Making Onboarding Work:

Driving Organizational Effectiveness through Improved Retention, Quicker Time-to-Productivity, Greater Level of Productivity, Accelerated Career Advancement & Enhanced Recruitment Results.

Kaiser Associates, Inc.

Organization Development Practice North America Practice Headquarters 1747 Pennsylvania Avenue, NW Ninth Floor Washington, DC 20006 www.KaiserAssociates.com 2007-2009 Kaiser Associates, Inc., All rights reserved.

KAISER ASSOCIATES, INC.

www.KaiserAssociates.com

How This Report is Organized:

We begin with an overview of where Onboarding came from and its current imperative. We then cover common shortfalls of Onboarding programs. We then provide our perspective on what an effective system needs to include in order to be competitive, drive down turnover, and increase productivity. We then conclude with how to get started and a description of the areas that we can address. Lets begin.

Thank you for requesting this special report. We hope you will find it to be both interesting and helpful.

2007-2009 Kaiser Associates, Inc., All rights reserved.

www.KaiserAssociates.com

PART ONE

PART ONE: Introduction

In todays employment marketplace, organizations are realizing the value of developing strategic Onboarding processes that reduce new hire time-to-productivity, enhance level of productivity, increase satisfaction levels of internal customers (i.e., hiring managers), and improve overall retention rates. Further, as the baby boomer generation retires, organizations are finding that Onboarding is a critical mechanism for transferring knowledge from legacy employees to the next generation of hires. Kaiser Associates research also indicates that effective Onboarding programs have a powerful and positive impact on how an organization is viewed as an employer-of-choice by the most desirable employee candidates. It is clear that in order for an Onboarding management program to achieve significant success, it must be structured to address a variety of issues. When we observe the most successful Onboarding programs, we notice that they incorporate early-career development, cultural, social, and administrative components into their design. This report will examine the specific steps leading organizations are taking for developing, implementing, measuring and driving the effectiveness of their Onboarding programs. The information contained in this article draws heavily from the experiences of our clients, and Kaisers role as a researcher and thought leader on this topic. We hope you find the ideas in this report helpful.

Kaiser Associates has been a tremendous partner to Target Corporation. The valueadded recommendations that Kaiser brought to the table were both achievable and sustainable for our company. We would highly recommend their services and look forward to working with them again in the future for additional Target needs.
Tricia Dirks, Vice President Corporate Human Resources Target Corporation

2007-2009 Kaiser Associates, Inc., All rights reserved.

PART TWO

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PART TWO: A Brief Historical Perspective

For decades, leading organizations have wrestled with how to reduce time-toproductivity for new hires and increase overall retention rates. This issue has increased in importance as organizations face the reality of a declining population of employees in their prime working years, coupled with demographic shifts as the baby-boom generation retires in increasingly larger numbers. Although recent articles in the business and HR press have popularized the term, Onboarding, the issues underlying the process are hardly new. Employee orientation programs and mentoring initiatives are well established in most organizations that take a serious interest in recruiting and developing their human capital. So why the seemingly sudden interest in Onboarding amongst HR and other senior leaders? Certainly, the historical scarcity of top talent is an important factor. Although it can be correctly argued that there has always been a scarcity of Alevel talent, the competition for highpotential recruits has also dramatically increased. Most Global 500 companies have highly tuned, albeit expensive, recruitment engines. In the corporate sector, companies that historically recruited regionally, now routinely conduct national searches with increased degrees of sophistication, support and investment. Meanwhile, in todays tepid economic climate, governmental and non-profit organizations are rethinking their recruitment and retention strategies given increased availability of top talent from the private sector. While these organizations have increased access to A-level recruits, the focus must reside in retaining these new hires for the long term, rather than risking high attrition once the market inevitably rebounds. Student attitudes towards prospective employers have also shifted over the past decade. Lifetime employment at a single employer is a stale concept for many new hires. It is well recognized that top recruits evaluate potential employers against a variety of criteria. What we increasingly understand is the weight that recruits now give to the quality of the prospective employers plan for them during their first year on the job. Virtually every organization has an orientation program, but top recruits are looking for more. They are looking beyond the first 90 days; they are looking at what organizations are doing to address their early careerdevelopment, cultural, social, and administrative needs. This issue is becoming increasingly important, especially among the top recruits who have a variety of employment options to choose among. As an interesting aside, we hear from both those in the executive recruiting field, and from university career services directors, about the role that a well defined and executed Onboarding program contributes to the organizations brand as an employer. It is clear that the most successful and sophisticated Onboarding programs have become strategic tools by which organizations are able to differentiate themselves from their recruiting competition. To examine what organizations are specifically doing, let us now shift our attention to the current state of Onboarding initiatives.

32% of employees who have been in their current job less than six months are already job searching.
Source: Development Dimensions International and Monster Intelligence 2006 global study of more than 3,700 job seekers and 1,250 hiring managers.

2007-2009 Kaiser Associates, Inc., All rights reserved.

www.KaiserAssociates.com

PART THREE

PART THREE: Common Shortfalls

Not surprisingly, Onboarding programs vary enormously in terms of sophistication, comprehensiveness and effectiveness. Since we believe that one can learn almost as much from what is less effective as we can from best practices, let us first take a look at some of the more common shortfalls we have found with Onboarding programs.

Lack of a System-wide Approach to Onboarding

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Our research shows that the majority of Onboarding programs have a very short-term focus in some cases limited to only the first two weeks of the new employees experience. We think this is a costly mistake. New hires tell us that orientation programs condensed in the first weeks of hire are typically either too light weight or are like drinking out of a fire hose. The majority of information fails to be absorbed since the new hire does not yet have the operating context to benefit from much of the knowledge transfer. Moreover, when you look at employment turnover statistics, you discover that the greatest risk of losing a new employee is during the first 18 months. Thus, the most effective programs have an established roadmap for providing Onboarding services throughout this entire period of time. Unfortunately, most organizations invest in an initial orientation and then only again invest at later career stages.

We observe that many Onboarding programs take a piecemeal approach. By this, we mean that the emphasis is often placed on only a few components of the overall experience, rather than a more comprehensive (and ultimately more effective) approach. As we will discuss in more detail shortly, the most effective Onboarding programs look at new hire needs from a variety of perspectives. These programs focus on providing material early career support systems, offering assistance in interpreting and adapting to the unique culture of the organization, ensuring that a new hires social needs are met, and providing the traditional administrative components. Onboarding programs that incorporate all of these factors are the ones that have the greatest impact on both time-to-productivity and longer-term retention both key to overall competitive and financial performance. As an example of the typical narrow approach, some organizations focus their efforts primarily on the administrative components of the Onboarding process. While there is no doubt that quickly and efficiently enrolling new employees in benefit plans, obtaining security access, providing a properly configured personal computer and other Onboarding administrative details are important, they are but the very surface of the most sophisticated Onboarding programs. The most, that we have witnessed, any organization achieves by attending to the administrative is to minimize annoyances. Expectations today are significantly higher.

ShortTerm
Focus

Not Customizing Programs for Specific Segments of the Employee Population

Offering program elements to one group of employees and not another is a sensitive subject. Certainly, in an ideal world, everyone would receive the full gamut of premier services. But this is not often feasible. In every organization there are certain groups of employees who are more difficult to recruit, who are in positions that are feeder-roles to senior management, or who otherwise stand out as top performers. We believe that these employees deserve specific consideration in the Onboarding program. Unfortunately, many organizations design their programs to the lowest common requirements. Put simply, this diminishes the organizations ability to attract and retain the most valuable talent. For example, in the government sector, the competition to recruit IT professionals with security clearance is highly competitive. Top candidates with robust experience and security credentials routinely entertain multiple offers and enjoy a high degree of career mobility. Increasingly, we are finding that differentiated Onboarding support for these hard-to-source and retain employee populations can make a substantial difference in their long-term commitment to the organization. Similarly, in the consumer packaged goods industry, the competition to recruit for the brand management function is the most competitive. Top marketing candidates from Northwestern, Wharton, Harvard and Stanford receive multiple offers. Onboarding support for these hard-tosource/attract and retain employee populations can make a substantial difference in their longterm commitment to the organization. Onboarding programs which do not offer differentiated services run the risk of wateringdown their programs and making them less appealing to those who are the most difficult to recruit and retain. The risk of losing these most prized assets makes for a good argument that there should be various levels of Onboarding services. 2007-2009 Kaiser Associates, Inc., All rights reserved.

PART THREE

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As with any management initiative, it is crucial to measure the effectiveness of the Onboarding program. Our research indicates that less effective programs have limited or weak measurement systems in place. Metrics for Onboarding are still in their infancy. For example, measuring turnover, while an obvious metric, does not give a true indication about the overall effectiveness of the Onboarding initiative. In order to accurately gauge and drive increased levels of success, the organization must measure a more mature set of variables. One important metric is a new hires time-to-productivity. This is a key outcome of an effective Onboarding program, and should be measured despite any perceived complexity. A growing number of organizations use online survey tools to ascertain how their new hires are adapting culturally and socially to the new organization. We find that there are three common metric questions: What should we measure? How do we measure? Once we have the answers, how do we determine the right performance drivers? Our research shows that organizations that establish metrics and benchmarks are able to quantitatively demonstrate the positive impact that Onboarding has on turnover and job effectiveness. Alternatively, and not surprisingly, organizations that do not develop metrics and benchmarks often fail to gain organization-wide support for Onboarding. In addition to developing metrics that focus on retention, time-toproductivity, engagement, cultural fit, learning (and there are others), we find that the most sophisticated organizations are examining ways in which they can measure how their Onboarding efforts impact the overall recruiting brand. As metrics measured must necessarily be customized to the unique needs and circumstances of the organization, we would be happy to discuss your situation in greater detail.

Insufficient Metrics and Accountability

Lack of Awareness of Best Practices

Lack of Functional Management Buy-in and Participation

Onboarding works best when there is an integrated system across divisions and functions. We find that the less effective initiatives only involve HR and the individuals immediate supervisors. The organizations that experience the highest returns from their Onboarding investments are the ones that engage a broad crosssection of functional leadership. This requires that senior management endorse the program. Without senior backing, programs often fail to achieve their objectives. Our work indicates that the success of the Onboarding program is largely dependent upon the ability of HR to make a compelling case to senior management about the importance of the initiative. We further observe that when that case includes metrics, awareness of best practices and a systematic process, the interest of senior leaders increases significantly. However, as we will discuss next, these inputs are not always easy to come by, and often prove to be a stumbling block for many programs.

Comprehensive Onboarding initiatives, as opposed to traditional employee orientation programs, are a relatively new concept. The ability of an organization to develop a world-class Onboarding program is in part dependent upon knowledge about what the best-in-class are doing. At Kaiser Associates, we synthesize cross-industry bestpractice insights that draw from our primary research, data analysis and benchmarking experience. Moreover, we believe we are the only firm that is approaching the analysis of Onboarding from a true systemwide perspective. In the next section we would like to share with you our point of view on four key areas that we believe need to be addressed in a fully integrated, organization-wide Onboarding initiative. We hope you will find our perspective helpful as you develop plans to increase your new employees time-toproductivity, improve retention rates and differentiate yourself as an employer-of-choice. We welcome the opportunity to discuss with you our perspective on any of these issues at any time.

2007-2009 Kaiser Associates, Inc., All rights reserved.

www.KaiserAssociates.com

PART FOUR

PART FOUR: The Kaiser Perspective

We have spoken about Onboarding and a number of the challenges that organizations face when attempting to implement a program. Suffice it to say that a successful Onboarding initiative requires an organization to shift its perspective from employee orientation programs to a broader vision. What we find particularly interesting is that the most effective programs focus on four key components that impact retention and time-to-productivity. These four program elements are: 1. 2. 3. 4. Early Career Support Cultural Social Administrative

Let us examine each of these in greater detail and discuss why we believe they are crucial to the success of an Onboarding initiative.

Early Career Support

Where is the future of Onboarding? What are the most progressive organizations doing? We believe it is early and effective career support. It is becoming apparent that the quality of early career support dramatically impacts both turnover and how the organization is viewed as an employer-of-choice. A key objective for any Onboarding program is to give new employees a sense of confidence in their new environment. When individuals believe that they have clarity and control regarding their career direction, confidence soars. Far too often employees feel confused, powerless, and often describe their career path as akin to a small ship at the mercy of a strong uncertain tide. For the most forward-thinking organizations, early career support goes beyond communicating information about career paths. Through a combination of individual mentoring, unique HR initiatives and other programs, new hires are given important tools by which to identify (and develop) the skills and abilities they will need for future assignments. Not surprisingly, early career support is a cutting edge initiative that is only offered by those organizations that are the most passionately committed to the retention and development of their new employees. From a practical perspective, these programs are most often offered on a selective basis, rather than as a part of the broader-based Onboarding initiative. This raises challenges for organizations that wish to offer unique services to segments of their employee population who represent the most potential, without negatively impacting the morale of those not invited to participate. How to balance these often-conflicting issues is a topic that we have studied in depth. We would be happy to share our observations and conclusions with you. One particular benefit of providing early career support is the positive impact it has on the organizations brand. We find this particularly significant for organizations that recruit on-campus. Our conversations with Directors of Career Services suggest that graduates stay in close contact with friends in next classes for the first 12 months after graduation. The conversation that comes up repeatedly is, How does working at the organization really compare to what was communicated to me during the recruiting process? As one would surmise, the answer to this question has a significant impact on the organizations reputation as an employer-of-choice in the next recruiting season. Our evidence suggests that the organizations that incorporate early career support into their Onboarding program realize a significant positive buzz on campus. This is no doubt partially due to the fact that the majority of employers have traditionally offered little early-career support. However, as an increasing number of organizations incorporate early career support programs, this will become a more significant issue. We believe that within five years, those organizations that do not have a reputation for providing high-quality early career support will be at a significant competitive disadvantage on the college and university campuses.

2007-2009 Kaiser Associates, Inc., All rights reserved.

PART FOUR

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Cultural
Every organization has a unique culture. The impact this has on an individuals career success is considerable. Although many forward-thinking organizations focus on identifying cultural fit during the recruitment process, far fewer organizations make a concerted effort to orient new employees to the uniqueness of the culture. Far too often new hires are left to figure it out on their own. This is a mistake and accounts for a large percentage of attrition during the crucial first 12 months of employment. What does it mean to proactively orient new employees to the cultural uniqueness of the organization? What are the specific issues that need to be addressed? The answers to these questions depend on the organization first recognizing what makes it unique from a cultural perspective. Is this an environment in which individual initiative is rewarded, or one that places more value on consensus building? Is speed or careful deliberation more highly valued? Is the preferred method of communication email, phone or meetings? How are decisions arrived at? When are employees expected to act on their own? At what point are they expected to communicate their actions and to whom? How does the culture and value system vary between the new hires department vs. the organization overall in which they are working? It is also hugely important to note that from the perspective of a new hire, it is also what makes the environment different from the one that he or she came from which in many cases is university and therefore the culture that defines success is extremely different. The breadth of issues that define the culture range from the seemingly superficial, to the understandably significant. However, we find that most organizations leave it up to the individual to sort out the answers on their own a highly inefficient and costly process. Although many organizations use mentoring as a part of their process for acclimating new hires, what specifically the mentor is supposed to discuss with the new employee is often left to chance. We find that having an agenda in which specific cultural acclimation issues are discussed (and supported by clear and documented summaries) greatly assists in increasing the new hires time-to-productivity and overall satisfaction with the organization.

Social
As an increasing number of employees relocate to accept new positions, they leave behind their established social networks. Its easy to forget how unsettling this can be, and its considerable impact overall employee satisfaction. Many supervisors make the effort to introduce their new hires to others in the organization, and lunches are commonly arranged for the first couple of days. After that, most organized support vanishes. This is an area that deserves more attention through the Onboarding process as Social connections (or lack thereof) have a material impact on new hires. Employees relocating typically seek to establish social networks in two groups: within the organization and in the larger, outside community. Kaisers research has found that the organizations that are most effective in accelerating this transition are those that make an effort to understand the interests and activities of both the employee and their family. They take proactive steps to introduce the new hires to appropriate organizations within the enterprise or the larger community. It is also important to recognize the importance of assisting the trailing spouse or significant other who has also been uprooted from his or her established social network. Specific outreach programs that focus on the unique needs (both socially and professionally) have an extremely positive effect on the adjustment, time-to-productivity and overall job satisfaction levels of new hires. The key point is that the more these programs are structured, rather than left to individual initiative, the greater the benefits to the overall organization. Again these are but a few of the ideas the most effective and progressive Onboarding initiatives are putting into practice.

2007-2009 Kaiser Associates, Inc., All rights reserved.

www.KaiserAssociates.com

PART FOUR

Administrative
Quickly and efficiently enrolling employees in the organizations benefits programs, obtaining security and ID cards, setting up ones workspace, and other administrative matters are an important component of the Onboar ding process. Unfortunately many organizations limit their Onboarding programs to just these administrative activities. There are a wide variety of IT systems available that are designed to assist the administrative aspects of Onboarding. Our analysis, and the experiences of our clients, suggests that the systems vary enormously in sophistication. We would be happy to discuss our observations on the merits of various IT tools with you at any time. If there is one area of Onboarding in which organizations tend to be reasonably proficient, the administrative component is usually it. However, the challenge is not to define the success of the overall Onboarding experience by how successfully organizations handle the purely administrative aspects.

Conclusion
Traditionally, Onboarding has focused on only the first few weeks or months of a new employees experience with an organization. We find that for the majority of organizations the experience that a new employee has in becoming acclimated to the new organization is largely dependent upon HR and the new hires immediate supervisor. While the role of the manager will always be important, the most effective programs are those in which Onboarding is addressed from a system-wide perspective. In order for this to be possible, Onboarding must be endorsed and supported at the very top of the organization. Although we believe that HR should continue to maintain ownership of the program, it cannot be viewed as strictly an HR initiative. We further believe that Onboarding should be held to the same performance standards as any other management program. Clearly for those organizations that wish to create best-in-class Onboarding programs, an awareness of best practices across industries is crucially important. We hope that as you move forward in developing your Onboarding programs you will avail yourself of the opportunity to speak with us about our services in this area. The next section in this report briefly reviews our system for working with organizations. We hope you will find it of interest.

Our work indicates that the success of the Onboarding program is largely dependent upon the ability of HR to make a compelling case to senior management about the importance of the initiative. We further observe that when that case includes metrics, awareness of best practices and a systematic process, the interest of senior management increases significantly.

2007-2009 Kaiser Associates, Inc., All rights reserved.

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PART FIVE

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PART FIVE: The Kaiser System

We have been asked to support clients with the following Onboarding needs: Opportunity Identification Where to focus Onboarding improvement efforts Best Practices Incorporate innovative practices into existing Onboarding structures Solution Design Both for entire programs and individual components Implementation Planning Positioning the enterprise for Onboarding changes Onboarding Integration Link with other HR programs/ systems (recruiting, development, etc.), including incorporating into the lines and functions of the organization Measuring Onboarding Success Snap-shot as well as on-going measurement programs
Over the past three decades, Kaiser Associates has been widely recognized as a leader in providing clients with solutions to complex business challenges. Our internationally recognized capabilities in benchmarking and external analysis enable us to bring both cross-industry perspectives and best-practice insights to the challenges of Onboarding. Kaiser continues to build an Onboarding knowledge base without a vested interest in a specific solution, process or tool. Rather, we develop customized solutions for public and private sector clients that draw from the best elements of the current Onboarding programs developed by leading Global 500 companies. Since each client project is customized, the approach we take in supporting clients often varies. However, many projects include the key steps listed below. Additionally, Kaiser has distilled its knowledge base and program design approach into a unique, economical, instructional guide and toolkit, Onboarding In-a-Box. This product is designed for organizations that have the internal team to build and implement a world class Onboarding program but not the requisite experience or insights to do so effectively, or the budget for our traditional, hands-on consulting services.

1 2

Measurement
We assist clients in developing realistic and obtainable goals for their Onboarding initiatives. An important component of this initial step is developing metrics by which the program will be evaluated. Based on previous work, we inform metric identification and selection. Further, we assist you in analyzing current performance against those metrics and the performance of best-in-class organizations to establish a base of comparison.

Diagnosis and Hypothesis Development

Post measurement, we work with our clients to highlight the improvement opportunities related to their Onboarding program. We have found that what determines ultimate success is the ability to dig deep and identify the root cause behind the performance issues. In order to do this we will not only evaluate your current situation but also compare it against the experiences of our other clients to ensure that we are focusing on the key issues that will impact the overall success of your Onboarding program. For issues where resolution options are not clear, we develop hypotheses on what levers need to be pulled in order to develop the most effective solution for your organization.

2007-2009 Kaiser Associates, Inc., All rights reserved.

www.KaiserAssociates.com

PART FIVE

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3 4

Build a fact base

In this step we conduct external research into selected benchmark organizations (e.g., peer/competitor organizations and/or best-in-class) to determine the hows and whys associated with the initial client performance data. At this point we are determining the unique but relevant benchmarks that help explain performance levels. This important step helps determine which learnings and practices are transferable to the client organization and which are not.

Design a Custom Solution

At this step we craft the design of a customized solution that reflects the unique operating structure of the client and is based upon our knowledge of best-inclass solutions. This solution will incorporate opportunities related to each of the four key Onboarding elements (Early Career Support, Cultural, Social and Administrative) and will likely have implications across functions and organizational layers. By utilizing a holistic solution approach, we find that clients are able to leapfrog current best-in-class performers and create a competitive employment advantage with their Onboarding initiative.

Build the Communication and Implementation Plan

The success of any organization-wide initiative will depend in large part on the communication plan. If Onboarding is to be embraced as a strategically imperative initiative it is important that the business case for change is built and that appropriate organizational buy-in is achieved. Based on this realization, Kaiser has worked with clients to help brand their Onboarding initiatives in a similar fashion to other prioritized organizational initiatives (i.e. recruiting, leadership training, etc.). At this stage the pilot program is expanded and timelines and resources levels are developed to support the larger role out. We find that using the RACI framework (Responsible, Accountable, Consulted, Informed) to execute the final deployment plan enhances the ultimate success of the performance improvement initiative.

2007-2009 Kaiser Associates, Inc., All rights reserved.

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KAISER ASSOCIATES, INC.

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About the Organization Development Practice and its Leaders:

Kaiser Associates' Organization Development practice is focused on helping clients align business strategy with processes, resources, structure and the personal objectives and interests of their people. The practice believes that the needs of the enterprise and those of its people are inherently the same: to learn, advance, take calculated risks, and reap the rewards and to uncover fertile ground for growth. However, external and internal forces commonly cause misalignment. Kaiser combines an analytically robust, systemic approach to blueprinting and developing solutions that ensure that an organization's architecture is optimized to support the business strategy and deliver necessary results. Mark Stein is Senior Vice President at Kaiser Associates and coleads Kaisers Organization Development practice. He has over 15 years of consulting experience and holds a B.S. in Business from the George Washington University. You can reach Mark by calling (202) 454-2060 or emailing him at mstein@kaiserassociates.com. Lilith Christiansen is a Vice President at Kaiser Associates and coleads the firms Organization Development practice. She has 15 years of consulting experience and holds a B.S. from the University of Virginia and an M.B.A from the Wharton School of Business at the University of Pennsylvania. You can reach Lilith by calling (202) 454-2063 or emailing her at lchristiansen@kaiserassociates.com.

About Kaiser Associates:

Kaiser Associates is a global strategy-consulting boutique with over 28 years of experience helping organizations gain and sustain competitive advantage. We are unique among leading consulting firms in our ability to offer clients fact-based insights and advice based on external learnings. Our powerful research and analysis capabilities offer clients penetrating insights into their customers/channels, their competitors, their industry, as well as the best practices employed by peer organizations and the best-in-class. You can learn more about Kaiser Associates by visiting us at www.KaiserAssociates.com.

lchristiansen@kaiserassociates.com

CONTACT US
Kaiser Associates, Inc.
North America Practice Headquarters 1747 Pennsylvania Avenue, NW Ninth Floor Washington, DC 20006 (202) 454-2000

www.KaiserAssociates.com

2007-2009 Kaiser Associates, Inc., All rights reserved.