stark figures which clearly show that most organisations have significant room for improvement.

Setting the tone Employee experience starts with the very first interaction with the company and shows prospective employees exactly what they can expect from your business. According to Stephen Duncan, head of marketing, people and payroll at The Access Group, the heavily administrative nature of onboarding can be challenging for some employers. Forms need to be signed, and compliance boxes need to be ticked. However, he says companies need to avoid piling the paperwork onto new employees from day one, and should instead turn the process into something quick, easy and digital.

“When you come in as an employee, the employer often needs to capture all of the really dull things: your TFN, your super, signing compliance forms, and so on,” Duncan says. “These things can either be easy, or they can be a challenge. “In one of my onboarding experiences, the company sent me a bunch of forms to sign, and I then had to print them, read them, sign them and fax them – all of it was very manual, and it really made me question where the company was at with regard to their technology,” he explains. “As the younger generations come through, they’re going to expect everything to be done digitally. If they don’t get that experience, then it’ll potentially set the tone for the kind of engagement they’re going to have throughout the rest of their time with the company.”

Duncan notes that the onboarding process can also go beyond basic information-gathering. Employers can ask personalised questions that will help inform the employee’s journey, or give them pre-learning materials about the organisation and their role. All of this will help the employee become a part of the system and feel fully integrated from day one. “A good onboarding process is also valuable to analyse when it comes to the cost of doing business,” Duncan adds. “The cost of onboarding employees is around $6k – so it isn’t small. If you don’t do it right, and people only end up staying for 18 months or so, then you’ll also face the cost of rehiring. Replacing a mid-range employee costs about 20% of their salary, and for an executive that’s up to 213% of their average salary. This can have a sizable impact on organisations, so the advice is to make the process as simple and engaging as possible.”

“[Organisations] tend to look at software from a payroll perspective, but not an onboarding perspective. However, onboarding happens way before payroll comes into the picture, and it’s absolutely vital to get it right”

Jo Sutton, The Access Group

The importance of technology The last few years have been a time of massive overhaul for most businesses, and many have invested heavily into new technology, particularly in the HR space. But while companies have streamlined how they operate, the onboarding process still tends to be very paper-heavy. According to The Access Group's content marketing manager, people and payroll, Jo Sutton, bringing digitisation to the onboarding process is vital, particularly from a compliance and record-keeping perspective. “From the minute that the employee accepts your offer, all of the legal documents and contracts need to be housed somewhere,” Sutton says. “If you have a disjointed way of working, that’s going to lead to a lot of paper, a lot of filing, and then finding that information again later on becomes very difficult. It pays to have ‘one source of truth’, and a single record for each employee. “Then with hybrid and remote working models, there’s obviously been a great change in the adoption of technology to enable remote onboarding and workforce connection,” she continues. “This has certainly led to improvements in onboarding. For example, more companies understand that you can digitally sign contracts and other documents now, and those signatures are legal. Workforce management software also means that HR professionals can also get a much better view of where every employee is at – they can see whether they’ve opened a particular form, or whether they’ve signed it. They won’t need to chase for these documents, because they can get them electronically through the onboarding process. These are all really valuable capabilities for an organisation to have.”

Sutton notes that a digitally driven onboarding process will also strengthen productivity. With the paperwork all but eliminated, employees will be free to start their actual job from day one, and the company will be fully compliant with all legal requirements as soon as that person walks into their office. Digital onboarding will also ensure that data protection and storage are easily manageable by HR leaders. “It will enhance the employee experience from a payroll perspective too,” Sutton explains. “If organisations already have the information they need for payroll and HR, so that person can get paid even if the pay run is the next day, you won’t be having an awkward conversation about how they won’t be getting their pay cheque for another two weeks.”

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Onboarding: The statistics

Great onboarding can improve employee retention by 82%

88% of organisations don’t do a great job of onboarding

58% of organisations focus their onboarding on processes and paperwork

1 in 5 new hires are unlikely to recommend an employer

Recruitment and onboarding costs

Recruitment costs $23,800 on average

Training costs approximately 1.5% of salary

Onboarding costs roughly $6,000 per employee

Rehiring costs up to 20% of a mid-range employee’s salary

Security is the other aspect of this process. “Physical paper forms can be left anywhere, and you don’t know where they’re filed or who’s looking at them. If you have access to workforce management software, you’re able to keep your data safe and secure, and you ensure that only the right people in the company get to see it,” Sutton says. “These are just some of the advantages of going completely online with your onboarding, and often these are things that companies don’t actually think about. "They tend to look at software from a payroll perspective, but not an onboarding perspective. However, onboarding happens way before payroll comes into the picture, and it’s absolutely vital to get it right.”