Are Your New Hires Eating at Your Bottom Line?

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By Rieva Lesonsky

New hires and other employees in changing roles struggle to quickly and adeptly transition into their new roles, according to a new study from VitalSmarts, a top 20 leadership training company. The biggest struggle is learning to turn new skills into the automatic habits required for reliable execution in their new roles.

Emerging leaders (employees taking on a people-management role for the first time), experienced the toughest transition—taking six to seven months to turn the skills required in their new jobs into reliable habits. The bad news for business owners? This transition time costs you $25,000 per new leader.

While the survey found the transition costs were highest with emerging leaders, it also identified the time and costs associated with employees in other transitional phases—including people entering the workforce for the first time, new hires, and employees transitioning from within the business. The survey shows:

For employees taking their first people-management position:

  • Transition time (the time it takes to learn the job, manage the demands of the job, learn the ins and outs of the team or business, navigate the culture and become fully proficient): 6-7 months
  • Transition cost (costs include salary during transition and opportunities delayed or missed during transition): $25,000 per person

For employees entering the workforce for the first time

  • Transition time: 5-6 months
  • Transition cost: $18,000 per person

For experienced, non-supervisory employees hired from outside the business

  • Transition time: 4-5 months
  • Transition cost: $16,000 per person

Experienced, non-supervisory employees who transition from another part of the company 

  • Transition time: 3-4 months
  • Transition cost: $11,000 per person

The survey also asked people what habits they found most challenging to master in their new roles. The most difficult habits in each area of transition include:

For employees taking their first people-management position

  • Discipline effectively—set clear expectations, hold people accountable for performance gaps, discipline when necessary.
  • Communicate downward—share the reasons behind decisions. Take the time to build understanding, commitment, and support for priorities.
  • Delegate—help team members develop important skills and become self-directed. Provide encouragement and follow-up so team members feel supported.

For employees entering the workforce for the first time

  • Master systems and processes—learn the tools vital to success in the new role.
  • Ask for help—recognizing when they are over their heads & quickly seek assistance.
  • Take initiative—seek out problems and opportunities and pitch-in without being asked.

For experienced, non-supervisory employees hired from outside the organization

  • Master systems and processes—learn the tools vital to success in the new role.
  • Ask for help—recognizing when they are over their heads & quickly seek assistance.

For experienced, non-supervisory employees who transition from another part of the organization 

  • Master systems and processes—learn the tools vital to success in the new role.
  • Ask for help—recognizing when they are over their heads & quickly seek assistance.
  • Receive coaching—know they have a lot to learn and are willing to take coaching and advice from others.

VitalSmarts researchers David Maxfield, vice president of research, and Emily Gregory, vice president of product development, say these costs are startling when considering a singular transition. However, they are staggering when multiplied across an entire workforce. The Bureau of Labor Statistics shows the median employee tenure is 4.3 years for men and 4 years for women. That means every four years, employees create transition costs for their employers.

“Organizations have long been aware of the costs associated with turnover,” says Maxfield. “And as they look to reduce those costs, they need to consider that onboarding requires more than mastering the skills involved in the new role. They need to help employees turn these skills into the kind of automatic, unthinking habits that drive reliable performance.”

Gregory says the science behind habit formation teaches us that transitions are slow and costly because it’s not simply a matter of learning new skills—it’s a matter of replacing old habits with new ones. “Many times, we blame a long transition on our new situation,” says Gregory. “But the truth is, old habits will always persist in new situations, even when they hurt us. We’ve found people who have this habit mindset can cut that transition time down dramatically. The sooner you notice you need to adapt, and the sooner you change habits, the quicker you’ll find personal success and the lower the cost to the organization.”

To accelerate habit formation and reduce the time and costs associated with career transition Maxfield and Gregory have some tips to share: (These come from the company’s upcoming training course The Power of Habit®, set for release in 2020, based on the New York Times bestseller of the same title by Charles Duhigg.)

  1. Focus on “Keystone” Habits: While new roles require many new skills, focus on one or two behavioral habits that will create small wins and momentum—habits that will naturally lead to other good habits. Start there.
  2. Don’t Break Habits; Replace Them: Rather than thinking in terms of the old habits you need to stop; focus on the replacement behaviors you need to adopt. Break them down into small, specific, concrete routines and then make sure you have the knowledge, skills and tools to do the new behavior. 
  3. Identify Cues: What will you put in place to trigger this new habit? Will it be a notification? When you see a specific person? When you enter a certain meeting? A certain time of day? When you feel a specific emotion? If you identify your triggers, you’re much more likely to actually perform the behavior.
  4. Identify Rewards: You won’t do a habit unless you think there’s a payoff. Choose a reward that gets you excited to do the behavior, and then make that reward both immediate and obvious. Build a reward ritual that happens every time you do the new behavior. And remember to account for the rewards you are currently getting from your old behaviors. Unless you connect those rewards to your new behavior, they will continue to drive the old behavior.

New hires stock photo by fizkes/Shutterstock

The post Are Your New Hires Eating at Your Bottom Line? appeared first on SmallBizDaily.

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