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GROW YOUR BUSINESS

Got a New Employee? Here's What Small Business Owners Need to Know

19-minute read

Susan Hamilton

30 March 2022

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Congratulations! You just hired your first employee. You can remove your job posting and get back to work, right?

Well, not exactly.

While you’ve found your perfect candidate, you shouldn’t expect them to be ready to jump right in on day one. It takes time for a new employee to acclimate to your business. Even the most prepared candidate may feel lost in the first few days on the job, and they will be counting on you for guidance.

That’s why an employee onboarding program is so important. Onboarding provides new hires with the information and tools they need to become productive team members.

It’s never too late (or too soon!) to create an employee onboarding process for your small business.

Don’t know where to begin? No worries. We’re here to help. This guide covers the benefits of an onboarding program, key elements, best practices, and more.

Let’s get started!

What is Employee Onboarding?

Have you ever traveled to a foreign country and felt a bit out of place?

That’s how most employees feel on their first day at their new job. Their surroundings are unfamiliar. They may not know how to get from one place to another. Even the language can be confusing.

It takes time to adjust to a new environment, which is why employee onboarding is so important.

So what is onboarding exactly?

Merriam-Webster describes onboarding as “the act or process of orienting and training a new employee.” But employee onboarding has become more than a training session.

Employee onboarding is a way of familiarizing a new employee into your organization and its culture. It’s the process of helping them adjust to the performance aspects of their new job quickly and smoothly. If done well, onboarding shows that you’re invested in your employee’s success.

Onboarding vs. orientation.

Employee onboarding shouldn’t be confused with employee orientation. While these terms often are used interchangeably, there are key differences:

  • Employee orientation is a one-time event that may last a day or a week. Employee onboarding is an ongoing process that may continue for several months.
  • An orientation session is a group event that may take place in a conference room or an offsite location. Its goal is to introduce newly hired employees to the workplace. Onboarding is a multi-session program tailored specifically to one employee and their role.
  • At orientation, employees receive general information about the company’s mission, guidelines, policies, and procedures. During onboarding, a new employee is immersed in the workplace to understand their day-to-day job responsibilities.
  • Orientation is a helpful guide for new employees, aimed at helping them adjust to their new job. Onboarding is a more strategic process focused on the behaviors and expertise needed to succeed in a particular role.

Wondering if your small business needs employee onboarding or an employee orientation? You likely need both.

Onboarding and orientation go hand in hand. You could say that the goal of employee orientation is to prepare new hires for their onboarding experience.

Who is responsible for onboarding a new employee?

The short answer? It’s a team effort.

A solid onboarding program typically includes everything from business objectives to work processes to company culture. When your team shares onboarding responsibilities, you establish the foundation for an effective working relationship between the employee and the organization, and it provides your new hire with multiple perspectives.

Depending on your business’s size and structure, you may enlist the help of these individuals:

  • Organization leaders
  • Human Resource specialist
  • Hiring manager
  • Supervisor
  • Co-workers

How long does onboarding take?

The consensus among HR professionals is that an employee onboarding program should take a minimum of three months. Some companies believe one year or longer is necessary. Gallup research indicates that new employees typically take around 12 months to reach peak performance potential.

A year may seem like a long time to train an employee, but there are benefits to extending your employee’s onboarding experience. Research suggests that businesses can increase employee retention by extending onboarding throughout an employee’s first year.

The bottom line: Onboarding can’t be rushed. When you give new hires time to adapt to your business, you have a better chance of keeping them on board.

What to do before your employee’s first day.

Your employee’s first day can be overwhelming. To make it less stressful, get some tasks out of the way before they arrive. Preboarding provides employees with all the logistics they need to start on the right foot.

Steps for preboarding your new employee may include:

  • Confirm they’ve received a formal job offer with the correct salary amount (signed by the hiring manager).
  • Send a Form W-4 and direct deposit information to your new hire before time to get them on the payroll.
  • Have them sign contracts and legal documents before they arrive. You don’t want to greet them with a noncompete agreement on their first day.
  • Announce their arrival in an email. Include your new employee’s name, job title, and areas of expertise. With your employee’s approval, you can add hobbies and other interests to make it more personal.
  • Make sure the employee’s work location is clean, organized, and equipped with a laptop or other technology they will need.
  • Leave a copy of your company’s HR policies, benefits package, and training manual at their workstation.
  • Arrange for a building pass, parking pass, and ID badge, if required.
  • Have a printed schedule so they know what to expect on their first day.

Don’t Forget Workers Compensation Insurance

If your new employee is your first employee, here’s something you should know: Your small business may need workers compensation insurance.

Workers comp is a business insurance that provides benefits to employees if they get injured or sick while working for you.

Most states will likely require workers comp coverage when hiring your first employee. Workers comp laws vary, so you should know your state's requirements.

As a business owner, it’s your responsibility to ensure that your new employees are safe while working for you. If your new hire has an accident, it could result in medical expenses or legal fees high enough to put your business at risk.

Let’s say your new employee slips in the breakroom and hits her head on the counter. She’s dizzy and needs to go to the emergency room. It turns out she has a concussion, and she has to take several days off from work.

In this scenario, your workers compensation policy could kick in to pay your employee’s medical bills and cover her lost wages.

Workers comp can cover:

  • Medical payments
  • Lost wages
  • Rehabilitation expenses
  • Death benefits

It does not cover:

  • Client or vendor accidents
  • OSHA fines
  • Work safety improvements
  • Wages for a worker who replaces the injured employee

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How Onboarding Can Help Your Business

How many times have you looked back on an experience and wished you had approached it differently? When it comes to welcoming your new employee, you may regret not having an onboarding process.

Over one-third of companies don’t have a formal onboarding program, which can affect the business-employee relationship. Your new hire may lack confidence and have less engagement and trust without a structured program.

First impressions can affect how your new employee feels about your business. When they arrive, they will follow your lead. They’ll observe your business operations, company culture, and behaviors. If you don’t have a thoughtful plan in place, your business could appear disorganized.

In contrast, an onboarding program can make your new hire feel welcome and supported. It sets the tone for their experience and shows that you care.

So what is onboarding going to do for your business?

When your new employee starts on the right foot, they will adjust to your workplace with ease. And that will have a positive impact on your business.

Here’s how employee onboarding helps your business:

1. It improves employee retention.

What makes an employee want to stick around?

Hint: It’s not the free coffee.

Perks are nice, but they are short-term motivators. Your new hire is more likely to stick around if they feel supported in a meaningful way. Most new hires will view onboarding as a sign that you’re invested in them.

While onboarding doesn’t guarantee that a new hire will stick around for years, you have a better chance of retaining them if you have a solid program. Sixty-nine percent of employees are more likely to stay with a company for three years if they experience great onboarding.

In contrast, employees who had a negative onboarding experience were twice as likely to look for new opportunities. As a small business owner, you may be hiring only one employee, but don’t underestimate the importance of an onboarding program. Whether you have one new hire or ten, onboarding is essential for retaining your staff.

Look at it this way — you don’t want to recruit all over again. You've put time and effort into finding the best candidate for the job. Onboarding is one way to keep them engaged and motivated to stay.

2. It reduces turnover costs.

What happens when a new employee doesn’t stick around?

Unfortunately, it’s not uncommon for a new employee to leave shortly after starting their job — and it can be an unexpected blow to your business.

Employee turnover can be disruptive and expensive. While the turnover costs vary, depending on the type of role on average, it costs a company 6 to 9 months of an employee’s salary to replace them. So, if your employee makes $60,000 a year, you may need to spend between $30,000 and $45,000 in recruiting and training costs.

Replacing a new hire is even more wasteful since they likely haven’t contributed many efforts to your business. When you think about the time and money it takes to backfill a new employee, onboarding looks like an excellent investment.

3. It maximizes productivity.

It takes time to settle into a new role. An employee may need the better part of a year to become a productive team member.

Onboarding begins when your new hire accepts your job offer, and it continues until they are fully proficient in their role. During this time, your onboarding program should address the most challenging aspects of the role and provide consistent training.

Here’s how onboarding may increase your new employee’s productivity:

  • It provides your new employee with clear guidelines and expectations, which reduces confusion.
  • It helps your new employee build connections with your team and company culture, making teamwork more cohesive.
  • It establishes a culture of learning that may continue throughout their employment.
  • It tracks your employee’s progress so you can work through any challenges together.
  • It allows your new hire to work faster by providing the right information at the right time.

Data suggests that employee training increases productivity and performance. New hires who receive training have a 50% productivity rate in their second month of work, and that number increases to 75% in their third month on the job.

4. It minimizes business risk.

Every business has policies and procedures, and your new employee should be made aware of them sooner rather than later. Many of these policies are in place to protect your business and your employees.

Before you hire your first employee, consider creating an employee handbook that documents your company’s policies. Let your employees review this information at their own pace, then schedule a time to answer any questions they may have.

An employee handbook may include information regarding:

  • Diversity, equity, and inclusion
  • Workplace safety and health
  • Harassment and sexual harassment
  • Remote work and telecommuting
  • Social media
  • Vacation time, sick time, etc.

An employee policy handbook won’t be the most exciting part of your onboarding process, but it’s an essential tool for your new employees. When you reinforce your company’s policies, your new hire has a set of rules and is less likely to make a critical mistake.

5. It builds company culture.

Company culture is a shared set of values, goals, attitudes, and practices that make up your organization.

When you think about how much time people spend at work, you can understand why a company’s culture matters. There’s a good chance your new hire accepted their role because they like your business — and maybe you, for that matter!

Your onboarding program is an opportunity to let your company culture shine. When you promote learning, curiosity, collaboration, and other practices, your employee sees you putting words into action. They will be more likely to understand your business and believe in it.

6. It keeps employees engaged.

It’s your new hire’s first day on the job, and they’re busy signing paperwork, meeting co-workers, and touring the office. They’re fully engaged.

But what about their second day?

Once the novelty of a new employee’s arrival wears off, your current employees are back to work. And your new hire may feel abandoned and bored. No one wants to see a new employee sitting at their desk nodding off, yet many employers don’t know how to keep their new employees engaged.

A good onboarding program can help.

Onboarding gives your new hire purpose every day. It can help employees feel more connected to your organization and its daily operations.

Here are ways to keep your new hire challenged and motivated:

Assign them a buddy.

Work friends can help with the initial isolation of starting a new job. Make sure your new hire has someone who can show them around, take them to lunch, and introduce them to other employees.

Give them a task.

Set your employee up with an easy task. If it’s something they can complete quickly, they will feel a sense of accomplishment.

Congratulate them.

Provide recognition for a job well done. Whether it’s a simple task or a contribution to a team effort, be sure to show your appreciation.

Collect feedback.

When you ask for feedback, it shows you care about your new hire and their onboarding experience. And it’s the best way to measure how you’re doing.

7. It strengthens your reputation.

“How’s your new job?”

It’s a question your new hire will be asked by friends, family members, and former colleagues.

Hopefully, your employee has positive things to say about your company. When an employee feels motivated, supported, and excited about their new job, they are more likely to spread the word. And that could help you attract top talent in the future.

Unfortunately, people are just as likely to share their negative impressions. If your new employee has a terrible onboarding experience, it may tarnish your company’s reputation. Twenty percent of new hires are unlikely to recommend an employer to a friend or family member after their onboarding experience.

Employees often make their opinions known on review sites like Glassdoor and Indeed. If you offer a stellar onboarding experience, your new hire will be more likely to write a glowing review or recommend strong candidates from their networks.

What Are the Key Parts of a Good Onboarding Program?

When it comes to onboarding, what’s best for a large company may not make sense for a small business. So your onboarding program should fit your organization’s unique needs.

A busy operation with a growing staff may want to consider one of these onboarding software options. They can help train new hires, organize and manage documents, track progress, and more.

As a small business owner, you may find that your new employees want more personalized attention than they can get from an automated system.

No matter which way you approach it, your onboarding program should incorporate these key elements:

1. Business clarity.

Where did we come from? How did we get here? Where are we going?

It’s inspiring for new employees to hear your company's story — how it started and where it’s heading. Most employees are eager to learn more about the history of your business and its vision for the future.

For your new employee to succeed in their role, they need to understand your company’s mission, strategy, and vision. It may take time for your new employee to absorb the information, so find ways to reinforce those messages throughout the onboarding process.

When educating your new employee on company values, leave time for questions and open dialogue. If your new hire is curious about how your company makes decisions or achieves its goals, that’s a great sign that they are engaged and committed to your business.

2. Workplace culture.

Starting a new job can feel like the first day at a new school. Getting accustomed to new norms, behaviors, and attitudes can be intimidating. Your new employee may wonder if they’re overdressed or may feel silly bringing their lunch.

Every company has a workplace culture, and it takes time for a new employee to fit in. Some norms are easy to communicate before your new employee’s first day. So if you have a relaxed dress code or free pizza on Fridays, give your new hire a heads up.

Other aspects of workplace culture may take a while for your new employee to figure out. It takes time to learn the office politics, nicknames, and unspoken social rules in every workplace.

If your onboarding program includes a social component, it will be easier for your new employee to get the lay of the land.

These activities can help your new hire feel like they are part of the team:

  • Plan a meet-and-greet on the first day so your new hire can get to know employees and key leaders in an informal setting.
  • Host a team-building event as a fun and interactive way to break the ice and bring all employees together.
  • Ask a current employee to be your new hire’s onboarding buddy. Having a buddy can help your new employee navigate questions while adjusting to their new work environment.
  • Encourage chit-chat. Small talk is a good way of finding common interests and fostering a sense of belonging.

3. People.

Your current employees are a valuable asset to your business, and they have a role in your onboarding program. Many small businesses are cross-functional and collaborative, making it easy for new employees to feel like they’re part of the team.

When you make employee introductions, be clear about your current employee’s role. Your new hire should understand how everyone fits into their onboarding program, so they know who to approach with questions.

Here are key people who can help with onboarding:

Co-workers

Co-workers, including your new hire’s onboarding buddy, can help your new employee manage day-to-day issues. If your new hire can’t find a conference room or needs assistance with a jammed printer, your co-workers should be ready to lend a hand.

Supervisor

Whether it’s a supervisor, manager, or team lead, it’s crucial to know who is accountable for your employee’s job performance. Supervisors are usually responsible for overseeing the training program, tracking progress, and goal-setting. Your new employee and their supervisor should have regular meetings to discuss job responsibilities and performance expectations.

Mentor

A mentor is an experienced, trusted member of your team who can help guide your employee’s career. While co-workers can help your employee adjust to your workplace, a mentor may provide role-related advice, knowledge transfer, and coaching. When your new hire has a mentor, they have a better chance of excelling in their new role.

4. Training.

It doesn’t matter how experienced your new hire is; your onboarding program should include training.

Your new employee should have a comprehensive training program that outlines what they need to know to complete their job duties, including how to use the equipment and tools required for their job.

Training doesn’t have to be a solo experience. When your current employee helps with the training process, you expedite the learning curve and continue to foster teamwork.

Observing others is an excellent way for your new hire to learn. Job shadowing allows them to work alongside a seasoned employee for a day, week, or longer. Your new employee should shadow someone who has the same or similar role, giving them a chance to see a real-world experience of how things get done in your business.

5. Policies, procedures, and perks.

Reviewing policies and procedures won’t be the most exciting part of onboarding, but leaving them out or putting them off could set your new hire up for failure.

Give them a reasonable timeframe to read and sign your materials. An automated system like BambooHR onboarding tools creates a more accessible, attractive way to review onboarding documents. And it can be a time saver, as well.

While you’re at it, don’t forget to share information about company perks. Be sure your new employee is aware of employee discounts, flex time, and other benefits that your company offers.

Onboarding Best Practices

It’s your employee’s first day. He arrives at your office, and no one knows who he is. He’s led to an empty conference room where he waits for hours. No one takes him to lunch. He’s frustrated, bewildered, and bored.

You worked so hard to recruit your new hire. The last thing you want is a bad onboarding experience. A negative impression may cause your new employee to walk out the door — forcing you to start your search all over again.

According to a survey conducted by Hibob, an HR tech platform, approximately 64% of employees are less likely to continue with a new job if they have an unpleasant onboarding experience. Even businesses with the best intentions can make terrible onboarding mistakes that may be impossible to overcome.

Follow these best practices for successful employee onboarding:

1. Have a welcome kit.

Nothing says “welcome to the company” like free swag. An employee welcome kit is a great way to boost your new hire’s excitement the moment they walk in the door. When you show your employees appreciation from the start, they’re more likely to feel inspired.

The best employee onboarding kits reflect a company’s culture, so think of creative ways to incorporate your values. If your business promotes health and wellness, include a fitness tracker or a yoga mat. If you are committed to sustainability, consider an eco-friendly water bottle or a reusable tote bag.

Welcome kits can include anything from socks to high-end noise-canceling headphones.

Some popular items include:

  • Coffee mugs and water bottles
  • T-shirts and hoodies
  • Laptop covers and phone cases
  • Notebooks, pens, and desk organizers
  • Headphones, fitness trackers, and other tech gadgets

The most important item to include is a welcome letter that reinforces your new employee’s vital role in the organization. When your new hire feels valued and respected, they are more likely to feel like a part of the team.

2. Create a schedule.

Your new hire’s first day sets the tone for their onboarding experience, so you don’t want to wing it. Share an agenda with your new employee before their first day. They will arrive more relaxed and confident when they know what to expect.

Here’s a sample schedule of an employee’s first day:

  • 9 a.m. Greetings and introductions over breakfast.
  • 10 a.m. Office tour with onboarding buddy.
  • 11 a.m. Overview of the company mission and core values.
  • 12 p.m. Catered lunch with teammates.
  • 1 p.m. One-on-one meeting with your manager.
  • 2 p.m. Settle-in time at your workstation.
  • 3 p.m. Role training with a peer mentor.
  • 4 p.m. Regroup and wind down.

Your employee’s first day will be over in a flash. Having a schedule helps them stay on track and focus on the essential matters of the day.

3. Set a comfortable pace.

Here’s a common onboarding mistake: Overwhelming your new employee with too much information.

A new job can be nerve-racking as it is. If you expect too much from your new employee, it may cause them more stress — affecting their confidence and, ultimately, their performance.

Consider setting a relaxed pace for your onboarding program. Don’t expect your new hire to tackle too much information in the first week. Give them time to read through policies and procedures, absorb your company’s culture, and learn their role.

Your new employee is more likely to retain information if they have time to digest it. When you provide them with a comfortable pace, they will be more invested and engaged in the work.

4. Rethink paperwork.

Paperwork is a crucial part of your employee onboarding program, but it doesn’t have to be in paper form. Electronic forms may be a better way to ensure that your business is set up for success.

The data you collect becomes part of your new employee’s personnel file. You put your business at risk if you can’t find a signed document or if you can’t decipher someone’s handwriting.

Digitizing paperwork can help keep your new hire’s documentation organized from day one. Onboarding software will notify your new employee when there are forms to fill out and send them alerts if any information is missing.

Electronic data collection not only keeps your new hire on track but also keeps their information safe, secure, and accessible. You and your employee will be able to access everything you need remotely.

5. Be available.

Remember the new hire who was left alone in the conference room? Don’t let that be your new employee’s onboarding experience.

A good onboarding program makes a new hire feel like a valued part of the team. Be present for your new employee on their first day, but don’t stop there. Make sure your new employee knows that you’re available when they need advice or guidance.

Create an open-door policy so your new hire feels comfortable approaching you with questions and concerns. You also may schedule formal check-ins to assist your new employee in the first few weeks.

Over time, you may notice that your employee has become more independent and empowered in their role. That’s a great sign that they’re thriving in a supportive environment.

6. Stay current.

Let’s face it. Your workplace can change overnight. One day everyone is in the office, and the next day they’re all working from home.

Upwork estimates that 22% of the workforce (36.3 million Americans) will work remotely by 2025.

Today, more employers are embracing flexible schedules and remote work options. If your business offers remote work or hybrid work, make sure you have an employee onboarding program that supports it.

Onboarding a remote employee will require a different approach than in-person onboarding. For example, you may need to utilize more technology such as video conferencing and messaging apps. Remote employee onboarding has its own best practices, but the goals remain the same — to introduce your new employee to your company and prepare them for their role.

7. Be timely.

One of the biggest mistakes you can make is postponing an employee’s onboarding program.

Imagine your new hire waiting days or weeks for a formal company introduction or a meet-and-greet with your team. Delaying these activities may negatively impact your new hire’s productivity and ability to function in their job role.

If your employee isn’t up to speed on policies and procedures, they will miss out on critical information. And it’s more likely that your new hire will make a mistake that may be difficult to correct.

There is one instance where it makes sense to delay onboarding. If your small business is hiring more than one employee, you may postpone onboarding until they all can attend an orientation. Grouping new hires in one orientation session helps you maximize resources and time. And it helps your new employees to get to know one another.

Getting workers comp insurance is not only about doing the right thing legally. Investing in a workers compensation insurance policy shows that you care about your employees.

Workers comp also can:

  • Protect your business’s finances in the event a claim is filed
  • Prevent your business from being wiped out by a catastrophic claim
  • Potentially pay for legal fees if you need to defend yourself against a lawsuit
  • Build trust with your employees
  • Give employees a sense of security that they’ll be taken care of if the worst were to happen
  • And more

At Simply Business, we’re here to help. We can find a workers comp insurance policy to fit your small business needs.

Just give us a call at 855-930-2844. You’ll be connected with a licensed insurance agent who can get you set up with workers comp coverage before your new hire arrives.

From New Hire to Engaged Employee

It takes time and effort to prepare a new hire for their role. An employee onboarding program helps you stay organized and focused — and gives your new hire the support and training they need to succeed.

Onboarding can be a make-or-break moment for your new employee, so don’t underestimate its importance. Whether you have one recruit or many new hires, a stellar onboarding program can help retain your new employee and keep them engaged and motivated.

Written by

Susan Hamilton

I've always loved to write and have been lucky enough to make a career out of it. After many years in the corporate advertising world, I'm now a freelance writer—running my own show and contributing to Simply Business. Fun fact: I have three desks in my house, but I still do my best thinking walking in the woods

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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