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Reducing Employee Turnover - Small Business On-Boarding Tips

Small Business • October 4, 2013 at 7:00 AM • Written by: Christina Merhar

Reducing turnover is a critical issue for HR professionals and small business owners. After all, employee turnover is expensive. The cost of losing an employee is estimated to be anywhere from 16% to 213% of the employee's annual salary, depending on their role at the company. About a quarter (22%) of employee turnover occurs in the first 45 days of employment. Expressions-13

Just a decade or two ago, it was the norm to stay in a job for many years... even spend a whole career at one company. But this is no longer the case. The average employee now spends 4.4 years in one job and has 11 different jobs over his or her career (Bureau of Labor Statistics, 2012). High employee turnover leads to extra expenses, loss of revenue, and negatively impacts morale.

One go-to-tool for small businesses to minimize employee turnover is an on-boarding program. An effective employee on-boarding program ensures that new hires feel welcome and prepared in their new positions, in turn giving them the confidence and resources to make an impact within the organization. In fact, new employees who go through a structured on-boarding program are 58% more likely to be with the organization after three years.

Employee on-boarding contributes to minimized employee turnover, but that's not the only reason small businesses conduct these programs. Employee on-boarding also reduces costs associated with on-the-job learning and saves supervisors time training the new employee (increasing productivity of the business). 

On-Boarding Tips to Reduce Small Business Employee Turnover

Here are five quick tips for small businesses to think about with an employee on-boarding program.

1. Engage Quickly to Reach Proficiency Faster. Create an on-boarding program that gets employees engaged and up to speed quickly. Reduce time to proficiency. Build your on-boarding program around getting employees to a productive level quickly, where they are contributing value to the organization. New employees will be positively effecting your organization’s bottom line faster, and also feel more engaged personally.

2. Have Some Fun. Socialization is an important part of integrating new employees, and helps new employees feel as though they are really part of the team. They'll start to develop genuine relationships. Employees who are socialized are more likely to stay with the organization and perform at a high level. Socialization will help new employees understanding proper expectations, role clarity, build friendships in the organization, and have an overall sense of belonging to the business. Socialization can exist in many ways: company mountain bike ride, department happy hour, or a team lunch.

3. Build a Leader-Employee Relationship. Most employees leave managers, not companies. This means the employee to manager relationship is one of the most important relationships a new hire needs to establish. The more small businesses can build opportunities for managers to interact with new employees early and throughout the on-boarding process, the better. If the manager is not conducting the on-boarding program, make sure they are still interacting regularly through shadowing, lunches, and/or one-on-one meetings.

4. Make it a Game. Most small businesses do not have a budget for fancy rewards or incentives, but that doesn't mean you can't structure the on-boarding in a competitive spirit. Depending on your small business culture, this could be a game-like process with levels or points when they complete different activities, or timelines and deadlines for achieving certain milestones. This will help create competition and camaraderie, especially if a class of new hires starts on the same day.

5. Have the Employee's Workstation Setup. This tip may be outside the scope of an actual on-boarding program, but from my experience it makes a big difference to walk into a new company and have your computer, phone, desk, and email set up and working. It immediately makes the new employee feel welcome and feel like they can jump right into work (productivity). 

How Do You Know if Your On-Boarding Needs a Tune-Up?

Now that you have an on-boarding program in place, is it working?

  • Know how long it takes for employees to become productive. The purpose of on-boarding is to give employees the information they need, when they need it. Know what your benchmark time is for productivity and measure change over the long term.

  • Find out why people are leaving the company with exit interviews. Not just why an employee left, but what caused them to look in the first place. Use the feedback for change to your on-boarding process (don't just file it away!).

  • Ask employees what they like about working for the organization. Then make sure new hires know about them. These are the benefits that make employees stay.

Download our employee retention eBook to learn how to keep your most valued employees without breaking your budget.

What are your new employee on-boarding tips? Leave a comment below.

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Christina Merhar