In spite of economic uncertainty, SMBs (Small & Midsize Businesses) have a positive outlook for the coming years but optimizing and streamlining operations still remains a strong priority as costs continue to rise. Adding to the challenges for SMBs is a very tight and contracting labor market, especially for frontline and entry level type positions. The irony is that when these lower paying, possibly customer facing, vacancies go unfilled, gaps in service and quality will always suffer. The ultimate challenge in hiring is retention as turnover is costly for SMBs. According to The Society for Human Resource Management, the average cost of hiring a new employee is $4700 and does not include any compensation, benefits or the time required in advertising, screening and interviewing potential candidates. Reducing and eliminating new hire attrition is a critical highlight for SMBs and having strategies for retention will save turnover costs as well as increase productivity through skilled and motivated new hires.
Defining an On-boarding Strategy
Day one can be a very disorienting experience for newly hired employees and can set the tone, either positive or negative, of the individual’s career path at the business. Some common events that can derail a person’s first day are:
- Unsure of what the expectations are
- Unsure of what their actual duties are
- Lack of a clear training agenda
- Unsure of who to report to or where to find support / answers
The time up to and including day one are critical in establishing rapport both ways and SMBs that take the time to define the business’s on-boarding strategy can see much smoother transitions and longer lasting new hires.Conveying expectations and delivering measured but key information after an offer is accepted is a strategic way to ramp up to the candidate’s first day. This type of communication will also set a positive tone in the early stages of the employer / employee relationship.
Focusing on the Individual
On-boarding new hires can be divided into stages that can shape the individuals work habits and overall productivity and motivation.
Stage 1 – Early Commitment – This stage occurs just after an offer is accepted. That time is usually reserved for handling employee paperwork, scheduling and other housekeeping type tasks. This is a time when owners and managers can communicate directly with the new hire and build excitement towards the opportunity.
Stage 2 – Team Players – During day one and shortly after is when the individual can ‘gel’ with the existing team. Introductions, training and projects completed with more seasoned employees can help drive ‘team’ culture home to the new hire. It is also a good opportunity for leadership to evaluate team strengths of the individual.
Stage 3 – Confidence – New hires generally lack confidence when they are unclear of their duties or ability. Shortly after their first day, it is critical for trainers and supervisors to focus on the individual’s confidence level and focus on initiatives that help build that momentum. Small solo projects and individual involvement in operations can help build that confidence. Ongoing positive recognition is also a confidence driver in new hires.
Beyond Day One
New hires are in their own evaluation mode when starting out in a new job and investing in their development over time can help elevate the employee’s experience. Lack of support and training during those first few critical weeks is a common cause of turnover and it would be natural for a new hire to need more support than a seasoned veteran. After any evaluation periods are completed, a well defined training plan can get new employees excited about their role in the business, increasing enthusiasm and motivation. Communicating where support and resources are available is another key component to a positive and efficient on-boarding process. New hires that go into the job with a certain degree of comfort are more likely to succeed and master the necessary skills to perform at a high level. While on-boarding and transitions are within a set time frame in the employee’s career, ongoing development and support can directly impact the longevity of the employee’s tenure.
The Bottom Line
The entire hiring process is challenging in this business environment, especially for SMBs that must control costs and create efficiencies wherever possible. Turnover of newly hired staff is very costly as vacancies on frontline teams will negatively impact service, quality and eventually, profitability. Starting new hires off on the right foot reduces instances of attrition and the costs associated with turnover and hiring. SMB owners and managers that adopt and utilize strategies for retention from day one will see those cost benefits as well as increased productivity and longevity from the new team members. SMBs in particular can greatly benefit from having well seasoned and highly skilled long term employees that have developed a sense of ownership of the business. Longer term hires are an essential factor in business growth profitability in the realm of SMBs.