Inducting New Employees Automating the Induction Process to Realise Significant Return on Investment

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1 Inducting New Employees Automating the Induction Process to Realise Significant Return on Investment

2 Studies by SHRM have proven the value of implementing a strong induction program within an organisation to improve employee engagement and retention. Automation allows organisations of all sizes to affordably capitalise on the benefits of a formal induction program. Unfortunately, according to a recent study by The Aberdeen Group, 60% of organisations that do not have an automated induction program cite costs and budget as the reason 1. To that end, the key question becomes, what is the return-on-investment associated with automated induction? What is Induction? Induction is the initial process of assimilating new hires into an organisation. In addition to equipping new hires with the tools necessary to succeed in their new position, a successful induction program provides new hires with the resources to become fully engaged and culturally aware members of a productive workforce. Why is Induction Important? According to SHRM s most recent induction study, nearly half of all hourly workers leave new jobs within the first four months and half of outside senior hires fail within 18 months. 2 The Aberdeen Group supplements this by showing that a formal induction process also helps to speed new hires to productivity and improves hiring manager satisfaction %20FINAL.pdf 3

3 One way companies can improve these statistics is by the use of strategic induction techniques that help employees assimilate. While every organisation has different induction techniques ranging from a formal induction process to the sink-or-swim mentality, the important thing to remember is that the faster a new hire feels welcome and prepared for their new job, the faster that employee will be able to contribute to the company s overall success. As SHRM points out, employees who are inducted using the sink-or-swim technique often struggle to figure out what is expected and how they can be successful in their new workplace. What is a Well-Managed Induction Program? A well-managed induction program is both well thought out and coordinated. The most important thing to remember is that induction is not one-size-fits-all. Different employees, depending on the level of their career, job function, geographic or cultural influence, etc. will require different induction techniques to ensure success. Although induction programs vary greatly from organisation to organisation, there are several over-arching characteristics present in all well-managed induction programs. One of the most important elements of a successful induction program is to focus on the new hire s experience. The induction experience must be enriching, yet simple. To accomplish this, induction requirements like forms and manuals should be presented as a clear and self-explanatory task-driven workflow. In addition to this, successful induction programs: Provide ongoing, clear, concise and consistent channels of communication Facilitate learning at every organisational level Clearly align new hires to key business strategies Set milestones to gauge new hire success Present information in easily-digestible amounts Reinforce the employment brand and other positive aspects of the company culture Provide the employee with both standard induction elements and individualised induction elements Standard Induction Elements At a macro level, many elements of the induction process are relatively standardised. For example, everyone in the company needs to complete the general paperwork and company trainings. New hires must be prepared with an understanding of the company overall. Such standard elements may include: Company values, mission, and culture New hire paperwork General company-wide policies and procedures Key business processes Important-to-know people and organisational chart (CEO, Directors, etc.)

4 Individualised Induction Elements The micro-elements of the best induction programs include items specific to the employee s department, function, and/or location. To help understand why this matters, think for a second about the differences between departments of a wellknown organisation, such as a large automaker. In such a scenario, would it make sense to induct a person to the finance team in the same way as one would induct a mechanic? Some examples of elements included in an individualised induction program include: Department or work location culture Explanation of how the new hire s function fits into the overarching company strategy and goals Measurable managerial expectations and goals Key departmental processes Important-to-know people (manager, mentor, buddy, team members) Customised learning plan and objectives Automated Induction Programs Many of the most successful organisations have automated their induction programs to streamline their talent acquisition initiatives and increase their returnon-investment. The software used to automate induction programs helps to reduce costs, while improving employee retention and productivity in the long run. For example, an automated induction program also eliminates reliance on paper documents. Automated induction programs take advantage of an induction portal, a comprehensive and easily accessible location to store the documents necessary for the entire induction process. This gives new hires the opportunity to access information when they need it, placing critical documents at their fingertips even before their first day of work. In addition to this, automated induction programs provide companies with many qualitative benefits, such as: Improved New Hire Engagement: Tailoring the new hire experience to the employee s job, department, location, etc. helps new hires acclimate to the corporate culture and procedures early. Fully branded New Hire induction Portals allow for streamlined communication of company benefits and business objectives engaging employees in the business before they start working. Enhanced Human Resources (HR) Productivity: Automation streamlines processes, helping the HR department to regain productivity, and eliminate oversights. Reporting and metrics give HR a direct view into tasks that require completion and bridges the gap between departments involved in the induction process. Increased New Hire Productivity: New employees are able to hit the ground running on day one with early exposure to important information and the opportunity to complete paperwork online. Increased Retention Rates: Task management tools help to ensure new hires are equipped with the tools needed to succeed. Provide a window

5 into your culture, assuring new hires feel they are a part of the larger organisation. Task Management and Process Improvement: Using system reporting capabilities, users can generate reports that expose bottlenecks in key processes. This allows users to measure key performance indicators (KPIs), ensure important elements are not missed while identifying areas that may benefit from process improvement. Barriers to Automating the Induction Process Even with all these benefits, many companies site cost as the primary reason why they have not fully automated the induction process 4. According to a recent study by The Aberdeen Group, 60% of organisations without automated induction programs state that they do not have the budget to implement an automated induction program. This, however, is only one side of the story. The return-on-investment associated with automated induction is significant. To that end, the question must change from 'can we afford automated induction to can we afford NOT to automate induction. Induction ROI To establish the return-on-investment, one can look at the possible returns for a hypothetical company with 200 employees. Assuming average turnover and growth, the cost of inducting new employees manually is approximately 55, per year. 4

6 Company Profile Manual Onboarding Automated Onboarding Number of Employees in the Company Number of Forms Per Hire Turnover Rate 44% 14% Employee Growth 10% 10% New Hires Per Year Average Hourly Onboarding Specialist Salary (include benefits) Average Hourly New Hire Salary (include benefits) ROI Calculations Mailing Costs Outbound Mail Costs 1, Return Mail Costs 1, Paper, Ink, Copying Total Mailing Costs 2, Time & Salary Onboarding Coordinator Form Preparation, Processing, Filing, etc. (30 minutes per form, Onboarding Coordinator salary 30K with benefits) Coordinating Logistics and Set-up (hours) Total Time Savings (hours) Total Cost 17, , New Hire Costs Time to Initial Productivity (in hours) Total New Hire Costs 37, Total New Hire Costs Per Year 55, , ROI 51, By automating the induction process, this sample company realised a return-oninvestment of 51, per year! How is that possible, you ask? First, by automating the induction process, the company eliminated all costs associated with mailing. Electronic forms have been automated reducing the document preparation and processing time. Second, the logistics, such as coordinating desk set up, supply orders, and IT requests, have also been automated, reducing the time spend and thereby the costs associated with these tasks. Just those changes alone reduced the hypothetical company s induction cost per hire by half.

7 Remember that, statistically, a strong induction program can reduce employee turnover from 44% to 14%, while improving new hire time-to-productivity by approximately 1/3. These improvements impact the annual costs most impressively with return-on-investment of 51, While the numbers used in the calculations above may vary from organisation to organisation, the point is clear, automating the induction process saves an organisation a significant amount of time and money! How icims Can Help icims is recognised as a leading provider of Software-as-a-Service (SaaS) Talent Acquisition Solutions in the industry and an leading Talent Platform. Through our induction software solution, icims Onboard, HR professionals can coordinate the logistics of a well-managed automated induction program, including a self-service Onboarding Portal for completion of post-hire iforms, scheduling of employee orientation, internal notification to key parties, and so much more. Learn how icims Talent Platform can streamline your end-to-end Talent Management initiatives and provide the necessary tools to facilitate a successful and cost-effective induction program. To learn more about the icims, call or take a look at our demo at:

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