Author: Guy Nadivi
It’s really true. Automation-driven employee onboarding can reduce the time that process takes from days to seconds. Actually, in some cases, we’ve heard that at some organizations, onboarding is measured in weeks, not just days.
I was at a VMworld conference in San Francisco a few years ago, and struck up a conversation with someone visiting our booth who said that prior to automating their employee onboarding process, it took them 2 weeks to get new hires fully integrated into their company!
When you calculate the cost of the people involved in onboarding that new hire, as well as the productivity time that new hire lost by not being fully onboarded faster, you quickly realize how expensive this process can be. The phrase “time is money” really applies to the onboarding process, which is why automating it frequently turns out to be such a big win for organizations.
According to the Society for Human Resources Management, more commonly referred to as SHRM, the average cost of onboarding an employee is $4,129. Of course, this is an average figure taken from a broad cross-section of companies and industries. Your mileage may vary. Maybe it’s lower. Or maybe it’s higher. MUCH higher.
That $4,129 figure is taken from a 2016 report published by SHRM, and was the most recent number we could find about the cost of onboarding from an independent, reputable source. One thing you can be almost 100% certain of though is that now, towards the end of 2019, that number has likely gone up even higher. How high is hard to say, but there’s no reason to believe that the cost of onboarding employees has gotten any cheaper the last 3 years.
If you’d like to calculate what the cost of onboarding an employee is for your organization, I encourage you to Google “employee onboarding calculator“, and you’ll find numerous websites that can help you determine what your cost is.
There’s probably a pretty good chance that no two organizations have identical onboarding processes. Everyone’s is just a little bit different. Or perhaps A LOT different.
Despite that, there are some aspects to onboarding that are probably universal across most, if not all organizations.
- First off, onboarding is typically laborious. Many different things need to be done in order to successfully onboard a new hire, and often times these things are primarily manual processes.
- Onboarding often touches many different things across multiple departments – HR, IT, Facilities Management, etc. The more things your onboarding process touches, the more things that can go wrong, especially if they’re done manually where the potential for human error is always lurking in the background. That’s just a basic application of Murphy’s Law.
- The process of onboarding can be very time consuming, particularly when some or even all of it is manual. This is true not just for the new hire being onboarded, but also for the people involved in the new hire’s onboarding.
And what are these laborious, error-prone, time-consuming processes I’m referring to? Here’s a list of some, but by no means all, of the tasks involved in many typical onboardings:
- Order new employee’s IT equipment
- Create new employee’s Active Directory account and email
- Add new employee to calendar and mailing lists
- Create new employee’s logins for primary systems they’ll use
- Provision new employee’s virtual machine(s)
- Email new employee all new hire documents from HR, including I-9 and W-4 tax forms
- Order new employee’s business cards
- Submit request for new employee’s office key and/or ID badge
- Create new employee’s IP phone (using API calls to Cisco Unified Comm. Manager, for example)
Guess what? In general, all of these tasks can be automated, saving a lot of work, a lot of time, and a lot of mistakes.
Doing so has some surprising benefits for an organization.
According to SHRM, 69% of employees who experienced great onboarding were still with the company after 3 years!
Now think back to the average cost of an onboarding, and ask yourself – how long would a new hire need to stay at my organization in order for us to break even on them? Hopefully it’s become a little clearer why the better the onboarding experience for your new hires, the more positive financial impact it can have on your organization.
That’s particularly true when it comes to onboarding executives and other high-pay employees.
According to a Harvard Business Review that polled global executives worldwide about their onboarding experience, nearly one third (32%) said their onboarding experience was POOR.
Why does that matter?
It matters because the cost to an organization of replacing a failed executive as a percentage of his or her salary is 213%, according to the Center for American Progress.
If your organization is hiring a highly-paid employee, you really want to make sure that it’s not only the right person, but someone who’s going to stick around long enough to justify the investment in hiring them. Otherwise, it might be much more expensive to lose them.
Now specifically with regards to automating your employee onboarding, here are probably the top 3 benefits:
- You’re going to save time, and when it comes to onboarding, the savings often will not be measured in hours but in days or weeks! BTW – I recently learned from Lee Coulter, the Chair of the IEEE Working Group on Standards in Intelligent Process Automation, that a better way to describe time saved by automation is “Hours Returned to the Business”. I think that’s very applicable to automating the onboarding process.
- You’re going to save money, that’s not only a result of saving time, but a product of longer retention for new hires.
- Finally, you’re going to reduce errors. The more things you do manually, the more opportunities you have for errors. Plain and simple.
Collectively, all these benefits contribute to a KPI that’s become increasingly important to how your department is graded, and in many cases compensated, at least bonus-wise.
I’m talking of course about customer satisfaction ratings. At a lot of organizations, this has become the central metric, or at the very least an extremely important one, for rating performance.
Automating the onboarding process will undoubtedly improve your customer satisfaction ratings.
Here’s something else to consider.
For many organizations out there these days, a good chunk of their new hires are younger employees. I’m talking about the millennial generation, of course, but also early members of the next demographic wave, often referred to as Gen Z.
You probably know that these generations have been raised on Facebook and mobile apps, and generally prefer interfacing with technology rather than people. We know that empirically because we see it for ourselves just about anywhere we look.
A 23-year old young lady in my own family told me that she and her friends consider books to be weird. Books apparently are weird because why would you read something written on processed dead trees when you could just use a smartphone and pull it down from the cloud?
So automating the onboarding process for this demographic is likely to be a bigger factor than you might realize in retention of younger employees. If their first impression as new hires at your organization is that you’re having them do things manually, you’re likely to persuade them that your organization may not be the kind of digitally transformed, progressive environment they want to be working at for 8+ hours a day.
Finally, it’s also worth mentioning that if everything discussed up till now applies to onboarding, then it also applies to offboarding, which is basically the same process in reverse.
This is especially true in the case of layoffs when you have a large volume of people who all basically have to be offboarded simultaneously. That’s a recipe for chaos when done manually, but a routine garden-variety process when it’s automated.
Automating the offboarding process also ensures you’ll have properly documented audit logs for compliance and internal review.
Both the onboarding and offboarding processes tend to be low-hanging fruit at most organizations, when it comes to automating procedures that yield big benefits quickly.