Digital Employee Onboarding: Pros and Cons

Time is one of the most precious resources a growing business can possess. There never seems to be enough. How often do you feel there simply aren’t enough hours in a day to cross everything off your to-do list? As we head into 2024, it’s important to reflect on your growth over the past year.

If you’re one of the 58% of organizations still relying on physical paper records and manual data entry when onboarding employees, this exercise may leave you feeling a little exasperated. It’s hard not to feel like taking two steps forward and one step back with each new employee when it takes over six months for some companies to reach a break-even point on their investment.

Lift HCM is an independent provider of human capital management services that’s helped companies adopt digital solutions aimed at maximizing the efficiency of employee onboarding while minimizing administrative burden for over 50 years. Let’s weigh the pros and cons of going digital to see if you’re “on board” with electronic onboarding in the new year.

The Pros of Digital Employee Onboarding 

Electronic onboarding is significantly faster, reducing the time from hiring to an employee's first productive day. Consider how often an internet browser like Google Chrome fills in an entire form without requiring you to press a single key. A digital solution also eliminates the risk of entering inaccurate information into legal documents and tax forms due to poor penmanship.

Improved Compliance

While we’re on the subject of auditing, digital onboarding systems provide a means of programmatically enforcing compliance with local, state, and federal regulatory requirements as new hires complete and submit their employment documentation.

Reduced Administrative Burden

Automating the submission, collection, and storage of employee records can significantly reduce the administrative and HR staff's workload. Digital onboarding systems provide even more value on this front for small businesses, where it falls on leadership and executive staff to facilitate these tasks.

Long-Term Cost Savings

Over time, electronic onboarding can save paper, printing, storage, and manual data entry costs. Digital recordkeeping also makes it easier for accountants to access the data they need come tax season.

Enhanced Employee Experience

Varying reports list that new employees are asked to complete an average of between 41 and 54 administrative tasks associated with their onboarding. This means there’s ample time for this to sour them on the company and its bureaucracy right off the bat. Good onboarding experiences have been shown to significantly impact employee retention and productivity. Research indicates that effective onboarding can lead to an 82% increase in employee retention and a 70% increase in productivity among new hires. These statistics underscore the critical role that a well-structured onboarding process plays in integrating employees into an organization and enhancing their engagement and performance.

Cons of Digital Employee Onboarding

While digital employee onboarding offers numerous advantages, it is not without its drawbacks. Despite the many benefits such as increased efficiency, improved compliance, and enhanced employee experience, there are several challenges that businesses must consider.

Initial Investment 

Electronic onboarding requires an initial investment in software, hardware, and training. Businesses need to allocate funds for digital platforms, potentially upgrade hardware, and provide training to ensure efficient use. While these initial costs can be significant, they are an investment in long-term efficiency and effectiveness.

Technical Support

Technical support may be necessary, incurring additional costs for troubleshooting, system updates, integration, and user training. Companies might need to hire IT staff or outsource services, adding expenses over time, especially with frequent maintenance or significant updates. Ongoing support also requires resources for continuous staff training on the onboarding platform.

Data Security

Data security is a critical concern in digital employee onboarding. Protecting sensitive data on on-premise servers requires ongoing security measures and expenses, including firewalls, encryption, and audits. Continuous monitoring and updating of security protocols are essential. However, secure cloud storage platforms can mitigate these concerns with built-in security features like encryption, multi-factor authentication, and regular updates, reducing the IT burden and ensuring data protection.

Transform Your Company's Employee Onboarding with Lift HCM

Electronic onboarding is a powerful tool that improves efficiency, reduces administrative burdens, and enhances the employee experience. While there are some upfront costs, the long-term benefits—such as improved compliance and increased productivity—often outweigh the initial investment.

Whether you're a small business looking to modernize your onboarding process or a growing company struggling with scalability, Lift HCM’s digital onboarding solutions can help streamline and optimize your employee onboarding experience.

Contact Lift HCM today to learn more about how we can help you implement a seamless, digital onboarding process that sets your employees up for success.