The role of onboarding in employee lifetime value: Part 2

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5 mins, 17 secs read time

People teams sometimes find it challenging to communicate the value of their work or to be considered true business partners by their executives. That’s why our VP of Strategy, People, & Marketing Maia Josebachvili began writing and speaking on the topic of Employee Lifetime Value (ELTV). In this series, we’ll be sharing how the People team at Greenhouse considers the work that they’re doing in relation to ELTV and share a few tips on how you can think about your own work through this lens.

At Greenhouse, our People department consists of Talent Acquisition, People Operations, Employee Experience, and Talent Management. In her second post, Director of Talent Acquisition & Management, Cheryl Roubian, elaborates on the role of onboarding in employee lifetime value. Find Cheryl's first post, "The Role of Onboarding in Employee Lifetime Value: Part 1" here.

Onboarding’s role in ELTV

As People People, we know that investing in great onboarding makes for engaged employees. Our challenge is to build and run effective programs AND show the return on that investment to our leadership. Luckily, the data backs this up: Studies show that organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%.

In Part 1 of this two-post series, I covered:

  • A review of ELTV, a framework for demonstrating the value of investing in good people practices

  • How we built Greenhouse’s onboarding program

In Part 2 (this post), I’ll share:

  • A quick refresher on ELTV

  • How we used ELTV to refine our onboarding metrics and

  • Some of our learnings from that process

ELTV refresher

Remember that ELTV is a tool to illustrate that investing time and resources at various points in an employee’s lifecycle creates measurable and significant returns for the organization.

ELTV – The employee lifecycle

We don’t calculate ELTV as a hard number at Greenhouse. Instead, we take measurements at various inflection points along the curve—e.g., the point at which someone is fully ramped—and then work to move that point—e.g., ramp people better/faster. By demonstrating how much incremental ELTV is created by the movement of the inflection point (illustrated below), we can demonstrate the return on the investment of time and resources.

ELTV - Raising the bar - Onboarding

Onboarding metrics

We take pride in putting metrics around our People Practices. And we’re pretty good at it. So when we launched our onboarding program, it was important to make sure we were measuring the success of it with concrete metrics.

When we launched our onboarding program, we set up two surveys to measure if/how well we achieved our goals. The first survey went to new hires at the end of their first week and the second survey at the end of their first month. We asked employees to rate their agreement with statements like:

  • I’m feeling welcome at Greenhouse

  • I know how my role contributes to Greenhouse’s overall goals

  • The onboarding sessions provide useful context for how various parts of the company function

And high-fived ourselves a bunch when the results that came back were overwhelmingly positive.

But… as we started to think more about the employee lifecycle, and later ELTV, it was clear that we were measuring (and seeing!) the effectiveness of the program, which was great, but we’d missed an opportunity to show the return on that investment for the business. So with the same goals and the same program, we changed the frame and introduced what we call our Ramp KPI.

The ramp KPI

In addition to measuring how well our program achieves its goals (which we still do through our week-one survey), we now also measure how effectively we’re able to get each new hire to the inflection point where they’re fully contributing in their role – i.e., how far to the left and up we can move that first inflection point on the ELTV curve.

To do this, we’ve created two surveys at the end of new hires’ third month: one survey goes to the new hire and one goes to the hiring manager. These surveys measure our “ramp effectiveness” by asking new hires to rate their agreement with statements like:

  • I know what success looks like in my role

  • I’ve accomplished my 90-day goals

And by asking hiring managers to rate their agreement with statements like:

  • I trust this person with the responsibilities of her/his role

  • This person has exceeded my expectations in the last three months

Not surprisingly, this data tells a similar story as our program-effectiveness data. The key here: It does this in the frame of business impact, which enables us to articulate the benefits of the program in terms of ROI. We also think it could tie into recruiting data for some really interesting insights.

What we’ve learned and advice on building your own

My most important learning from this process: Measure early and with business impact in mind.

Our onboarding program has been running for over 18 months, but I only have data for our ramp KPI from the last six. By the time we started gathering ramp data, the program was already pretty effective. So we missed an opportunity to show some real movement in the inflection point and demonstrate the program’s impact on the business.

Here are some questions to get you started:

  • How do you or your department leaders know when a new hire is ramped?

  • What is the average ramp time across your org—i.e., how long does it take your new hires to feel like they are fully contributing in their roles? How do you know?

  • What would it look like if you could ramp new hires more effectively in less time?

  • How much more could your sales team sell?

  • How much happier could your customers be? How much faster could they ramp?

  • How much more quickly could your engineers ship great code?

  • How much time/what resources are you currently spending to get your new hires up to speed?

Summing it up

In this post, I shared a little bit of theory, a lot of practice, and some learnings. I hope you find this helpful as you build or optimize your onboarding programs. Please share comments about your experiences building onboarding programs below and have fun moving those inflection points!