Why Is Onboarding So Important? These Stats Will Tell You

Why Is Onboarding So Important? These Stats Will Tell You

Image courtesy John Benson | Flickr

Onboarding may have become a popular HR buzzword in recent years, but the concept it describes is far more important than just another fad. Essentially, onboarding refers to the effective integration of a new employee into your organization. This might sound a little like orientation, but onboarding is more complex than simply filling out some forms and getting a tour of the office on the first day. Instead, it’s a comprehensive, extended process that helps new employees begin their jobs on the right foot and stay engaged throughout their employment. Companies with a well thought-out onboarding program reduce their risk of employee turnover and low employee productivity.

To get a true sense of how critical a good onboarding process is to a company’s organizational well-being, and how much benefit it can bring to employees and organizations alike, check out these key statistics:


Every year, 25% of the working population of the United States experiences a career transition, according to the Society for Human Resource Management (SHRM).


Half a million is the estimated number of managers who take on new roles every year within Fortune 500 companies. Overall, managers typically start new jobs every two to four years.


A remarkable half of all hourly workers will leave a new job within the first 120 days of employment. Furthermore, up to 20% of this turnover occurs within the even shorter timeframe of the first 45 days on the job.


onboarding meeting
Image courtesy UBC Learning Commons | Flickr

A CBS MoneyWatch report reveals that when businesses need to replace an employee who has left the company, it costs an average of 16-20% of that employee’s salary. This percentage grows even higher for upper management and executive positions. When it comes to the overall organizational costs of turnover, the figure is higher still: 100-300% of the replaced employee’s salary, according to data from SHRM.

$37 billion

The estimated amount spent by companies in the US and the UK to retain unproductive employees who are not fully competent in their jobs.


SHRM reports that the likelihood of new employees remaining at a company for three years increases by 69% if those employees experienced a positive and well-structured onboarding program. Likewise, new employees are 58% more likely to remain at a company for more than three years if they went through an effective onboarding process.

8-12 months

onboarding meeting
Image courtesy Jeffrey Zeldman | Flickr

It takes a newly hired employee, on average, anywhere from eight to 12 months to achieve the same level of job proficiency as their tenured colleagues. However, according to a recent Allied Workforce Mobility Survey, 27% of companies say that new hires take over a year to reach top productivity, while 25% say it takes less than three months. Most surprisingly, 58% of companies surveyed said that they simply do not measure new hire productivity.

50% and 54%

A standard onboarding process helps organizations increase their new hire retention by 50% and their new hire productivity by 54%. Furthermore, when employees receive formal onboarding training, manager satisfaction also increases by 20%.

77% and 49%

Of new hires who achieved their first performance milestone, 77% underwent formal onboarding training; of new hires who did not achieve initial milestones, 49% did not have formal onboarding training.

25% and 60%

One-quarter of companies report that their onboarding process does not include any training programs or initiatives. Furthermore, 60% of companies say that they do not set any milestones or goals for new hires. These two figures contribute to employee confusion and a lack of care and attention in their performance.


The amount spent by 35% of companies on onboarding, as indicated by the Allied Workforce Mobility Survey. In other words, more than a third of employers do not consider employee integration and retention to be a worthwhile investment. By contrast, companies that are considered to be best-in-class in terms of onboarding practices budget an average of nearly $180,000 for onboarding programs.

2 months

The maximum length of time the majority of companies devote to onboarding. This is despite the fact that employees at companies with longer or more extensive onboarding programs achieve full job proficiency 34% faster than employees who undergo the shortest onboarding processes.

30%, 50%, and 20%

These are the respective percentages of organizations working at the level of passive onboarding (30%), high potential onboarding (50%), and proactive onboarding (20%). Passive onboarding indicates little to no investment or effort in a cohesive onboarding process; the attitude here is that onboarding simply consists of checking a series of unrelated tasks off a list. High potential onboarding indicates that there is still some way to go in establishing a systematic, organization-wide onboarding process, but some mechanisms are in place and are being utilized effectively. Proactive onboarding is the “best practice” level of onboarding, in which a comprehensive and systematically organized process has been created using a strategic HR management approach.


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