Onboarding automation ROI calculator
The business case for investment
Automating onboarding isn’t just about impressing employees in their first days at a new job. A well-designed onboarding process saves organizations resources and money and helps reduce hiring costs.
Whether you’re updating an existing onboarding program or building a new one from scratch, it’s important to present a strong business case to leadership to secure approval and budget for your plans. We can calculate the impact of implementing the technology based on research and publicly available analytics.
Calculation methodology
A company’s internal cost of hiring a frontline employee is around 221,340 rubles, and for managers it can reach 1.9 million. And those are only direct costs! If you factor in indirect costs, hiring a frontline employee can cost up to 562,490 rubles, or 48% of the annual salary at a monthly salary of 100,000 rubles.
If you retain that employee for the long term, the money is well spent and pays off through their work. But if the employee leaves before reaching full productivity, all those costs are wasted.
The average employee turnover rate in Russia is up to 30%, and in some industries it reaches 58% per year. That means an average Russian company with 500 employees spends about 84,000,000 rubles a year just on hiring new staff!
Meanwhile, nearly one in five new hires leaves the company because of poorly organized onboarding.
The average hourly cost of an HR manager in Russia is about 700 rubles. Each new hire needs more than 10 hours of administrative support: from training materials and paperwork to answering frequently asked questions.
One of the advantages of a digital onboarding platform is the ability to automate most of the time-consuming administrative work and initial training of new hires. With automation, 10 hours can be cut to 3. Savings on administrative costs alone come to up to 5,000 rubles per new hire.
Even for a mid-sized organization, savings on this cost item alone come to about 735,000 rubles a year!
The time a new hire needs to reach target performance levels determines how quickly they start contributing to the company’s work.
This metric is strongly affected by two main factors: the candidate’s overall qualifications and the effectiveness of the organization’s onboarding program.
Good onboarding has been shown to reduce time to productivity by up to 70%. If we take the onboarding period to be equal to the probation period (3 months), reducing the time to 100% productivity can save the company at least one month of the employee’s salary.
Reducing the time it takes an employee to reach target performance brings additional business benefits. Senior and line managers spend less time training and onboarding the new hire, so they can focus on development goals. This saves the company money in the long run.
ROI calculator
How many new employees do you hire each year?
What is the average salary of new hires, including taxes and contributions?
What is the average cost per hire at your company?
The cost per hire may vary by region, position or company business processes.
On average in Russia, it ranges from 221,340 rubles for frontline employees to 1.9 million for managers
What is the employee turnover rate at your company?
The employee turnover rate is calculated using the formula: number of employees who left / average headcount × 100%.
In Russia, the average is about 30%
How many working hours does an HR manager spend hiring one employee?
On average, administering the hiring of one employee takes an HR manager about 10 working hours
What does an hour of an HR manager’s time cost at your company?
On average in Russia, an hour of an HR manager’s time costs about 700 rubles
By implementing the platform, you’ll save:
Your benefit from automated, effective onboarding equals 0 rubles minus the cost of an annual license.
To find out the exact cost of an annual Talent Rocks license for your company, request a quote.
