Enterprise behavior: Reduce the cost of employee onboarding

July 12, 2018

Onboarding new employees can be an unexpected drain on your profits. In addition to standard recruitment costs, there are hidden costs including the time supervisors (and the new employee) spend on on-the-job training, doing mandatory paperwork, deferred productivity while the new hire gets up to speed, and costs of more formal training if needed. Then there are the costs of materials such as card keys, branded clothes or uniforms, and software licenses. These costs add up, and according to some experts, can cost an average of $4,000 per hire. If the new hire leaves before staying a full year, those costs are lost. With a little organization and research, you can reduce your onboarding expenses: Here are 9 strategies to get you started:

1. Promote from within.

Managers need a high level of institutional knowledge to be successful. Replacing and training lower-level employees, on the other hand, is often easier and more cost effective. When there’s a vacancy, consider moving up someone already entrenched in the business and brand and work to onboard an entry-level position.

2. Schedule “face-time.”

Some researchers estimate that interruptions and information overload cost companies 28 billion wasted hours a year. New hires have a lot of questions, and the constant interruptions really add up to lost productivity for the whole team. One way to respond adequately to questions without letting them hijack the team is to schedule regular check-ins. Employees can save their questions or concerns until their scheduled meeting instead of interrupting your work flow constantly.

3. Set up mentors.

Break up the task of onboarding a new employee by arranging mentors in specific activities. Then schedule time with these mentors when the mentor is likely to be in a slower period. This helps make their “downtime” more productive and onboards your new employee faster. It also helps them establish a network of specialists they can interface with as they grow into their role.

4. Combine start dates.

When possible, have new hires start at the same time. It’s a simple idea, but often overlooked. You’ll get more value out of the time you spend training by training multiple employees at once.

5. Take advantage of free tutorials.

Some training courses are available for free. For example, customer service tutorials and sexual harassment prevention workshops may be readily available on on YouTube. Other training may be available for free through your local library, sometimes using outside sources like Also ask your vendors about their resources. Clover, for example, has free support for learning the most common tasks employees perform on Clover devices.

6. Create your own tutorials, checklists, and other training.

If you find that you have high turnover at low-level jobs, think about creating self-guided tutorials for entry-level employees that can be used anytime someone new joins the team. Work on making them fun and personal so that the process isn’t too dry. Tutorials about your brand can be filmed on your cell phone or laptop. Or you can use screencasting tools to create tutorials that require you to demonstrate specific uses of software.

7. Streamline and automate your training.

Once you have a good sense of what you need new hires to learn, it’s important to organize the materials. What should new hires know before stepping out onto the floor? What topics, such as safety and security, should be prioritized? Who are the best people to train them? Will you spend the entire first day training, or will you break it up over a week? If you’re splitting the task of training, provide your trainers with checklists of topics you want them to cover.

8. Offer an employee referral program.

Got great talent? Chances are, your best employees know others who might be fantastic new hires. Having a referral program helps cut recruitment costs, motivates employees to make the workplace more fun, and incentivizes them to onboard new hires well. (They don’t get paid until the new hire reaches a specified anniversary.)

9. Retain your best talent.

This isn’t an onboarding tip per se, but it’s important to remember that if you do a good job retaining talent, you don’t need to spend as much on onboarding. According to research, the average separation rate for retail is 59% and fast food is even higher at 100%. Some estimates put restaurant separation rates at 150%. That means if the restaurant has 20 employees, they can expect to have to hire 30 in a one-year period due to employee departures. Keeping employees happy can really save you money in the long term and reduce your recruiting/onboarding costs.

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