The cost of losing an employee at any level is significant. Losing an entry-level employee can cost you up to half their salary, but losing a senior level executive can cost more than 400 percent of their salary.
Those are just the direct turnover costs. When you lose executives, there are other costs to the company, including loss of momentum and sometimes damage to the company’s reputation. That’s why companies invest so much time in the executive search process. Despite all that effort, 40 percent of executives who take a new position fail during their first 18 months in the job.
A strong executive onboarding program can help reduce that risk of failure. Many companies have a standard onboarding program for employees that focuses on administrative matters, such as providing information about healthcare, 401K programs, and computer passwords. While those tasks need to be handled, they don’t meet the special needs of executives, whose work relies on relationships moreso than software.
An effective executive onboarding program needs to establish the new executive’s authority, provide an understanding of the organization’s culture, establish key stakeholder relationships, and clarify expectations and priorities. This requires an onboarding process that extends over weeks or months and provides the executive with the following:
- A customized overview of the organization
Onboarding should provide the executive a customized, in-depth review of the teams they’ll need to work with and the challenges they’ll need to address. This should be tailored to the department the executive will be responsible for and the issues they will be tackling.
- A detailed review of stakeholders
Stakeholders aren’t always obvious from an official organization chart. New executives need to understand exactly who has input into decision-making and the informal processes through which policies are discussed and consensus reached. Because management’s decisions succeed or fail based on how well lower-level employees carry them out, the new executive also needs insight into how those workers feel about the organization, their work, and the current processes.
- A statement of expectations
No executives can succeed when it isn’t clear what they are expected to do. Organizations should provide new executives with clear priorities, along with the metrics that will be used to measure success. Those guidelines let the new executive know where to focus his or her efforts and how to track progress.
Along with that information, new executives need a defined process that provides ongoing support for success. There should be a partnership between the new executive, management, and HR to make sure he or she gets the information needed to succeed, whether it’s day one or day 100 on the job.