HR | 10 MIN READ

5 Reasons You Need to Automate Your Employee Onboarding

Many business professionals may associate automation technology solely with robotics and other IT applications. However, automating your onboarding process can help you drastically reduce costs while also giving your employee retention and productivity rates a huge boost.

Jump to the main takeaways:

 1. Strong Onboarding Means Better Employee Retention
 2. Onboarding Automation Will Help You Save Big on Costs
 3. Employee Onboarding Automation Improves Productivity, ROI
 4. Automation Can Also Make “Cross-Boarding” Much Easier
 5. Bad Employee Onboarding Leads to Negative Word-of-Mouth

 

As we enter a new decade of fast-paced technological innovation, the average employee onboarding process will likely get a major facelift. And with good reason too, since Gallup poll numbers show that only 12% of professionals think their companies do stellar onboarding work.

With so much room for improvement, reversing this trend is an easy path to long-term organizational profitability and stability, regardless of your industry. In this blog article, I’m going to break down five reasons you need to automate your employee onboarding.

Let’s get started!

 

1. Strong Onboarding Means Better Employee Retention

The most noticeable and perhaps most important aspect of onboarding automation is how it can help your organization retain its key employees.

Research done by Glassdoor found that strong employee onboarding can improve employee retention rates by as much as 82%. It stands to reason that, the more talent your business is able to keep in the fold for a longer period of time, the less you’ll have to worry about wasting time, money (more on that later), and resources on searching for new blood.

Unfortunately, effective onboarding is far from the norm. As per the Harvard Business Review, 22% of businesses have no formal onboarding process established for their new hires, let alone one that’s above average. It should come as no surprise, then, that 33% of professionals are job hunting again just six months after being hired.

That percentage goes up if they fall into the Millennial age bracket.

It’s easy to see that strong employee onboarding is vital to building a team that can help your organization thrive. Whether it’s sending and tracking contracts or setting up new IT accounts, eliminating human error is a major benefit of automating your onboarding.

That said, it’s not just about reducing reams of paperwork and piles of mind-numbing administrative tasks either. CIO contributor Myles F. Suer highlights how employee onboarding automation can also help organizations pivot from logistics to engagement once a candidate has accepted an offer:

“CIOs say that the onboarding process should be personal. They say that account provisioning processes behind the scenes need to be automated and seamless. CIOs believe that the emphasis, however, needs to move from logistics to engagement mechanisms the minute an offer is accepted. Yes, benefits sign up and I9s are necessary. However welcoming, including, and engaging have long term value.”

As per BambooHR, employees who felt they received effective onboarding were 18 times more likely to feel committed to the organization and its long-term goals. It’s just another piece of evidence that shows, beyond a reasonable doubt, that a streamlined, automated onboarding will keep your best employees around longer.

Once you hire great talent, you also need to keep them happy. Find out how you can make their lives better on our blog!

 

2. Onboarding Automation Will Help You Save Big on Costs

It’s no secret that every business wants to keep their overall costs to a minimum. But did you know that the hiring and onboarding processes can make up a huge chunk of your yearly expenses?

Consider this: The average U.S. employer spends $4,000 and nearly five workweeks onboarding a single new employee. And, if that employee decides to leave shortly after starting with an organization because of a negative experience, the cost of that hire essentially doubles.

If those numbers don’t raise enough eyebrows, don’t worry - it’s just the tip of the iceberg. As this Glassdoor blog post points out, additional hidden costs, often related to time spent by administrators manually processing data, can up your HR costs to new, potentially astronomical heights:

Let’s say a recruiter makes $25 an hour, and you hire 50 new employees per year, and it takes 10 hours of administrative time to process their documents. That adds up to $12,500 per year — probably a conservative estimate for larger companies.

Then there’s the question on ensuring that new and current employees have the right tools at their disposal. This can add to an already hefty digital transformation bill, an area of spending that topped $2 trillion in 2019.

Investopedia’s Annie Mueller elaborates on how balking at these costs can hinder long-term organizational growth:

“Hiring a new employee isn't a decision that should be taken lightly, as it doesn't fall lightly on the company budget. But without workers, there isn't much work done. And that's the bottom line for businesses; even though the investment may make the company accountant cringe, the potential in return on a good new hire continues to make the investment worthwhile.”

By investing in an automated system that automatically sorts out technical onboarding details for you, your organization will be able to cut into those hiring costs and avoid breaking the bank on new talent.

 

3. Employee Onboarding Automation Improves Productivity, ROI

The age-old tale in the annals of science fiction is that robots will eventually replace human beings and take over a planet that we once controlled. However, this cautionary tale doesn’t tell the whole story, especially as it relates to employee onboarding.

Automation and AI shouldn’t replace a human touch when welcoming new hires. Instead, it should complement and enhance your existing staff’s efforts.

First, there’s the logistical side of this coin. The average new employee has 54 activities to complete during a given onboarding process. This includes simple tasks like setting up email and cloud storage accounts, attending meetings and even participating in icebreaker-style games. If human error enters the equation, a new hire is liable to lose their way.

Then, there’s also the nuts and bolts of the onboarding process itself to consider. New apps, software, operating systems, and other tech means that onboarding systems need to be updated regularly to keep them feeling fresh. Sadly, this is something that 10% of companies haven’t done in three years (!). Automation can also help in this regard.

The reason for all of this is simple: productivity. Studies show that employees who receive effective onboarding are 38% more likely to feel confident in their ability to perform at the highest level. The strength of employee onboarding also impacts how quickly new hires can contribute to team success, with nearly 49% contributing in the first week if the experience is positive (versus just 35% when it’s not).

Ryan Sanders, Co-Founder and COO of BambooHR, echoed as much in this CIO post:

“Onboarding is more than just the first day or the first week, so having a set process that extends beyond that is critical. For new hires, there's a learning curve and a ramp-up time when they don't feel productive. If the company has everything organized, strategized and streamlined, they feel like the company wants them to succeed and 'has their back.' When that's the case, their performance is greater and their satisfaction and loyalty increase, too.”

The flip side, where ineffective onboarding processes lead to disengaged employees, is a less-than-ideal situation. Complacent workers cost their organizations an estimated 34% of their salary, which can mean tens or even hundreds of millions of wasted dollars every year for large corporations.

If you want a great example of a well-known corporation who embraced investing in IT and automation to enhance productivity, check out our blog!

 

4. Automation Can Also Make “Cross-Boarding” Much Easier

I’ve talked a lot about onboarding new employees so far but automation technology can also help streamline the “cross-boarding” process.

When a current team member is either promoted or moved to a different position, there needs to be infrastructure in place to smooth that transition. Much like new hires, they’ll have a long list of milestones to hit, and doing so without an automated onboarding system is far more difficult.

The importance of reskilling existing employees instead of perpetually hiring new talent that doesn’t stick around long-term has never been higher. It’s not for a lack of need either. The World Economic Forum says that AI will create an estimated 133 million new jobs, while another 75 million fall by the wayside.

That’s a lot of demand fighting over the same workforce supply.

HCI data shows that 81% of professionals believe that onboarding for internal hires is just as important as processes established for external hires. That said, less than 30% of organizations effectively transition employees when they’re promoted or moved to a different position. Clearly, the level of execution has not caught up to the sense of urgency.

As Eliza Paul points out in this blog post, the benefits of cross-boarding, especially with an efficient automation solution acting as the bedrock, is more valuable than some organizations realize:

“Crossboarding enables HR managers to provide career growth opportunities to internal resources, and explore ways in which they can make a tangible difference in alternate roles. This maximizes employee productivity while eliminating complacency and a sense of monotony at the workplace.”

Boosting productivity will increase the ROI for both your employee onboarding expenditures, as well as staff member salaries. The better your ROI is, the more your market share and industry performance is likely to improve.

 

5. Bad Employee Onboarding Leads to Negative Word-of-Mouth

Finally, we come to am employee onboarding automation tip that demonstrates what to do by highlighting what not to do.

I’m talking about your organization’s brand and how it can be viewed by potential new hires, for better and for worse. Ratings on job board sites, social media chatter and, most of all, word-of-mouth forges your brand’s public image, whether you like it or not. For the sake of space, let’s focus on the latter aspect of branding, though it applies to the former two as well.

Essentially, if your newest employees are subject to a poor onboarding process, they’ll be the first to vent all those ugly truths to their friends. Their friends will pass those opinions on to other people they know and, before you know it, a snowball effect can steamroll HR’s best attempts to discredit those notions.

Digitate states that one in every five new hires is unlikely to recommend their workplace to a friend because of a bad onboarding experience. With the U.S. unemployment rate continuing to shrink and new, exciting job options surfacing regularly, the pressure for organizations to hold on to talent has never been higher. Bad word-of-mouth doesn’t help this cause.

Businesses can’t afford to have an onboarding process that sabotages their public image and, in so doing, their hiring goals. This feels even more crucial when you consider that internal referrals for external candidates is a coveted recruitment asset that makes hiring good talent quicker and far less expensive.

HCI survey respondents singled out skill shortages and increased competition in their respective industries as the two biggest factors that will impact their organization in the future. This means that sourcing and holding onto talent, especially younger professionals, will come under even more scrutiny in the coming years.

Case in point: Don't let a poor onboarding experience sink your company's ability to snag truly great candidates.

Letting bad word-of-mouth taint your brand is just one of many mistakes that great tech leaders avoid. Read them all on our blog!

 

Recap

Hiring new employees isn’t easy. Hiring great talent and ensuring that they stick around with your organization over the long haul? That’s an even greater challenge.

Thankfully, automation technology can provide a huge assist to make sure that your onboarding process is efficient, cost-effective, actionable, easy to follow, and an asset that enhances your organization’s external image instead of hurting it.

Don’t be afraid or cautious when thinking of automation’s impact on your business. It’s the way of the future and, as far as HR is concerned, it’s an important aspect of your company in the present too.


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Originally published Jan 16, 2020 1:57:00 PM

Late 2019, we did a brand split. Mindville is the company behind the Insight products. Riada provides expert consultancy services on all things Atlassian. Riada can be found at riada.se. Mindville is an Atlassian Platinum Top Vendor and Riada is an Atlassian Platinum Solution Partner.

Topics: HR

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