According to one Aberdeen Group study highlighted by the Society for Human Resource Management (SHRM), only 2% of companies extend their onboarding programs beyond 1 year. However, research indicates it can take up to 8 months (and sometimes 2 years) for a newly hired employee to reach the same level of productivity as an existing staff member. And within the first 2 years, nearly a quarter of all new hires quit.
Implementing an onboarding program that lasts at least 1 year offers many benefits to those employees who may be thinking of moving on before they’ve reached their full potential with your organization, as well as many other benefits for your organization itself, emphasized below.
Increases New Hire Retention Rates
Onboarding programs that last at least 1 year have been proven to increase new hire retention rates by as much as 25%, compared to onboarding programs that only last a few months, weeks, or even only a day. In fact, research shows that any onboarding program that’s less than a month is actually detrimental to retention rates—companies with programs that last a month or less are 9% less likely to keep first-year employees compared to those with longer processes.
Leads to More Productive and Engaged Employees
When you consistently provide your new hires with things to learn, they’ll continue to stay engaged at work and with your organization. Employees who are coached throughout their first year on the job, for instance, will have opportunities to grow and learn new facets of their roles. They’ll better understand where they fit into your organization and how they can be productive when they’re learning about your organization or their role on a weekly basis, opposed to a day-long onboarding seminar that has too much information for one person to retain or put to good use.
Offers Structure and Real-Life Context During a Trial Period
If you offer new hires a structured onboarding program that lasts 1 year or longer, you’re offing them true insight into what it would be like to remain at your company long-term. When you continue employees’ learning to higher levels, it demonstrates your commitment to their personal and professional advancement, leaving less ambiguity about their career path with your company in the future.
Saves Your Company Money
Most importantly, onboarding programs that last 1 year or more save businesses money. A study conducted by the Center for American Progress uncovered that average turnover costs are around 20% of an employee’s base salary but can reach over 100% for a higher paid employee. For example, the cost to replace a manager who makes $40,000 a year would be around $8,000, but the cost to replace a CEO who makes $100,000 a year is $213,000.
And that doesn’t factor in indirect costs like lost productivity, lower morale of employees who have to pick up the slack, and other employees wondering, Why is everyone leaving?
Bottom line, longer onboarding programs are a win-win for companies and new hires.