(Editor’s Note: Today’s post is the second in a series being sponsored by Allied Van Lines, one of the world’s largest moving companies. The 2012 Allied Workforce Mobility Survey asked human resources professional about strategies, practices and performances related to mobility in the workplace.)
In the May issue of HR Magazine, SHRM President and CEO Hank Jackson talked about the next challenge for human resources being global talent migration. He cited that CEOs claim their biggest challenge in the next 10 years will be attracting and retaining talent.
You might be saying to yourself, “That’s nothing new. Attracting and retaining talent has been the challenge for the past 10 years.” And it’s true…it’s a never-ending quest.
But it’s really no wonder after I saw the new set of survey results in the 2012 Allied Workforce Mobility Survey. According to the survey, companies lose 25% of all new employees within a year. Shocked? I was.
The survey indicated that the average cost to fill one position was about $11,000. I have to think companies are more than a little frustrated when they spend $11K to hire an employee only to have them leave in less than a year.
What’s more shocking is the reason why – Onboarding.
- Almost 30% of companies reported that it takes a year or longer for a new employee to reach full productivity.
- 25% of companies said their onboarding program did not include any kind of training.
- And 60% of companies indicated they don’t set any milestones or goals for new hires.
There’s an old cliché about never having a second chance to make a first impression. And it’s certainly true here. New hires are excited to join the organization. They want to show the company that they are the right candidate. Not providing a new hire with the tools and information to be successful, well…that makes the new hire wonder why they’re there.
The other aspect of the survey that surprised me was the amount of money dedicated to onboarding. Or more accurately, the lack of it. Approx. 35% of companies spend $0 on onboarding. That’s not a typo. They spend nothing, nada, nil. I understand budgets are tight and the economy still isn’t back to its old self. But to spend $11K on hiring someone and $0 on making them productive…sounds like stepping over dollars to pick up quarters.
It only seems logical that one of the first ways to solve the “attracting and retaining talent” challenge is to focus on the onboarding process. If you’re wondering where to start, here are a few suggestions:
- Know how long it takes for an employee to become productive. The purpose of onboarding is to give employees the information they need, when they need it.
- Find out why people are leaving the company via exit interviews. Not just why an employee left but what caused them to go looking in the first place. And don’t just file away the information. Use it to create change!
- Ask employees what they like about working for the organization. These are things you want to make sure new hires know about.
Needless to say, it would be great to have an unlimited budget devoted to onboarding. But we all know that’s not realistic. What could help get some funds in the onboarding budget is being able to show how much it costs to hire an employee, the average length of employment for new hires, and the cost of an employee resignation. I’ve never met a CEO who lets money fly out the window – show them the numbers.
I hope you found these results interesting because I really enjoyed sharing them with you. There’s a lot more great data available for review at the Allied HRIQ site. Please check it out.
Competition for talent is heating up. Companies are struggling to find skilled workers. It would be a shame to hire the next company rock star only to see them leave…or worse, stay and be unproductive.
Oh and P.S. Fellow HR bloggers Steve Boese, Kris Dunn and Trish McFarlane are offering their own insights into this data as well. Find their posts here on the Allied HRIQ site. You can also check out their individual blogs here, here and here.