Metrics for the Effectiveness of Your Employee Onboarding Program

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How do you track the effectiveness of your onboarding process? We present some commonly used employee onboarding metrics to help you determine whether your onboarding program is achieving the desired results.

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Tracking work processes has become a staple of modern-day business. We track everything from customer satisfaction, marketing, and sales results, to financial performance.

More recently, and thanks to diligent HR experts who have developed a series of excellent metrics in their own field, we can also track the effectiveness of onboarding programs.

This article will present you with some of the most commonly used metrics that can help you gauge how successful your company is at creating happy, high-achieving employees at your company.

Have a look at our list and see if our proposed metrics can help you track the effectiveness of your onboarding process.

New Hire Satisfaction Rate

Let’s start off with a general question. What is the goal of employee onboarding?

Is it as simple as showing a new employee how things are done at your company and demonstrating the basics of your workflows?

Well, yes. But that’s just the tip of the iceberg.

Another vital goal of your onboarding process is to turn newbies into high-achieving, happy members of the team who are likely to stay on your staff for a long time.

This is an important point because studies have shown that a third of employees start investigating other job opportunities very quickly after they’re hired.

Source: Archbee.io

And with the costs of employee turnover ranging between 100% and 300% of the replaced employee’s salary, we can safely say that new hire dissatisfaction is a costly mistake you should try to avoid.

But how do you measure employee satisfaction?

As a primarily emotional state, professional satisfaction is difficult to quantify. Therefore, a good course of action is to gauge it using qualitative methods, such as a survey, or better yet, a structured interview.

So, as soon as you start collecting feedback from your new hire, inquire how satisfied they are with their position and the onboarding process.

You can ask questions like:

  • Has the onboarding process made you feel welcome so far?
  • Do you feel engaged and sufficiently challenged in your role?
  • Do you feel comfortable and appreciated working within your team?
  • Are you having any trouble understanding the company culture?

Not only will your new employee’s answers tell you how satisfied they are at your company thus far, but they are likely to also point to aspects of your onboarding process that may require some attention.

Another clever way to collect data about employee satisfaction is by keeping track of your net promoter score among your new hires.

Your net promoter score is essentially the percentage of your employees who would recommend working at your company to others.

This metric is easily collected using anonymous surveys.

Let’s demonstrate how it’s calculated.

Source: Archbee.io

The higher your net promoter score, the higher you can consider your employee satisfaction rate to be.

So to measure it, just distribute the survey among the employees who are still undergoing that initial training.

With a better understanding of how satisfied your new hires are with onboarding and their role in general, you have a greater chance of retaining those employees long after the process is over.

Plus, you’re gaining valuable insights into how your practices can be improved.

Team Lead Satisfaction Level

You should look at the subject of employee satisfaction from more than one perspective.

Along with the satisfaction rates of your new hires, you should also be monitoring how satisfied team leaders are with the onboarding process.

After all, your managers and team leaders are the ones who are responsible for training new employees and introducing them to company culture.

Therefore, their opinions regarding the onboarding process are valuable and can be of much use to you.

This is another aspect of measuring the effectiveness of onboarding that can benefit from applying qualitative research methods, that is, questionnaires, reports, and interviews.

The questions do differ a bit from what you would ask to measure employee satisfaction, but the purpose is the same.

Here are some examples:

  • Are there any parts of the onboarding process that the new hires struggle with?
  • Does your team have all the materials, equipment, and tools needed to successfully complete the onboarding process?
  • Among the new recruits, are there any individuals that aren’t fitting in with the rest of the team?

Another difference is the person responsible for tracking this metric.

If employee satisfaction is tracked by team leaders, then team lead satisfaction levels should be monitored by their superiors or the HR lead, depending on the size of the firm.

Source: Archbee.io

A lot of the details, such as whose responsibility it is to monitor whose satisfaction levels, will vary from company to company, but the important thing is to try and make this measurement as standardized as possible.

A good practice to follow here is to come up with a single questionnaire to be applied to all new hires and another one for team leads.

By always asking the same set of approved questions, you’re able to see if your onboarding process is becoming better or worse over time, while also providing a basis for the comparison between teams at your company.

If you work at a large company with many teams, departments, or even company branches, you can create your questionnaire using documentation software, like Archbee, and have it online, available to all of your team leaders and managers at all times.

Archbee.io

Archbee even allows you to collaborate on documents and get input from your managers and HR staff to create a document that includes all of the important questions that will allow you to gauge employee satisfaction as accurately as possible.

As we’ve already argued, employee satisfaction isn’t an easy metric to quantify.

However, taking a systematic approach to this matter will help you get an accurate picture of how effective your onboarding process really is.

Time to Productivity

Another important goal for your onboarding process is to turn new hires into productive employees as quickly as possible.

As one of the most important activities for your organization, employee onboarding is something you should definitely take your time with. However, onboarding isn’t supposed to go on forever.

In fact, it should be kept as short as possible, yet without sacrificing effectiveness.

Companies follow their own policies regarding the duration of quality employee onboarding, and for more than half of the companies out there, onboarding regrettably lasts less than a week.

Source: Archbee.io

As you can imagine, although companies strive for compactness, a week is scarcely enough time for employees to become productive, so these onboarding programs can hardly be called effective.

Time to productivity is a useful indicator that can help you determine the level of effectiveness of your onboarding process.

This is the number of days that pass between the employee’s first day at work and the moment they become a fully independent part of the team.

Time to productivity is a useful metric when you keep track of its average value across the company. Here’s how that works.

Source: Archbee.io

Naturally, you can’t expect all of your new hires, across all teams and every level of seniority, to have a relatively similar time to productivity.

However, you can compare this metric among the employees of one team.

If you notice that your average time to productivity is increasing, that could mean your onboarding process is becoming less effective.

In that case, it’s time to refocus your efforts and see what you can do to turn new hires into productive members of your team faster.

Remember, the point isn’t to shorten the onboarding process as much as possible at any cost. Rather, the point is to provide more support to your new hires so they can become productive in less time.

New Hire Turnover Rate

Your new hire turnover rate is a clear indicator of the effectiveness of your onboarding program.

If your recruits are leaving your company during the onboarding process, that means they aren’t happy or aren’t reaching the desired level of productivity, indicating a problem with the training.

There are two kinds of turnover you should be looking out for: voluntary and involuntary.

Here’s a short rundown.

Source: Archbee.io

A high involuntary turnover among your new hires may point to a problem in your hiring process.

If you notice your new recruits just aren’t meeting your expectations, it may be worth considering whether you’re hiring the right people for the job.

On the other hand, if your employees are leaving of their own volition, the case might be that your onboarding process or your company isn’t meeting their expectations.

In that case, it may be time to reevaluate your onboarding practices.

We’ve already talked about the high cost of replacing employees, so it should be clear why these numbers are to be taken very seriously.

Unfortunately, turnover rates are what we call a lagging indicator, meaning that by the time you notice that they’re high, the damage is already done. The employees are already gone.

The following formula will show you how to calculate the turnover rate so that you can keep a close eye on it.

Source: Archbee.io

According to the SHRM Human Capital Benchmarking Report, the average employee turnover rate in the US hovers around 18%, but you should aim to get your rate down to about 10%.

To accomplish this low rate, it’s important to take steps to reduce these rates as soon as they come to your attention.

Your hiring process and onboarding program are the first suspects when new hire turnover occurs, so examining them is a great place to start fixing the problem.

Training Completion Rate

This metric tells you what percentage of new employees manage to complete their on-the-job training and become independent workers contributing to your company goals with minimal oversight.

When training completion rates falter, that probably means there is some sort of problem with the program you’re making your new hires follow.

It may be too difficult for employees to complete, or the staff responsible for training may not be up to the task.

However, it could also mean that your training program is too short and that your new employees don’t get enough time to successfully pass it.

And just like the employee turnover rate, this metric is calculated by dividing the number of employees who haven’t completed their training by the total number of employees who underwent it.

Source: Archbee.io

If training is something new employees at your company are finding particularly difficult, it may be a good idea to focus more on ensuring that the program is effective, relevant, and well-thought-out.

For example, Bonobos, the eCommerce clothing company, has always been a company focused on learning and development, first and foremost.

They offer multiple classes and training opportunities where employees can learn everything about managing people, as well as themselves, to become successful employees.

The training programs they offer include:

  • WTF Program (Wellness, Thoughtfulness, Fitness)
  • Managing for Success (key management skills)
  • Fit for Success (performance management with a mentor)
  • How to Manage up Well (training for associate-level employees—a new hire training program)
  • Learn.Know.Bos (learning and development sessions with renowned speakers)

This kind of focus on training is quite rare in modern business; it’s more reminiscent of a college syllabus.

But Bonobos insists on helping employees become the best versions of themselves because they are conscious of the fact that successful employees make a successful company.

Quote from: Greenhouse

Take a note from Bonobos’s book and develop training programs that cater to the needs of your employees to make sure your training completion rates stay up and your onboarding process remains as effective as possible.

Return on Investment

Hiring and onboarding are costly processes. According to some sources, onboarding can cost as much as $4,100 per new employee.

Source: Archbee.io

We all want to give a warm welcome to employees and do everything we can to make sure they feel right at home working for your company.

But it’s also important to keep in mind that we’re making these investments with the goal of advancing the company mission.

Therefore, an onboarding process can only be said to be effective if it provides a satisfactory return on investment (ROI). That’s easy to understand.

However, the definition of a good return on investment is a little more complex.

The point isn’t just to have the employee earn back the revenue invested in their onboarding. It all depends on what your desired outcomes of onboarding are.

Are the goals increased retention and employment rates? Improved employee engagement? Faster time to productivity?

In other words, from an HR perspective, the ROI of onboarding isn’t only measured in financial gain, but also in the key KPIs that tell us how effective our onboarding process is at creating happy, productive employees.

Following this logic, you can measure the ROI of your onboarding process using some of the formulas we’ve used for other purposes in this article.

For example, you can use the Employee Turnover Rate formula to see whether your onboarding practices are resulting in a satisfactory number of new employees that successfully complete the onboarding process.

On the other hand, if you need to find the exact ROI in financial terms, a good practice is to calculate the costs of onboarding and compare them to the revenue per employee metric (your yearly revenue divided by the number of employees).

Calculating the cost of onboarding can be quite complicated, so you can also use a dedicated calculator, like the one offered by Sapling.

Source: Sapling

In conclusion, the ROI of your onboarding process is a very important metric. But don’t let the term “return on investment” lead you to think that this is a purely financial metric.

From an HR standpoint, the real ROI of onboarding is a happy and productive employee.

Employee Onboarding Metrics Are Important, But...

As this article has shown you, measuring the effectiveness of your onboarding process can be achieved using a variety of metrics.

These can tell you much about how your new recruits are picking up their new roles, whether or not they’re being served well by your existing process, and if they’re likely to stay after the onboarding process is finished.

However, remember that a truly effective onboarding process should be driven by the employees themselves.

Therefore, it’s important to supplement your metrics and process tracking efforts with some good, old-fashioned feedback.

Take the time to talk to your employees about the onboarding process and try to incorporate their experience into the process to make it even more effective.