You may think that selecting an ideal employee is the most challenging part of onboarding. We understand why — the choice has so many implications. Your hire will directly impact your organization's success.
But the process of getting that employee through the door has changed. We now live in an age of remote and hybrid work. It’s harder than ever to track, let alone measure, the success of your onboarding efforts.
Onboarding affects your new employee’s ability to deliver in their role. A poor experience impacts morale and can diminish their chances of successfully settling into your organization. On the other hand, issues with your onboarding program could reflect a pattern throughout the company.
Key Performance Indicators (KPIs) are an excellent way to monitor your onboarding program and beyond. Basically, you can make quantifiable predictions and then weigh your results. Your team can make tactical decisions based on the success (or lack thereof).
Key Performance Indicators (KPIs): a quantifiable measure used to evaluate the success of an organization or employee in meeting performance objectives.
Your company's needs, values and goals are unique. It can be tough to define which onboarding KPIs make sense for your company. To help, we’ve examined the nuances of the employee onboarding experience and outlined metrics that can support almost any bottom line.
In this article, we’ll discuss:
- How an excellent performance stems from effective onboarding.
- The Importance of Aligning Employee Onboarding with Performance Management.
- Five KPIs and Metrics for measuring onboarding effectiveness.
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An excellent performance stems from effective onboarding
An effective onboarding process ensures that your employee feels welcome, engaged and productive. Managers should understand how new hires fit in the team’s framework before they even arrive.
Clear Company states, "Organizations with an excellent onboarding process increased new hire retention rates by 52 percent." A robust program directly contributes to employee retention and brand effectiveness.
Your onboarding process should directly support company-wide objectives by preparing new employees to integrate into their new roles. When done wrong, you risk time, money and bandwidth lost.
A clearly outlined onboarding process, with identifiable indications of success, directly supports your new hires by:
- Reducing stress
- Increasing productivity and ramp up time
- Reducing turnover
- Establishing a solid relationship between the manager and new team member
Establish an engaged workforce to retain top talent. A strong, organized onboarding process massively influences business goals and employee success.
How do the “4 C's” determine onboarding success?
Onboarding splits into four building blocks called the “4 C’s.” These phases are as follows.
1. Compliance: The first stage starts with assessing and completing company and legal documentation.
2. Clarification: It's vital for both the company and employee to clearly understand the new hire's role, what activities and outcomes they’ll perform, and what value the company offers.
3. Culture: A company’s culture has a tangible effect on employee productivity and turnover. Managers can communicate their vision, mission and values in this stage.
4. Connection: A new employee should feel connected to their manager and team.
You can bridge the communication gap early by prioritizing these connections during onboarding.
These four phases are critical success factors for new hires. They encourage engagement and set the tone for their growth with the company.
It can be easy to overlook “culture” and “connection” once you’ve completed the first two Cs. Stay diligent. Your employees will thank you.
Align employee onboarding with performance management
Performance management measures and ultimately improves employee performance. Include onboarding in your performance management to sustain retention and boost productivity for the whole team.
"Performance management is a strategic approach to creating and sustaining improved performance in employees, leading to an increase in the effectiveness of companies." — Valamis
It’s pretty simple: Managers who align employee development with company goals help their teams thrive.
Performance management can eradicate three major concerns organizations often face.
- Engaging their employees.
- Retaining talent.
- Nourishing emerging leaders.
Performance management calls for regular review. Most employees prefer quarterly reports for reinforcement and constructive feedback. Managers can also use these reviews to identify concerns and resolve issues.
Make an effort from the start. Your early investment will encourage new employees to recognize the value of their work. By removing barriers and celebrating wins, you motivate them to meet goals and increase their commitment to company success.
Why you should measure onboarding success
KPIs gauge your program’s effectiveness. Monitor them regularly, and don’t take undesirable outcomes as a death sentence. As the famous saying goes, "what gets measured, gets managed."
Objectives and Key Results (OKRs) are also tools in your arsenal. These function individually and company-wide, with personal objectives (hopefully) aligning with the organization. By tying your KPIs to a larger outcome, you can more clearly define and track what success looks like for your program.
Objectives and Key Results (OKRs): A goal-setting framework that identifies quantifiable goals and tracks their outcomes for individuals, departments and whole organizations.
HR teams and direct managers benefit directly from implementing an OKR framework to measure results within their onboarding program, including:
- Identifying successes and deltas.
- Increasing employee productivity.
- Making informed decisions for the team.
- Giving proper guidance and constructive feedback to a new employee.
- Measuring employee satisfaction without biases.
- Gaining feedback on the new employee's onboarding experience.
Five KPIs and metrics for measuring employee onboarding success
KPIs are powerful barometers for your onboarding program. They help you see what works and where your program is lacking. Are you on track? If not, you have the opportunity to assess and strengthen your processes.
When incorporating metrics, consider the objectives you’re trying to achieve. When you align with your aims, you can better define which indicators are most meaningful to the company.
Measure your onboarding program’s effectiveness with five KPIs that align with almost any team’s overarching goals.
New Employee Engagement Rate
Employee engagement is a critical driver of company success. It speaks to employees' commitment to their work and their passion for striving in their arena.
You induct new hires into your company’s ecosystem. With that should come a level of personal investment. An engagement rate could determine how connected employees feel to the organization and its mission.
You can monitor employee engagement indicators (like those in the image above) using the employee Net Promoter Score (eNPS). This calculation for employee engagement rate produces a precise numbered score. It's also an excellent method for you to gauge feedback from new hires. Prepare a survey with critical questions to understand and improve engagement.
To get started, we recommend simply asking: On a scale of 1-10, how likely are you to recommend this workplace?
Ask them not to feel pressured to impress their manager or seniors. In such a case, honesty helps to ensure transparency, enabling you to find room for improvement.
eNPS = Percentage of Promoters - Percentage of Detractors
New Employee Satisfaction
A company’s success is only as strong as its culture. Revenue, longevity and growth are nothing if you have an unhappy team.
When an employee joins your ranks, they quickly subscribe to the energy around them. An uninviting team will lead to a disconnected new hire. By determining how well employees acclimate, you can get an idea of the conditions overall.
Common ways to measure employee satisfaction are tracking your turnover rate and conducting post-onboarding and ongoing surveys. This data offers a glimpse into employee morale, happiness and emotional investment. By improving the employee experience, you directly support your engagement and retention rates.
Employee Turnover
Employee turnover rate measures the number of employees who leave in a given period. Some of this is inevitable and even healthy. But if you notice a trend in revolving door employees, you need to investigate.
Turnover impacts the whole team, and frankly, it’s expensive. The total cost of losing an employee ranges from 90 to 200 percent of the employee's annual salary. Not to mention the fact that losing one employee increases the chance that others will follow suit.
If your numbers are high, look to your exit surveys. What pain points are trending? These claims will likely give you the answers you need to make a change.
Turnover Rate = Total Departures ÷ Average Number of Employees x 100
Employee Retention
Retention is the opposite of turnover. Keeping top talent at your company is vital to a healthy workforce and sustainable business.
The Senior Vice President of Flex HR, Phil Davis, explained, "Greater employee retention not only avoids costs [associated with employee turnover] but can also yield greater performance and productivity."
High retention rates show that an organization cares about building long-term relationships with employees. It leads to a more engaged workforce, more substantial foundation and higher profit margin.
Calculation timeframes may vary from company to company, but many measure their retention rate annually.
Retention Rate = Remaining Headcount During Set Period ÷ Starting Headcount During Set Period x 100
Employee Productivity
Hybrid and remote teams have the freedom to manage their own workflows. However, with new hires spanning across timezones, it can be hard to know what’s getting done, when and by whom.
Productivity metrics help your organization understand how effectively employee efforts and outputs achieve business goals.
Other benefits of monitoring employee productivity include opportunities to:
- Optimize the workforce
- Increase financial gain
- Track employee performance
- Monitor organizational management
You can simply measure this KPI using this formula:
Productivity = Input/Output
However, there are other ways to measure productivity. You can use project management software or 360-degree feedback. Use your responses to create systems that make tasks manageable.
If productivity is low, employees may need more front-end support or training. Consider using tools like Scribe to save time, enable employees and standardize documentation.
Building a people-centric measurement system
As we embrace the massive transformation to remote and hybrid models, we have to reexamine how we manage our teams, conduct reviews and guide new hires to achieve top performance levels.
KPIs are vital to measuring your onboarding program’s health, but they are most meaningful when examined against specific objectives. Connect with your team and see what goals are in place or what you can prioritize in the future.
Numbers are only indications of actual experiences. Use them as a springboard to have conversations, ask questions and foster connections.
