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Onboarding 2013: A New Look at New Hires

Onboarding 2013 A New Look at New Hires April 2013 Madeline Laurano Onboarding 2013: A New Look at New Hires Page 2 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 Executive Summary The first impression an organization makes is often the most critical not only with customers and key stakeholders but, more importantly, with its employees. As a result, employee Onboarding has become a key business initiative and an accelerator of company growth and performance. Today's leading organizations are thinking more proactively about the way they onboard talent by adopting new practices and investing in both traditional and innovative technology solutions to achieve results. This study of 230 organizations, conducted in January and February 2013, will explore the best practices organizations use to transform basic new hire orientations into strategic initiatives and how they leverage world-class technology to boost productivity, engagement, and retention.

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1 Onboarding 2013 A New Look at New Hires April 2013 Madeline Laurano Onboarding 2013: A New Look at New Hires Page 2 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 Executive Summary The first impression an organization makes is often the most critical not only with customers and key stakeholders but, more importantly, with its employees. As a result, employee Onboarding has become a key business initiative and an accelerator of company growth and performance. Today's leading organizations are thinking more proactively about the way they onboard talent by adopting new practices and investing in both traditional and innovative technology solutions to achieve results. This study of 230 organizations, conducted in January and February 2013, will explore the best practices organizations use to transform basic new hire orientations into strategic initiatives and how they leverage world-class technology to boost productivity, engagement, and retention.

2 Best-in-Class Performance Aberdeen used the following three key performance criteria to distinguish Best-in- Class companies: 91% of employees were retained, as compared to 30% of employees at Laggard organizations 62% of employees hired in the last 12 months met first performance milestones on time, as compared to 17% at Laggard organizations 33% year-over-year improvement in hiring manager satisfaction, as compared to a 3% increase among Laggard organizations Competitive Maturity Assessment Survey results show that the firms enjoying Best-in-Class performance shared several common characteristics, including: Deep commitment to aligning Onboarding objectives to overall business goals Combination of both tactical and strategic Onboarding initiatives to drive productivity and engagement Investment in world-class technology throughout the Onboarding process Required Actions In addition to the specific recommendations in Chapter Three of this report, to achieve Best-in-Class performance, companies must: Define metrics and ensure agreement from key stakeholders Consider innovative technology options such as gamification Balance both the tactical and strategic elements of Onboarding Research Benchmark Aberdeen s Research Benchmarks provide an in-depth and comprehensive look into process, procedure, methodologies, and technologies with best practice identification and actionable recommendations.

3 This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. Onboarding 2013: A New Look at New Hires Page 3 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 Table of Contents Executive Summary .. 2 Best-in-Class Performance .. 2 Competitive Maturity Assessment .. 2 Required Actions .. 2 Chapter One: Benchmarking the Best-in-Class .. 5 Business Context .. 5 The Maturity Class Framework .. 7 The Best-in-Class PACE Model .. 8 Best-in-Class Strategies .. 9 Chapter Two: Benchmarking Requirements for Success.

4 15 Competitive Assessment .. 16 Capabilities and Enablers .. 17 Chapter Three: Required 24 Laggard Steps to Success .. 24 Industry Average Steps to Success .. 24 Best-in-Class Steps to Success .. 25 Appendix A: Research Methodology .. 26 Appendix B: Related Aberdeen Research .. 28 Figures Figure 1: Key Drivers for Onboarding .. 5 Figure 2: Top Pressures for Onboarding .. 6 Figure 3: Timeframe for Onboarding .. 7 Figure 4: Onboarding Strategies .. 10 Figure 5: Year-Over-Year Improvement of Business Metrics .. 11 Figure 6: Ownership of Onboarding .. 12 Figure 7: Ownership for Best-in-Class Organizations .. 12 Figure 8: Activities that Link Onboarding to Learning .. 13 Figure 9: Year-Over-Year Improvement of Business Metrics for Gamification .. 14 Figure 10: Employee Groups Included in Onboarding .. 18 Figure 11: Onboarding and Performance Management .. 20 Figure 12: Onboarding Automation .. 21 Figure 13: Barriers to Automating Onboarding .

5 22 Tables Table 1: Top Performers Earn Best-in-Class 8 Table 2: The Best-in-Class PACE Framework .. 9 Table 3: The Competitive Framework .. 17 Onboarding 2013: A New Look at New Hires Page 4 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 Table 4: The PACE Framework Key .. 27 Table 5: The Competitive Framework Key .. 27 Table 6: The Relationship Between PACE and the Competitive Framework .. 27 Onboarding 2013: A New Look at New Hires Page 5 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 Chapter One: Benchmarking the Best-in-Class Business Context Despite the buzz around strategic Onboarding , the majority of organizations are still immature in their approach to the new hire experience. In fact, only 37% have invested in a formal Onboarding program for longer than two years. One reason that Onboarding has not advanced beyond the early adopter phase is that organizations find it difficult to discern the return on investment (ROI).

6 Instead, Onboarding focused on basic orientation activities or , more recently, socializing new Hires into the company culture an initiative that, while important, has been difficult to measure. As a result, many Onboarding programs have fallen short and become little more than a transition from recruitment to employee development. Organizations looking to gain competitive advantage must adopt a new approach to Onboarding one that not only engages new Hires but also drives business outcomes. Aberdeen research conducted in January and February 2013 found that organizations are reevaluating their Onboarding strategies in order to improve new hire productivity. Figure 1 reveals that the top objective for initiating an Onboarding program is getting employees productive more quickly (68%). Figure 1: Key Drivers for Onboarding Source: Aberdeen Group, March 2013 In order to achieve this goal, organizations must rethink their processes and technology options in order for new Hires to get up to speed quickly and Fast Facts Only 37% of organizations have invested in strategic Onboarding for longer than two years.

7 Onboarding 2013: A New Look at New Hires Page 6 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 contribute to business-driven initiatives. By improving efficiencies, organizations should not abandon efforts to engage employees but instead should view socialization activities as a way to drive productivity and empower new Hires with the tools they need to succeed. The following pages of this report will help to uncover the challenges, strategies, and technology enablers impacting the way organizations onboard new Hires . A New Look at New Hires Given today's economic uncertainty, many organizations are finding that what worked in the past, no longer works today. Onboarding is no exception. Over the past few years, many organizations have either stuck with traditional orientation programs that fail to assimilate new Hires or embraced innovative programs that offer little impact on the bottom line.

8 Although the ultimate goal is to improve the new hire experience, many of these programs fail to connect the dots between Onboarding initiatives and business objectives. As a result, organizations face intense pressure to improve engagement (50%), meet company growth objectives (49%), and address shortages of critical skills in the market (44%). Figure 2: Top Pressures for Onboarding Source: Aberdeen Group, March 2013 In order to overcome these challenges, organizations must start by reconsidering the length of their Onboarding initiatives. Traditional new hire programs last for one week or, in some cases, a single day. These short-term strategies fail to improve areas such as retention, productivity, and engagement. Aberdeen research found that 90% of organizations believe that employees make the decision to stay at within the first year. Organizations thus have one year to make a positive impression on top Fast Facts 90% of organizations believe that employees make their decision to stay within the first year.

9 Onboarding 2013: A New Look at New Hires Page 7 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 talent, but many do not take advantage of this long term opportunity. In fact, organizations have reduced the timeline of their Onboarding programs over the past year. Today, only 15% of organizations extend Onboarding beyond six months compared to 20% that had an extended process in 2012 (see Figure 3). Even more startling is that only 2% of organizations extend the process to a full year. Figure 3: Timeframe for Onboarding Source: Aberdeen Group, March 2013 As this report will show, these challenges are not insurmountable. Organizations have achieved dramatic gains not only in their ability to create a more efficient process but also in their ability to link Onboarding to business goals. The Maturity Class Framework Aberdeen used three key performance criteria to distinguish the Best-in-Class from Industry Average and Laggard organizations: Employee retention measured as the percentage of Hires that stay with the organization.

10 Time to productivity measured as the percentage of new employees that meet their first performance milestone on time. Hiring manager satisfaction measured as the year-over-year change in hiring manager satisfaction with the employees that have come into the firm. Onboarding 2013: A New Look at New Hires Page 8 2013 Aberdeen Group. Telephone: 617 854 5200 Fax: 617 723 7897 Table 1: Top Performers Earn Best-in-Class Status Definition of Maturity Class Mean Class Performance Best-in-Class: Top 20% of aggregate performance scorers 91% of first-year employees were retained 62% of employees hired in the last 12 months met first performance milestones on time 33% year-over-year improvement in hiring manager satisfaction Industry Average: Middle 50% of aggregate performance scorers 70% of first-year employees were retained 29% of employees hired in the last 12 months met first performance milestones on time 11% year-over-year improvement in hiring manager satisfaction Laggard: Bottom 30% of aggregate performance scorers 30% of first-year employees were retained 17% of employees hired in the last 12 months met first performance milestones on time 3% year-over-year improvement in hiring manager satisfaction Source.


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