Opinion: The Cost of Poor Employee Onboarding

A picture of Brianna Stashak, HR consultant with KPA

The Great Resignation continues to cause record-breaking turnover for companies across the U.S. Employees are leaving their jobs to achieve better pay, promotions, improved work/life balance and other various reasons.

Regrettable turnover cost is well-documented. It is estimated that the cost of replacing an individual employee can be one-half to two times the employee’s annual salary. Replacement costs include lost productivity and innovation, time spent finding a replacement, hiring, training, and the time required to get a new hire up to speed and making an impact.

We are operating in a strong candidate’s market. The employee experience has never mattered more. If an employee is unhappy, they have no problem jumping ship.

In such a tight labor market, what can you do to ensure an employee will stay with your RV dealership? Here are answers to some major questions you might have about onboarding and retention.

Q: What are other RV dealerships experiencing now?

A: Employee acquisition and retention is a major focus for many companies, including RV dealerships. The Great Resignation is providing several opportunities for workers to job hop, leaving employers in a tough spot. Job applicants typically have numerous offers to choose from.

“Ghosting” also is common. Employers make offers to candidates, only to never hear

from them again. It is not uncommon for candidates to sign job offers, then never show up for work. Often, new hires fail to show up because they accepted another offer at a different company.

Q: What can RV dealerships do about turnover?

A: While talent acquisition is important, RV dealerships should not overlook retention. As mentioned, turnover costs can be extreme and can grow exponentially if you have staff leaving in droves.

The potentially high costs are why you must think about what you are doing as a dealership to retain the staff you have. At KPA, we believe retention starts with employee onboarding.

Q: Why is onboarding so important?

A: Consider the employee onboarding experience as your first impression (and yes, first impressions matter). Onboarding is your opportunity to show the employee you have command of the ship, and you are steering the company in the right direction. During onboarding, ensure the new hire feels empowered and prepared to take on their work and meet the organization’s goals.

A good onboarding experience can improve employee retention by an estimated 82%. Myriad additional benefits include:

  • Employees who go through effective onboarding are 69% more likely to stay with an employer for at least three years.
  • Organizations investing in effective onboarding retain 50% more new hires than their competitors.
  • Successful companies are 35% more likely to initiate onboarding for a new hire before the person’s first day on the job.
  • Standardized onboarding procedures lead to 50% greater productivity than nonstandardized onboarding.

However, only an estimated 12% of employees strongly agree their company does onboarding well. Poor onboarding can exacerbate several productivity and retention issues, including:

  • New employees take about eight months to begin producing at full capacity.
  • One-third of new hires look for another job within the first six months.
  • One-quarter of new hires leave before a year on the job.

Q: What common mistakes do you see with onboarding?

A: I see four main errors RV dealerships make during the onboarding process.

Outdated training or compliance materials. Some dealers provide employees with a series of copies from a document dated 1999.

The practice is not a great sign to new hires that you take training or compliance seriously and certainly a sign you are not willing to keep up with current regulations.

Letting the new hire work alone.

A buddy system is crucial for a new hire to feel a sense of belonging. Consider pairing them with a high performer or someone passionate about the company or position. By doing so, you can get the new hire off on the right foot.

No HR involvement in onboarding. New hires undoubtedly will have questions. Make sure they know they can go to their manager, HR, payroll or others for answers.

Forgetting to ask about the experience. RV dealerships should implement a survey or some other method to collect feedback about the new hire’s onboarding experience. Survey results can help identify improvement areas to make future onboardings more successful.

Q: What can RV dealerships do to improve the onboarding experience?

A: At KPA, we encourage our clients to focus on what we call “The 5 Cs

of Onboarding”—compliance, clarification, culture, connection and check back—to maximize onboarding’s effectiveness.

Compliance. The most critical step in the onboarding process, compliance education helps employees understand your dealership prioritizes compliance above all else. Convey to new employees that they are always expected to do the right thing. If employees violate policies (especially legal regulations), they will be disciplined or terminated. Employees should sign any necessary documents and paperwork, including nondisclosure agreements (NDAs), nonsolicitation agreements and state and federal forms.

A key to compliance is training. Staff should understand how to perform duties such as reporting harassment or injuries, managing customer inquiries or complaints, protecting their customers and their information and understanding F&I compliance.

Clarification. This is where you, the employer, should ask several questions to ensure the new hire clearly understands their role and its responsibilities. You might ask:

  • Is your job offer signed?
  • Do you have the tools you need to succeed?
  • Did you receive a facility tour?
  • Have you discussed with your manager how you will be evaluated? Is there a regular schedule for evaluating performance?
  • Do you understand your department’s goals and objectives and how you are expected to contribute to them?

If the new hire does not provide clear answers to these questions, your responsibility is to ensure they have the tools they need to do so.

Culture. A new hire may take a while to become familiar with a company’s processes and culture. Regardless, handbooks are a crucial resource. Every employee should read your dealership’s employee handbook to get a better sense of basic expectations and how you operate. The handbook should address your dealership’s:

  • Mission, vision and values.
  • Basic expectations.
  • Products, services, markets and competition.
  • Anti-harassment and anti-discrimination, safety and fair lending initiatives.

Connection. Connecting with employees, especially now, can be a challenge. By going the extra mile in the new hire’s onboarding, you can maximize the chances they will feel accepted and connected to the company’s core mission and staff. You might send them an email, hand-written letter or even a welcome video.

Ensure the new hire is introduced to colleagues, managers and leaders in their department, along with anyone outside their department they may work with. At KPA, we like the idea of assigning a “buddy” to the new hire. The buddy can help them better acclimate to the dealership.

Check Back. The onboarding process does not end after you accomplished the first four Cs. Many new hires are often inundated with information as they learn the ropes, so the onboarding experience (and everything they learned) can fade quickly. Be sure to set up check-in meetings at 30, 60 and 90 days to see how new hires are feeling and ensure they understand expectations and are acting on them.

Q: What else is key to remember?

A: While employee onboarding can help new hires get acclimated to your dealership, the process should also ensure that legally required paperwork is filled out.

The last thing you want is a regulatory body to come knocking and not have the necessary paperwork completed. Important documents might include a W-4, Form I-9, direct deposit forms and any state-required forms. Each state has unique forms and processes.

At KPA, we think documented processes are a crucial legal compliance piece. If you are not sure where to start, talk to your HR department or HR consultant.

Brianna Stashak is a human resources consultant at workplace compliance and safety company KPA. She helps clients who need to train employees, tackle compliance issues and effectively manage HR processes across the employee life cycle. Among her tasks are helping with HR process automation, training and applicant tracking.

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