Fundamentally, business is about people. Your customers. Your employees. People determine the success or failure of your enterprise.
So when you're in the business of recruiting people, you need to make sure you're doing a great job. And it's not just about attracting the smartest and brightest, either. You need to ensure you land the best cultural fits, as well.
Say you do all the hard legwork--you scour campuses across the country, you meet with talented executives and you apply the principles of recruitment marketing to amplify your brand message.
Your hard work pays off and you land some exceptional talent. Everything is looking great, and then... wham, hundreds of your ideal recruits leave within the first six months. Your HR team is left scratching their heads wondering what went wrong.
So what did go wrong? Well, most businesses spend a lot of time trying to recruit the best talent, but drop the ball when it comes to on-boarding new hires. Believe it or not, up to 20 percent of turnover happens within the first 45 days of employment.
It's not cheap, either. The organizational cost of employee turnover is estimated to range between 100 percent and 300 percent of the replaced employee's salary. In other words, it's incredibly expensive.
Let's explore why companies lose millions when on-boarding new talent--and what you can do about it.
What Went Wrong?
Get this: Millennials will make up over 75 percent of the workforce by 2025. This tidal shift is having a marked impact on the way businesses need to think about engaging and retaining talent. A major difference is that Millennials actively seek work that offers purpose and meaning.
65 percent of Millennials chose their current job primarily because it offered room for self-development. It's great to see that people are becoming invested in a company's purpose or mission. There's a big problem, though: Companies are failing when it comes to translating this vision into a reality.
The statistics back this up. 25 percent of all new employees are gone within a year. That turnover is literally costing businesses millions; it's estimated to cost between $3,000 and $18,000 to replace the average employee.
For senior level executives? Watch out. That number skyrockets to upwards of $2.7 million.
We shouldn't be surprised by high company turnover, especially when you consider that 60 percent of companies fail to set milestones or goals for new hires. How can you expect someone to succeed when you don't give them a structure or platform to follow?
Performance and Productivity
I recently spoke to my fellow Inc.com columnist J.T. O'Donnell. She's the founder and CEO of WorkItDaily, a LinkedIn Influencer with 1.5 million followers, and an all-around great person.
Her answer? Bespoke digital on-boarding courses.
Any company in the world can now create an entire portfolio of courses, workshops and sessions that educate and entertain. It's a clever way to champion company culture, promote team values and get new hires up to speed. And best of all, you can ensure that on-boarding programs are of a consistently high-standard across the board.
New recruits can follow guided 30, 60 or 90-day programs that help situate them within a new company and environment. Existing staff can focus on work, while still being able to support new hires in the best capacity.
Don't underestimate the power of effective on-boarding. On-boarding programs have been shown to increase retention by 50 percent, a key factor in improving employee performance.
Even more impressive: After both operational and cultural on-boarding, 92 percent of new hires feel like productive contributors to their organization after one month on the job.
The Bottom Line
Businesses are falling short on their promises to new hires, from the moment new recruits step into the building. The effects are being felt in a number of ways--from a marked impact on the bottom line to rising employee turnover to poor company culture.
Just think about this for a second: 69 percent of employees are more likely to stay with a company for three years if they experienced great on-boarding.
It shouldn't be left to chance. It should be a given.
Heed this warning and take action now. That way, you can retain more talent and remain one step ahead of your competitors.