Intentional, or Accidental?
Early in my career, I worked as the systems administrator for a very early startup, with only 10 of us, many family members of the founder. It was wild, and we were running on a shoestring. We brought on some folks to the tech support team. This was my first introduction to employee enablement: I developed the training for our tech support. It was wild, it was ad hoc, barely structured, but it did the job for those who had some basic experience. Those who did not, they really struggled. We had heavy turnover, with many sticking around for no more than 90 days.
You see, if you don’t properly train your folks, they will leave as they do not have the adequate resources or experience to succeed. No one likes feeling like they are failing.
And yet, in many early startups, one in three employees considers leaving within the first 90 days due to poor onboarding. Think about that for a minute: All the cost you put into recruiting, interviewing, finding a good candidate, and getting them started. All lost, because they didn’t have the tools they needed to do the job. They didn’t know where to go, what was expected of them, how their success was measured, or how to do key parts of the job.
Now, once they leave, you have to start all over again, often spending up to 2x of their salary just to get a replacement. As a startup, you can’t afford that. You also can’t afford the lost momentum those hires would have brought, the bottlenecks that will result due to unfulfilled roles, and the days, weeks, months, or even quarters where you just can’t find the right person who will do the job without needing onboarding. Hint: you can’t. Everyone needs to be onboarded.
You are training your people, whether it’s intended or not. The only question is, are you intentional, or is it accidental?
The Myth: “We’ll Figure It Out Later”
But you are a busy guy! Leading an early start-up, you are busy with Sales crushing deals, evangelizing your product to everyone and anyone that will listen, and looking to build your market share. It’s why you hire! You need people to take aspects of the business you don’t have time to do yourself. So, you figure you can hire experienced folks from other similar companies and they will just “figure it out” as they go along. So, you step back, take your role under Product or Sales, and just let onboarding happen.
The belief, or the myth, is that smart people will just figure it out. They’ve worked in their industries before in similar roles; they can just make that happen. So, you turn them loose onto your fledgling company with little direction and hope for the best. The anecdotal evidence that feeds the myth is that, often, people make it work. They bring their experience from their previous companies, build their own fiefdom with their own policies and operational roles, such as IT and HR just have to figure things out as each department runs on its own rules and policies. It’s inefficient, often expensive, and feeds silos where collaboration should exist.
At the employee level, this feeds controlled chaos, areas where people become “indispensable” because they hold all the tribal knowledge for their department. If they go, the department is thrown into disarray and confusion as co-workers immediately update their LinkedIn profiles and resumes. Employees become disengaged because they don’t have a firm foundation of policy and procedure: It all comes down to the memory of their co-workers and shadow support processes that develop in response to the vacuum. How can they make a decision when it’s immediately undermined by a more experienced co-worker?
Finally, there is a more operational hit. As teams realize their need for training, they will start training internally, their own training, their own takes on policy and procedure, their own LMS. I’ve walked into companies that had 5 different learning management systems, and new employees were expected to use every single one of them as part of their onboarding process, as dictated by a wiki page or Word doc that was constantly out of date. License costs were crazy, and those expenses could have been better applied to hiring new people.
The Hidden Costs of Poor Onboarding
So, you figure, “well, it’s just the cost of business, right?” And as your teams start to build their own programs, their own policies, their own mini-companies in your company, the one you have poured your heart and soul into, you carry on, hoping things will work out on their own. So, what exactly are the “costs of doing business” when you come right down to it?
01
Lost Productivity
Poor onboarding means it takes longer for employees to get up to speed. Most organizations will have a 30-60-90 day plan, which, if you don’t prepare your employees properly, will extend for weeks, months, or even quarters as they “Try to figure it out themselves.” Eventually, of course, they do, but you have wasted months of productivity while senior staff are constantly pulled in to shadow new employees, dealing with missed KPIs and increased training needs. It’s inefficient, it’s costly, and it’s leeching momentum from your growth.
02
Higher Turnover
When there is a lack of clarity, a lack of direction, or a lack of support, employees become continually frustrated. Many try to contain this frustration internally, which feeds into poor mental, emotional, and physical health. Eventually, the work of catching up becomes too much, and the calculations start: How much more frustrating is it to try and meet unknown, vague, and/or inconsistent requirements than to try and find another job? It may take 90 days, 5 months, or even 1 year, but that calculation is constantly running in your employee’s head.
Now, you need to hire someone to replace them. The cost of replacing an employee can run as high as twice the compensation of the employee who left. It’s like hiring three people to keep one. Is that efficient? Is that economical? Is that good for business? Now, couple that turnover with the costs of delays, bottlenecks, and stalled growth.
03
Cultural Drift
When teams are left to fend for themselves, they develop their own culture, policies, processes, and expectations. If your company doesn’t structure onboarding, it’s happening by accident. You may be the most employee-first, diversity-minded, and ethically-driven leader, yet your ideals and values are not the ones being perpetrated. The culture that is perpetuated is dictated by your early employees, or those who remain. Those who are dealing with their own frustrations, those jaded by their own poor onboarding experience. That will be the culture of your company, that will be your legacy, until you decide to fix it, and fixing a culture is extremely torturous and expensive.
04
Customer Impact
“Still,” you think, “that’s a problem for another day. Our customers can’t wait, and I don’t have time to dedicate to proper onboarding right now.” Imagine for a moment, you walk into a hospital for a routine bypass surgery. Your doctor finds out that the surgeon slated for your procedure has left, frustrated with the hospital policies that constantly change on a whim. So, as your doctor, they are asked to do the surgery. Leadership thinks, “You’ve been to medical school, right? You can do this.” The doctor, your family doctor, one who does stitches or the occasional hernia check, is expected to expertly cut into your chest and perform a bypass. As a patient, would you go back to the hospital? Would your doctor?
Customers can tell when their Sales, Customer Success, and Support teams are poorly trained or supported. They know, because they’ve seen it in their own companies. Your customers lose trust in the company and are now doing the calculation: Do you bring enough value to warrant the frustration they get from poorly trained contacts? Once the calculation has started, it’s difficult to reverse it. It’s difficult to rebuild trust once it’s lost. That means churn.
05
Leadership Burnout
“But,” you say to yourself, “I hired leaders to take care of this. If they can’t do it, I’ll get someone else who can.” Sure, you can blame your leaders for your lack of dedication to proper onboarding for your company. So you start to churn through leaders, because they are getting burned out trying to make onboarding happen in a structured way. Blame is thrown about, and good, talented leaders, left to their own devices, start looking elsewhere.
I’ve been on both sides: Leaders leaving because they just can’t get anywhere with senior leadership, and as a leader, struggling to make things work in a culture of vague direction, promises, and poor onboarding. Onboarding can make or break whole teams.
Why Early-Stage Startups Are Hit Hardest
When you are just starting, you need every headcount you can get. You need folks who can hit the ground as quickly as possible, keep on message, and grow the company. Sales for new logos, Customer Success, Product, and Support for retention. You need to build a structure quickly and efficiently. Every weak ramp-up process derails progress and delays growth.
“Well,” you might think, “Perhaps I just don’t need the headcount. My team is small, but they can make it happen.” They can, now. But can they, when one person is hit by the lottery (because it’s nicer than being hit by a bus)? Perhaps they leave for a better opportunity elsewhere, or start their own business? Do you have the redundancy necessary to cover for those who are temporarily or permanently out of the office? And what about mistakes made by the team, without help? Newly onboarded employees will make mistakes. Poorly onboarded employees make serious mistakes. Mentors can help mitigate the impact, but not if you are short-handed.
What then does your budget allow? Frequent turnover is costly, not just in lost sales or lost customers, but in real dollars. Limited budgets can’t afford high turnover because of poor or non-existent onboarding.
Small teams are hit worse by less redundancy and more mistakes.
Signs Your Startup Has an Onboarding Problem
“Yeah, sure, what you are saying makes sense,” you are thinking to yourself, “but I don’t have a problem!” Perhaps, though, you pause. Then think, “How would I know?” That’s a much better response: How do you know you have a problem with onboarding? What are your indicators?
The first sign would be that your new hires are asking the same questions again and again. And again. They ask for a momentary response or solve the immediate problem, and the answer is pushed out by the next crisis. Answers are not internalized, skills are not developed, and learning isn’t happening. This is, quite often, the case when you rely too heavily on mentors and on-the-job training. Don’t get me wrong, both are valuable to the onboarding process! But your new-hires need a strong foundation of information and skills from which to draw, so the practice can apply.
This leads to our next indicator: your teams rely too heavily on shadowing and mentor leadership instead of structured training. Mentors provide guidance and knowledge checks, but shouldn’t be there to teach. They don’t have time; they have their own jobs to do! Structured learning provides that necessary foundation that Mentors can place into context, showing the value of mentorship.
Next, we have inconsistent performance across hires in the same role. Some folks do really well in the chaos, quickly acclimatizing themselves and running with it. Others struggle. Inconsistency in onboarding is a sign that something is wrong, and it’s not your new hires. One constant is true with hiring: Those who are hired generally want the job. Maybe not because they are motivated by your Mission, or even by the team they are on, but ultimately, they want to work (or they wouldn’t have applied). Onboarding should provide a baseline of performance from which everyone can work. Mentorship places the training into context, and everyone should have the same opportunity to succeed. Even if you follow the standard Bell curve, at least 75% of your team members should meet their KPIs within a reasonable amount of time (generally 1.5 to 2 months). If you aren’t seeing that baseline result, there is definitely something wrong with your onboarding process.
Finally, your managers, or you as the founder, need to constantly re-explain “how we do things.” Culture is critical to a company, but if you constantly have to remind your employees of how things are done, something’s wrong. Now, I’m not talking about basic compliance training, which is required by law. I mean explaining your culture: How the company does business, why people do the things they do, and what’s important for your business outcomes. This goes beyond compliance; this is the heart and soul of who you are as a company, your brand.
The ROI of Getting Onboarding Right
“Okay, okay,” I can hear you say, “but how do I know onboarding is going to be worth it, and not just another expense you are trying to sell me?” A good question. Onboarding is much like a service: If it works, you don’t know it’s there. When it doesn’t work, everything is in chaos. Let’s break down the real benefits of good onboarding.
First, you have a faster ramp-up process for new hires. They are ready in weeks, not months. Skills are taught at an accelerated rate because you aren’t relying on the live environment to give you all the experience someone needs: You have it set up in a controlled, curated setup that covers almost everything. This translates into real business growth and bandwidth because hiring bottlenecks are removed.
You have reduced turnover and, therefore, fewer recruiting costs. Your new hires are more comfortable, more prepared, and feel ready to go faster and without much mentor intervention. They ask fewer questions, they contribute faster, and the business is better placed to grow. Without increased recruitment costs and lost experience from high employee turnover.
Your culture is stronger, the vision of every employee is aligned with the founder’s, and employees feel connected to the company’s purpose. Employees know what you want, they know what drives you, and they understand why.
Your onboarding process can scale with your hiring needs. Onboarding playbooks prepare you for rapid growth, setting well-established processes in place with regular reviews for updates. It doesn’t have to be complex, it doesn’t have to be all video, and it doesn’t have to be difficult to set up. You just need to be organized, have an easy method of tracking progress, and measure the success.
Proper onboarding means real returns on your investment: productivity, time-to-value, and significantly reduced recruiting costs.
Practical Steps for Startups
So where do you start? Once you know you have a need, you need to get the plan in place.
Start with a “Day 1–30 Roadmap” for each role. Your HR team, ideally, should have skill requirements and job analyses for every role. Chances are, though, the HR team for a startup doesn’t. It’s a large task, and you likely have a small team that handles onboarding. Often, this task is delegated to the hiring manager. Then, build out a 30-day onboarding roadmap that level-sets job requirements and skills, familiarizes the learner with the processes for the role, and sets milestones for success.
You can then document those processes somewhere they’re easily accessible. Start with docs (Google Docs, SharePoint, Notion, Confluence, etc) and make sure everyone has the access they need. Create learning paths that are user-specific in your LMS (preferably only one for your org), and assign the learning they need. This should be role-specific, with knowledge checks. The training doesn’t have to be complicated or completely built out by hand. If you have a Large Learning Library (LinkedIn Learning, Skillsoft, etc), then use the training that is available there for generic role skill sets. Be creative, and you can make it happen with the resources you already have.
Then, assign your onboarding buddies/mentors as guides. They can track the onboarding process, verify that the learner is meeting their milestones, and provide context for the training. You can use your training platform as a way to measure progress, communicate milestones, and provide guidance for your managers as they follow up on development.
Finally, treat your onboarding as a strategic investment, not an afterthought. The success of your onboarding means success for your new hires. The success of your new hires means the success of your company as it scales.
Poor onboarding drains start-ups, keeping them from scaling successfully. By investing in onboarding, you are not investing in overhead. It’s acceleration fuel for scale. Treat it as the valuable asset it is.
If your team is growing and you’re concerned about onboarding gaps, a fractional CLO can help design a scalable onboarding framework without the cost of a full-time exec. Let’s talk.