As we noted in Part 1, finding people with the right strengths is important to help your business grow and succeed. As you integrate the right engagement structures to ensure that your people will stay with your company for the long term, we want to explain the importance of onboarding in exit planning. We call this reboarding.
One critical factor in retaining your employees is having a tried-and-true onboarding plan. A well-designed onboarding process helps new hires understand their roles, responsibilities, and expectations resulting in accelerated productivity, a well-designed onboarding also serves to reboard existing members into an edited role and manage employee changes. Not having a proper onboarding plan can lead to employees leaving within the first two months, adversely affecting your business exit strategy. Without this process your exit strategy is missing an essential value that potential buyers look for, how well you retain and develop your best competitive advantage, your people.
A recent survey conducted by Glassdoor identified that companies with a well-structured onboarding program improved new hire retention by 82% and outlined the following successes:
- 91% felt strong connectedness at work.
- 89% felt strongly integrated into their company culture.
- 49% reported contributing to their team within the first week.
- Employees were 18 times more likely to feel highly committed to their organization.
In contrast, organizations without an effective onboarding process experience a 31% higher employee turnover rate within 6 months, and more than half of employees who received ineffective onboarding (52%) also felt negatively about the organization as a whole.
The Impact of Poor Onboarding
When employees leave within the first few months, it creates several notable problems:
High Recruitment Costs
Recruiting new employees is expensive. It involves advertising job vacancies, screening resumes, conducting interviews, and training new hires. When employees leave within a short time, you will incur these costs again, increasing your recruitment expenses.
Loss of Productivity
New hires take time to adapt to their new roles and responsibilities. When they leave within a few months, they have not completed their learning curve and are unlikely to have made significant contributions to your business. They have also taken time from peers and others on training. This loss of productivity slows your business operations.
Negative Impact on Morale
High employee turnover rates can affect morale among the remaining team members. When employees leave without being replaced, other team members must pick up the slack and work longer hours. This can lead to burnout and decreased job satisfaction.
Jeopardized Business Exit Strategy
When you plan to sell your business, potential buyers look at various factors, including employee retention rates. A high turnover rate is a factor in the perceived value of your company, making it less attractive to potential buyers.
Benefits of a Proper Onboarding Plan
New hires should be provided with a comprehensive onboarding plan outlining their role’s expectations and responsibilities. This plan should include an introduction to the company culture (i.e., shared values, attitudes, behaviors, and standards that make up a work environment), a detailed role description, and training timelines should be completed.
A well-designed onboarding process will help your business in several ways:
Increased Employee Retention
An effective onboarding program can significantly improve new hire retention rates. When employees feel welcomed and supported, and their time is structured during their first few weeks on the job, and they have scheduled progress checks with supervisors, they are more likely to stay with your company.
Enhanced Productivity
A proper onboarding plan accelerates new hire productivity. When employees clearly understand their roles and responsibilities and receive proper training and support, they can start contributing to your business operations sooner. Additionally, new hires should be given access to the necessary tools and resources to succeed in their role.
Improved Employee Morale
A positive onboarding experience can boost employee morale and job satisfaction levels. When employees feel valued and supported, they are more likely to be engaged in their work and motivated to achieve their goals.
Favorable Business Exit Strategy
When you have a well-structured onboarding process in place, you demonstrate to potential buyers that you have a stable and committed workforce. This can increase the determined value of your business, making it more attractive to prospective buyers.
Conclusion
A proper onboarding plan is crucial for retaining employees, achieving business success, and increasing the perceived value of your business in preparation for a business transition or exit. Investing in a customized onboarding program designed by FIREPOWER Teams is critical to achieving long-term success for your business. Contact Maria Forbes at maria@firepowerteams.com today.
https://www.exitplanningexchange.com/wp-content/uploads/2024/02/Team-work-puzzle.jpg