Recruiting great talent is no easy task. Research shows that replacing talent can cost as much as double annual salary. Since it can take a lot to bring the right employees into your organization, you want to keep them around for as long as possible. Just as businesses know that it's more cost-effective to market to existing customers than acquire new ones, maximizing talent retention can be a major gain.
Although it may not be their industry, any business can learn a lot about employee retention from the Software as a Service (SaaS) industry. While SaaS is known for its high margins, one of the challenges this industry faces is customer churn. Not only do SaaS businesses need to bring in leads and then convert them to customers, but they need customers to actively use the software. If someone isn't using the software and getting value out of it on a consistent basis, they're very likely to cancel their subscription.
One of the most effective ways SaaS businesses have found to retain and engage customers is through onboarding. Since there's often an initial hurdle to getting started with a new software product, more SaaS businesses are investing resources to walk new customers through this initial process. In addition to this initial onboarding, many SaaS businesses have added features to their software that allow them to easily engage with customers if they start noticing a lack of activity.
Both of these strategies directly relate to how all businesses should handle employee onboarding. When a new employee arrives for their first day, they shouldn't feel like they're stumbling around and trying to find their place. Instead, steps should be taken to ensure things like job duties and responsibilities are made crystal clear. Social interactions are also key.
While the first day of employment is a significant milestone, employee onboarding should go well beyond that date. The reason that onboarding should be viewed as a continuous process is research has found that new hires may take as long as six months to decide whether or not they feel a long-term commitment to a new company.
Because a formal onboarding program means that employees are 58% more likely to stay with a company for at least three years, creating this type of program is a very worthwhile investment. The first day of onboarding should focus on setting expectations and introducing objectives. Then during the first month, training should be prioritized, as well as periodic check-ins about an employee's happiness, engagement and comfort. In the following five months, things like pairing employees with a mentor can be highly effective forms of ongoing onboarding.
By taking the time to figure out what will work best for a specific company and its culture, HR departments can greatly increase retention and engagement among key talent.
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