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How do managers and organizations quickly transform new hires into productive employees, a process called “rapid on-boarding”? This question is hardly trivial. Whether a company is growing to take advantage of a new market opportunity, restructuring to remain competitive or simply trying to cope with attrition resulting from retirements and turnover, one thing is certain — more and more employees are newcomers to work groups, departments or organizations. In today’s volatile economy, more than 25% of all workers in the United States have been with their company less than a year and more than 33% less than two years. Americans will, on average, change jobs 10 times between the ages of 18 and 37.1 And, of course, new employees are only part of the challenge — the constant state of internal restructuring in most organizations continually pushes managers to assimilate waves of employees suddenly transferred into new work roles and relationships.
The first and most obvious challenge with newcomers is jump-starting their productivity. Initially, newcomers are typically a net drain on productivity, drawing a salary, incurring training and orientation expenses, and consuming co-workers’ time without providing much in return. A recent study by Mellon Financial Corp. found that lost productivity resulting from the learning curve for new hires and transfers was between 1% and 2.5% of total revenues. On average, the time for new hires to achieve full productivity ranged from eight weeks for clerical jobs to 20 weeks for professionals to more than 26 weeks for executives.2 In the past, managers were often content to wait months (or even years) for their new arrivals to get up to speed. But in today’s fast-paced, competitive environment, many managers simply don’t have that luxury.
The second challenge is tapping into the creativity of new hires. Newcomers represent one of a company’s most important and underutilized assets — a source of fresh ideas, perspectives, expertise and industry contacts that an organization can leverage to become more innovative and competitive. However, most newcomers (whether college recruits or senior executives) express frustration in getting their ideas heard and accepted. Interestingly, this problem is particularly true at successful organizations with strong cultures. In most cases, newcomers at such companies are not really heard until they’ve gained visibility and legitimacy in the eyes of their peers.
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1. U.S. Department of Labor, “Employee Tenure in 2002” (Washington, D.C.: Government Printing Office, 2002); and U.S. Department of Labor, “Number of Jobs Held, Labor Market Activity, and Earnings Growth Among Younger Baby Boomers — Results From More Than Two Decades of a Longitudinal Survey” (Washington, D.C.: Government Printing Office, 2004).
2. These numbers are for external hires. Internal transfers get up to speed about twice as fast. See R. Williams, “Mellon Learning Curve Research Study” (New York: Mellon Corp., 2003).
3. This study was based on the U.S. Department of Labor’s National Longitudinal Survey and uses a representative sample of mostly early-career workers in the United States. See D.N. Dickter, M. Roznowski and D.A. Harrison, “Temporal Tempering: An Event History Analysis of the Process of Voluntary Turnover,” Journal of Applied Psychology 81 (1996): 705–716.
4. See, for example, R. Moreland, “Social Categorization and the Assimilation of ‘New’ Group Members,” Journal of Personality and Social Psychology 48 (1985): 1173–1190; D.J. Nash and A.W. Wolfe, “The Stranger in Laboratory Culture,” American Journal of Sociology 78 (1957): 399–417; and R.C. Ziller, R.D. Behringer and M.J. Jansen, “The Newcomer in Open and Closed Groups,” Journal of Applied Psychology 45 (1961): 55–58.
5. Turnover costs include lost productivity resulting from a vacancy, search fees, management time for interviews and training the replacement. Ten percent of companies report the average cost as more than $40,000. See R. McNatt and L. Light, “Job Turnover Tab,” Business Week, April 20, 1998, 8.
6. The entire AT&T study is described in D.W. Bray and A. Howard, “The AT&T Longitudinal Studies of Managers” in “Longitudinal Studies of Adult Psychological Development,” ed. K.W. Schaie (New York: Guilford Press, 1983). Further support for the importance of a challenging assignment is found in D.E. Berlew and D.T. Hall, “The Socialization of Managers: The Effects of Expectation on Performance,” Administrative Science Quarterly 11, no. 2 (1966): 207–223; and H.G. Kaufman, “Relationship of Early Challenge to Job Performance, Professional Contribution, and Competence of Engineers,” Journal of Applied Psychology 59 (1974): 377–379.
7. See, for example, S.C. de Janasz, S.E. Sullivan and V. Whiting, “Mentor Networks and Career Success: Lessons for Turbulent Times,” Academy of Management Executive 17 (November 2003): 78–92; E.A. Fagenson, “The Mentor Advantage: Perceived Career/Job Experiences of Proteges vs. Non-Proteges,” Journal of Organizational Behavior 10 (1989): 309–320; and G.T. Chao, P.M. Walz and P.D. Gardner, “Formal and Informal Mentorships: A Comparison on Mentoring Functions and Contrast With Non-Mentored Counterparts,” Personnel Psychology 45 (1992): 619–636.