Measuring Success - Metrics to Evaluate Onboarding Effectiveness

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How can you justify to the stakeholders that investment in Employee Onboarding is worth the dollar? The best way to win the argument is to demonstrate a solid return on the dollar invested – or speaking the financial language to show attractive ROI (Return on Investment).

To be able to demonstrate attractive ROI you need to be able to measure it. According to John Doerr, the Chair of the VC firm Kleiner Perkins and an early investor in Google, "Structured goals give backers a yardstick for success.”

So what are the metrics you need to track as you hire and onboard top-notch talent? We've shortlisted 4 Key Metrics that contribute to the Onboarding ROI enhancement.

1. Time-to-Productivity

This is a take-off metric – or how long does it take your new hires to reach their "cruising altitude"? In other words, time-to-productivity measures the amount of time (days, weeks, months) it takes for new hires to reach the expected performance levels. It is generally a fair indicator of the Onboarding quality in the organization and the best example of the "less is more" rule. The shorter the time-to-productivity, the higher is the ROI in Onboarding.

Compare time-to-productivity across teams. For example, if two all-else-equal teams (two sales teams selling a similar range of products but managed by 2 different people) have a significant difference in time-to-productivity, it may signal that a leadership or management style might be causing a longer ramp-up.

Evaluate Onboarding Maturity at Your Company

2. Cost-to-Productivity

On average, it takes 2-6 months to fill out a vacancy, depending on the position (as some senior positions take more time to fill). This time translates into the loss of the employee's contribution to the company's performance.

For example, if the company (let's call it XYZ) budgets 7.5 million of sales for 5 sales reps and is currently 1 salesperson short, XYZ misses 1.5 million in sales per year. The longer it takes to close the vacancy, the more sales XYZ is losing.

If XYZ can close the vacancy in 1.5 months and its time-to-productivity is 2.5 months, then the cost to productivity is:

[Time to Fill Vacancy + Time-to-Productivity] / 12 months x [yearly sales per sales rep] =

[1.5 months +2.5 months]/12 months x [7.5/5] =

[4/12] x [1.5] = 0.5 million $.

Evaluate Onboarding Maturity at Your Company

3. New Hires Turnover

Measures the turnover of the newly hired staff within the first 6-24 months in the organization.

New hires who left / Average # of new hires

Example: XYZ hired 50 people over the last year, and 22 people in the current year. Over the last year, 5 new hires left the job voluntarily, and during this year only 3 had left voluntarily. Calculate the turnover of new hires.

New hires who left: 3

Average # of new hires: (50+22)/2 = 36

Turnover: 3/36 = 8.3%

Evaluate Onboarding Maturity at Your Company

4. Completion vs Effectiveness

How to measure what matters – or what metrics track the impact of the training and Onboarding on the business. While it seems very tempting to measure the completeness (e.g. percentage of staff who began the training and completed it), even a 100% completeness rate doesn't imply that employees learned or validated knowledge during the training.

Have you ever scrolled through training just to get it done? Even if you would never do that, you would be surprised how many employees just click through the training to complete it.

The reason why employees click through the training often stems from the organization-wide push for completion rate for certain training types. For example, financial organizations mandate 100% completion of compliance and risk training. Therefore, even a 100% completeness cannot guarantee that employees made effort to learn.

You can use the reversed Kirkpatrick’s model of evaluation model to measure the effectiveness of Onboarding. The models consist of 4 steps:

Step 1. Evaluate the Impact on Business

Start with the desired impact on the business the Onboarding aims to achieve. For example, if you plan to grow revenue by increasing customer retention, you can define success as an increase in Net Promoter Score to 8.5.

Step 2. Identify Required Behavior Change

Define what behavior change would contribute to the increase in the Net Promoter Score. For example, if you stick to direct sales via phone, you might want to consider working on the eloquence and phone ethics of the sales staff. In that case, the improved phone ethics would be the required behavior change.

Step 3. Design Learning

Identify what needs to be learned to enhance the telephone skills of the sales staff. For example, developing a solid script or, in some cases, the ability to improvise, would help to bring more deals to closure.

Step 4. Reaction

Evaluate the reaction of the learners – collect employee feedback about the newly developed learning script and see whether they buy into it.

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5. Stakeholders' Buy-in with the Onboarding

Are the hiring manager, team, and other stakeholders happy with how the new hires are equipped for doing their job?

Send out a survey to the employees and see how many 4s and 5s you've got. If the distribution of the result is around these two numbers, your Onboarding efforts are paying off and are recognized internally.

Scores around 2.5-3.5 indicate that employees in your organization are on the fence regarding the Onboarding effectiveness.

The lower scores would need an urgent improvement because even though you might be working on improving the Onboarding quality, your efforts are not recognized. In the long run, it may lead to losing support from key stakeholders (non-HR staff, e.g. hiring managers and team leads, who participate in Onboarding).

Keep collecting the feedback from existing teams during the first week, first month, 3 months, and 6 months to evaluate the effectiveness of Onboarding in each of these stages.

The core point here is to involve teams, hiring managers, and other stakeholders in the Onboarding of new hires. Keep in mind that the teams need to participate in the Onboarding for it to achieve its bigger goal for the business.

Evaluate Onboarding Maturity at Your Company

At Corpedios, we put together the best features of text, images, and videos to create an exceptional onboarding experience for employees at your company. Try onboarding new talent via a conversation that we tailor to your needs in our text message-based onboarding solution. Your coworkers and new hires text – would it be terrible to put it to good use?

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