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Ignoring Onboarding Is An Expensive Mistake

Dana Cera

Technical onboarding might not be the first thing that comes to mind when thinking about the most critical factors in building a successful engineering team—perhaps you think it’s more about finding the developers with exactly the right skills. But we’ve talked in a few posts how onboarding helps retention. Even in the most senior roles, every new engineer should be onboarded well, so that they feel valued and productive, and you can get the most from your investment. In reality, onboarding saves more time and money than it costs to set it up, and you’ll reduce costs over time when your onboarding process is in place before you hire. 

Let’s start with the costs: there are formulas for determining the cost per new hire, but most engineering teams don’t have the resources to track and calculate their exact costs. Glassdoor found the average US company takes up to 52 days to fill a position, with an average cost of around $4,000. That’s the cost for finding, interviewing, and hiring—what you spend to get the right fit in the ergonomic chair, so to speak. Now factor in that one-third of new hires look for a new job within the first six months, and nearly one-quarter don’t make it to their first anniversary. Multiply that exponentially as your company grows. With these major factors to consider, the costs of not onboarding may not seem obvious at first, but they add up fast. 

In the rush to get to market, it’s easy for a startup to lose sight of how long-term investments upfront will result in positive workflows that directly increase the bottom line. As teams expand to cover more product surface area, new hires without guidance won’t know where to start learning or effectively use their time. An informal onboarding process (sometimes known as “getting thrown in the deep end”) becomes unscalable as a company grows.

Engineering teams that don’t invest in technical onboarding miss out on harnessing the potential of great people who struggled to thrive without guideposts. Their new hires don’t become productive because the ramping up period takes longer than necessary. And the uptick in stress levels for all involved results in too much turnover. And each of those financial risks increase with every new hire you bring on. 

So let’s take a deeper dive and look at the hidden costs of not onboarding: 

  1. Decreased velocity. If your most productive engineer keeps getting slacked by new hires looking for help, they aren’t spending time building the product. While no one wants a new hire sitting there wondering what they should be doing or—worse—feeling like they shouldn’t be there at all, it can be a challenge for your senior team members to constantly be interrupted to answer questions. You won’t meet your deadlines.
  2. Slow time-to-productivity. The average time for new engineers to achieve full productivity is 6-9 months. A Mellon Financial study determined lost productivity due to the learning curve for new hires was between 1% and 2.5% of total revenues. When the scaffolding is constructed to support new hires, and when that onboarding infrastructure is in place well before they’re hired, time-to-productivity is reduced. Staff get up to speed 34% faster in companies with the most substantial onboarding programs. 
  3. Duplication of effort. There’s a great deal of inefficiency when senior team members have separate and unique conversations as each new hire comes on board. Most of the time, those one-on-one conversations don’t result in documentation that would alleviate this pressure in the future. Edmond Lau, an early engineering leader at Quora, refers to this hidden cost as communication overhead. Some engineering leaders might attempt to solve the problem by hiring more people to get more things done. However, larger teams mean more communication overhead, more coordination, and lower overall efficiency. Alternatively, management might or split into smaller groups to cover the product surface area, and thereby reduce communication overhead. But beware: reducing opportunities for collaboration can result in reduced workplace enjoyment, in turn resulting in lowered productivity—the very opposite of what you want. 
  4. Engineer churn, or turnover. Once you find the right person for the job, and you’ve invested in them—recruiting, hiring, training—you want them to stay a while. With the average tenure of engineers less than three years, you could spend big bucks to backfill that role and lose out on the original hire. If you’re replacing someone rather than hiring for a new position, you can expect to incur costs estimated at six to nine months of that person’s salary. You paid to train them, now you’re paying that amount again to find someone new. The number one reason tech hires move on is the lack of team connection: research shows that being more intentional and structured during the onboarding process can help stave off early turnover

Onboarding reduces turnover by providing a consistent and rapid way to get new engineers up-to-speed and productive. Start-ups especially have limited resources, both time and money. But leaders can protect this valuable asset—their employees’ time—by investing in onboarding. A well-designed onboarding process is an opportunity for increased effectiveness, and it will pay for itself over time, with every new hire. 

Similar to how you invest in automation tools for your engineering work, automating the onboarding process frees up everyone else on the team to do what they do best. It may seem counterintuitive that automation can support human beings to be their best selves, but we do it all the time through scheduling apps and email, customer support bots, and all manner of macros-as-virtual assists. By reducing your communication overhead through automation, you are leveraging what everyone has already learned and providing that aggregated knowledge to the new hires. 

Perhaps most importantly, the onboarding process is an opportunity to direct the learning and activities of a new hire toward what the team believes matters most. The infrastructure of onboarding provides a framework, an intentional scaffolding that allows for those initial conversations about expectations, growth, feedback, and skill development.

Onboarding is an investment in people--and reduced time-to-productivity, stable velocity, and lower engineer churn are the returns on that investment. We can help you see that return on your investment with our technical onboarding solution, eddy

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