When a new employee starts at Netflix, they spend the full first quarter of their new role being onboarded. The result is an impressive 11% annual turnover rate, less than half the national average of 23.4%.
Each new Zappos employee spends their first 4 weeks in intensive training, including taking customer calls for the first 2 weeks, regardless of their role. Once training is over, new hires are offered $4,000 to leave if they feel Zappos isn’t the right fit. Less than 1% of people accept.
Buffer is especially transparent about the evolution of their onboarding system. While they used to require each team to hire and onboard new members, they discovered that new folks weren’t receiving the same information, and ultimately standardized the process across the entire company.
While you can find dozens of varying examples online, expounding on the merits of different onboarding processes, successful organizations tend to share one thing in common: they are intentional about helping new hires integrate into the company and set them up with all of the knowledge and context they need for their new role.
You don’t necessarily spend a month onboarding every new employee who joins your team, but you do need to have a clear path that introduces them to the people they work with and the information they need. Without it, you end up in onboarding debt: a productivity cost you might not account for when you hire someone, but one that your team will eventually have to pay.
What is onboarding debt?
No one can jump into a new role with 100% of the knowledge they need to do their job. That’s what the first few weeks are for: helping new employees learn the processes and resources they’ll use in their new role. It’s normal and expected that someone new won’t be as productive as more senior employees.
But at some companies, formal onboarding never really happens. New hires meet their team, get access to the right tools, and are quickly dropped into projects and tasks, without full context. Hypothetically, you’re increasing productivity by asking someone to jump in and fill an empty role. Realistically, you end up slowing the entire team down because your new employee doesn’t have the background they need to do their job well. As a result, your organization ends up paying the onboarding debt.
Onboarding debt is the accumulated productivity cost that builds up when a company doesn’t create clear, repeatable systems for bringing new employees up to speed.
Skipping documentation or formal training might save time in the moment, especially when everyone is busy and a new hire is eager to get started. But the lack of knowledge doesn’t magically resolve itself. It shows up later in repeated questions, longer ramp-up times, preventable errors, unnecessary interruptions, and employees searching for information that should be easy to find.
Like technical debt, onboarding debt compounds. One undocumented process might cost a few minutes here and there. But as your company grows and you add employees, those same questions get asked again and again, pulling your most knowledgeable team members away from their own work.
That’s why outlining and standardizing your onboarding process is the best way to eliminate onboarding debt, protecting the time your team keeps spending to solve problems it has already solved before.
Where companies see the productivity tax
Onboarding debt is sneaky, weaseling into small productivity losses scattered across a team. It’s a new hire spending 20 minutes hunting for a document, or a manager explaining the same process for the third time this month.
One incident is small, but spread across numerous employees over time, it eats into everyone’s productivity and momentum.
Your experienced employees become the go-to problem-solvers
When someone doesn’t know an answer, it makes sense to turn to the people who have all the answers, your most experienced employees.
Now, there’s nothing inherently wrong with top employees sharing their knowledge. But you don’t want to encourage knowledge concentration, where most of the critical company information is held by a handful of people. Additionally, being the person with all the answers can make it hard to get your own work done.
Suddenly, the same employees you rely on for complex projects are fielding questions about where files live and how certain processes work. Even if an interruption only lasts a few minutes, it takes an average of 23 minutes to refocus on the task at hand.
New hires spend too much time looking for answers
Your experienced employees aren’t the only ones paying the productivity tax.
When information is scattered across Slack messages, old emails, shared drives, outdated documents, and coworkers’ brains, even simple questions start feeling like a research project. You can’t get much traction on a project when you’re constantly searching for the context you need.
Long-time employees have accumulated enough institutional knowledge to navigate these systems almost automatically. New hires haven’t. They’re learning how to do their jobs and how to find the information they need to do them.
Every new hire gets a slightly different version of the company
In his bestselling book Unreasonable Hospitality, Will Guidara describes an incident that stood out to him during one of his first weeks as general manager of an NYC fine-dining restaurant. As a server carried plates out to a table, he was stopped by a manager and chastised for not carrying the tray a specific way. After adjusting his hold and resuming his journey, the server was stopped a second time by a different manager and directed to carry his tray the way he had been in the first place.
Without outlining all of your processes and documenting workflows and relevant information, your new hires are going to end up getting slightly different directions from the various leaders and colleagues they work with. This can end up causing slight inefficiencies, or even problems with the way a person does their job.
And in all honesty, it can leave a bad taste in a new employee’s mouth. Trying to decipher between policy and preference makes the transition unnecessarily harder.
Onboarding debt only compounds as your team grows
Onboarding debt is easy to ignore or overlook when your team is small. If you only hire a couple of people a year, walking someone through a process doesn’t feel like a major productivity drain. There’s usually someone nearby who knows the answer, and filling in small gaps as you go seems faster than documenting everything from scratch.
But that approach doesn’t scale well. As your team grows, you’re not just adding more people who need to be onboarded. You’re also incorporating more processes, tools, managers, departments, and layers of institutional knowledge for them to learn.
This is the point when onboarding debt starts to compound. One undocumented workflow might cause a new employee to ask a few questions. But by the time you hire five people, you can end up answering the same question five times.
When knowledge holders leave before documenting the information they were carrying around in their head, it gets even trickier. By that point, you have to reconstruct months or even years’ worth of knowledge and potentially relearn processes that were once second nature to a certain employee.
The sooner you turn institutional knowledge into repeatable systems, the less expensive it is to onboard new employees, because you’re no longer starting from scratch.
How to start paying down your onboarding debt
Onboarding done well takes time. At Google, new hires, known as Nooglers, usually take at least 6 months to fully settle into their new role. And that’s with a wildly intensive and thought-out onboarding process.
Getting your new hires up to speed takes time and intentionality, but the payoff is well worth the initial investment. Here’s how you can optimize onboarding and set your new employees up for long-term success.
1. Actually onboard new hires
When I was looking for suggestions to improve the onboarding experience and ease the transition for new employees, I saw the same sentiment on several discussion threads about this topic: “You guys are actually getting onboarded?”
Turns out, the ultimate onboarding bottleneck is not onboarding your employees at all.
For small companies with limited resources, finding the time to fully outline your onboarding process can seem impossible. However, you don’t have to develop a nine-core-element process to help new hires feel at home.
Start by thinking about what every new employee should know by the end of the first day, first week, and first month. List it all out—the tools, the processes, the people, etc. Deconstructing it all allows you to then build a basic onboarding checklist that gives new employees a clearer path forward.
2. Document, document, document
Company information and processes can only be so helpful when they live inside someone’s head. Documenting everything your new employees need to know is time-consuming, but it is one of the best ways to prepare them to work independently.
Since proper documentation can take months to develop, be willing to start small and slowly incorporate documentation as it’s completed. Look at the most common questions you’ve heard from recent hires and begin creating a FAQ document.
3. Build asynchronous onboarding into the process
Not every part of onboarding needs to happen in a meeting. Asynchronous onboarding activities take the pressure off everyone’s calendars. Instead of waiting until a senior employee has 30 minutes available to explain a workflow, a new hire can work through the basics independently and use their meeting time for questions, feedback, and context.
The key is to not let your asynchronous onboarding become death by PowerPoint, where employees complete a seemingly pointless task just so they can check it off their list. Incorporate resources like recorded walkthroughs, written guides, short training videos, and project examples.
Glitch takes an uncomplicated but thorough approach, creating a Trello board for new employees that is filled with tasks employees can work through at their own pace. You may even be able to gamify this part of onboarding to increase engagement, like Google, where employees are sent on a treasure hunt across the campus.
4. Assign a designated buddy
A new role comes with a lot of questions, but not necessarily clarity about who to direct them to. Designating an experienced ‘buddy’ relieves concerns about bothering the wrong person. It also helps you better adjust the workload of your senior buddies, building that mentorship into their daily tasks.
Buffer assigns each new employee two buddies: a role buddy who works in a similar position, and a culture buddy who is assigned to a different team. Zapier, Wellabe, Airbnb, Netflix, and Spotify are also known for integrating a ‘buddy system’ into the onboarding process.
5. Teach new hires how to seek out answers instead of asking for them
You’ve probably heard the old adage, “Tell me and I forget, teach me and I remember, involve me and I learn.”
Your new employees are going to have a lot of questions. Instead of always supplying the answers directly, show them how to find the answers on their own. This increases their independence and confidence, while protecting the time of your more experienced employees.
This approach shouldn’t be viewed as a brush-off. Think of it as creating a default path before assigning a human guide. New hires shouldn’t be afraid to ask questions.
Stop paying for the same problems
There’s no way to onboard a new employee without investing time. They’re going to have questions, need guidance, and rely on more experienced employees while they get their bearings.
Onboarding debt comes from paying for the same problems over and over. Every question you document or process you standardize prevents some of that debt from carrying over to your next hire. Eventually, you build a complete system that helps new employees become independent faster without pulling everyone else away from their work.
