Onboarding Technology Four-Thought

Onboarding Technology Four-Thought Four Common Myths Four Key ROI Points for Building Your Business Case Four Steps to Onboarding Success With Lawson Resource Navigator Onboarding and Offboarding

Table of Contents Onboarding business challenges...3 The role of technology in onboarding initiatives...4 Four common onboarding technology myths...5 Four key ROI points for building an onboarding technology business case... 7 Four keys to onboarding success...9 Summary...10 About Lawson Resource Navigator Onboarding and Offboarding... 11 2

Onboarding Business Challenges Is your organization challenged with: Streamlining onboarding costs and processes? Getting new-hires up-to-speed faster? Engaging new-hires and decreasing new employee turnover? Integrating all of the various software systems involved in the onboarding process? Simplifying onboarding administration for both HR and hiring managers? If so, you re not alone. A University of Michigan Onboarding study and the U.S. Department of Labor help tell the onboarding story: 30 That s the number of steps that are involved in the typical onboarding process counting every form that needs to be filled out every approval every data entry into various systems, and the like. 14 Represents the average number of software systems that are involved in the onboarding process from applicant tracking systems to HR and payroll applications to benefits administration to documents management and provisioning solutions to training and performance management applications, and others sales incentive systems, for example. 45 That s how many days it takes a typical new employee to reach full productivity it's quite costly for employers and demoralizing for the employees! 8 Seems like a small number compared to the others, but not when you consider that it represents the percentage of compliance paperwork that s never collected and the costs associated with potential litigious situations. 4 Billion The dollars North American companies spend annually on new-hire orientations much of it lost after Day 1. In addition to the above administrative numbers, there are other even more important numbers to consider as well. According to Aberdeen Group s 2009 Onboarding Benchmark Report, 85% of new hires decide, within the first six months, whether they will stay with their new employer. And, according to Gartner, new people coming in to the workforce today will have an average of 20 jobs over the course of their careers. Given all of these numbers, the goal becomes clear.: Employers today must provide a better new-hire experience. With fewer steps. And lower costs. 3

The Role of Technology in Onboarding Initiatives To achieve this goal, more and more employers are automating the most time-consuming, expensive and resource-intensive components of the onboarding process. There are three types of onboarding technologies: 1. Forms and Task Automation: These solutions automate most onboarding forms and provide checklists to manage associated tasks. They eliminate a fair amount of the paperwork involved in the process. Because they do not integrate data into the appropriate systems (i.e., HRIS, payroll, benefits administration) and do not provide for culture socialization these types of systems are most often deployed by smaller-sized employers, typically with under 1,000 employees. 2. Onboarding Orchestration: Onboarding orchestration technologies go beyond forms and tasks automation to include workflow, integration of data sources, electronic acknowledgements of policies, I9 e-verification, provisioning, stakeholder (new-hire, hiring manager, HR) dashboards and tools to extend onboarding past Day 1 during the critical six months when new-hires are deciding if they made the right job choice. These might include features such as new-hire portals to accommodate pre-boarding, a knowledgebase of policies/benefits info/work-life events, benefit decision support tools and social networking options such as the ability to chat online with mentors or hiring managers. Some orchestration solutions provide personalized tours, so that new-hires see only the information relevant to them in their job role, location, bargaining unit and other parameters defined by the employer. 3. Collaborative Options: For a complete new-hire experience, many employers integrate solutions such as Learning Management and Performance Management solutions into the onboarding workflow to show new employees what training options are open to them; and help them understand their 30-60- and 90-day goals, for example. Best-in-class employers particularly in mid-market and large/enterprise-market organizations leverage both onboarding orchestration and collaborative options to improve the new-hire experience and retention, lower costs, ensure compliance and streamline the process for all stakeholders. Additionally particularly for employers with heavy seasonal hiring, such as retail or hospitality organizations automated onboarding eases the burden on HR shared services centers, call centers and helpdesks. 4

Four Common Onboarding Technology Myths Myth #1: A blue-collar or in-the-field workforce will not use online onboarding. This has been proven over and over again to simply not be true. According to Knowledge Infusion, only 1 in 5 adults do not regularly access the internet, and this 20% tends to be over the age of 65 and without a high-school education; therefore, they are not representative of the majority of most workforces. Additionally, according to the same Knowledge Infusion findings, there are more computers in homes today than there is cable TV. In short, even if your new-hires will not be sitting at desks with computers, chances are excellent that they have a computer at home and know how to use it. Case in point: Major Entertainment & Resort Facility. This East Coast Hospitality group hires 7,000-8,000 seasonal employees annually to work in their hotels, restaurants and amusement parks. Its youngest new-hires are 14 years old the oldest in their 70's. In the summer of 2009, the organization did its seasonal onboarding completely online for the first time. Fewer than 1% of all new-hires were unable to pre-board online, upon accepting an offer letter, using personal computers and email addresses. Myth #2: Online onboarding takes the human touch out of new-hire orientation or the human out of human resources. In speaking to dozens of employers about their onboarding automation experiences, anecdotal evidence would find the opposite to be true. Today, most face-toface orientations are spent filling out forms, being told the rules and policies, and being overwhelmed with benefits information. This leaves very little time to talk about an organization s culture, or about the things that make working there fun and exciting. This can be demoralizing and un-motivating, dampening the enthusiasm (or increasing the anxiety) of new employees. By pre-boarding online, new-hires arrive at orientation with forms already submitted, and policies read and acknowledged. If the onboarding solution has benefits decision support, chances are they ve already elected their benefits. And if there is an integrated knowledgebase, they ve been able to answer their own questions about things like vacation and pay. Which leaves the face-to-face time for the things that matter the most in getting your new-hires up-to-speed and engaged. Case in point: Major International Media Conglomerate. While surveys showed that consumers believed this media empire s movies and TV shows to be innovative and exciting, the opposite was true for new-hires, who spent their first days filling out forms and waiting for equipment. Given the competitive nature of the media business, this organization wanted to provide a new-hire experience that would reinforce the excitement of coming to work in the entertainment industry. Today, new-hires pre-board online. Because provisioning is also completed as part of the pre-boarding process, new employees have all of their equipment on Day 1, and the hiring manager is ready for their arrival. Most important, the first day is filled with studio tours and other exciting activities. Did it work? Yes. New-hire turnover is down, and productivity is up. And surveys show that new employees have a much higher level of satisfaction with their employment decision. 5

Myth #3: It is better to license onboarding software from your applicant tracking software (ATS) vendor than from a best-of-breed vendor. While there is no right or wrong answer here, the trend has certainly pointed to this not being a best practice. For many ATS vendors, although not for all, onboarding was an after-thought, and the applications tend to be more basic forms and task management. Additionally, many of these solutions are designed to integrate only with other applications from the particular ATS or talent management vendor, unlike best-ofbreed onboarding solutions, or onboarding solutions that are part of HR Service Delivery suites, which more readily integrate with all of the HR, Payroll, Benefits, ATS, Performance Management, Document Management and other solutions in the typical mid-to-large enterprise multi-platform environment. To find the answer for your organization, you might start with some questions: 1) Which is the highest priority? For pre-boarding and onboarding to be: a) The end of the recruiting process? b) The beginning of an employee s life cycle with our organization? 2) Is it most important for our onboarding technology to: a) Integrate with our ATS solution? b) Integrate with our entire HR Service Delivery platform (employee portal, benefits administration system, HRIS, Payroll system, ESS, MSS, ATS, etc.)? 3) Is our current onboarding practice (or planned onboarding initiative) to: a) End formalized onboarding after the first day or week? b) Have onboarding be a formalized process for Day 30, 60 and beyond? If you answered a to two or more questions, an integrated ATS/Onboarding solution might be the right choice for your organization. If you answered b to two or more questions, a best-of-breed onboarding solution, or one that is part of an integrated HR Service Delivery suite, may be the better choice. Case in point: Gartner Group and CedarCrestone. In its 2009 Hype Cycle for Human Capital Management Software, leading industry analyst Gartner separated onboarding from ATS for the first time, ranking onboarding solutions as technology triggers for HCM excellence and mainstream adoption. Additionally, leading industry consultants CedarCrestone, also for the first time, separated onboarding from ATS in its 11th annual 2009 HCM Technology Survey, ranking it as key to HR Service Delivery excellence. Myth #4: Onboarding solutions aren t a priority in a down economy when there are fewer employees being hired. Although most employers may hire fewer employees in a downturn economy, they are still hiring. And onboarding new-hires manually is expensive. It still takes people and time, and data-entry mistakes (or lack of compliance paperwork) drive costs even higher. More importantly, the cost of turnover is even more expensive than the cost of onboarding. The Society for Human Resource Management (SHRM) estimates that it costs 1½ - 2½x salary to replace an employee, including hard-dollar costs (like recruiting) and less tangible costs (like lack of productivity) while a position is vacant. 6

Therefore, engaging new-hires from the day they accept an offer is even more critical because organizations don't want to pay the price of turnover turnover, unavoidable or not. The other situation where automating onboarding in any economy is important is with industries such as retail, services, or hospitality where there is heavy seasonal hiring. Whether a retailer is hiring 10,000 holiday season employees in a bad economy or 15,000 in a good economy, automated onboarding will still be more efficient. Lastly, many onboarding orchestration solutions also offer off-boarding which provides efficiencies in terms of time, people and compliance during downsizing or at the end of a seasonal hiring period where the seasonal employees must be off-boarded. Case in point: Major healthcare organization. Even in a downturn economy, this 10K+ employee hospital group, after automating onboarding, is still on track to save $1.4 million in 3-years by cutting processing time by more than 50%, reducing turnover by almost 12% and consolidating five hiring locations into one. Four Key ROI Points for Building an Onboarding Technology Business Case There are many return-on-investment (ROI) points that can help build a business case for automating onboarding. However, in today s economic environment, many traditional HR ROI calculations have included too many soft or intangible costs. For the purpose of this paper, we will stick to four areas in which hard-dollar savings can be achieved. Further, a key consideration is that the cost of automating is a replacement of costs. ROI #1 New-hire administration and labor It costs employers an average of $30 to print and mail full new-hire packets, including all forms, benefits information, handbooks and more. For an employer who hires 3,000 employees per year, that is a cost of $90,000, which would be eliminated with online onboarding. Data entry, at an average of $35 per hour, it would take 6,500 hours to manually enter all data for 3,000 new-hires in to relevant systems. This, too, would be eliminated, at a savings of $227,500. There are many other administrative and labor costs that would be reduced or eliminated as well, but these two examples represent a savings of $317,500. ROI #2 Reduction in turnover costs If 10% of new-hires leave in an organization hiring 3,000 per year that represents 300 new employees who will leave during their first six months. Using the most conservative number, let s assume this will be reduced by 5% with a more engaging onboarding process facilitated by technology. Replacing 150 employees, with an average salary of $50,000, and using the lowest figure of 1x salary to replace an employee this represents a savings of $7,500,000 per year. This estimate alone represents a significant hard-dollar ROI for any solution over the lifetime of the solution. 7

RO1 #3 Orientation and travel costs For very decentralized organizations, organizations that do heavy seasonal hiring, or organizations that just simply must cut costs wherever possible, some onboarding solutions offer the ability to do streaming videos and much more to acclimate new employees to corporate culture. This can significantly cut down the labor and travel costs associated with face-to-face orientations. If, for example, 30% of new hires travel to orientation, and that number can be reduced to 15% and using an average of $600 per trip for travel expenses this represents a savings of $270,000. ROI #4 Compliance-related costs Earlier we showed that in the typical, manual new-hire process, eight percent (8%) of new-hire compliance-related paperwork is never collected. This can be extremely costly when considering the cost of litigation. If 1.5% of 3,000 new-hires (45) bring a complaint at an average cost of $5,000 in legal expenses per incident, this represents $225,000 in compliance-related costs. These costs can be eliminated via onboarding technology, which, through workflow, automatic notifications and electronic acknowledgements, prevents a new-hire from coming onboard until all compliance information and completed forms are received in the system. To summarize the ROI hard-dollar savings that may be realized via onboarding automation, see Table 2: Summary of Onboarding Hard-Dollar ROI 1 ROI based on an employer hiring 3,000 employees per year New-hire labor and administration $ 317,500 New-hire turnover reduction $ 7,500,000 Orientation and travel costs $ 270,000 Compliance related costs $ 225,000 TOTAL HARD-DOLLAR ROI $ 8,312,500 8

Four Keys to Onboarding Success When the first generation of automated onboarding solutions first arrived on the industry scene, there were generally three components that were evaluated: Forms Management, Task Management and Socialization. Newer solutions take this to the next level with four key steps for onboarding success. Step #1 Acclimate new-hires to your corporate culture, policies, benefits... If your onboarding solution allows for pre-boarding, all forms and other tasks can be completed online prior to Day 1. This not only facilitates faster new-hire productivity, but allows for a more effective face-to-face orientation, where you can better focus on culture, core values and more. Integration with a personalized, searchable knowledgebase is also important for this step, allowing new-hires to ask questions about policies, pay and more before they come to work. Acclimation is further facilitated by solutions offering a workflow design, not just a checklist. In this way, new-hires are intuitively guided through personalized tours based on job code, location and criteria you define to provide a robust, engaging experience. Features like the ability to present streaming video and/or social media promote a new-hire s ability to see messages from the CEO and chat with mentors to feel welcome in the culture when they walk in the door. Further, remember that acclimation and engagement activities should not end when an employee walks in on the first day. To reduce new-hire turnover during the first critical six months, look for solutions that provide features such as: Benefits decision support tools to roll-out during pre-boarding or 15 days before an employee becomes benefits-eligible. Collaboration with solutions such as Performance Management and Learning Management Systems to help new-hires stay focused on their 30-60- and 90- day goals, sign up for required/optional training etc. Step # 2 Automate process workflow and management for key stakeholders. Through features such as electronic forms as well as automated notifications to HR, hiring managers and new-hires, the administration time and costs associated with new-hire processing can be significantly reduced. Next generation, easy-to-use dashboards, providing status and drill-down reporting capabilities, can also simplify management for all stakeholders. 9

Step # 3 Integrate all relevant data and systems. Onboarding administration can be minimized even further with solutions that provide for the pre-population of forms and automatic Day 1 triggering. This means that new-hires, when they first log in during pre-boarding, can review forms populated with data received from the ATS and update their information. At this point the remaining downstream forms will be populated, eliminating duplication of effort by the new employee. When the employees arrive on their first day or when they become benefitseligible, for example an automated data file can be provided to integrate the form data with all relevant systems, such as your core HRIS, Payroll, Benefits Administration and other HCM systems on your platform. Some solutions also allow for the integration of provisioning systems so the new-hire has everything they need, such as parking passes, name badges, safety equipment, email addresses, and desk/phone/computer, when they walk in the door. The end result is fewer steps for both the new-hire and HR, more accurate information and the elimination of manual data entry. Perhaps most importantly, new-hires have the equipment they need to begin working on their first day. Step # 4 Ensure compliance with policies, laws and regulations. As shown in the earlier ROI section, compliance-related complaints from as few as 98 employees can result in costs exceeding a half million dollars. Automated onboarding features such as electronic acknowledgement of company policies and electronic verification for I9 compliance can significantly reduce these risks and help avoid unnecessary litigation. Summary Adoption of online onboarding solutions is becoming more mainstream as employers break through common myths. Today it is clear that online onboarding will: Achieve widespread usage by even the most diverse workforces including blue-collar workforces. Facilitate even more effective face-to-face orientations. Be extremely important in any economy both up and down. Employers who achieve best-in-class onboarding status can achieve dramatic hard-dollar return on investment which can top $8,000,000 for organizations hiring 3,000 employees per year. Given the wide variety of priorities and needs, there are onboarding solutions to fit all sizes. 10

What is Lawson Resource Navigator Onboarding and Offboarding? Lawson Resource Navigator is a suite of content-driven services that work in conjunction with Lawson Employee and Manager Self-Service to deliver end-to-end services that help enhance the employee experience while helping to improve their efficiency through self-service functions that drive down HR staffing costs needed to deliver HR services. Lawson Onboarding and Offboarding is one of seven Lawson Resource Navigator products: Onboarding Secure new talent with first-impression experience pre-boarding orientation and at-hire activities Offboarding Manage compliance, consistent termination practices and employee exit experience Employee Resource Company policy, life event and benefit decision support with self-service transactions Manager Resource Fast answers, management policies, management procedures, and coaching HR Professional Fast answers, research and compliance tools Total Compensation Statement Provides total wealth attributed to an employee or applicant position, as well as executive compensation information HR Call Center Takes Employee Resource to the next level of full HR service delivery For more information on Lawson Onboarding and Offboarding, including an ROI calculation for your organization, email your request to: shcm@lawson.com or call us at 1 800 477 1357. 11

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