How to Use Our Free Onboarding Cost Calculator

Hiring and onboarding new employees can be costly, but understanding those costs is the first step toward managing them effectively. Our Onboarding Cost Calculator makes it simple to calculate expenses and uncover insights into your onboarding process. Here’s how it works:

1. Select Your Mode
   • Use Simple Mode for a quick estimate of your onboarding costs, perfect when hiring a few employees.
   • Choose Advanced Mode to dive deeper into the details, including recruitment costs, productivity losses, and retention rates.
2. Input Basic Details
   • Enter the number of new hires, average monthly salary, and onboarding duration.
   • Include costs for training, equipment, and other resources provided to new employees.
3. Add Advanced Details (Advanced Mode Only)
   • Input additional expenses like recruitment costs, onboarding staff costs, and software licensing fees.
   • Include productivity loss percentages and retention rates to capture the broader impact of onboarding.
4. View Your Results Instantly
   • See a detailed breakdown of your total onboarding costs, including training expenses, resource costs, and productivity losses.
5. Optimize or Adjust
   • Use your results to evaluate your current onboarding process and identify areas where you can save money. Adjust inputs to test different scenarios or click Clear to start fresh.

With just a few inputs, you’ll have a complete picture of your onboarding costs—no spreadsheets required!

Your Complete Guide to Onboarding Costs

Bringing new employees into your business is an exciting step—but it’s not free. From training to equipment to the time spent getting them up to speed, onboarding costs can add up fast. That’s why it’s critical to understand where your money is going and how to make every dollar count.

Here’s everything you need to know about onboarding costs, why they matter, and how to manage them effectively.

What Are Onboarding Costs?

Onboarding costs cover all the expenses involved in integrating new employees into your business. Think of it as an investment—not just in your new hires, but in your company’s long-term success.

These costs can be broken into three main categories:

• Training Costs: Expenses for materials, programs, or trainers needed to prepare employees for their roles.
• Equipment and Resources Costs: Everything from laptops to uniforms to software licenses.
• Productivity Costs: Time spent by your team onboarding new hires and the temporary dip in efficiency as employees learn the ropes.

When these costs are managed well, onboarding sets employees up for success. When ignored, they can quietly drain your resources and hinder growth.

Why Knowing Your Onboarding Costs Matters

Understanding your onboarding costs isn’t just about keeping budgets in check—it’s about being proactive and strategic. Here’s why it’s so important:

1. Plan for Growth
   Whether you’re hiring one person or scaling a team, knowing your costs helps you budget accurately and avoid surprises.
2. Spot Inefficiencies
   If onboarding consistently costs more than expected, it’s a sign that something in your process needs adjusting.
3. Boost Retention
   An effective onboarding process builds confidence and loyalty in your employees, reducing turnover and saving money in the long run.
4. Measure ROI
   Tracking onboarding costs allows you to connect the dots between your investments and outcomes like employee performance and retention.

How to Calculate Onboarding Costs

Calculating onboarding costs involves breaking down all the expenses associated with integrating a new hire. If you don’t have exact numbers, using industry averages can give you a solid starting point. Here’s how to calculate onboarding costs step by step, with real-world examples:

1. Salary During Onboarding

Onboarding usually lasts 30 days or more, during which new employees aren’t fully productive. You can calculate the cost of their salary during this period:

• Example: A new hire earns a monthly salary of $4,000. Assuming 22 working days in a month, the daily salary is approximately $182. If onboarding lasts 30 days, the salary cost is:
  (Daily Salary × Onboarding Days) = $182 × 30 = $5,460

2. Training Costs

Training costs include internal trainers’ time, materials, or external courses.

• Example: If internal training takes 10 hours and the trainer earns $40/hour, that’s $400. Adding $100 for materials brings the total to $500 per employee.

3. Equipment and Resources Costs

New hires typically need tools and equipment to do their job.

• Example: A laptop costs $1,000, a software license is $300, and other supplies (e.g., uniforms) are $200. This totals $1,500 per employee.

4. Lost Productivity Costs

New hires usually take time to reach full efficiency. Productivity losses often range from 20-40% during the onboarding period.

• Example: Let’s say a new hire is 70% productive during their first month. If their full productivity generates $6,000 in value, the lost productivity is:
  (Full Value × (100% – Actual Productivity)) = $6,000 × 30% = $1,800

5. Recruitment Costs

If you include hiring costs in your onboarding analysis, consider expenses like job postings, recruiter fees, and interview time.

• Example: Job ads cost $500, recruiter fees are $3,000, and interview panel time is worth $500, totaling $4,000 per hire.

6. Administrative Costs

HR time spent on onboarding tasks like compliance, benefits setup, and orientation should also be factored in.

• Example: If HR spends 5 hours on paperwork at $50/hour, the cost is:
  (HR Time × Hourly Rate) = 5 × $50 = $250

Bringing It All Together

Using these examples, the total onboarding cost for one employee would look like this:

• Salary During Onboarding: $5,460
• Training Costs: $500
• Equipment and Resources: $1,500
• Lost Productivity: $1,800
• Recruitment Costs: $4,000
• Administrative Costs: $250

Total Onboarding Cost: $13,510 per hire

Tips for Reducing Onboarding Costs Without Cutting Corners

Efficient onboarding doesn’t mean spending less—it means spending smarter. Here are some tips to optimize your process:

1. Streamline with Digital Tools
   Use onboarding software like Connecteam to automate repetitive tasks like document collection and compliance training.
2. Standardize Your Process
   Create a consistent onboarding experience for all employees. It saves time, reduces errors, and ensures quality.
3. Invest in Retention
   A strong onboarding process improves employee satisfaction, which means fewer people leaving and fewer resources spent rehiring.
4. Use Scalable Training Resources
   Switch to online training modules that can grow with your team instead of paying for multiple in-person sessions.
5. Measure and Adjust
   Track your onboarding costs regularly and look for ways to improve. The more you refine your process, the more you save.

The Bigger Picture: Why Onboarding Costs Are Worth It

Every dollar you spend on onboarding is an investment in your team’s success. When done right, onboarding:

• Increases Productivity: Employees reach full efficiency faster when they’re properly trained and supported.
• Improves Engagement: A great onboarding experience shows employees they’re valued from day one.
• Reduces Turnover: Employees who feel supported are more likely to stay, saving you the costs of re-hiring.

But neglecting onboarding costs can lead to:

• High turnover rates
• Poor employee performance
• Missed opportunities for growth

Take Control of Your Onboarding Costs with the Free Calculator

Don’t let onboarding costs stay a mystery. With our Free Onboarding Cost Calculator, you’ll have all the tools you need to track expenses, optimize your process, and make smart decisions. Whether you’re hiring a single employee or building an entire team, this calculator helps you plan with confidence.

Start saving time, money, and resources on onboarding today! Give the calculator a try—it’s fast, accurate, and completely free.

Streamline Onboarding and Save Costs with Connecteam

Onboarding doesn’t have to be complicated or costly. With Connecteam, you get all the tools you need to onboard new hires efficiently, improve retention, and reduce expenses—all in one simple platform.

Here’s how Connecteam can transform your onboarding process:

• Digital Onboarding: Automate paperwork, training, and compliance tasks with an easy-to-use app that saves time and keeps everything organized.
• Customizable Training Modules: Deliver tailored onboarding programs directly to your employees’ mobile devices, ensuring consistency and quality across the board.
• Task and Checklist Management: Assign, track, and complete onboarding tasks with clear timelines and accountability.
• Employee Communication: Keep new hires engaged and informed with built-in chat, announcements, and a knowledge hub.

Whether you’re onboarding one employee or scaling your team, Connecteam simplifies the process, saves valuable time, and ensures your new hires feel confident and supported from day one.

Ready to cut costs and improve onboarding? Try Connecteam for free today!