Last time I posted about Onboarding. This is the process of taking a new employee and integrating them into your business. Many business owners that I talk to think this sounds like a lot of overhead. To me, it is simple expediency. To that end, I want to provide a couple of pieces of context around this.
First, is your Brand. If you look back through my posts, you will find a significant number of them that deal with Branding a Smaller Business. Large Enterprises spend a lot of money on Branding. Smaller Businesses need to rely on how well they execute their Products and Services. Think about going to a fine restaurant and having a great meal. Now imagine that meal coming with terrible service. Would you go back? What would you think about that Business. Your employees are likely to be your front line to your customers and prospects. You need them to represent your Brand to the outside world. Is investing time in people post-hire to help them add to your Brand seem like a good investment in that context? I hope so.
Second, is the cost of recruiting and hiring the right people. It takes a long time to get new people to come on board. It will take more time to integrate them to be effective in their new role. That time is a resource expenditure just like cash. And hiring probably had some cash expenses as well. By having lots of voluntary turnover (the term that means that people leave on their own), you are spending time hiring. Assuming those positions are productive and producing money for you, then by having them open you are losing momentum in what you are doing. Plus, you are spending more time and more money in recruiting people to replace those that left.
Third, is based on what I call the 3Ps of Management: Products, Processes and People. Products are what you are selling today. They drive today’s revenue. But for many companies, they will change over time and be replaced by other products. Processes are the way you do business. As most of you know, it costs more money to operate a business each year. There are raises, rent increases, insurance price increases and other increases in general. When I was at AFC, we used to estimate it was 7% per year. That means that you need to generate 7% more Gross Margin (the direct profit on goods sold) to keep the same level of profit. That is without hiring or expanding. Just doing what you are doing. So, you need to constantly update your business processes to be more efficient. Finally, there are People. When it comes to making new Business Processes and creating new Products, they are the folks that are going to do it. It means that in the long term the vitality of any company is the People. You want to hire, retain and grow great people.
Given these motiviations, does it make sense to pay attention to your new employees and make sure that they become productive and happy as soon as possible? I hope so.
Have a great day!
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