Does better employee onboarding equal better retention?

July 31, 2025

 

Alex Oliver

10 min read

Nearly a third of new hires quit within their first 90 days, right when they should be getting comfortable. This signals a clear problem: Companies treat onboarding as a paperwork process rather than a time to foster a genuine connection with their new hires.

The good news? Organizations with structured processes see 50% better new hire retention. Here, we’ll unpack some real tactics to elevate your onboarding and excite employees about their future at your company.

The connection between onboarding and retention

Onboarding is new hires’ first real glimpse into what life is like at your company. This time is crucial to building an emotional bond with your employees — a key ingredient of long-term retention, according to Gallup.

Since onboarding encompasses most of an employee’s first year with a company, it is during this process that employees make their decisions about whether to stay or leave. In fact, Work Institute’s 2025 Retention Report notes that early attrition accounts for 40% of all turnover and is often the most expensive.

But when you align the onboarding experience with new hires’ excitement from their job search, you reduce recruitment costs and keep talent longer.

Why onboarding is part of a talent strategy

How quickly employees integrate affects every aspect of your talent strategy, including:

• Employee engagement
• Employer reputation and brand
• Company culture
• Performance management
• Career development

The more effective your onboarding experience, the more likely employees are engaged and invested in contributing to your company.

Compare this to a company that focuses primarily on the compliance paperwork aspect of onboarding, with little thought on how onboarding influences your broader workforce management objectives. Likely, employees feel adrift in their jobs, leading to role ambiguity, poor performance, quiet quitting, and early attrition.

Effective onboarding management is a crucial part of your overall talent strategy, as it accelerates employee integration, fosters a positive company culture, and strengthens your employer brand — ultimately leading to better talent attraction and cost savings.

What onboarding metrics really matter

Recruiting metrics in onboarding helps you diagnose the effectiveness of your current process, allowing you to identify and enhance areas that need improvement. The biggest onboarding metrics to watch include:

• Time to productivity: Measures the time between the employee’s start date and when they begin meeting performance expectations. Generally, the shorter the employee’s time to productivity, the greater the employee return on investment (ROI).
• Onboarding satisfaction score: Measures new hires’ satisfaction with their onboarding experience, typically a combination of quantitative and qualitative data. You’ll gather this feedback from new hires usually 30 days, 60 days, 90 days, six months, and one year after their start date.
• Early turnover rate: Measures the number of new employees who leave within a specified period from their start date, usually 90 days to one year. Lower rates tend to indicate more effective onboarding.

These metrics work together to provide a comprehensive view of your onboarding process and its effect on employee retention. They also demonstrate ROI to leadership while highlighting opportunities for improvement.

Did you know? Your industry influences employee turnover rates. Remember to compare your turnover rates against your historical average and industry benchmarks, like the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, for the most insight into your employee retention efforts.

How to personalize onboarding by role

A personalized onboarding experience gets employees up and running in their roles faster than a traditional “one-size-fits-all” approach. Beyond standard orientation and paperwork, personalize onboarding by:

• Job type: Provide function-specific learning paths based on the key technical skills new hires need in the role, from process workflows to equipment and software tools they need to use every day.
• Department: Facilitate team introductions, clarify workflows, and highlight relevant key performance indicators (KPIs) specific to the new hire’s department to ensure role alignment.
• Seniority: Offer mentorship, shadowing, leadership training, and career development opportunities to employees entering senior positions.

Don’t forget to ask your recruits about their expectations and experience before, during, and after onboarding. Frequent follow-ups with new employees will provide you with the insights to adjust their onboarding experience as needed. This fosters trust with your employees, enabling them to envision their careers with your company.

How technology empowers better onboarding

From a candidate relationship management system to a human capital management (HCM) platform, an integrated HR tech stack can transform chaotic onboarding processes into streamlined experiences. For example, a digital onboarding platform:

• Automates repetitive work: Creates consistent, set-it-and-forget-it workflows for sending new hire paperwork and reminding employees to complete documentation or training.
• Enables employee self-service: Allows employees to complete new-hire requirements at their convenience while tracking their onboarding progress and role KPIs.
• Develops tailored training opportunities: Uses AI-powered algorithms to suggest learning paths specific to the new hire’s role and career interests.
• Increases employee engagement: Introduces new hires to their team members through team member welcome messages and icebreaker questions.
• Ensures labor law compliance: Keeps you up-to-date with the latest federal, state, and local regulations, such as W-4 forms, and state-specific training requirements, like workplace harassment prevention.
• Tracks onboarding metrics: Provides onboarding stakeholders access to new hire dashboards to monitor onboarding progress and gain insights into areas for improving process efficiency.

Are your current onboarding tools not cutting it? Explore iCIMS Onboarding for automated workflows, new hire portals, progress monitoring, and customizable workflows to maximize employee retention while simplifying onboarding.

Why better onboarding saves money

SHRM’s 2022 benchmarks show it costs approximately $4,700 to hire an employee. If you hire 100 employees in a year, that’s $470,000. If half quit within a year for preventable reasons, costs balloon to $705,000.

But with effective onboarding, you can reduce these costs significantly. Harvard Business Review notes standardized processes improve retention by 50%. Using our example, this means a structured onboarding experience can save you up to $117,500 annually through better retention alone.

True, dedicating time and resources to upgrading your onboarding process creates real budget constraints, from initial upfront costs for onboarding software to lost productivity among current staff due to training and integrating new hires.

But the tradeoff? Huge cost savings for you and recruits who are more likely to stay in the long run.

Action steps to improve onboarding and retention

Ready to get new hires excited about staying with your company? With the benefits of a good onboarding process clear, try the steps below to level up your workflow. 

Pro tip: Revamping your onboarding process? Remember to start small and scale up. Huge changes all at once create confusion and hurt workplace productivity. Work through each step a little at a time and watch your onboarding metrics turn positive.

1. Review your current onboarding flow

Take a look at your current onboarding process and ask yourself:

• How quickly do employees reach full productivity?
• How much time does your team spend on onboarding administrative tasks?
• Do new hires understand their roles and company goals?
• How satisfied are new hires with their experience?
• How many new hires leave within a year?

And, do you have enough data to answer these questions?

If your answers disappoint, time to proceed to step two.

2. Identify and track key metrics

Use your human resources (HR) or payroll software to determine the number of employees who’ve left your company over the past year. This will be your early attrition benchmark and what you aim to beat.

Work with recruitment stakeholders to develop a system for monitoring success, like:

• Regular surveys at 30, 60, 90 days, six months, and one year.
• Progress-tracking dashboards for training and role-specific milestones.

These enable you to calculate your onboarding satisfaction and time-to-productivity metrics, allowing you to act quickly should your onboarding effectiveness dip.

3. Add elements of role-specific personalization

Create unique onboarding checklists for each employee based on department, location, and level of seniority. Here are some examples:

• Employee shadowing for new hires to observe and learn how a peer in their role operates.
• Mentors for new hires to receive personal guidance from coworkers and develop community.
• Development plans for new hires and their managers to outline individual career advancement goals and pathways to success.
• Training paths for employees to refresh their technical skills or expand their soft skills in areas like leadership, communication, time management, and conflict resolution.

4. Get employees engaged

It’s not enough for new hires to know how to do their job; they also have to find their work engaging and meaningful. Try out these tactics to connect employees with your business culture:

• New hire buddies: Select a peer outside of the new hire’s manager to serve as their confidante, cheerleader, and company culture champion.
• Regular check-ins: Provide plenty of chances for managers and their new hires to talk, share concerns, and clarify role expectations.
• Welcome events: Create networking opportunities for employees to build relationships with their team and the company as a whole, like lunch-and-learns, coffee hours, and team-bonding activities.
• Company groups: Introduce new hires to employee resource groups (ERGs) and diversity and culture committees to foster a sense of belonging.
• Professional development: Offer numerous opportunities for employees to achieve their career goals, including company-sponsored education and training, self-led courses, and opportunity marketplaces.

5. Evaluate onboarding tools to support consistency

Your employee onboarding tools should simplify the onboarding process by automating tedious administrative tasks while supporting individualized ramp-up experiences. Ensure your tools:

• Support personalized checklists and workflows.
• Automatically remind new hires of important deadlines, like paperwork and training course due dates.
• Integrate with your applicant tracking system (ATS), HCM, and learning management systems.
• Allow for personalized goal setting and team welcome messages.
• Calculate and track important metrics to improve onboarding efficiency.
• Promote employee self-service to reduce follow-ups with HR teams.

If your current tools are nothing more than paper personnel files and spreadsheets, consider modern software platforms that create consistency and free your team to focus on employee training.

Explore onboarding tools that retain top talent

Your employee retention efforts start way before your employee’s first day. It begins with a smooth recruiting process that demonstrates your company values, a preboarding workflow that excites employees about their first day, and an onboarding experience that prepares them for their future careers.

But software platforms that rely on excessive data entry and rigid, prebuilt workflows hinder this process. With a holistic solution like iCIMS, you can combine recruiting and onboarding management to create a streamlined process that lets you focus on what matters most: welcoming new team members.

Leverage AI-powered automation, customizable workflows, and internal collaboration to retain top talent from day one. Book an iCIMS demo today.