Poor onboarding is costing you more than you think – here’s how to change that
22 Jul 2025
The old truism has it that first impressions are everything. In an attention economy where everything moves lightning-fast – and where concentration spans seem to be shrinking by the day – those first impressions count even more. It’s a familiar concept as it pertains to customers… but what about employees?
Talented individuals have rightly come to expect a level of employee experience commensurate with their value to the organisation as a whole. Companies can’t rely solely on an offer of the right salary and benefits to attract people anymore; premium talent demands a premium. From company culture to brand relevance, remuneration package to a sense of belonging, your employee value proposition may derive from a variety of sources.
So, competition for quality talent is at an all-time high. Turnover is expensive. Finding good people with the skills you need is only half the battle – the rest lies in retaining the talent you’ve got. And that starts with onboarding processes that signal your organisation’s status as a place where systems work, where responsibility has ownership and where support for employees is comprehensive and unwavering.
1. The financial drain of early turnover
In business, continuity is essential. You need people who will own projects, processes, products and relationships end-to-end – but to achieve that you’ve got to keep the talent you’ve got. The costs of screening, interviewing, onboarding, training in terms of time, money, effort and momentum are substantial, with estimates placing the price of replacing an employee at 50–200% of their salary, so each loss carries a steep price tag in both direct and hidden costs.
Most companies are seeing rising attrition rates – a third of new hires give notice within the first three months – driven by poor employee experience, lack of engagement, better offers elsewhere or a combination of the three. This suggests a worrying trend: new hires are walking out the door before they’ve even settled in. Those numbers soar when onboarding is factored in: new hires with poor onboarding are even more likely to quit, most commonly due to under-training.
In contrast, structured onboarding can boost retention – and with the associated costs estimated at $1,000–$1,420 per employee (not to mention broader hiring costs), retention represents a significant saving in our “do less with more” culture. That’s a lot of money down the drain if the experience doesn’t stick, and clearly there’s a lot of room for improvement. When you’re losing up to two years’ worth of salary on a single early leaver, those costs stack up fast – especially in high-churn roles.
2. Productivity lag and lost ROI
New hires report not feeling prepared for their role after onboarding. The average employee takes 28 weeks to reach full productivity – that’s an expensive six months before a new hire becomes fully effective. If a new hire earns $60,000 a year and takes six months to reach full productivity, that’s $30,000 spent on their salary before you see ROI (and even more if their output is delayed). Because of the financial risk inherent in slow ramp-up, a lost employee constitutes a loss of productivity and thus a financial (and potentially a reputational) shortfall. New hires who’ve undergone a strong onboarding process reach that point faster, and an Enboarder survey of over 1,000 HR leaders found that one of the top challenges for 2025 was “ramping new hires to productivity quickly” – something that is virtually impossible without adequate onboarding.
Robust, structured onboarding offers many efficiency gains , especially when the process includes goal‑setting and feedback. And it’s increasingly easy to provide employees with a well-rounded onboarding experience – platforms like Enboarder enable you to tailor the experience both for the role and for the individual. This goes a long way towards shortening time-to-impact by ensuring clearer goals, certifications and fewer mistakes along the way – it’s a productivity lever that sets your people up for early success. AI-guided onboarding can also help by guiding the process and ramping hires to productivity more quickly.
3. Erosion of employer brand and future talent acquisition
Poorly onboarding new hires doesn’t just result in attrition –this “credibility gap” between promise and fulfilment can also damage your brand and turn off future applicants. Reputation matters, especially when candidates are doing their homework long before applying. Research by the Human Capital Institute shows that 72% of candidates share bad experiences online and off, meaning news of poor onboarding can spread quickly when early disillusionment spills over into recruitment narratives. Few employees report that they would recommend their employer after joining, further adding to the risk of negative word-of-mouth. Rebuilding a damaged employer brand often means additional spend on recruitment marketing or even higher salaries to offset perception gaps.
On the other hand, happy employees are the best advocates you could have for your employer brand. Most candidates are more likely to apply if a company actively promotes its brand, but these efforts can be too easily undermined by weak onboarding. Most also say that strong onboarding is critical to their decision to stay long-term, making it vital to brand perception in the marketplace. Organisations with strong onboarding see a boost in retention and productivity, reinforcing the power of first impressions both internally and externally. Beyond the impact on the new hire, poor onboarding also takes a toll on the team around them.
4. Impact on existing workforce and morale
A bad hire costs more than just money. It can erode trust, culture and cohesion within the wider team, having a knock-on effect on existing employees as well. Even if unhappy employees choose to stay, disengagement is a drain on ROI (costing the company a third of their salary in lost productivity) as well as morale. That lost productivity doesn’t happen in a vacuum; it spreads – when new hires lack direction, that burden lands on others. New hires who disengage early impose added pressure on existing employees, leading to burnout. Where roles and responsibilities are unclear, new hires become dependent on peers or managers, distracting them from their core tasks. And overburdened team members of longer standing also pose an increased turnover risk in the broader workforce.
Only 12% of employees strongly agree that their company has a great onboarding process, suggesting that dissatisfaction and poor integration with existing teams may be more widespread than employers are aware. If an employee earns $70,000 a year, disengagement could cost the business over $23,000 annually – without them ever leaving. This is onboarding’s ripple effect: when it fails, the fallout extends beyond the new hire to drain morale, productivity and stability from the team as a whole. Factor in the lost time from overburdened teammates, and the effect is amplified.
The strategic value of modern onboarding
The good news is that when done well, onboarding pays dividends: after a great onboarding experience, employees are 2.6x more likely to be satisfied at work, feel more engaged long-term and perform better. And with the right tools, you can make your team feel equipped and confident in their roles from before their first day.
Key enablers like AI and automation allow you to personalise journeys, streamline tasks and shorten time to productivity while keeping communication regular, engaging and useful. More and more companies are investing in tech-led solutions, so that the HR software market is projected to balloon to $81.84 billion by 2032 (up from just $ 37.66 billion in 2023) – a lot of which will be spent on digital onboarding tools. It’s already a top strategic investment area for HR leaders – McKinsey notes a greater boost in investment in people‑focused tech in the past year than in the whole of the preceding decade. Experience-driven onboarding, which focuses on creating personalised, engaging journeys for new hires, takes the process beyond paperwork and policy to build connection, clarity and culture from day one.
Conclusion
More than just a bad start, poor onboarding is a strategic liability with measurable costs in turnover, productivity, morale and brand reputation. Given onboarding’s centrality to these metrics, CHROs need to treat onboarding processes as business-critical, not just an HR admin checklist. Poor experiences can drive up cost-per-hire, leaving open roles hanging and pushing recruitment costs even higher. Replacing a single employee can cost 50–200% of their salary, meaning a $70k role could cost $35k–$140k to refill. Delayed productivity, too, can cost tens of thousands in salary and lost output while new hires take up to 6 months to fully ramp up – and disengaged employees cost companies 34% of their salary. Furthermore, when morale drops, so does productivity across the board.
The ROI is clear: strong onboarding can improve retention, productivity and job satisfaction, and it’s not hard to get right with the help of modern onboarding solutions like Enboarder offering scalable, tech-enabled experiences that streamline integration and support employees throughout the process.
Modern onboarding platforms like Enboarder are built to support experience-driven onboarding processes at scale, welcoming new team members with a personal touch, not a blanket approach. As HR leaders step up their investment in onboarding tech, now’s the time to turn your process into a performance advantage. Onboarding is an overlooked lever. Pull it.
Let us help you make onboarding your strategic advantage.
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