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    Employee Onboarding

    How to calculate the ROI of employee onboarding

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    Ethan Israel
    November 9, 2022
    4 min read
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    As a Learning and Development Manager, it’s essential to understand the impact of effective onboarding on employee productivity and how to measure it. One of the most important metrics to consider is the time it takes for a new hire to reach peak productivity, known as “time to success.”

    It’s also important to remember that onboarding is just a small piece of the puzzle when it comes to effectively training and professionally developing your employees. There is a bigger more holistic journey all employees must undertake in order to reach peak success and productivity.

    Now, I know what you’re thinking. “ROI of employee onboarding? That sounds about as exciting as watching paint dry.” But bear with me, folks. Understanding the ROI of employee onboarding is crucial for the success of any business, and it’s not as dull as it sounds.

    Why Calculate ROI of Employee Onboarding

    I’ll answer this question from the organizational POV and from the L&D one.

    From the organizational perspective, investing in employee onboarding and training is a significant investment for any organization, and so it’s important to measure its effectiveness. By understanding the value of onboarding, you can make informed decisions about how to allocate resources and improve your overall employee development strategy.

    From the L&D perspective, once you know how to calculate the ROI of onboarding, you can apply the logic to EVERYTHING L&D and finally have a way to unequivocally prove your impact on the organization and get the recognition (and additional budgets) you deserve(!).

    Calculating the ROI of Employee Onboarding

    Calculating the ROI of employee onboarding can seem like a daunting task, but it doesn’t have to be. As a Learning and Development Manager, you can take a data-driven approach to determine the true costs and benefits of your onboarding program. Here are some factors to consider when calculating the ROI of employee onboarding:

    • Training Costs: This includes the cost of training materials, trainers, and other associated costs. The more you spend on training, the higher the ROI will need to be.
    • Time to Success: This is the amount of time it takes for a new employee to become fully productive in their role. The faster they reach peak productivity, the higher the ROI of onboarding will be. Be sure to note that “productivity” is measured differently in each department.
    • Employee Turnover: High employee turnover can significantly impact the ROI of your onboarding program. The more employees who leave within the first year, the lower the ROI will be.

    Now, you may ask – how do I get this data?

    If you aren’t already, you MUST track these metrics.

    The good news is – even if you aren’t and you don’t have a tech platform to do it for you (wink wink, that’s what we do… 😉 ), you can get this data by collaborating with team leads and managers on mapping their past employee onboarding processes. After all, the pain of an unproductive employee weighs heavily on them, so a manager will always remember if it took an employee a month or 6 months to become a contributing member of the team.

    What you then need to do is collect the data from across the company and analyze tit at the company level – is the ROI different in different departments? for different managers?

    Improving the ROI of Employee Onboarding

    Improving the ROI of employee onboarding doesn’t have to be complicated. By focusing on a few key areas, you can significantly impact the effectiveness of your program. Here are some strategies to consider:

    1. Use Interactive Training: Interactive training sessions can be more engaging for new employees and can help them retain information more effectively.
    2. Provide Mentors: Providing mentors for new employees can help them acclimate to the company culture and feel more connected to the organization.
    3. Create an Inclusive Environment: Creating an inclusive environment where all employees feel valued can lead to higher employee engagement and retention.
    4. Use Technology: Technology can be an effective tool for onboarding and training. By using online training platforms, you can reduce costs and provide more flexible training options.

    In Conclusion

    Measuring and improving the ROI of employee onboarding should be a top priority. By understanding the value of onboarding aswell as a holistic learning journey for your employees, you can make informed decisions about how to allocate resources and improve your overall employee development strategy. So, put on your data hat and start measuring that ROI! Trust me, I see it with our customers at Juno all the time, when you get into the numbers, you’ll become obsessed with growing your impact through employee development optimization, you just need to start! Remember – onboarding is only the first step of the journey!

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