How to calculate the ROI of employee onboarding

Before discovering how to calculate the ROI of employee onboarding, it is important to understand why you would want to calculate ROI and how it could be beneficial for your business.

  • Roni Misano
    Roni Misano

    November 09, 2022

  • How to calculate the ROI of employee onboarding

    Before discovering how to calculate the ROI of employee onboarding, it is important to understand why you would want to calculate ROI and how it could be beneficial for your business.

    Why Calculate ROI of Employee Onboarding

    Hiring and training is typically a major investment by the employer. Even those new hires who don't need substantial training will take some time to become as effective and productive as you likely need them to be.

    When you have a position to be filled or you wish to expand your team, you should understand the upfront cost that you will incur with a new employee. Only when you understand the cost can you begin to understand if there is value in hiring a new employee.

    How to Calculate ROI of New Employees

    Now that you know why you would want to make an effort to calculate ROI, let's talk about how to do so. When you start thinking about the expenses associated with hiring someone new, you might think about advertising costs related to the job ad. That number is fairly simple to arrive at, but there are several more expenses that need to be considered.

    A cost-benefit analysis relies on complete cost information and a guess as to how valuable this employee will be for your business. These numbers can be difficult to arrive at, but only when you understand all the costs involved can you begin to decide if hiring is the right choice.

    Ad Costs: These are the actual costs associated with placing your opening on a job board or advertising it locally.

    Recruitment and Interview Time: This is the time spent both recruiting and interviewing potential hires by HR, department heads, or anyone else involved in this process.

    Training: Training is a huge portion of the expenses associated with new employees. This includes materials, time, and the employee's salary package during the training period.

    Equipment: You might need to purchase an additional laptop, headphones, or any other supplies for this employee to be able to do their job.

    Once you discover an amount that you feel represents the cost of onboarding a new employee, you will need to calculate the benefit that you hope to see over time. How productive will they be? Will they directly bring in new business? How long do you hope they stay?

    Improve Employee Retention to Increase ROI

    The last thing that employers want is to invest time and money into onboarding a new employee only to have them leave within the first year. Keeping your employees learning, growing, and excited about your company and their role will increase ROI. A smooth onboarding process and training program makes the new hire feel confident that they can grow professionally within the company.

    Formal training programs, mentors at work, and an inclusive work culture can help keep employees interested and help them grow. Training might seem daunting, but templates are available to make it much easier to design interactive training sessions. Templates that are easy to change will also cut down on the costs of the onboarding process.

    Juno Journey

    Juno Journey offers a robust and simple-to-customize development program that can give you control over training and reduce expenses at the same time. You can easily design any of a large library of ready-to-use templates to fit your training needs.

    Juno Journey also offers anROI calculator that can help you visualize the value of hiring a new employee. Adjust the calculator to see the value of training and long-term engaged learning.

    Hiring a new worker is a big decision, and any business may have to pay a lot of money up front. Understanding the costs and benefits can help leaders decide when to hire someone and give them a reason to keep that person on board for a long time.

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