Recruiters and the budgets that support them are undone when a promising new hire quits after a year on the job. “Organizations pour time and money into recruiting only to see a new employee leave,” says Bob Lavigna, vice president for research at the Partnership for Public Service, a nonprofit organization that works to revitalize the federal government by transforming the way government works.
A substantial study conducted by the partnership and Booz Allen Hamilton in 2008 found that successfully onboarding employees during their first year of service increases engagement, raises retention by as much as 25 percent, improves performance and accelerates the time to full productivity. With salary budgets under pressure from all sides, building a better onboarding process may be the most cost-effective approach to boosting engagement and first-year retention rates.
The partnership and the federal agencies it serves are understandably concerned about attrition. By 2012, federal agencies will lose nearly 530,000 employees, including many in leadership and critical-skills positions. The partnership’s study focuses squarely on optimal onboarding practices designed to engage new employees from the time they accept a job through their first year of service. According to research cited in the report, 90 percent of employees decide within the first six months on the job whether they will stay at an organization or look for a new position.
The report provides a detailed onboarding model based on best practices from the private sector and lessons learned from focus groups with federal employees and interviews with agency managers. The report recommends a strategic yearlong onboarding model to integrate new employees so they gain a sense of commitment to the organization and quickly become effective and productive.
Defining the problem
Within the next five years, about one-third of the federal government’s full-time permanent workforce will leave government, the majority through retirement. Consequently, federal agencies are now waging a recruiting blitz that will continue for years to come.
In fiscal year 2007, the federal government hired more than 195,000 new employees, but high first-year attrition is undermining its massive recruiting programs. First-year attrition for firefighters at the U.S. Forest Service, for example, stands at 26.6 percent nationwide and 46.6 percent in Southern California, the country’s most fire-threatened region.
For every two patent examiners hired at the U.S. Patent and Trademark Office, the agency loses one within five years, with one-third of those leaving within the first year. Patent application backlogs now threaten development efforts across the entire high-tech industry.
For all federal agencies, first-year voluntary turnover between 2003 and 2007 ranged from 10 to 18 percent, a dramatically higher rate than the 3 to 3.5 percent voluntary turnover rate for all federal employees over the same period.
The partnership study found that one key problem in retaining new hires through the critical first year is that many agencies do not provide a comprehensive onboarding process or recognize the key role of managers and supervisors in engaging employees during their first year. At too many organizations, onboarding is reduced to orientation.
The partnership’s yearlong onboarding model incorporates five phases: the period from the acceptance of the job offer to the start date, the employee’s first-day orientation, the first week of employment, the first 90 days and the first year. During each phase, the focus remains squarely on integrating the new employee into the workplace, communicating the goals of the organization and building engagement in the work.
As soon as a candidate accepts the job, human resources staff can begin to coordinate all of the functions involved in onboarding, including IT and security, to put the logistics in place. “Particularly for younger employees, IT has to be ready,” Lavigna notes. HR can communicate with the employee to build excitement about the new position and help the new hire review and complete any necessary paperwork.
The Government Accountability Office now uses an online system to notify appropriate departments in advance of the arrival of a new employee so the parties can prepare IT equipment, establish accounts and ensure that the employee’s office is up to standards. The Office of the Comptroller of Currency sends gift baskets to all new bank examiners—a mission-critical position. At the Department of Homeland Security, automated processes allow new hires to complete all forms before the first day of work.
With logistics in place and paperwork completed, the organization can use the employee’s first day to move beyond transactional issues and focus instead on communicating the organization’s vision and mission. NASA schedules tours of its facilities for new employees to help them fully understand its work and their contribution.
“Orientation is an important element of onboarding, but it is only one element,” Lavigna says. “Some parts of orientation—for example, the involvement of senior management—are very important. But limiting onboarding to orientation is missing the boat.”
The partnership report also notes the importance of reducing the amount of paperwork that typically consumes the first day of employment and recommends that employers establish the technology and policies to complete this work before the start date. Only 18 percent of employers in the private sector use Web-based tools to onboard new employees prior to their start date, according to a survey by Towers Perrin. However, 21 percent report that they plan to implement this practice by the end of 2008, and another 21 percent plan to do so in 2009.
Maintaining the energy created during the first day through the first week is essential, the partnership’s report notes. The key is to provide purposeful work and involve managers and peers in motivating and acculturating new employees. New employees at the Environment Protection Agency work with their managers to develop performance expectations and establish a performance plan during the crucial first week.
New employees should feel fully integrated by the end of the first 90 days, the report states. Managers should monitor performance and provide feedback, review performance objectives and set individual development goals during this period.
For employees, the sense of newness and the accompanying learning curve continue beyond the first 90 days, but few organizations extend onboarding beyond that point. Performance reviews at the six-month and one-year mark, combined with continued support and feedback, can help solidify engagement. The Office of the Comptroller of Currency conducts focus groups with new employees at six-month and one-year intervals to discuss issues related to retention. Employee surveys can also help identify potential retention problems.
Building the business case
“We hear from HR executives that they understand the need for a yearlong onboarding process, but the issue is bringing line managers around,” Lavigna says. To win over line managers, HR executives must build the business case for more extensive onboarding. For line managers, retention is a substantial concern, particularly in the federal government, where heavy retirements threaten operations.
Faster time to productivity and engagement are also important parts of the business case for line managers.
“And they need to understand that their role in the onboarding process is key,” Lavigna says. “Other HR responsibilities have been pushed out to line managers, and the managers appreciate this because it gives them more flexibility. But more extensive onboarding can be difficult to sell if it takes too much time and managers don’t have the resources.”
HR can address this problem by creating systems and providing resources for line managers to make their onboarding efforts more efficient. With the work of so many functions necessary to generate comprehensive onboarding, coordinating and integrating the tasks is a critical part of the process.
“There is not a single solution for the question of who is ultimately responsible for onboarding, but someone must be accountable,” Lavigna notes. “The question is whether HR has the authority to ensure that other players, such as IT and security, are doing what they should. HR generally assumes the role of coordinator, but HR needs the authority to ensure that stakeholders meet their responsibilities.”
Technology can help HR track each player’s work in providing the various elements required. “This is helpful,” Lavigna says. “And it is important for all stakeholders to see their role specified in the onboarding model.”
The report also recommends tracking the success of new onboarding programs against their stated goals by using both operational and strategic metrics. Operational metrics might include the percentage of new employees who have e-mail accounts ready by day one and the percentage who are satisfied with orientation programs.
Organizations can measure success in meeting strategic goals with metrics that monitor the attrition rates and performance of new employees. Strategic metrics also include information on new hires who are not performing up to expectations and whether they have been dealt with appropriately.
“There’s a dearth of strategic metrics,” Lavigna notes. “But the GAO does as much as any agency to try to analyze retention and conduct exit interviews, and it has seen good retention results.”
The Federal Deposit Insurance Corp. has less than an 8 percent failure rate during the first year for bank examiners who are part of a comprehensive training and onboarding program. “Organizations that adopt more strategic onboarding as a longer-term process have better engagement,” Lavigna says.