FREE DOWNLOAD: ROI Of Recruitment And Onboarding

When it comes to talent acquisition, most HR and recruitment teams are measured by the twin metrics of cost per hire and time per hire. The key measure for recruitment success is usually considered to be quality of hire, but most organizations find this hard to quantify. Is it the length of time someone stays with you, or how productive they become within a certain period? Some might prefer to look at longer-term milestones such as promotion, whilst many companies now seek to assess the influence an employee has on both their teams and the outcome of projects on which they work.

Whatever measures are used, it seems that both the cost and time of hire are increasing, and vacancies are remaining unfilled for longer. In a 2014 report, global business forecasting and analysis consultants Oxford Economics concluded that the full business cost of replacing a member of staff could be around £30,000. This included the logistical costs of recruiting and integrating a new employee as well as the cost of lost output whilst they got up to speed. This latter factor, also defined as the cost of someone being less effective until they reached optimum productivity level, accounts for over 80% of the total cost. 
Estimates from the UK usually back this up, with a figure of around £5,000 as the average cost of recruiting an employee. US figures are often a little different. In 2015 the talent acquisition software business iCIMS estimated that the cost of having a desk unfilled could be
as high as $500 a day (which translates to around £390 or €435) and that the average length of time to fill a vacancy was 44 days. Around the same time, global business insights consultancy CEB (now Gartner) found that the length of time to fill a regular vacancy had risen by over 60% since 2010.

Through the use of video, checklists, quizzes, interactive assignments or virtual reality, Appical allows you to get your new hires hit the ground running by completing all onboarding formalities and meeting the new team virtually before they even come onboard.

Across Europe, there are reports of skill shortages. Concerns over both the quality of future management pipeline and access to the skills necessary to keep the business agile regularly top the list of CEO and business leader challenges. Whichever measures we use, the costs associated with recruitment and retention are rising. For many businesses, the focus is usually on the transactional expenses of advertising, interviewing, accessing digital career sites and briefing staffing agencies. However, as we have already seen from the Oxford Economics research, the associated costs of recruitment can be very high.

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What is the ROI of a good onboarding programme?

As Team Appical, we work for a large number of super cool companies in various branches. When we meet potential customers, we are often asked: “What is the real result, in terms of ROI, of a good onboarding programme?" That question is not an easy one to answer. Every company is different. Still, looking at our customer base, they do have a few things in common.

To answer this question properly, we recently developed a new ROI calculator. This calculator provides insight into the savings during the four crucial stages that each new hire goes through, both in SMEs as well as multinationals.

The key to succes

Putting your employees first is the key to successful, involved employees. This sounds simple, but in practice, it often isn’t. It is important to provide new hires a great experience, so that they start their new job without any problems and get a real ‘wow!’ feeling. In the recruitment phase, candidates are promised the world, because you want them to come work for you. But then, the new hires fall into the famous black hole. A pitiful introduction, day two months after your first working day, boring information on the Intranet, or worse still: a bulky manual for new employees. In which four phases of the employee journey can you save time as a HR employee by setting up a good onboarding programme?


Preboarding, or starting the introduction as soon as the contract is signed, offers you the golden opportunity to keep that euphoria of a new job alive for longer. In that phase, just after signing, new hires often have questions and doubts. These are only discussed in the first few weeks of work. And that is a shame! Answering their questions, making them feel welcome and removing their doubts, is a good first step to improve the dialogue and keep them enthusiastic.

HR is already working on the required paperwork in the preboarding phase, Such as employment contracts, tax forms, certificates of conduct and company codes. In addition, there are also lots of logistic issues that needs to be sorted, such as passes, parking and staff numbers.

This costs HR around 5 hours in this phase. Your new employee needs an average of 16 hours to read the documents and arrange other matters.

The first day of work

Usually, new employees only get to see their new working environment and meet new colleagues on their first day of work. The introduction period comprises the first few weeks in the office, a lot of personal attention, and the obligatory tour of the building. Questions such as: ‘Where is the coffee machine?’, ‘What is the printer number?’, ‘How can I book a meeting room?’ are usually at the top of the list. Usually, HR will appoint a colleague (buddy) to show new hires the ropes. Although it can be quite a challenge for a new employee to familiarise yourself with the office, your new duties and new colleagues, it is as important and stressful for managers. To ensure that an employee is a successful and productive addition to the company team, it is crucial that the new employee feels at home from day 1, feels part of the team.

On average, a new employee spends around 4 hours on the tour and a welcome session with a senior manager, but more is also possible.

Onboarding in the organisation

Onboarding is a broader term than introduction period, and focuses on shortening the time needed by the new employee to achieved the minimum expected level of productivity. The onboarding period starts on the first day and it can last between three months and one year, depending on the complexity of the function.

When onboarding starts (on the first working day), a new employee spends around 4 hours looking for the necessary information. In more complex environments, such as the professional service sector, this can be up to 20 hours or more.


As a manager, you have to ensure that you pick up all relevant insights and points for improvement ‘along the way’, instead of waiting until the annual evaluation review. We see that employees, in an onboarding programme of three months, spend around 2 hours on giving feedback. Because it is done that way… Nearly all our customers indicate that the feedback they receive from new employees is very valuable. New hires look at the ingrained company processes with fresh eyes, as opposed to the colleagues who have been there for years. They will look at the processes and think: Well, that’s how it’s done here… New hires are not burdened with this occupational blindness yet, so use their fresh eyes and request honest feedback. In their onboarding app, organisations such as Hunkemöller and Coolblue, for example, actively ask for critical feedback from new hires, and use this feedback to tackle their processes.

Functional onboarden as a new phase

Onboarding not only involves multiple departments and colleagues, such as recruitment and HR, but also multiple layers within an organisation. Dr John Sullivan outlines the five layers of onboarding at an organisational level, location level and individual level. We see that various high-performing organisations, after the regular onboarding programme, focus on functional onboarding as a new phase.

  • Organisational level
    This includes recruitment and organisation-wide standards and values.
  • Location level
    This includes information and issues in respect of the country/region and the location where the new hire will be working.
  • Departmental level
    This relates to the department where they will be working.
  • Team/functional level
    This includes the team and the position of the new employee.
  • Individual level
    This includes issues on a team level which relate to the unique and diverse needs of this person.

Onboarding looks different for the various function groups within a company. Suppose you regularly hire new sales staff, software developers, sales representatives and technicians. Although they all have different jobs, they need to be offered a basic introduction that includes information about, for example, the company where they will be working and the work location in particular. Once they have received this information, it is time for a functional training, depending on their role. This means that their onboarding has to continue.

This is the biggest challenge of a successful onboarding programme. How do you create a consistent basis, with common denominators where possible and differences where necessary?

On average, functional onboarding costs 11 hours per employee. This does not include job-specific (group) trainings.

What advantages does a good onboarding programme have for your company?

Many HR departments are thinking about onboarding. Eventually, the question always is: what is in it for us? If you want to make a business case, to convince the board for example, you can use our ROI calculator to see what the advantages are of a good onboarding programme. This calculator is already filled with average values, coming from (international) surveys and from experience of our customers. All these variables can be altered.