How to Avoid the Most Costly Onboarding Mistakes

Little mistakes at this critical life-cycle stage can cost employers a lot more than they may think.

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By Matt Straz

Andrew Rich Photography

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Talent is expensive. In 2014, U.S. companies increased their average talent acquisition costs 7 percent over 2013, according to a Bersin by Deloitte report published in April. Again, for 2014, the average cost per hire rose to nearly $4,000.

Related: 10 Tips for Successfully Onboarding Your New Hire

With that much money on the line, companies can't afford to lose any more during the onboarding process. They need to get those pricey recruits in their seats, adjusted and productive as soon as possible, to get the most for their money.

But onboarding isn't easy, and expensive mistakes run rampant. Here are a few of the most costly onboarding mistakes and how to fix them, to get the most from new hires:

1. Starting too late

The costly mistake: It's Stephanie's first day, and the HR team is excited to start the onboarding and training process. The HR staff spends the day going over paperwork, getting Stephanie acquainted with the team and going over the most basic company policies and information.

But the team has already wasted valuable time and money. According to a survey of employees conducted by Intercall, 40 percent of respondents said that they spent between six and 10 hours on training each year. Yet a third of those said the training wasn't a productive use of their time, and another third claimed that training was neither interesting nor engaging.

How to fix this: Give Stephanie an advantage, and allow her to start on the meat of training immediately, by providing her basic information and paperwork before her start date. Also give her access to the employee website or HR platform early, so she can begin preparing as soon as possible.

Consider the fact that 48 percent of employees surveyed by Intercall said they wanted the ability to review training materials as they were presented, and another 47 percent wanted the flexibility to complete training at their own pace. The takeaway is that providing new hires with resources available through an easy-to-access platform early on can make the onboarding process smoother for everyone involved.

This way, Stephanie can spend her first day on the job getting the critical hands-on training she can't get on her own.

2. Focusing on the wrong information

The costly mistake: Stephanie has been on the job for a few days, and she has a thorough understanding of her company's vacation policy, insurance options and list for who is in charge of making coffee every day. But she doesn't know the information most important to her success -- what's expected of her.

In a report released by Gallup in October, only half of the employees surveyed said they had a clear understanding of what was expected of them at work. In addition, a report conducted by Wrike found that missing information was the number one cause of stress for workers. Unclear accountability, leadership and roles were also among the top stress factors employees named.

If employees don't know what is expected of them, they can't possibly be productive and contribute to the company's goals. And when employees aren't doing their jobs as they should, money gets wasted.

How to fix this: Although policy information is important, setting Stephanie up with the right information for success is just as crucial to an effective onboarding process. Get her up to speed on the roles within the company, whom to report to when problems arise and her daily responsibilities. Set goals with her so she can stay on the right track, work toward business objectives and be accountable for her progress.

Related: 10 Tips for Successfully Onboarding Your New Hire

3. Using a paper system

The costly mistake: Stephanie walks in on her first day and is handed a big stack of papers -- an employee handbook, insurance and benefits policy information and new-employee paperwork. While this information is important, delivering it in paper is like delivering a big stack of wasted money.

First, there's the actual cost for the paper and printing of these materials, not to mention the environmental strain. Then there's the time Stephanie spends reading through these materials and filling out paperwork by hand. When she fills out the paperwork by hand, she makes a few typos, copies down a number wrong and writes illegibly in one section. Now, the HR team has to go back and fix those little mistakes to get accurate information.

How to fix this: Go digital with forms to save Stephanie and the HR department time and frustration. HR software can send new employees like Stephanie the forms they need to complete on their own time, decreasing manual errors and increasing the speed of the process.

4. Ignoring employee experience

The costly mistake: Stephanie is overwhelmed by the onboarding process. There's a lot to learn and she doesn't feel like she's getting up to speed fast enough. In addition, she hasn't gotten to know the team and wants more support from its members and her manager.

After sticking it out for a few weeks, Stephanie realizes that her experience hasn't improved. She's stressed and begins to question if the company is the right fit for her. She feels that she has no other choice but to look for a new job and leave.

Onboarding can be frustrating, and many employers are unaware of how their new employees feel during the process. In fact, 69.4 percent of companies surveyed by the International Data Corporation in June said they didn't measure employee experience at all. But a poor employee experience, especially during onboarding, can increase turnover rates. When new employees walk out the door, the money spent to recruit them does, too. On top of that, there's the cost of recruiting another professional to replace them.

How to fix this: Don't leave Stephanie stranded by herself -- check in regularly to see how she's doing and what HR can do to improve the onboarding experience. HR software and tools allow Stephanie to submit weekly feedback to managers and supervisors, keeping communication open in the early stages and throughout her tenure with the company. After some time goes by, ask new employees like Stephanie to provide feedback, to make the onboarding process more effective and pain free for future new hires.

How do you make the onboarding process seamless for new employees and HR? Let us know in the comments!

Related: Onboarding: 5 Steps to Get New Salespeople Up to Speed

Matt Straz

Founder and CEO of Namely

Matt Straz is the founder and CEO of Namely, the HR and payroll platform for the world's most exciting companies.

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