Category : Onboarding

How to Reduce Employee Onboarding Cost in Canada

How to Reduce Employee Onboarding Cost in Canada

In our previous blog, How to Calculate Employee Onboarding Cost we found out how much it really costs to onboard an employee, and we did so by drilling down into the real cost of the new-hire in each phase of onboarding in their Pre-Onboarding, Onboarding and First Month of the job. 

In this post, we look at all the factors that could lead to a poor onboarding experience for your new hires and see how we can save that with the help of our Digital Onboarding Experience Platform – Digidesk.


Why go for a Digital Onboarding Software?

A majority of HR and Recruitment staff understand the benefits of onboarding software, but only a few are treating it as a priority. “I know that in a few years electronic onboarding is just going to be the norm, but it is just not a priority for me right now.”– said a lead HR of an MNC

Traditional onboarding means dumping an envelope full of paperwork on a new hire, or sending an email with a string of attachments to download and print. Consider how a candidate will perceive an online onboarding portal, compared to a pile of papers. Which one says ‘Company of the Future’ more? Anything that improves the candidate experience gives you an edge in recruitment. 

According to a study by Impact Instruction Group, “Onboarding has become a strategic priority for a growing number of companies for 2013 and beyond.” They credit recent technology advances, a more geographically dispersed employee population, and strong competition for talent as the catalysts for the shift in perception.

Moreover, they found that:

  • Over 73 percent of organizations indicate that the largest catalysts driving change to their onboarding programs are to accelerate new employees’ performance, as well as improve retention and loyalty.
  • Some 71 percent of organizations are currently in the process of updating their onboarding programs, and 86 percent consider those updates to contain moderate to major changes

Great candidate experience gives you first choice candidates. Organisations that know the value of digital onboarding, but don’t prioritize it, know why they’re losing first-choice candidates.


Costs involved with your current paper-based onboarding process

Sapling reports that new hires will have over 50 activities that need to be completed during their onboarding period. 

The average new hire will be assigned a minimum of 3 documents to sign, upload, or acknowledge, and 41 administrative tasks to complete, such as desk set-up. They will also have 10 outcomes, which are achieved learning goals around the company culture, market knowledge, and role alignment. This variety of activities ensure the new hire is fully acclimated and integrated into their new role. Let’s look at these in detail.

Pre-Onboarding Costs

Direct Costs 

  • Forms (Pages)
  • Documents to be submitted
  • Form & Doc Collection Time(hours)
  • Shipment (OPTIONAL-assumption 1 shipment to send the offer letter+onboarding kit)
  • Engagement (SMS, email, phone calls) in hours
  • Engagement (HR Exec Time) in hours

Indirect Costs

  • Stationery (Pen, Notes, etc)
  • Printer Space (sq.foot)
  • Amortised Printer Time 5 mins
  • Cartridges Cost
  • Time of Executives Printing

Onboarding Costs

Direct Costs

  • Induction (HR Exec time/admin setup)

Indirect Cost

  • Specific Job Role Training (Team Exec Time)
  • Stationery
  • Physical Storage of Documents

First Month on the Job

Direct Costs

  • Feedback (HR Exec time – 1 hr/week)

Indirect Costs

  • Stationery

Time and Cost Saved with Digidesk

Below, we’ve broken down onboarding tasks with and without using our platform. See the difference for yourself. 

Note: Unit Price for each of these tasks in USD are as follows:-

Items
Industry Average (Av.) in USDUnit Price in USDDerivation of Unit Price
A4 Sheet Cost (per ream of 500 A4 sheets)90.018Av./500
HR executive Salary (per month)316818Av./(8*22)
Shipment cost (average within Canada)66Av.
Communication Cost / month316818Av./(22*8)
Note book30.1Av./30
Pen30.1Av./30
Sq.foot Cost
65
Printer Cost9000.08Av./(5*261*8))*10%
Catridge Cost ( each actridge prints 2250 pages)300.01Av./2250
Maintenance Cost of Printers200.01Av./(225*8)
OnBoarding tasksTime (hours)Without Digidesk (in USD) Time (hours)With Digidesk (in USD)
Form & Doc Collection Time (hours)6108236
Time of Executives Printing590____
Engagement (HR Exec Time)590118
Induction (HR Exec time / admin setup)472236
Specific Job Role Training (Team Exec Time)472118
Feedback (HR Exec time – 1 HR/week)236118






Form Filling & Document Collection Time 

You have gone through the hiring process, made a job offer and the candidate accepts it. Now what? The next step in adding an employee to your organization is to complete the numerous critical new employee forms that are necessary to be submitted even before the new-hire joins. These forms include – EPF forms, Some of the documents include, previous employers, payslips, educational documents, etc.

Average TIme spent by an HR for form and document collection without Digidesk: 6 hours
Average Cost spent by an HR for form and document collection without Digidesk:  $108 (6×18)

Average TIme spent by an HR for form and document collection with Digidesk:  2 hours
Average Cost spent by an HR for form and document collection with Digidesk:  $36 (2×18)

With more than 75% of the form fields being repetitive our onboarding platform through its dynamic form generation algorithm automatically fills in details and generates the forms. The candidate saves time as he/she just needs to fill in the data just once, which is then automatically filled onto the other forms.

Easy Form filling - Cutting onboarding cost with digidesk
Digital document collection - cut onboarding cost with digidesk

Time of Executives in Printing

When you have a lot of paper forms then surely there is time involved in getting all the forms printed. As you can see above the time involved in printing comes close to a near 5 hrs per new hire whereas with a digital onboarding solution, where there is absolutely no paper-work involved, time spent on this task is almost nil.

Average TIme spent by an HR Executive in Printing without Digidesk: 5 hours
Average Cost spent by an HR Executive in Printing without Digidesk:  $90 (5*18)

Average TIme spent by an HR for form and document collection with Digidesk:  0
Average Cost spent by an HR for form and document collection with Digidesk:   $0

Time in printing and storing employee documents becomes literally nothing as our onboarding platform lets the candidate capture Documents and Photos in real-time through their mobile phones which in turn is intelligently stored and tagged to a particular new hire thus making the retrieval easy.

Magical Form Filling - Cut down 60% of your Onboarding Cost with Digidesk

Time in Engaging New Hires 

A recent CareerBuilder survey found that nearly two-thirds of HR professionals spend less than a month onboarding new employees. Half of the respondents said they spend about a week or less on onboarding. Pushing people through paperwork and training so they can start work sooner may not be the ultimate path to employee productivity and contribution.

Average TIme in engaging new hires without Digidesk:  5 hour
Average Cost  in engaging new hires without Digidesk:  $90 (5*18)

Average TIme  in engaging new hires with Digidesk:  1 hour
Average Cost  in engaging new hires with Digidesk:   $18 (1*18)

With our onboarding platform, we constantly keep the new hires educated, informed and engaged. The platform helps new-hires get all the company and team-specific news, within the application, thus, making the new hires feel part of your company even before their date of joining.

Professional engagement system- cut onboarding cost with digidesk

HR’s Time Spent on New-Hire Induction

A key element of a good induction is time spent with individuals in different departments. Whilst an employee will naturally get to know their line manager and team members within the first few weeks it is also important for them to understand what the other departments do and how they will be working with them. This typically includes HR Executives time and admin setup time. An HR spends on an average of 4 working hours per new hire without Digidesk on Induction. With our onboarding experience platform, this can be brought down to just 2 hours.

Average TIme spent on Induction of new-joinees without Digidesk: 4 hour
Average Cost spent on Induction of new-joinee without Digidesk:  $72 (4*18)

Average TIme spent on Induction of new-joinee with Digidesk:  2 hours
Average Cost spent on Induction of new-joinee with Digidesk:   $36 (2*18)


Specific Job Role Training

Training and development officers/ Team Executives are responsible for identifying staff training and development needs, and for planning, organizing and overseeing appropriate training. These are specific job role training for the new hire to be able to get into the workflow quickly and seamlessly as possible.  

Average TIme spent on specific job role training without Digidesk:  4 hour
Average Cost spent on specific job role training  without Digidesk:  $72 (4*18)

Average TIme spent on specific job role training with Digidesk:  1 hour
Average Cost spent on specific job role training with Digidesk:   $18 (1*18)

Since with our onboarding platform the new hire gets access to all the initial specific job related digital training via exclusive videos, it helps in saving the time of the trainers so that it can be used for other productive purposes.


Time spent on Feedback

HR Managers should be asking employees how they like to work and sharing their work preferences as well. New employees effectiveness dramatically increase once they figure out their organization’ work style. Time spent on feedback by HR Executives which is close to 1 hr/week can be somewhere around 2 hrs per new hire without Digidesk. This can be brought down to 1 HR with digidesk in place.

Average TIme spent on feedback without Digidesk:  2 hours
Average Cost spent on feedback without Digidesk:  $36 (2*18)

Average TIme spent on feedback with Digidesk:  1 hour
Average Cost spent on feedback with Digidesk:   $18 (1*18)

We all want to be heard by the right people at the right time. With our onboarding experience platform, you can collect digital feedback across strategic touchpoints which makes the onboarding process complete and acting on such feedback makes your onboarding better over time.

Digital feedback system- cut onboarding cost with digidesk

In Conclusion

Total Time required per new-hire onboarding can be brought down from 28 hrs down to 7 hrs and Total Cost per new-hire onboarding from $468 to $ 126.


How much can you save if you have 200 new hires onboardings per year?

With the above calculations in mind, if you have 200 onboardings per year then 


Without Digidesk – 2 years

With Digidesk (1 st year)

With Digidesk (2nd year)

With Digdesk – 2 years
Savings

The total cost of onboarding
$187,200$42,200$30,950$73,15060.92%

Number of manhours for onboarding
10,400140014002800271.43%
Cost savings$114,050
Man hours saved7600
Total Days Saved317

Explanation of the table

Without digidesk, the onboarding cost lands to 468$ per new hire. For 200 onboards per year, total expense for 2 years (without digidesk) becomes 200*2*$468= $187200.

If Onboarding is done with digidesk, in the first year, the company is required to pay a one time digidesk setup cost which happens to be $15000 and per onboard digidesk charge which estimates to $10 if the number of onboards in an year are less than 250. Thus, in the first year, the total expense incurred by the company equals to

  1. One time digidesk setup cost
  2. The Per hire digidesk onboarding charge
  3. The Per hire cost incurred by the company on recruiting the new hire.

Therefore, total amount shelled by the company in first 1 equals 15000$+ 200*10$+ 200*126$ which equals to 42,200$. It should be carefully noted that with digidesk, the per hire onboarding cost has already been drastically slashed from 468$ to 126$.

Coming to 2nd year, here the company is only required to pay

  1. 25% of the digidesk setup cost as maintenance charges
  2. The per hire digidesk charge
  3. The per hire onboarding cost incurred by the company itself in recruiting the new hire.


Therefore the total expense incurred in 2nd year equals to 25%*15000 + 200*$10 +200*126$ which equals to $30,950. So the combine cost of year 1 & year 2 (with digidesk) equals 42,200$ (Year1)+ 30,950$ (Year 2) which equals to 73,150$.

Thus in a nutshell, within a span of 2 years, with digidesk, a company’s onboarding cost gets reduced from 187,200$ to 73,150$ and the company is able to achieve a savings percentage of about 60%. Similarly, the quantum of labour time needed gets slashed from a whopping 10,400 hours to 2800 hours which accounts to 317 days.

Imagine what could be done in the time span of 317 days. Jay S. Walker became a billionaire, in 1988, which was just a year after he founded Priceline.com. Even if we look at the opportunity cost, there are hundreds of thousands of capital and time saved within a short span of just 2 years

Digidesk removes the hassle out of the standard joining procedures and provides a smooth and efficient onboarding experience. With over 6,00,000 onboardings completed, seamless integration with your existing HRMS & ATS and trusted by leading companies, Digidesk is the leading Onboarding Experience Platform in the world.

Calculate personalized savings that your company can make by just entering the number of potential onboards in your company in this link

Schedule a call with our Onboarding Experts to see a demo of Digidesk and take your first step towards HR Digital Transformation

Leave a comment