It is generally accepted that a new employee can take up to 6 months to get up to speed, but we know that timeframe can be dramatically reduced by a strong induction which delivers early productivity. Research shows that this can translate to 1-2.5% of total revenue. And for a business with a 10% margin, an increase in revenue by 2% could mean a 20% increase in profitability!
With this level of impact, companies can’t afford NOT to take a good look at the way they induct.
Leanne, a General Manager with a national airline, was sick of seeing time and effort wasted by new employees, through no fault of their own, because they didn’t know how things worked in their large and complicated organisation. Even more concerning, she saw that leaders didn’t seem to know or understand their responsibilities, or what they needed to do, even after 6 months in the role.
When she came to us for help, we helped her reflect on her own induction. It had been non-existent (apart from the admin and the day of “talking heads”) and she was left to figure it out on her own with little support or guidance. She knew how unproductive, confusing and frustrating it was for her.
We then suggested a dual approach to induction – a general induction journey for every person who joined the company, and an additional but integrated journey for leaders. Within 6 months of committing to fix it, Leanne had a transformed induction offering enabling new employees to quickly and easily navigate the organisation, and understand their unique way of doing things. No longer did new employees or new leaders wander around trying to find out how things worked or who to talk to. We ensured they had the contacts, resources and information they needed to get up and running, and to full speed, as quickly as possible.
When existing employees saw that new employees knew things they didn’t, they were motivated to check it out too, increasing the overall impact of the onboarding initiative.
Given that the airline was inducting over 2000 new employees a year, being able to boost new employees’ productivity by an average of just one week each delivers a business impact of $2.5million, which is a 1700% return on investment in the first year! And this is well below the statistics which say they can expect up to 54% greater new hire productivity.
This early productivity, along with the impact on retention and productivity, was a contributing factor to the airline achieving its second highest annual profit the following year.
The Three Most Common Induction Mistakes:
 The classic Mellon Learning Curve Research Study
 A business with $10million turnover and 10% margin gives $1m profit; a 2% increase on revenue adds $200,000 to the bottom line – an increase of 20% profit