Why First Impressions Matter: The Impact of Onboarding on Retention
Post-COVID pandemic turnover rates averaged at 21.4% in 2022. In 2024, that figure had fallen to just 10.8%. For Australian employers, this has led to a new focus: retention rather than pure recruitment. And this all starts with the onboarding process. Onboarding is a critical time period. On the one hand, it can create a seamless introduction to the organisation that stays with new hires for years. On the other hand, an unpleasant or disorganised experience could fill them with doubts, damaging your reputation in the process. That’s why today, 70% of HR leaders prioritise employee retention and attraction.
In this article, we explore the role that great onboarding plays and why this strategy is vital to long-term organisational success.
How Does Onboarding Impact Retention?
Effective onboarding increases employee retention by shaping early perceptions of your organisation. These perceptions have a long-term impact, with 52% of employers experiencing improved retention rates after implementing strong onboarding practices.
Forbes employment data also shows that applicants who stay for at least 90 days are more likely to remain with the company for at least a year!
On the flip side, 6 out of 10 Australian managers have had an employee leave within their probation period. The reason? 43% point to poor onboarding.
These practices are particularly damaging in sectors like health and aged care, where workforce shortages are already at dangerous levels. Providers aren’t able to deliver the high-quality care that’s necessary, which could ultimately cost lives.
Why is Effective Onboarding So Important to Retention?
As explained by Ryan Ray, General Manager of Culture and Capability at charity UnitingCare Queensland:
“At a time when high-quality talent is scarce, a highly professional first impression, speed in making the offer, and a positive employee experience are essential.”
But why is this? A positive onboarding experience with effective training ensures new hires can immediately step up to their responsibilities. Improved time-to-productivity relieves some of the pressure placed on existing team members, meaning they’re less likely to feel burnt out and leave the organisation.
Beyond practicalities, good onboarding also impacts team morale. HR research highlights that happily onboarded workers are more productive, increasing employee performance by up to 70%. Continual high-quality performance creates a thriving, productive culture that influences both new hires and loyal team members. And the long-term effects speak for themselves:
Lower Costs
Replacing an employee is estimated to cost between 50% and 200% of their annual salary. But with great onboarding programmes that aid retention, replacement isn’t necessary. The saved capital can be used to optimise the process and further invest in training and development.
Valuable Knowledge Retention
Retention isn’t just about reducing hiring expenses. Keeping employees in the business also means keeping everything they’ve learned and the knowledge they contribute, helping to minimise disruptions and maintain productivity.
A continual smooth service delivery is particularly paramount in sensitive industries like health and aged care.
Great Reputation
Employees who have experienced poor onboarding often share their experiences through online platforms like LinkedIn or Glassdoor. With 77% of candidates considering a company’s culture before applying for a job, this can deter the most employable candidates from joining your ranks. A good onboarding experience can instead help you build a reputation as an excellent employer and attract those first-choice candidates.
How to Create Lasting First Impressions with Effective Onboarding
Nearly 64% of employers feel they can now better manage employee turnover — the highest levels of confidence in four years. Alongside more flexible working arrangements, employee wellbeing support, and improved career development opportunities, solid onboarding plays a key role in this newfound confidence. Here are three tips to optimise your onboarding practices:
1. Start From Day One
Begin by maintaining communication with new hires straight after offer acceptance. Building good communication streams, whether through email, SMS, online onboarding platforms, or even in-person, opens the floor to questions and ensures new hires know what to expect when they begin. This approach reduces confusion, lowers job anxiety, and means new hires are less likely to back out. Making employees feel part of the team from the very first day of their journey should also start with pre-boarding. This covers the time between a candidate’s official offer acceptance and their first day, and involves organising the practicalities of the new role.
Create a checklist to ensure no step is missed, including:
- Setting up welcome portals with logins and intranet access
- Designating workplace mentors or buddies
- Assigning training materials and organisational policies
- Delivering welcome messages
- Creating security passes and passwords
2. Invest in Onboarding Software
Australian HR Institute research found that employers see the most effective recruitment channels as online platforms and professional networking sites like LinkedIn. The common theme? Digital recruitment. And the same goes for onboarding! Not-for-profit aged care organisation Southern Cross Care implemented onboarding software that seamlessly integrated with its recruitment and IT tools. This software pushed employee data through to payroll systems at the click of a button, reducing the time taken to conduct the process by more than 80%.
As demonstrated here, digital onboarding tools streamline lengthy admin processes, meaning fewer hours spent on paperwork and more time helping new hires feel properly settled in. Other benefits include:
- Fewer Human Errors: Eliminating manual onboarding encourages more accuracy when creating contracts and policies. Get them signed and approved quicker too, with automated workflows that distribute documents to the relevant teams.
- Easier Compliance: Featuring automatic compliance updates, onboarding software ensures all key details are covered in employment contracts and policies. This helps HR teams check that new hires’ qualifications and training are up to date before officially onboarding them.
- Enhanced Employee Experience: Having all materials and instructions collated in a secure online portal makes the training process easier, leaving less room for confusion. New hires aren’t overwhelmed with paperwork and policies all at once, and can complete everything at their own pace in manageable chunks
3. Prioritise Training & Development
Continual training and development is important for maintaining high-quality service standards, especially with ever-evolving regulations in heavily regulated industries.
However, investing in employees as assets from the very start also demonstrates longevity. New hires who feel they have a future within your organisation are more likely to embrace its mission and culture in the long term.
Contributing to career growth offers measurable benefits for your organisation, too. For instance, talent development research shows that companies offering structured training programs have a 218% higher income per employee than those without.
Onboarding platforms are ideal tools for optimising these training approaches.
Residential care provider Infinite Aged Care ensured new hires got the training they needed by syncing mandatory sessions with their onboarding schedule. High-quality onboarding software from Onboard Express made this process easier, reducing the organisation’s time-to-hire from 50 days to just 13 working days.
Creating More Than Just First Impressions
Onboarding goes beyond giving a glimpse into your organisation. For new hires, it provides a comprehensive run-down of the responsibilities, company culture, and development opportunities they can expect from the next few years of their career.
And for HR teams, a great onboarding experience can engage and retain top talent. With the right tools, new hires quickly become fully-fledged employees who reach their full potential.
Want to build a workforce that contributes meaningful value to your organisation for years to come? Book a demo to discover how Onboard Express can help you streamline the onboarding process, maintain compliance with ease, and transform your retention strategy.