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    Making the business case for digital employee onboarding

    Whether you’re giving your existing onboarding program a facelift, or building new from the ground up, it’s important to communicate a strong business case to the powers-that-be to secure approval and budget for your plans.

    Digital onboarding is not a new concept - HR professionals have long been aware of the positive impacts that integrated onboarding software can bring to the new hire process.

    Unfortunately, HR rarely has the final say when it comes to budget and approval for big-ticket software investments. These decisions are usually in the hands of upper management, and it becomes HR’s responsibility to build a compelling business case to convince decision-makers.

    Today, let’s take a look at how you can draw on key benefits to demonstrate why investing in digital onboarding is critical for future growth.

    Icon-RightArrow-Yellow Your audience

    Before we dive into how to build your business case, let’s take a quick look at our audience profile. What are decision-makers looking for in an onboarding process?

    In our experience, C-suite management responsible for resource investment decisions want to see two things:

    1 Transparency. They want a clear understanding of what they’re getting with as few ‘I don’t know’s’ as possible.

    2 Flexibility. They’re looking for flexibility in both pricing and set-up that can expand and retract along with the organization’s needs.

    Keep these things in mind when putting together your business case. Ensure you know what you’re talking about, and have a clear understanding of the financial terms involved.

    Icon-RightArrow-Yellow Building your business case

    To make a successful business case, you need to essentially ‘sell’ the benefits of digital onboarding to your audience through four key points:

    → Return on investment
    → Risk assessment
    → Compelling data
    → People factor


    Return on

    First, we need to demonstrate the ROI of digital onboarding. How much will the project cost the organization, and how much do they stand to gain long-term from a successful implementation?

    Calculating the ROI of digital onboarding is a tricky business. But there are some simple ways to paint a compelling picture.

    → Safeguarding recruitment investments

    The cost of replacing an existing employee can run up to 50-60% of their annual salary. For an employee making $65,000 per year, that’s roughly $36,000 (splitting the difference). Mid-sized organizations of around 1000 employees have an approximate turnover rate of 10% - putting the annual cost of employee turnover at over $3.5 million.

    Considering digital onboarding can reduce new hire turnover by up to 82%, there is a strong business case to be made here that investing in a digital onboarding tool will help bring those costs down.

    → Saving time for HR

    On average, HR professionals make $52,000 per annum, approximately $25 per hour. Each new hire requires upwards of 10 hours in administrative support - everything from training materials and paperwork to FAQ.

    One of the big benefits of a digital onboarding tool is the ability to automate much of the labor-intensive new hire admin. With software, that 10 hours can be reduced to 3 - a saving of $175 per new hire in administrative costs alone. For a medium-sized organization, that’s a combined $175,000 as financial incentive for digital onboarding.




    Then we need to profile the risks involved, both financial and procedural, and outline how these will be addressed.

    Any investment involves risk, and these must be clearly defined for your decision-makers. A risk and response table will show any risks you’ve identified, alongside solutions.

    Your organization will have its own unique risk profile, but here are two to get you started:
    Risk | Adoption rate
    Risk of a low adoption rate in less tech-savvy users.
    Solution | Training
    Provide compulsory training for all stakeholders with refresher courses every 6 months.
    Risk - Personal connection
    Risk of a lack of person-to-person connection with an increased digital presence.
    Solution | Automation
    Use automation to reduce admin hours, invest extra hours in more personal-touch activities.




    Next, we need to look at digital onboarding statistics. What metrics does digital onboarding impact, how will they improve over time, and what have other organizations done.

    The digital onboarding landscape is a treasure trove of exciting data points that very clearly illustrate how going digital can improve on HR’s key performance indicators.

    You’ll need to look for examples specific to your industry for truly relevant data, but there are some overarching numbers that hold true across the board.

    Organizations that utilize digital onboarding elements see employee engagement increase by up to 33%

    Organizations that employ strong onboarding practices increase new hire productivity by up to 70%

    Reduction in non-starters
    Organizations that prioritize digital onboarding reduce non-starters by more than 35%




    Finally, it’s time to seal the deal with a good dose of reality from recent onboardees. We want to demonstrate how your existing onboarding program is lacking and how a digital upgrade would positively impact new hires.

    Our study of recent joiners revealed that 64% struggled with role clarity during onboarding, and 25% thought that technology was missing entirely from their organization’s new hire program.

    What do your new hires say? Their feedback and insight can be valuable tools in helping you convince your C-suite of the importance of best practice digital onboarding.

    Consider putting together an anonymous survey where recent hires can share their unfiltered feelings on the state of your current set-up.

    Alongside these 4 points, you will undoubtedly have your own unique set of organizational requirements. But this is a good place to start and done well, should give your audience a solid understanding of the benefits of digital onboarding.

    The takeaway_

    Without solid backing from decision-makers, your grand onboarding plan is dead in the water, so it’s your job to convince them.

    Remember, you’ve probably had much longer to consider the positive impacts of digital onboarding than your audience has. So be sure to offer clear insights and hard data that will inspire them to back your project.

    Want more on building the onboarding business case? 

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    Topics: Onboarding , Featured , HR
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