Evaluating how long it will take your new hires to become productive is frequently a guessing game. It’s a complex arena that depends on variances in industry, job role, seniority level, onboarding process, and, most crucially, the KPIs used to measure performance.

Deriving “time to productivity” (also known as T2P) requires a complex series of assessments. This article will cover everything this indicator has to offer your HR and strategic planning, helping you motivate your new hires to increase their performance levels.

What is new hire time to productivity?

T2P is a measuring process determining how long new employees take to add net value to your company from their start date.

In other words, it’s a metric reflecting the days, weeks, months, and even years for them to deliver a dollar contribution more significant than the employment cost, at the very least.

In the same way that investment opportunities rank in terms of ROI, employees must also achieve acceptable returns on their employer’s investment to uplift them as functioning team members. Breakeven is okay, but not nearly good enough.

The impact of onboarding on new hire productivity

Imagine a team project firing on all cylinders with all hands enthusiastically on deck. Then suddenly, a key team member is no longer around. It may be that the departure is for a positive reason, like a promotion or a happy life event. Unfortunately, however, it could also be for a negative reason, like an unforeseen illness or layoff.

No matter the reason, disruptions can be very difficult to anticipate and challenging to deal with. It’s very rare to have a perfectly prepared understudy standing in the wings, ready to go on stage and continue the show.

While a replacement is essential, even for experienced hires, the unique requirements require training and guidance to get up to speed. Effective onboarding processes are critical in ensuring the new team member is up to speed (as far as possible!) before they’re launched into their new role, and “effective” is rarely synonymous with “super fast” when it comes to learning.

Meanwhile, there’s frustrating downtime, often with a confusing reallocation of work between project participants, and the patience of those involved runs thin. Some are angry at the disruption or slow to appreciate why the previous team dynamic broke and that it may require an overhaul to accommodate the newcomer.

Time to productivity scenarios vary, but size matters

No matter the exact context, a new hire enters a challenging work environment. In the worst of situations, some colleagues may be unwilling to enrich the recruit’s experience with guidance and heartfelt understanding. This description is no exaggeration, convincing many that a recruit’s first month on the job will make or break a lasting career in the company.

In the darkest scenarios, a new hire’s fate can look bleak without support and instruction at this early stage. Conversely, a well-oiled onboarding process to welcome newcomers can jet-propel the latter’s productivity. Size matters when it comes to T2P.

Large corporate entities have good and bad news to report on their time to productivity capabilities:

• Pro: They can demonstrate structured mentorship programs, induction processes, and solid management support ready to go.
• Con: They lack fluidity and have reams of red tape hampering a new team member’s seamless entry.

On the other hand, SMBs manage things the opposite way:

• Pro: A reduction in levels of bureaucracy and and more personal contact with colleagues can ease integration into the existing team.
• Con: Smaller organizations have scant resources available for new-hire support on the job, both in terms of personnel side and documentation.

There are plenty of statistics out there highlighting the percentage of companies that spend $0 on onboarding (35%), those that have no “structured” onboarding (36%), and those few (12%) whose employees say their organization has a good onboarding process. Still, what matters most for you is what’s happening under your own roof.

Where does your organization currently stand on this broad spectrum? Recognizing your strengths and weaknesses results in strategies to address the failings and bolster the strengths.

Two key drivers for improving your onboarding strategy

Undoubtedly, remote and hybrid work models have thrown a spanner into the works – putting productivity under a new microscope. Unless hiring companies are ready to fully automate the onboarding process, consistently apply it across the company for all positions, and focus on breaking down team barriers as a priority, T2P won’t budge much.

Boosting time to productivity requires a comprehensive review of your organization’s onboarding strategy. Start by examining the context (How healthy is your company’s culture?), and productivity benchmarks for new hires (Does each new hire have clear KPIs?)

1. A healthy company culture

You probably already have an answer in mind, but how healthy is your company culture? Consider the following questions:

• Is the leadership in consensus, or is it divided?
• Is the rumor mill spinning furiously, creating rumor and intrigue, or is transparency and encouragement to express thoughts and ideas without retaliation a driving force?
• Is there an “every man and woman for themselves” attitude, or is there a theme of company interests first?
• Is your employee churn rate extraordinarily high, or are employee retention metrics something you can be proud of?
• Do your employees distrust the words and promises of their supervisors, or do they trust them implicitly?
• Would most of your employees never recommend a friend or family member to work for you, or would they welcome them in?

An unhealthy company culture is bad for everyone, and terrible for new recruits. If you’re thinking of instituting a T2P program but you know you’ve got a toxic culture, deal with the health of your culture first. Otherwise, a new hire will face such a negative environment that they’ll be unlikely to stick around.

Conversely, a culturally healthy organization represents an obstacle-free path to new hire T2P. A positive environment is like a magical “open sesame” trigger to ease new hire inclusion with every team member in support.

2. Clear new-hire KPIs

Does your organization have clear key performance indicators set for each new hire?

T2P measurement shouldn’t be a secret to anyone trying to establish a career in an organization. After all, if there’s no definition of “performance” and what it depends on, there’s nothing to distinguish a good hire from a poor one.

Moreover, the metrics gauging performance should be as objective as possible. A few examples:

• Sales folks covering a territory or category with significant support understand their critical KPIs are revenue growth, margin percentages, and customer accumulation, as well as loyal client ratios, churn factors, and variable selling costs.
• IT experts entering a new job should understand the KPIs that matter, such as reductions in downtime, hacker prevention, faster digital interconnections, and saving money on SaaS installations and apps.
• Factory engineers on production lines should connect to reducing wastage, utility usage, and integrating AI into processes by strict deadlines, etc.
• Departmental managers should expect to be judged on their staff retention, improved output, revenues, costs, inventory levels, and debtor collections.

A company’s ability to generate accurate and time-sensitive numbers and ratios removes guesswork from the productivity equation and minimizes personality differences from skewing the results. Tools for measuring employee productivity vary by industry and role, too, but they can certainly help to generate operational data.

Of course, every business has unique divisions where management assessment without KPI guidance is the rule. For example, research programs running PhD-educated think tanks working on groundbreaking technologies are far less stratified and measurable with KPI attachment. Nonetheless, if the company is straightforward in its expectations and the new hire is on the same page, T2P should stay on track.

It makes you think, doesn’t it? The message is to get your onboarding right, or most of your recruits will abandon ship before reaching productivity.

Get onboarding right or new recruits will abandon ship before reaching productivity. Click To Tweet

What is minimum productivity?

Keeping things in perspective, it’s vital to remember that productivity is a dynamic consideration in every business, and stakeholders want to see it growing progressively for years into the future. However, T2P is not that far-reaching. We’re only interested in knowing when new hires have reached productivity levels that secure their position as integral team members. Achieving this requires setting a timeline to attain a critical KPI score that meets acceptable productivity benchmarks.

Notably, there may be a few timelines and varying benchmark values where the hirer and the new hire agree that Rome can’t be built in a day. In other words, longer-term objectives are part and parcel of the employment contract. Still, it rests on transparency, tangible metrics, unsurpassed employee support, and an overall healthy culture.

You may even throw a probation period into the hiring, delivering a trial period to ensure the parties are comfortable with one another. So, for this to work, the employment contract must provide for:

• A pre-arranged buyout at (say) three months as an option.
• Clear KPIs that will determine whether the new hire continues.

Companies should only consider this approach if they are confident that new hires have zero grounds to complain about lack of support. Why? With team positivity in the new hire’s favor, plus guidance and training at every stop, the KPIs have every opportunity to tell a happy tale at the probation hearing. If the new hire is not successful despite this fully supported onboarding, it will be clear the hire is unsuitable.

On the contrary, it’s a dangerous option for businesses saddled with unhealthy environments, and they may suffer severely by using this tactic. Again, why? Problems emerge if too many terminations ensue, with the unfortunate new hires complaining they never received the promised support (probably with just cause). Consequently, it can snowball into the following:

• The hiring program fails.
• Word gets out that your company contains a hostile culture.
• It will get progressively challenging to attract strong candidates.
• The churn costs will adversely impact the bottom line.