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Why is Onboarding so Important

So you’ve finally found the perfect candidate to fill that role. You’ve spent countless hours reviewing resumes, conducting interviews, and narrowed it down to the person you feel confident is THE ONE.  All you have to do now is sit back and let them do them thing, right?  Wrong.  Now you need a plan on how to get them started, trained, and acclimated to the company, otherwise known as onboarding.

Why is proper onboarding so important? Because turnover is expensive—astronomically so. It can cost 30% to 50% of the person’s annual salary to replace an entry-level employee and for mid and senior-level employees it can reach 150% - 400% respectively. Every time an employee leaves, it impacts morale and productivity suffers. That’s why it’s critical for organizations to work on keeping their employees, and this can start by providing a well-designed onboarding process.

Studies have shown that a new hire’s decision to stay with a company long-term is made within the first six months of employment. That requires a great first impression! New hires are expensive. You want to protect your recruitment investment. An onboarding process that lasts more than one day or that begins even before the first day with engagement and crucial information can do that. Relying on a one-day HR orientation, a series of unrelated administrative tasks, and a folder of forms doesn’t work. Especially with the new generation of workers who expect speed and automation.

An onboarding program that delivers in all the right ways will accomplish these goals:

Reduces Time-to-Productivity:
Proper onboarding gets employees up to speed much more quickly, so that within weeks, it’s hard to tell the difference between new and seasoned hires.

Reduces Stress:
Being a new employee can cause a significant amount of anxiety. By giving your new employee all the information they need to know before they need to know it, it can reduce the negative affect that happens for new employees and makes it possible for them to concentrate on their jobs rather than their anxiety.

Reduces Turnover:
Turnover is very costly. Strong onboarding programs assure new employees that they are valued and have all the necessary tools to succeed. This is the time to show your employees that you care about them so they are less likely to look for work elsewhere. 

Develops Job Knowledge:
While showing your new employee the mission, vision, values, and culture of the organization, proper onboarding ensures that new employees fully understand their roles and how they relate to the organization’s big picture operations. New employees learn what’s expected, how to deliver, and how and when they will be evaluated. Upfront education prevents damaging mistakes down the road. By conducting a great onboarding process, surveys have found that there is a better assimilation of new hires into company culture, higher time-to-productivity ratios, and higher employee engagement.  Companies that are putting forth the effort in the beginning are finding that they retain new hires longer, they are able to get to a desired level of performance quickly, and managers are satisfied with the process and the hires. This has also minimized the disruption to the rest of the organization and strategically build trust between new and seasoned hires.

Many organizations start onboarding prior to Day 1 by finding ways to welcome their new hires and allows for them to deal with the administrative matters in advance. Several organization have a senior leader actively involved in the process.  This can be as simple as a department head sending a personal note to each new hire or having a high level employee do a presentation for a group of new employees. While there are many different ways to measure employee engagement, it is critical to asses new hire satisfaction with organization-wide and group specific onboarding initiatives at 30 days, six months, and one year. It would also be a good idea to measure the percentage of your hiring managers who are satisfied with the onboarding process and the preparedness of their new hire.  You can create surveys to generate insights from both new hires and their managers.

Retention of new hires is so important, since employees who transition through a consistent onboarding program engage more and with greater intensity. Likewise, they demonstrate they are less likely to quit. Unlike new hires who get thrown into a job cold.

Most new hires have already bought into your company story and they want to take part in what you’re doing. Onboarding takes these enthusiastic new people and rapidly engages and connects them to the life of the organization. That engagement leads to employee commitment. And their commitment leads to accomplishment.

Now if you are having any questions about the importance of properly onboarding employees, here are some numbers to really bring this home:

Retention

  • 69% of employees are more likely to stay with a company for three years if they experienced great onboarding (source)
  • Up to 20% of employee turnover happens in the first 45 days (source)
  • New employees who went through a structured onboarding program were 58% more likely to be with the organization after three years (source)
  • Organizations with a standard onboarding process experience 50% greater new hire retention (source)

Turnover

  • The average cost of replacing an employee is between 16 and 20% of that employee’s salary (source)
  • The organizational costs of employee turnover are estimated to range between 100% and 300% of the replaced employee’s salary (source)
  • Nearly 33% of new hires look for a new job within their first six months on the job (source)
  • 23% of new hires turnover before their first anniversary (source)

Performance and Productivity

  • 60% of companies fail to set milestones or goals for new hires (source)
  • It typically takes eight months for a newly hired employee to reach full productivity (source)
  • Best-in-class companies are 35% more likely to begin onboarding processes before day one (source)
  • Only 37% of companies extend their onboarding programs beyond the first month (source)
  • Best-in-Class businesses are 2.5 times more likely to their new hires’ progress in the onboarding process (source)
  • 22% of companies have no formal onboarding program (source)
  • In the U.S. and U.K., an estimated $37 billion is spent annually to keep unproductive employees who don’t understand their job (source)
  • Organizations with a standard onboarding process experience 50% greater new hire productivity (source)
  • Employees whose companies have longer onboarding programs gain full proficiency 34% faster than those in the shortest programs (source)
  • Manager satisfaction increases by 20% when their employees have formal onboarding training (source)

 

Need Help?

If you need assistance setting up a top-notch Onboarding process, reach out to Faces HCM for assistance.  We have extensive experience creating successful Onboarding process for our clients.  We can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it..

Workplace issues in the Cannabis Industry

As cannabis continues to grow and expand to additional states, it is attracting talented people from several types of fields, backgrounds, and ages.  It is also a path that many millennials are following in the hopes of finding a relaxed and fun-filled environment.  However, many employees are leaving within the first year for assorted reasons.  

While there are many employees that have come from corporate positions into this industry, they don’t appear to be bringing the policies and structure with them.  This is causing dissent and unhappiness among the employees and increasing turnover dramatically.

The Work and Well-being in the Colorado cannabis industry project was conducted by researchers at Colorado State University and the Center for Health, Work & Environment at the Colorado School of Public Health in conjunction with partners in the Colorado cannabis industry.  This report found that:

  • 23% of workers never received health and safety training on the job 
  • Some workers had experienced a number of symptoms after handling pesticides on the job, with the top three symptoms being skin irritation, headache/dizziness, and eye irritation 
  • Workers generally viewed their health as only “fair”, and reported a number of general health symptoms such as back pain; discomfort in hands, wrists, and fingers; and knee pain.  
  • Workers felt some stigma from society for the work that they do. 
  • Workers reported feeling a little burned out and some wanted to leave their jobs 

After conducting this project, they were able to offer some recommendations:

  • There was alarming variability in the quantity and quality of health and safety training workers received 
  • Cannabis industry businesses should develop, implement, and repeatedly evaluate formal health and safety training programs for all cannabis industry workers. 
  • Recommended training topics such as: Unique cannabis industry hazards, such as those involved with growing, cultivating, trimming, and selling cannabis as well as General health and safety training programs including ergonomics, emergency preparedness, and the proper use of PPE (Personal Protective Equipment) 
  • Cannabis industry businesses are encouraged to consider local and diverse populations when recruiting and hiring employees, and to become involved with cannabis industry sustainability 
  • Cannabis industry businesses, leaders, and managers are also encouraged to provide support to workers, such as autonomy on the job, formal employee support systems, and emphasizing the purpose for working in the cannabis industry 
  • Cannabis industry businesses should establish formal policies and training programs regarding cannabis use before shifts, on-the-job and while driving motor vehicles at work

Other recommendations include offering benefits, providing flexible scheduling, and career paths.  Employees should have clear expectations of what their job duties are and then be given the opportunities to continue learning more and taking on new responsibilities.  

While these issues aren’t unique to the cannabis industry, with the growth that is occurring in this industry, leaders should make immediate changes to keep their employees engaged.  Supervisors and managers are tasked with creating an environment that is appealing to the multigenerational and diverse workforce and when they don’t, employee’s leave.  As the saying goes, people don't quit jobs, they quit managers.  In such a highly regulated industry, in which businesses are responsible for tracking plants and compliance with Byzantine restrictions, they forget it's also important to take proper care of the people who work for the company.

Other potential issues include businesses not being compliant.  There are expensive consequences when employees are misclassified or paid incorrectly.  Policies and procedures should be in place and followed to ensure compliance and consistency.  Working with a Professional Employer Organization (PEO) or an Administrative Services Organization (ASO) can help create these foundations for businesses and provide other HR services that the business may be lacking.  Faces Human Capital Management is an ASO that works with several cannabis related industries and understands the unique challenges of this industry.  They offer a customized partnership with their clients and offer many different work solutions.

Faces HCM at Seattle CannaCon

Faces HCM has been taking in the sights and sounds of Seattle as we take part in the city’s CannaCon expo.

The three-day event is a good rock’s throw from Puget Sound  and is billed as one of the largest marijuana business and culture expos in the world.

There have been some very interesting seminars on a wide range of topics, and thousands of people in attendance.

For our part, it’s been great to meet with new cannabis companies – shout-outs in particular to Brian Yauger at Front Runner and the folks at Uncle Ike’s – and to get the word out about our work.

Faces HCM will be announcing our expansion into Washington State shortly.

We couldn’t be more pleased with what we’ve been seeing at this event and elsewhere, when it comes to the expansion of the legal cannabis industry.

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