Is Your Employee Onboarding Designed for Retention?

April 7, 2021
Author: Mara Zemicael

Would you throw money away? “No” would be most people’s immediate answer. Yet, companies that do not invest in employee retention strategies are essentially losing and reducing valuable resources. Turnover has a negative impact on a company’s bottom line, so how can employers improve retention and financial outcomes?

Successful employee onboarding influences a company's retention efforts.

Onboarding Matters

The top three reasons most employees state for leaving a company are preventable. They are a lack of career development, poor work-life balance and bad management experience. Armed with this knowledge, companies can develop a company-wide plan to handle these issues.

Here are a few practices that may prove beneficial:

  • Start with the employee onboarding program. This sets the tone for the employee experience. A bad onboarding process can affect how well an employee assimilates into the new role and company culture and likely influence first impressions on whether or not they are a fit.
  • Set goals. A company can use an employee’s first 90 days to set expectations with specific role responsibilities, build relationships between the new hire and their colleagues, help them develop confidence and trust in the new organization, and establish a clear definition of roles and boundaries.
  • The first week is pivotal. Have your HR, training team or department heads set up a calendar of activities, ranging from greetings on a new hire’s first day to industry and product exposure to company standard operating procedures and communications processes.
  • Make introductions between new hire, their department and those with whom they will interact. Explain their role and responsibilities and how the company anticipates this person will make an impact. This is an early stage of setting expectations and trust.

"Onboarding is a magic moment when new employees decide to stay engaged or become disengaged," said Amy Hirsh Robinson, principal of the consulting firm The Interchange Group in Los Angeles, to SHRM. "It offers an imprinting window when you can make an impression that stays with new employees for the duration of their careers."

SHRM also found that 69% of employees were more likely to stay with a company for three years based on a great onboarding process, while 58% were more likely to remain with the company for over three years.


High Cost of Turnover

A lack of investment in onboarding and company culture adds up. According to Gallup, the cost of replacing an individual employee can range from one-half to two times the employee's annual salary – and that's a conservative estimate. For an organization with 100 employees that provides an average salary of $50,000, Gallup estimates that the turnover and replacement costs could range from $660,000 to $2.6 million per year.

Begin with Success in Mind


A successful onboarding program requires collaboration and support by all levels of the organization. An online onboarding portal can be accessed for information about their department, role, company policies, and new hire paperwork before their first day. This can be especially helpful if remote working is a company’s new norm. Hiring managers can set up a new hire checklist so new employees have an idea of what to expect during their first 90 days.

The onboarding process should be measured, and employees can be encouraged to provide feedback after 30 to 90 days. Their observations can prove useful to optimize your system as the company adds new layers of efficiencies. And incorporating useful input from exiting employees about company culture or communication can be helpful in improving retention and curbing turnover.

Competing for Talent

As the economy continues to rebound, how companies interact with their employees has a heightened impact, as the competition for talent will continue to surge. Dissatisfied employees with in-demand skills will feel more emboldened to take a chance to venture out and seek out new employment opportunities. Employees in occupations with a limited talent supply will find their employment and compensation options increase significantly.

Related: Reinventing Employee Performance Reviews

Employers who want to maintain their growth plans and workforce engagement strategies will want to make onboarding and a healthy company culture top priorities. Great talent is hard to find, and a winning employee experience will lead to a company’s competitive advantage.

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