Onboarding is one of the most important HR functions.
The title says it all. When you’re onboarding someone, what are you actually doing? The term “onboarding” refers to a process that helps new employees get started with their job. But what exactly does this process consist of? How do good programs differ from bad ones?
A lot of people don’t understand how important onboarding is, or how much of a difference it can make. They might think that as long as you teach new hires the basics of their role and give them access to the tools they need, you’ve done your job. But this is only part of the story.
Let’s start by talking about why onboarding matters so much. One reason is that poor onboarding is associated with high turnover rates. Gallup found that only 12% of U.S. employees say their company does a good job of onboarding. And HBR has shown that 20% of turnover occurs within the first 45 days of employment. A study published in the Journal of Applied Psychology found that 33% of new hires begin looking for another job within six months, while 23% leave before hitting the one-year mark. And finally, ~90% of employees decide whether to stay or go at some point during the first six months of their job.
In short, onboarding is crucial for retaining employees. It also affects employee performance. In fact, it turns out that onboarding is one of the most important HR functions. According to Gallup, good onboarding leads to reduced turnover, decreased stress, higher engagement and job satisfaction, long-term loyalty and commitment, a sense of belonging, clarity on what defines success, fulfilling recruitment promises, preparing employees to be high performers, and more.
What good employee onboarding actually needs
But what exactly makes a good onboarding program? Why do some programs work well and others not? There are a number of reasons, but I’ll focus on two here. First, good onboarding must address the psychological and cultural needs of employees beyond just the tasks of their roles. Second, program structure matters as much as content. Role training and computer setup are necessary, but they aren’t the most critical parts of onboarding. Instead, understanding shared cultural values and “how we do things around here” ends up being the most important discoveries that new employees make. These findings are grounded in fundamental psychological needs, and the way in which an organization structures and executes its onboarding program is paramount. For many employees, how onboarding was organized and delivered was the most valuable aspect of the whole experience.
This isn’t to say that onboarding is a single event — rather, it should be an extended, progressive process. Many companies think of onboarding as a one-day affair, but this approach tends to overload new hires. The relevance, engagement, and actionable value of information matter more than volume. A structured process progressively builds knowledge, giving employees time to absorb and apply what they learn.
Contextual onboarding for SaaS users
User onboarding in SaaS is a parallel domain. Just like with employees, signing up doesn’t mean that users will become loyal customers. That’s why contextual onboarding exists. Contextual onboarding is different from generic tutorials or user guides. Rather than providing a static guide, contextual onboarding tailors help to the specific needs of each individual user. New users provide information about their needs and level of experience, and the system uses that information to tailor its guidance accordingly. This means that every step of the onboarding process is targeted and customized to the user.
Contextual onboarding works because it leverages triggers. Triggers include page load, hover, click, exit, and time-on-page. Events occur when the user sets off a trigger, delivering the right guidance at the right moment. Static guides fail to deliver this kind of precision. User onboarding theory tells us that guiding through key functions helps users reach their “aha moment”, the point where they understand the product’s value. This theory is grounded in behavioral psychology, and the outcome is improved SaaS customer retention and product adoption.