The Real Cost of Bad Onboarding with Kristen Gallagher – E3

When you’re trying to scale, one of the biggest challenges you face is bringing on new team members. Chances are you’ll face a high turnover rate as you figure out what roles you need to fill and the type of person who should fill it. But what if it’s YOUR fault that a new hire isn’t living up to your expectations? Today, Mandi and Kristen talk about the real cost of bad onboarding and how to do it better.

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• Transparency is something leaders and managers want, but too much transparency, especially without context, is a huge problem. Your employees might not understand or might get the wrong message when they don’t have the context with which to process the information you give them about the company, strategy, and actions.
• A great example is when a CEO talks to a low-level employee about spending thousands of dollars on a webinar or piece of equipment. That dollar amount could be a sizable portion of their salary, so it can cause resentment. The employee doesn’t see the bigger picture in the same was a CEO does.
• Poor onboarding can cause issues before an employee even gets started, and this is a strong bias for Kristen. New team members need education, information, and time to get to know the people and the organization. What does your onboarding look like? According to Kristen, it should look like a 3-layer cake.
• The top of the cake is company onboarding. It’s the typical thing you’d think of: welcome to the company, here’s your desk, the programs you use, etc. It’s all very basic stuff – important, but not enough to do the job well. The second layer of the cake is understanding teams or departments, and how they work together. And the third layer is projects or sub-divisions within teams.
• How much time should you spend on onboarding? For the first layer, company onboarding, it starts the minute the new hire is official, and 1-2 days intensive when they start. The rest of the onboarding can take up to a year. But the most important part of onboarding is the first 30 days, and Kristen explains why.
• What about distributed teams and contractors? The prevalence of small businesses hiring employees across the country and the world is growing, and remote onboarding presents its own set of challenges. Kristen shares some best practices on how to successfully onboard new team members using virtual tools.
•  Kristen shares the story of how one of her recent hires was a total failure, but not because of the person. Kristen realized that she didn’t communicate the things she needed to early on, and she shares exactly what she should have done – and what you should be doing with every new hire.
• Do you want to know the REAL cost of bad onboarding? If a team member is leaving within 12-18 months of being hired, it actually costs you 3.5 times their salary. It’s a shocking number, and Kristen explains why it’s so high, including the hidden costs you haven’t even considered.
•  Hiring for a small and a large company is very different. Kristen believes that, for companies of 50 people or less, you’ll even be hiring a different type of person. Consider: a stellar marketer with Nike had a much different support system (copywriters, strategists, designers) than what they would have at a small company.
• If you’ve onboarded properly, but the contractor is still dead weight, a small business absolutely cannot afford to keep them on. Mandi poses the questions: how do you identify when that person needs to go and what is the process to let them know the standard? Kristen shares the story of one of her own contractors who she enjoyed working with and changed her processes for, but who still couldn’t get the job done. Kristen shares her lessons from that experience and the way she handles things differently now.

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The Cost of (Not) Onboarding Your New Hire

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