All On Board: How Companies Use First-Year Development

Image courtesy of Flickr/Michael Cornelius

Of all the jargon used by business professionals, the term “onboarding” is perhaps the least egregious. Unlike “architecting” or “synergies,” onboarding describes with relative clarity what it implies without turning the word into something few outside of business can understand.

Onboarding, also known as organizational socialization, is the process of assimilating new hires to acquire the necessary skills, knowledge and behaviors to become effective employees. According to research published in the International Journal of Selection and Assessment, 93 percent of companies are estimated to have a formal onboarding program.

Making sure new hires have a productive path to performance is vital. A study by employee assessment consultancy Cognisco Group found businesses lose roughly $37 billion a year as a result of employees not understanding their jobs. Onboarding practices also tend to shift with the economy. When the economy hits a low, so do the dollars allocated to corporate learning and development, the area where onboarding typically sits.

“If you’re a CEO and you’re losing money fast, this [learning and development] was historically the first place they looked to cut,” said PJ Neal, product director of leadership programs at Harvard Business Publishing. “But today organizations are starting torethink that approach and are looking to invest in those first-time employees again.”

How these investments pan out varies. One firm’s way of onboarding may not be equally effective for another.

Whatever approach a company takes, it’s critical to have some strategy in place. According to business research firm Aberdeen Group Inc., 90 percent of new hires make their decision to stay at a company within the first six months of employment. What’s more, Society for Human Resource Management research shows roughly 1 in 25 people leave a job because of a poor onboarding program.

Kicking Into Gear

Get Ready for Gen Y

For today’s talent managers, designing an onboarding program likely means analyzing the preferences of one particular group: millennials.

Projected to make up roughly half of the U.S.  workforce by 2020, millennials are storming intoorganizations, bringing new work styles and values. Professional services firm PricewaterhouseCoopers, for instance, says it recruits an average of 8,000 millennial college graduates a year in the United States and about 25,000 worldwide.

In building its current first-year onboarding program, Pricewaterhouse collaborated with researchers from the University of California at Berkeley and the London Business School on a two-year study that included 44,000 of those born roughly between 1980 and 1995.

“What we found is that, more than anything, millennials really thrive on feedback,” said Joanne Veech, Pricewaterhouse’s global talent director of onboarding and talent transitions. “They don’t just want that once-a-year review. They want to know how they’re doing and what they can do better all the time.” 

With this research in mind, Pricewaterhouse has developed a formal onboarding framework that starts at offer acceptance and runs through an employee’s first six months on the job. The program consists of three stages — prepare, arrive and perform — and incorporates feedback and face-to-face communication, said Anne Donovan, the firm’s U.S. human capital transformation leader.

“We have changed the way we develop our people and give feedback by focusing more on the conversation rather than on the paperwork,” Donovan said. “We’ve shifted to in-the-moment feedback and real-time development to meet the needs of millennials.”

In addition to face time and feedback, Pricewaterhouse’s millennial research also pointed to another burgeoning need when onboarding today’s worker: flexibility. 

To this end, the firm has incorporated flexibility as a work style for all workers. “From day one, we offer a flexible culture,” Donovan said. In fact, the firm encourages nonmillennial managers to model work-life flexibility. “Our studies have shown everyone wants flexibility,” Veech added.  

Beyond the desire for flexibility, another distinguishing attribute of today’s early tenure workers is to have clear expectations. When it comes to career trajectory, millennials want to know they have ample opportunity for advancement.

“A big part of our onboarding process is helping them see how their time with us will be maximized,” Veech said. “Our new hires receive an onboarding plan with what we expect them to accomplish over their first six months. We cover everything from our purpose, our culture and values, ethics and technology training to setting up their networks and meeting with their coach.” 

Concocting a Strategy

Firms Mix Formal, Informal Approaches

Most experts say there are two basic forms of onboarding: formal and informal.

Informal onboarding occurs in every company. New hires enter the company, and by the very nature of meeting co-workers, learning cultural norms and trying to learn the job, the employee becomes integrated in such skills and behaviors over time.

Formal onboarding, on the other hand, is more deliberate. It usually comes in the form of a set of coordinated policies, activities and procedures that aim to help early tenure employees adjust to their new environment.

Talya Bauer, a professor of management at Portland State University with a specialty in organizational design, cites four distinct components as essential to any formal onboarding effort.

Compliance: The most basic level of onboarding. It encompasses teaching employees basic legal and policy-related rules.

Clarification: This level provides role-specific clarity. Do they understand their new job?

Culture: This part makes sure early tenure employees receive training in both formal and informal norms.

Connection: This level helps new hires establish interpersonal relationships and “information networks” that will help them be successful.

Jenny Dearborn, senior vice president and chief learning officer at business software giant SAP, said the company’s onboarding strategy aims to combine these elements by focusing on skill-building and community. The company also makes sure its onboarding is role-specific. “Whether you’re coming to us in sales, HR or service, onboarding will look different,” Dearborn said.

For example, SAP’s early tenure employees who will be working in the company’s sales functions come together as one cohort when they’re hired and go through a programtogether. “Because of the global nature of SAP in our first-year onboarding program, these sales people are assigned to have different field experiences all over the world,” Dearborn said.

These experiences include classroom training, deal-making, product demonstrations and presentations — all things SAP’s sales staff is expected to do once it’s fully operational. “Then when new hires graduate from that first-year academy,” Dearborn said, “we’ve also had the chance to observe them over the course of the year and have insight into who will excel in which specific roles.”

While onboarding is commonly thought of as a practice that begins once new employees are “in the door,” many employers begin the process well beforehand. SAP refers to this practice as “Day Zero training.”

“For most roles [it’s] once we get the signed offer letter through SAP’s ‘Pre-boarding Portal,’ which all new hires have access to,” Dearborn said. There, the new hires are able to access webinars, videos, online courses, infographics and presentations.

The goal of Day Zero training is to have new hires educated in SAP’s culture before their first day. “The Day Zero content is really about getting familiar with the company, its products and services, corporate culture and history, business model and industries,” Dearborn said.

Management consulting firm Booz Allen Hamilton Inc. also makes efforts to onboard employees before their first day. The firm’s first-year onboarding program begins the moment an employee accepts an offer. “We don’t look at onboarding as an event or a day or a set of resources,” said Betty Thompson, the company’s executive vice president and chief personnel officer. “It’s an ongoing focus to help those new hires connect with our firm and form an immediate affiliation as quickly as possible.”

Booz Allen’s onboarding begins with a series of emails that new hires receive prior to their start date. These emails are designed to prompt new hires to fill out paperwork electronically.

For formal onboarding, Booz Allen has implemented “Next,” a two-day, role-agnostic program that nearly all hires go through after starting with the firm. During the two days, employees participate in cultural immersion exercises that focus on Booz’s values and mission. “There’s this common experience that everyone at every level has before they go out and interact with clients,” Thompson said. 

Afterward, new hires return to their local offices for more role-specific onboarding. “This is where they might get an overview of their client, get to know the client team, they’ll get a new-hire sponsor, and ultimately they’ll continue to get grounding in those broader organizational values,” Thompson said.  

This local onboarding is seen as particularly important for early tenure employees. “Local onboarding helps them build their network within the firm and understand our functional communities and project teams,” Thompson said. “We’re a consulting business, so when contracts end having that network to tap for your next opportunity or a mentor to help you in a skill you’re trying to develop is key.”

Thompson said the new hire sponsors are critical to the initial onboarding phase. As the person tasked with making sure the new hire is set up for success, the sponsor is provided with access to an internal website with templates and best practices for interacting with the new hire.

Career managers and sponsors are also the first individuals to meet with new hires after they complete orientation, Thompson said. Sponsors are expected to meet at least monthly for the first six months of a new hire’s tenure, with more frequent meetings within the first 90 days. The new hire completes more formal feedback meetings with the career manager after completion of orientation.

Thompson offered an example set of check-in questions likely to come up during these conversations: How is your onboarding experience going so far? What concerns or questions do you have? What is your typical schedule and what assignments are you working on? What questions do you have about the firm’s operating model? Do you know your billed hours target?

Measuring Onboarding

Surveys Show Success

Measuring onboarding success has become more robust thanks to advances in HR technology. Things like talentattraction, attrition, engagement, satisfaction and time-to-productivity are all metrics talent managers look at when considering the effectiveness of their company’s onboarding.

Still, onboarding measurement may vary depending on the nature of an organization’s business. For Booz Allen, a consultancy that tracks billable hours, employee time-to-productivity is how fast a new hire becomes fully operational as a billable consultant. “Because our staff are billable, we look at how quickly we’re getting them to billable status. Is our onboarding getting them there faster?” Thompson said.

Booz Allen is especially confident in the success of its onboarding program because it doesn’t require all its employees to go through it. For instance, if a new hire is needed on a crucial project right away, a manager may request that the  employee skip formal onboarding. This helps the company track the success for the employees who do go through it against those who don’t, in turn providing a more controlled measurement figure for the program.

“About 10 percent of our employees receive this waiver and we track their progress over time with the firm as well,” Thompson said. Unsurprisingly, employees who skip the firm’s formal onboarding tend to have less of an understanding of its culture than those who do participate, Thompson added.

SAP’s Dearborn said she takes data from the company’s learning management system to measure its onboarding success. Employees who participate in SAP’s formal sales onboarding exercises tend to have the most sales and bundled deals, Dearborn said.

When onboarding is measured is another matter. According to Pricewaterhouse’s Veech, measurement begins right away. The firm uses new hire surveys one month into employment and then again six months in, Veech said. “The surveys line up exactly to what we expect our new hires to experience, so it’s easy to pinpoint where we are doing a great job and where we need toput more attention.”

Pricewaterhouse also surveys new hires as part of its people survey each year. According to the latest results, 91 percent of the firm’s new hires in the U.S. report that they intend to stay with the firm for another year.

“Our internal surveys show us that graduates see us as providing the most development opportunities,” Veech said, “and that’s why they’re coming to us.”

To learn more about how to determine if you have an effective onboarding program, read the sidebar that accompanies this special report here.