Is onboarding necessary for a small business?
Tuesday, 9 July 2019
Small business owners are a busy bunch.
Their days are filled with attracting customers, keeping those customers happy, maintaining relationships with vendors, making sure the products they sell are up to par—and the list goes on. Onboarding new employees is usually at the bottom of the list (and sometimes absent entirely).
I have personal experience with this concept. Back in my early 20s upon taking a job at a five-person public relations firm, I showed up for my first day in my nicest work attire, excited to delve into an what I thought would be in-depth training for my role. Instead, I was given a hammer, an IKEA instruction pamphlet, and a box that contained a desk.
“Sorry, we've been so busy we haven't had time to make your desk, so if you could do that today, that would be great," my boss told me. Eventually, I learned my role at the company, but only after weeks of trial and error—not after a well-thought-out onboarding regimen.
This experience isn't uncommon, especially in businesses with fewer than 10 employees, but it begs the question: Should onboarding be imperative in a small business setting?
Yes, it should, according to research conducted by Urban Bound, a relocation management software company.
The research found that businesses with established onboarding processes benefit from 54 percent higher new hire productivity and 50 percent greater new hire retention than companies that don't have onboarding processes in place.
Without onboarding, companies are more likely to see higher turnover, and the expense to replace an employee can cost business owners between $3,000 and $18,000.
Case study: Chelsea's Boutique
Colin Tracy, the chief technology officer and co-owner of women's clothing store Chelsea's Boutique, is a huge proponent of onboarding. The company, which operates stores in Sioux Falls, South Dakota, and in Provo, Utah and maintains a robust online presence, employs only five full-time people and several part-timers, but Tracy says onboarding is "extremely important" within the business.
“If you don't have boundaries and rules and processes in place from the first day, your business can turn into a free-for-all and you end up having to play catch up," he says.
Once an employee is hired at Chelsea's Boutique, Tracy sends that person everything they need to hit the ground running on their first day.
“We tell them to look for a slew of emails before they start; they can expect an online W2, information for their 401K plan and health care options and a fun survey about their favorite desserts and things they like to do outside of work," he says.
When the new hire (part time or full time) arrives, he or she is greeted with a gift basket filled with goodies they referenced on the personal survey. If several new hires cite their preference for the same activity—hiking, for example—Tracy and his team will plan an outing for the whole company at a later date.
From there, every part-timer is paired with a mentor for four or five days of intensive training. Full-time hires receive two full weeks of training. This includes learning the company's technology system, guidelines for communicating with customers, information about products in each store and online, and so on.
“We also give them access to an Internet website where we keep our company handbook," he says. “That handbook is updated constantly so people can refer back to it when they have a question. We've gotten great feedback from all of this—people appreciate being trained well and having the resources they need."
Starting an onboarding process
Are you a small business owner thinking about starting an onboarding program? Here are Tracy's top three tips for how to get started:
- Think about how you onboard right now. Even if you don't have a formal process, it is a good idea to write down what you do and don't do. The process of documenting will shed light on what could be improved.
- “Communicate with current employees," Tracy recommends. “Tell them that this is the first time you're starting a formal onboarding program and you would love their feedback. It will help them feel comfortable with open communication from the start."
- Make a handbook with the rules and processes important to your business. “Everyone should have an Internet-based handbook—not a physical one that would be cumbersome to update all the time," he says. “A virtual handbook can help answer your employees' questions any time they are in front of a computer or even on their phones. That access will free you up to focus more on your business at hand."
The content provided is for informational purposes only. Neither BBVA USA, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial advisor about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of BBVA USA or any of its affiliates.
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