You’ve just hired a new person and you feel super excited, even a bit in love. You have such high hopes for them. Their first day at work consists of you personally showing them the ropes and answering questions. But this unstructured onboarding works if you don’t hire often.
The problem starts to appear when your company grows. When you have a new employee every month, you won’t have the time to teach them everything; plus, the processes will become so complex that teaching will take a lot more time.
What you need is a system, a standardized process that’ll make sure each new employee integrates in your team and starts performing at full capacity as soon as possible. What you need is systematic employee onboarding.
What is onboarding
Onboarding is welcoming new hires to your company. According to research, 86% of new hires decide whether to stay or leave within the first six months; and 69% of new hires are more likely to stay longer than three years if they experience well-structured onboarding.
Why is retaining new hires so important? Because hiring and training people costs money.
Onboarding a new employee costs about 150% of their monthly salary. When translated to actual money, this is how much it costs to recruit and train a single employee:
- $3,328 for an employee earning $10.00/hour
- $8,000 for a manager earning $40,000/year
- $21,000 for a C-suite executive earning $100,000/year
Onboarding isn’t simply training for the job. It’s also about instilling company culture and making them feel like welcome and making sure they fit in. Michel Falcon, founder of Experience Academy, said it best:
“Employee onboarding is the design of what your employees feel, see and hear after they have been hired. Often, companies confuse onboarding with training. While training does have a role within the onboarding it doesn’t represent the entire scope of the process.” - Michel Falcon, founder of Experience Academy
Most small companies don’t have a well-developed onboarding process because developing it costs proportionally more for a lower reward. For example, when you’re small, you don’t onboard a lot of people to justify investing time in the process; but when you have 500 employees, the cost is nothing compared to time and money you’ll save with each new hire.
Just because a company has structured onboarding, it doesn’t mean it’s good, though. Sometimes it’s better not to have a systematic onboarding because at least you know it’s bad and you have to do something about it.
A mediocre company will give you an orientation packet and a bunch of paperwork, read old documentation, and make you watch in-house training videos. But the truly great company will welcome you with a big smile, ask you how you feel, track your engagement, and make you too excited to sleep because you can’t wait to go to back to work.
How some companies onboard new employees
Percolate had a problem: how can they grow their team while keeping its culture? The answer is through thoughtfully designed onboarding. The CEO personally takes newest members through company history, philosophy, and culture. It’s his personal job to share the company vision and make sure the new hires know how they contribute to it. The company also has a 18-page document called “Day One” that’s regularly updated and contains everything a new hire should know.
“When your company is really small, the percentage of time everybody gets to spend with you (the founder) is pretty high. If you’re five people, everybody conceivably gets 20% of your time. That’s a lot harder at 200 employees. But founder connectedness is always paramount. When it comes to your message — mission, vision, and values — repeat yourself until you think you sound like a broken record. Then start repeating yourself some more. That’s a good way to think about what your job is in building a culture and running a company.” - Noah Brier, Percolate Co-founder
Red Branch Media
At Red Branch Media, training is a learning processes that encompasses both the how and the why. A new hire will learn not only how to do something but how to behave when faced with a new challenge. They focus their “why” around sales and ease of use, so for example when an employee schedules calls or shares social updates, they ask themselves “How will this make our customer’s life easier?” or “How will this sell the product?”.
“When you train your new employees in the ethos of the company while simultaneously showing them how to do their job, everyone wins. We give them a reason to believe and a map to what their future could be by telling stories of our successful employees and the highs and lows that got them there.” - Maren Hogan, Chief Marketing Brain at Red Branch Media
Once a year, Infusion runs a month-long boot camp for new graduates. There, they teach every skill a person needs to know to do well at the company. This includes everything from pitching ideas and gathering requirements, to good programming practices and how to actually code (including deployment, release, and documentation). By working on real projects, graduates are prepared for the actual work to come.
Netflix keeps a new hire busy with a highly-structured schedule for the first 2 weeks, after which they have regular check-in meetings. This way, newbies are never left wondering what to do next. They also meet with team leaders from other departments so they can understand how they fit into the big picture. They also get to talk to the CEO in a small informal group setting within the first 3 months.
New hires get real responsibilities and can see their impact quickly. An employee will start working on a product immediately and within 4 months they’ll see their work being used by tons of Netflix customers. This gives them a big confidence boost and makes them see value in their work.
Valve has a flat company structure (no hierarchy, management, or being told what to work on), which is very rare for a big company (they have around 360 people). This makes onboarding difficult as most people never worked in a similar environment.
That’s why Valve employees created a handbook for new hires. It’s a survival guide that explains company culture, inside jokes, job review processes, and why desks have wheels, among other things. The handbook is so good that it made people want to work at Valve, while at the same time helping new hires adapt to a specific company culture.
This book isn’t about fringe benefits or how to set up your workstation or where to find source code. Valve works in ways that might seem counterintuitive at first. This handbook is about the choices you’re going to be making and how to think about them. Mainly, it’s about how not to freak out now that you’re here. - Excerpt from Valve’s Handbook for New Employees
Zappos makes every new employee, regardless of their position, go through a 4-week customer service training. After all, making customers happy is their core value and making an accountant or a developer answer customer tickets shows how important it is. Sometimes, new hires figure out they don’t want to stay and instead of keeping them, Zappos offers them $5,000 to quit. This way, they make sure they only have employees who really enjoy working and offering great customer service.
Square is a mobile payments startup. To show new hires how important it is to have good relationship with merchants, Sqaure takes new hires to visit local merchants so they can meet customers and see how they really use their product.
4 Tips for structuring your employee onboarding
1. Prepare one day in advance
A day before the new hire comes, create an email account for them and set up all the other accounts with it (like Active Collab, Git, Slack, etc.) so they don’t have to waste a whole day on administration. Also, prepare the workstation and the computer a day in advance. Make sure the computer is stripped of old user data and that all the software is installed and updated. You can even organize their bookmarks and include bookmarks to all the documents and software you use.
Provide answers to questions most new employees have. This can include who’s who, who they can ask for office suplies, what are the benefits, and so on. It’s best to keep the FAQ in a cloud document like Google Doc so anyone can update it and there are no different versions floating around.
Prepare a welcome package that includes your swag (t-shirt, personalized coffee mug, favorite candy bar, bag), a sample of your product, welcome card, and so on. A Kindle or an account to online courses is a great gift too because it encourages them to learn. Also, make sure they have keys and other access credentials waiting for them so they don’t have to hunt for them.
2. Document processes
You should have every process documented so when one person leaves, another one can continue. For knowledge management, it’s best to use a wiki software (like DokuWiki), but spreadsheets, docs, images, and checklists are also good.
The problem with having several sources of documentation is it’s all over the place. To keep it centralized, you can use links in a wiki software or create a project in Active Collab and put everything there so it’s all in one place and everyone can access it.
The best thing about having extensive documentation is that it scales incredibly well as your team grows. When you have a good onboarding documentation, your team can asynchronously learn and update it as things get more complex. It’s also good for existing employees to refresh their memory when they have to do some arcane process they haven’t done in ages.
3. Treat onboarding as a mini-project
Onboarding a new employee is a mini-project by itself. One person’s onboarding isn’t that different from another’s. Once you make a to-do checklist do, you can use the same checklist again for other new hires (MIT has some interesting checklist examples).
Project templates are perfect for this. They let you define tasks and then create a project with those tasks each time you have a new hire. (You can also use recurring tasks if you don’t want to create a whole new project just to onboard a new person.)
Create tasks and assign the new employee and any responsible team members. Then, new hires can work through the tasks at their own pace, starting with something simple, like checking out team the calendar or saying hi to everyone. You can even gamify the experience and let them collect points for each task they complete.
Create a project from an onboarding template before the new hire arrives and assign other people to complete tasks. For example, once an onboarding project is created, the sysadmin should be assigned to the task “create the email account and other login credentials” and a deadline should be the day the new hire arrives. Involve multiple people in onboarding because, as they say, it takes a village to raise a child.
4. Formalize team integration
The first day at work can be stressful. When you’re new, you don’t know anyone, there are so many new names to remember and you worry what others think of you. It can be very awkward to join the tight-knit people who know each other well.
To make sure a new hire fits in, you should formalize the first part so you take away the nerves of a new team member joining the team.
Assign a different team member for each part of the onboarding process so the new hire gets to know more people. Also, assign a buddy, someone who will take them on a tour of the office, introduce them to others, answer questions, take them out for lunch, and keep them company while they settle in.
A good idea is to make a task for new hires to send an introductory email to everyone in the company. This email should include what they were doing before joining the company, what they will do in the company, some random personal details, and a crazy embarrassing photo. This emails are fun to read and provide great discussion starters for others to get to know the person better.
Other posts in the series on growing a business
- Part 1: Why entrepreneurs burn out
- Part 2: How to make sure your business can grow
- Part 3: How companies grow and die (Adizes lifecycle)
- Part 4: Setting up a self running business
- Part 5: Introducing processes
- Part 6: Staying relevant
- Part 7: Staying profitable
- Part 8: How management changes (Greiner's growth model)
- Part 9: When to hire first project manager
- Part 10: A practical approach to risk management
- Part 11: Identifying key players
- Part 12: What happens when a key player leaves
- Part 13: Leadership pipeline
- Part 14: When to hire first HR manager
- Part 15: Contractor vs full-time employee
- Part 16: Hiring process for growing businesses
- Part 17: How and where to find talented employees
- Part 17: Hiring advice for growing businesses
- Part 18: Systematic onboarding
- Part 19: Avoiding toxic workers
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