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Employee Onboarding Software is Extremely Beneficial If Deployed Correctly
Effective employee onboarding is crucial for the success of any organization. It sets the tone for an employee's journey within the company and significantly impacts their productivity and engagement.
More organizations are increasingly turning to employee onboarding software to streamline and enhance the onboarding process. Onboarding software not only simplifies the administrative tasks associated with onboarding for both employers and new employees—automating onboarding tasks can result in an 18% improvement in initial performance—but can help build seamless onboarding that boosts employee engagement, reduces turnover, and fosters a sense of belonging.
HR tech is a significant investment, and organizations want to make sure it’s working (especially considering that 39% of organizations plan to replace the bulk of their SaaS applications with platforms that have better functionality). How do you measure employee onboarding software's return on investment (ROI)?
Setting Employee Onboarding Software ROI KPIs
Set KPIs Before Purchasing Any HR Tech
Before investing in any new HR tech, set KPIs to determine if the technology meets your goals. This approach helps establish clear objectives for the investment and assess its effectiveness when it's time to renew subscriptions. Setting measurable KPIs, defining timelines for achieving each KPI, and determining beforehand what constitutes success and failure, aids in evaluating ROI. Additionally, consider the price factor in ROI, ensuring the investment is recouped.
Employee onboarding software automates many aspects of the onboarding process, from document management to training modules. It ensures a smoother, more efficient onboarding experience, allowing HR teams to focus on more strategic tasks. Setting KPIs should take these things into consideration.
It’s worth noting that for HR tech to work,” says Jess Tejani, COO at HiringThing, “it must have the features that will help your organization hit your business goals and be deployed correctly.”
Realize What Matters To You
When determining ROI, consider the use case of the HR tech. Evaluate whether the technology is an absolute necessity for your business or simply an add-on to enhance employee value. Different KPIs may be more significant depending on the essential nature of the tech to your operations.
Keep in mind that these metrics are subjective. Employee satisfaction might be a top priority for some organizations but not for others, and that's perfectly fine. Recognize that your company's mission and values will influence which KPIs contribute to the overall ROI.
Important Employee Onboarding ROI Metrics
Time Saved
One of the most tangible benefits of onboarding software is the time saved during the onboarding process. If you haven't automated onboarding yet or are considering a new vendor to save more time, document the duration of your current process to have a benchmark for comparison. Reduced onboarding time directly translates to increased productivity and cost savings. Calculate the hours spent on paperwork, training sessions, and administrative tasks before and after implementing the software to measure the impact.
Improved Employee Productivity
Onboarding software can really transform new hire productivity. Organizations with effective employee onboarding have an average of 33% higher employee engagement. They also see a 70% increase in new hire productivity.
Track the productivity levels of new hires before and after the implementation of the onboarding software. Are employees reaching their full potential more quickly? Increased productivity can clearly indicate the software's impact on employee performance.
Reduction in Errors
Manual data entry is prone to errors, making it essential to have a baseline. Keep track of where errors occur or have historically happened. While this may seem tedious, it's the best way to determine whether the software you adopt is effective. Measure the reduction in errors after implementing onboarding software to assess its impact on data accuracy and legal compliance.
Mitigated Compliance Risks
Compliance issues can arise from incomplete or inaccurate information. Ensuring compliance is not just about ticking boxes; it's about protecting your organization from legal risks and financial liabilities. Employee onboarding software can significantly contribute to compliance efforts, but how do you measure its ROI in this regard?
- Reduce Violations: Track pre- and post-implementation compliance incidents to measure reduction.
- Time Saved: Calculate hours saved on compliance tasks for cost efficiency.
- Audit Efficiency: Assess time and effort reduction in audit preparation.
- Penalty Avoidance: Estimate potential fines and legal fees prevented by compliance.
- Training Completion: Monitor completion rates of mandatory training for compliance readiness.
Comparing these metrics against software costs reveals the software's ROI in compliance.
Employee Satisfaction and Retention
Happy employees are more likely to stay with a company, and good onboarding increases employee retention by 82% and new hire retention by 52%. Conduct surveys or gather feedback to measure employee satisfaction with the onboarding process. Additionally, analyze retention rates to determine if the software contributes to retaining talent within the organization. This approach helps identify recurring issues and areas for improvement in the onboarding process.
Cost Savings
Companies can save money by automating their document management: an average of $20 per paper on filing, $120 spent on looking for lost documents, and $220 spent on recreating lost documents.
Consider the cost of paper, printing, and administrative tasks associated with traditional onboarding. Compare these costs with the investment in onboarding software, including licensing fees and implementation costs. The goal is to achieve a positive balance between cost and efficiency.
You also want to include costs associated with employee turnover and retention. Replacing an employee costs 33% of their salary, and this includes a drop in productivity as well as the costs associated with recruiting, hiring, and onboarding.
Employee Usage and Buy-in
Keep in mind that KPIs are subjective, and monitoring employee usage and engagement is crucial to determine if the tool provides real value. If employees aren't using the software for specific reasons, it may not be a wise investment. Team buy-in is essential for the success of any HR tech tool. Usage largely depends on the onboarding and training your team receives, the customer service available to them, and their understanding of the importance of the new HR tech. Even the best software needs proper support and education to be effective.
Hypothetical Case Study: XYZ Corporation
Let's examine a hypothetical case study of XYZ Corporation to illustrate the practical application of measuring ROI for employee onboarding software.
XYZ Corporation implemented onboarding software, which reduced onboarding time by 30%, increased employee productivity by 20% within the first month, and reduced compliance-related issues by a significant 15%. The software also contributed to a 15% improvement in employee satisfaction scores and a 10% decrease in turnover.
By calculating the time saved, productivity gains, and reduced costs, XYZ Corporation determined that the ROI for their employee onboarding software was realized within six months of implementation.
Conclusion
Measuring the ROI for employee onboarding software involves a comprehensive analysis of time saved, productivity improvements, error reductions, employee satisfaction, and cost savings. Organizations must carefully track these metrics to assess the software's efficiency and bottom line impact. A well-implemented onboarding software solution can not only streamline processes but also contribute significantly to a company's success and growth.
At HiringThing, we just launched our new white label employee onboarding solution. If employee onboarding can help your business or offering employee onboarding can help your customer base save time, improve productivity, improve employee satisfaction, and save money, set up a chat with one of our partner development representatives today.
About HiringThing
HiringThing is a modern recruiting and employee onboarding platform as a service that creates seamless talent experiences. Our white label solutions and open API enable technology and service providers to offer hiring and onboarding to their clients. Approachable and adaptable, the HiringThing HR platform empowers anyone, anywhere, to build their dream team.
