The business case for employee onboarding software

Transcription

1 The business case for employee onboarding software April 2013 In order to compete in the war for talent, companies can strengthen their company brand by making a good first impression through onboarding software Aberdeen Group Level 1 79 Maroondah Highway Ringwood VIC 3134 Australia P F Building a business case for onboarding Page 1

2 A better way to onboard employees Think employee onboarding begins on a new hires first day? Wrong. If you're a progressive organisation that actively uses social media, talks about innovation and being an employer of choice when you're advertising to attract a new hire, that s great. But if on a new hire's first day you hand them 15 different forms to fill out, your employment brand message has just died. While recruitment systems manage the screening, interviewing and selection of a candidate there is a gap between selecting the candidate and bringing them onboard to the organisation. Using technology to automate the onboarding process can save you significant dollars as it coordinates various individuals and tasks by taking care of paperwork electronically. An automated solution assembles contracts, personalises the employee experience through the use of a personalised portal and sends notifications to IT and payroll staff to ensure everything is set up for Day One. Onboarding technology can be an effective way to socialise your new hire into your organisation's culture. On an employee portal, you can share videos and brochures that state talk about your values and provide employee testimonials. This whitepaper defines the many benefits that can be achieved through employee onboarding software and details real organisation examples that you can use to determine the savings that would be achieved by automating your onboarding process. Paperless onboarding is secure, highly efficient, inexpensive and professional way to onboard new hires into your organisation. Building a business case for onboarding Page 2

3 Current manual onboarding practices There are many reasons to create a web based onboarding program in your organisation. The trick is finding the issues that are the most relevant and have the most clout with decision makers within your organisation to build your business case. These questions should assist you in gathering data and statistics to support the building of your web based onboarding program: How much time do HR personnel spend manually onboarding someone? How long does it take for approval and signoff to onboard someone? What do your current or tenured hires say about the onboarding experience? Can you quantify the costs of lost productivity if resources (eg PC s) are not set up for your new hires on Day One? How many first choice candidates have you lost due to delays in candidates receiving their offer pack? What time is lost to double handling, scanning of documents and processing new hire forms and documents into your systems? Have you assessed the engagement levels of new hires and how long it takes for them to engage with your culture and employment brand? Building a business case for onboarding Page 3

4 Benefits of paperless onboarding There are a range of benefits to the overall Organisation, HR Manager and new hires that can be achieved by using a paperless onboarding solution. You can use these benefits to build your business case, depending on the priorities within your Organisation. Benefits to the Organisation Save money as onboarding costs are reduced to around 10% of manual cost (see the real World example in document) Convert your current onboarding pack into an entirely sustainable paperless process (one organisation was able to convert a 100 page new starter pack to being entirely paperless) Elapsed time to onboard improved from weeks to hours Time to productivity reduced significantly as everything is set up ready for Day One Improved data accuracy Compliance achieved with an audit trail and delegated authority levels Secure access for staff, managers or new hires anywhere around the world, 24/7 A more professional image of the organisation by the candidate Save FTE resources or redeploy them to other areas of the Organisation Reduce your carbon footprint and comply with GreenHR initiatives Figure 1 Reviews and approvals are completed online Building a business case for onboarding Page 4

5 Benefits to the Back Office (HR, IT) Reduce costs and administration time by onboarding new hires quickly Candidate acceptance times reduced with secure legally binding digital acceptance Ensures contracts and policies are agreed to prior to commencement date Improve employee retention rates by having an efficient onboarding solution Reporting provides visibility of candidate status throughout the process Streamlining provisioning of new employee setup for other departments Figure 2 HR dashboard view shows the status of all candidates Building a business case for onboarding Page 5

6 Benefits to new hires The process is personal, easy to use, and reinforces that the new hire is joining a leading edge Organisation that values their new hires Accepting the job can be completed from any computer, at anytime, anywhere around the world Never enter the same data twice on forms, saving them significant time and eliminating errors On accepting their employment offer, new hires see all conditions, policies and corporate information Figure 3 Candidate portal all documents online Figure 4 Secure, legally binding digital acceptance Building a business case for onboarding Page 6

7 Case studies Case Study 1 Onboarding costs at a leading Australian Organisation To validate our assertion that you can significantly reduce your on-boarding costs by automating the process let us review a case study from a large Australian Organisation. This Organisation recently modelled the savings that could be achieved by moving from a manual process to an automated onboarding solution. The Organisation has 7,000 employees, a 15% turnover rate and a growth rate of 5% resulting in an average annual recruitment of 1,400 new hires per year. Physical Costs With their current manual onboarding processes there are a range of hard costs incurred including printing of forms, brochureware, policy documents, stationary and postage or courier charges. In this case the hard costs were estimated at $10.00 per new hire, excluding environmental costs Using a paperless system the hard costs are $0.00 per new hire equating to a saving of $14,000 per annum HR, Payroll and Hiring Manager time to onboard a new hire Preparing employment contracts, gaining approvals and entering into HR systems is cumbersome and takes time. In this case the organisation estimated a total of 11 hours of HR time per onboard. With an average FTE hourly cost of $37.88 (FTE $75,000 annual salary) this equates to $ per on-board By comparison, moving to an automated onboarding solution would realise significant savings and would reduce the HR time required to onboard a new hire to 5 hours or less. (Contract and form processing (1hr), payroll & HRIS setup time (1hr), logistics and all other pre-employment set-up time (3hrs)). Building a business case for onboarding Page 7

8 With the same average FTE hourly cost of $37.88 this equates to $ per on-board. If we extrapolate these costing across 1400 new hires, the manual process was calculated at $583,338 vs $265,146 for the automated process. Of course the operating cost for the onboarding system must be included and this was calculated at $70,000 per annum. Total savings to the Organisation: $248,192 or approximately 3 FTE s per annum Case Study 2 - New Hire Productivity Losses: Another area of massive savings is reducing the lost productivity that is incurred getting a new hire operational. These costs can be as simple as the time taken for a new hire to fill out all of the new hire forms, through to chasing IT for a new PC, access to systems etc. These delays can vary widely between organisations but our research indicates that as a minimum you should allow approximately 2 days per new hire. At approximately $37.88 per hour (based on an average new hire FTE of $75,000) this totals $1,392,787 per annum in waste. By implementing an onboarding system these costs can be removed completely as the provisioning process to onboard a new hire had been completed before the new hire actually starts. A saving to the Organisation of $1,392,787 per annum in lost productivity costs. Building a business case for onboarding Page 8

9 Case Study 3 Intangible benefits at a leading Australian University Of course the benefits to a Organisation are not always financial. Sometimes other equally important, but intangible costs come into the equation. A Australian University recently completed their business case into the benefits of automating their onboarding process. However this time, rather than concentrate on the financial FTE savings, the focus was around enhancing the Universities brand and image with new hires in a globally competitive market. By streamlining the on-boarding process, it was argued there was: An improved workflow for new employee engagement A reduction in errors that are often present in a cumbersome manual process A shorter lead time in having new employees onboard and operational. It was also argued that the workflow required to onboard a new employee would be greatly simplified as a number of steps (such as transferring data into their HRIS) would either be automated or removed completely Building a business case for onboarding Page 9

10 Case Study 4 Environmental Considerations, Green HR The final case study looks at the environmental impact of manually onboarding a new hire. Anecdotally it is not uncommon for an organisation to print over 170 pages per new hire application. In some cases this number may be larger if we include the Contract, Tax Declaration form, Super Choice form, Payroll forms, acknowledgement and agreement with policies and HR s propensity to not only send information packs to a candidate, but also to have a second set stored for reference. The organisational savings at 170 pages per employment offer: 0.34 reams of paper saved, $2 in paper cost $4 in toner saved Printer leasing : $0.92 (when =$808 pa could get rid of one printer) Printer electricity saved : 0.34kwh - $0.02 Total cost per employment offer sent $6.94 ** items not costed: distribution cost (envelopes + postage), storage (in cabinets), obsolescence, lost documents. The environmental savings at 170 pages per new hire. Trees saved: , and this converts 56.67kg of CO2 into O2 Landfill saved: m3 Toner production - oil used = litres oil Paper Production CO2 created in paper production = tonnes (or 2.86kg) Water used in paper production = litres Electricity used in paper production = kwh These figures are based on a single new hire and the values get quite large if you then multiply out the number of new hires at the Organisation x 170 pages. Building a business case for onboarding Page 10

11 Are you ready to change? Although technology creates huge efficiencies in costs and time for everyone involved, it is only part of the solution for a better way of onboarding your new hires. For organisations to fully realise the benefits and savings of paperless onboarding Executive and Senior Management support for a better way of doing things is vital. Senior support for a paperless onboarding project ensures staff are motivated and encouraged to change entrenched processes. If you would like any assistance with building your business case, auditing your current manual processes, suggesting workflows to create an entirely paperless onboarding solution, or suggest a technology solution to best suits your needs, feel free to contact us on It has been amazing how fast we can get offers accepted now. It took only 20 minutes from the time the letter of offer was issued, until it was accepted by the candidate, including collecting all required data and accepting policies online HR Manager, Large construction firm Building a business case for onboarding Page 11

12 About Navigo Navigo are a leading Australian HR software provider and specialist HRIS systems consultancy, with a vision to re-invent HR through strategically aligning people, process and technology. The company boasts over 600 customers across various industry sectors in Australia, New Zealand and Papua New Guinea. Our team of professionals across Australia have significant experiences with technology and within the HR industry. Our independence allows us to deliver candid advice and recommend solutions that will remove daily process burdens and improve inefficiencies for our customers. Navigo is the exclusive distributor of a suite of powerful, well proven HR solutions in the area on onboarding, organisation charting, workforce visualisation and modelling. Building a business case for onboarding Page 12