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‘Onboarding debt’ is costing organisations – how can it be fixed?

By Shandel McAuliffe | |7 minute read
‘Onboarding debt’ is costing organisations – how can it be fixed?

On the day your new hire joins your team, they don’t understand what is expected of them. They don’t know that much about the culture. They don’t understand the processes you use, and they may not be adept at some of the technical aspects of their role. But, most of all, they don’t know their manager’s expectations.

And because they don’t understand these things, they will solve problems on their own. They will do things the way they think is right, do things they shouldn’t, or neglect to do the things they should. It’s not your new hire’s job to magically understand what’s expected of them; it’s their manager’s job to help them understand.

Often when I’m working with leaders, I ask three key questions to assess an employee’s potential to succeed in a role:

  1. Are they capable of succeeding in the role?
  2. Do they understand what it takes to succeed in the role?
  3. Do they want to succeed in the role?

Whether they are capable and whether they want to succeed is on them. But whether new hires understand how to succeed is on their manager.

According to Gallup, only 12 per cent of employees believe their company did a good job onboarding them. And from my research, they could be right. Managers are failing woefully in their job of helping new hires understand how to succeed, leading to out-of-control onboarding debt.

Onboarding debt is much like sleep debt. If you don’t have enough sleep for a few nights, it’s probably okay, but if you don’t get enough sleep over weeks, months, and years, you accumulate a sleep debt, which can create serious health issues.

Onboarding debt works in a similar way.

The first moment of the first day a person joins your team, they carry the maximum amount of onboarding debt. Their manager’s job is to oversee a system that reduces that onboarding debt as effectively as possible. They must help them understand the culture, the technical and process expectations, and their expectations as their manager. If they don’t understand and continue to work in your organisation into the future, there will be a difference between what they should know and what they know. This difference, this liability, is carried around like an invisible sack of stones on the back of every employee.

It affects three main areas: productivity, retention, and the business’ culture.

To what degree does onboarding affect these three areas? The employee review website Glassdoor found that: “Organisations with a strong onboarding process improve new hire retention by 82 per cent and productivity by over 70 per cent.”

Skipping an effective onboarding process is like borrowing money. With borrowed money, you can do something sooner than you could otherwise, but it comes at the cost of interest.

Reduced productivity is the ongoing cost of not having an effective onboarding process, much like the interest you pay when you borrow money. Reduced productivity results from people misunderstanding the company culture, their manager’s expectations, or the role’s technical processes.

When this happens, they do things the wrong way or in a less effective way. Efficiencies are lost, costly mistakes are made, and work must be redone.

When you accumulate too much financial debt, most of your effort ends up simply servicing the debt. In the same way, if you accumulate too much onboarding debt within your team without reducing it, managers spend most of their effort addressing embedded misunderstandings and their consequences.

In my global survey of over 1,100 CEOs and hiring managers about the impact of onboarding, I found that 83 per cent of organisations have an onboarding process of 14 days or less, with almost 50 per cent less than seven days. Yet, the real impact of onboarding accelerates from 30 to 90 days. The vast majority of onboarding processes have a duration that is simply too short to produce a tangible impact on either productivity or retention.

If you’re looking to reduce onboarding debt, consider three important factors in an effective onboarding process.

First, have the new hire’s manager develop an effective role scorecard that defines success in the role across three areas, the cultural expectations, the technical and process expectations, and their expectations as their manager.

Second, have the new hire’s manager build a 13-week onboarding sprint plan, which details how the new hire will come to understand the expectations to the point it’s not possible to misunderstand and will achieve success in the role.

Third, have the new hire and their manager complete the 13 weekly meetings, transitioning through three stages along the way of understanding, learning and applying, and embedding what they have come to understand.

Like fixing financial debt problems, onboarding debt can be fixed, but it needs to be done correctly.

Brad Giles is a leadership team coach and author of the new book: ‘Onboarded: How to bring new hires to the point where they are effective, faster’.




Onboarding is the process of integrating new hires into the company, guiding them through the offer and acceptance stages, induction, and activities including payroll, tax and superannuation compliance, as well as other basic training. Companies with efficient onboarding processes benefit from new workers integrating seamlessly into the workforce and spending less time on administrative tasks.

Shandel McAuliffe

Shandel McAuliffe

Shandel has recently returned to Australia after working in the UK for eight years. Shandel's experience in the UK included over three years at the CIPD in their marketing, marcomms and events teams, followed by two plus years with The Adecco Group UK&I in marketing, PR, internal comms and project management. Cementing Shandel's experience in the HR industry, she was the head of content for Cezanne HR, a full-lifecycle HR software solution, for the two years prior to her return to Australia.

Shandel has previous experience as a copy writer, proofreader and copy editor, and a keen interest in HR, leadership and psychology. She's excited to be at the helm of HR Leader as its editor, bringing new and innovative ideas to the publication's audience, drawing on her time overseas and learning from experts closer to home in Australia.

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