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Onboarding is a new human capital management program that is rapidly gaining popularity with business leaders in all sectors who really understand that their employees are their most important asset.

What is onboarding? For most human resource executives the term is self-explanatory. For the purpose of this column, a formal definition is in order. Believe it or not, Wikipedia explained the concept in a succinct manner without the typical consultant jargon common among those who want you to buy their onboarding program. Also, with companies making it easier to complete onboarding remotely it has become one of the most essential processes within a business.

“Onboarding is the process of acquiring, accommodating, assimilating and accelerating new team members, whether they come from outside or inside the organization. The prerequisite to successful onboarding is getting your organization aligned around the need and the role.” For more information, visit Amazon and review, “Onboarding, How To Get Your Employees Up To Speed In Half The Time,” by George Bradt and Mary Vonnegut.

If the definition of executive search is the process of getting married after four or five dates, and truth be told that is exactly what candidates say the recruitment process is like, then why would an organization spend thousands or hundreds of thousands of dollars on recruiting a key executive or manager without giving much thought to onboarding the individual into the organization to accelerate their contributions and to ensure a long and successful tenure?

If the cost of a miss-hire is conservatively estimated to be between 50 to 200 times annual salary, depending on title and scope of responsibility, why would an organization just throw together a new employee orientation program that is frequently more about signing paperwork with an uninspiring Power Point presentation describing benefits, rules and regulations – this is how you get fired here — blandly delivered by an HR assistant, not an engaging program designed to get employees up to speed while learning about their new professional home?

In a blog on the four deadliest sins of onboarding programs, author/blogger/consultant David Lee quotes Rex Castle a senior executive with a Lubbock, TX bank:

“…you sign and sign more paper than you would if you were buying a house, and then you walk out thinking, ‘Man, I hope I don’t get fired, but at least I know how to get fired’.”

Onboarding programs are still skeptically viewed by some organizations as an unnecessary expense. It would be safe to bet that these are the very organizations which apply the same level of financial analysis to the equally important management development programs. Executives who believe that – who allow that point of view to rule in their organizations — are destined for significant challenges unless they can change the culture.
So this begs three big and a very important questions:

1. If employees – now defined as human capital in the world of consultant speak – are our most important resource, why do we play Russian Roulette with the sizeable investment we make in recruiting them to our organizations?

2. Why aren’t more healthcare organizations investing in gold-plated onboarding programs to ensure success and reduce costly turnover?

3. Why is any of this important at a time when the public seems more concerned with government spending and the overall cost of healthcare, not whether a particular institution invests in its people?

Well, let’s start with the escalating costs of healthcare and the increasing number of stories about the inefficiencies of hospitals and the incredible waste that exists in far too many of our top-tier medical centers. While no one knows for sure what the economics of healthcare reform will be, it is a very safe bet that the federal government will make additional Draconian cuts in Medicare payments to hospitals. Hospitals will be forced to dramatically cut costs and redesign processes. Ironically, this will lead to an increase in turnover within the executive suite which is an important reason for organizations to develop an effective onboarding program.

There are so many areas in a hospital where expenses can be cut. One area that is frequently ignored is the money spent on miss-hires and employee turnover. For many larger hospitals, this is a HUGE number. For example, if your RN turnover is 60 nurses in a year, the cost is conservatively estimated to be around $2.7 million. Conservatively. If the turnover includes key clinical personnel in the OR or ICU, that number WILL be higher. If you botch a mission-critical executive hire, with a base salary of $300,000, human capital experts conservatively estimate the cost of this mistake to be between $500,000 and $ 1 million. In the case of a recent CEO termination at a health system, the cost to the healthy system was estimated to be more than $4 million, including lost opportunity time and the losses the now departed CEO piled up with questionable judgment and poor execution. That number is still being counted and could easily top $5 million before all is said and done.

Onboarding may be an expense, but it is an expense that the well managed healthcare system can ill afford to do without.

Thankfully, onboarding is moving front and center in the human capital business.

Over the next week, I plan to write about onboarding – when it starts, how it should be structured within the organization and how healthcare organizations should measure its success.

I hope you will share your thoughts.

This is an important concept to master. Effective leaders cannot afford to be on autopilot on this one.

John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of healthcare leadership experience in public relations, national marketing, business development and as Chief Executive Officer of hospitals and consulting firms, Mr. Self is highly regarded for his keen insight into operations, business culture and for his ability to consistently select the right leaders.

You can contact Mr. Self at 214.220.1234 or JGSelf@johnmarch.com. Or you can follow him on Twitter at Self_JohnMarch. He is an active member of Linked In and a frequent editorial contributor.

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