Standalone Onboarding Software vs an HRIS Module: When the Extra Tool Earns Its Cost

Many mid-market and enterprise businesses across the US find that relying on their HRIS system’s onboarding module feels similar to using a Swiss Army knife, as it helps with adherence (or compliance) norms yet lacks effectiveness in delivering excellent experiences. Conventional HRIS modules offer great service in the aspects of gathering transactional information, conducting I-9 verifications, establishing direct deposits, and routing tax forms, but they are unable to manage complicated multi-department launches. With the US labor market being so competitive, one can think about the costs of implementing a separate onboarding solution by calculating different costs related to the operations.

What is Standalone Onboarding Software?

The use of standalone onboarding software is to help in managing, automating, and optimizing the entire process of bringing new employees on board in an organization. The standalone software is different from the general human resources information systems that regard onboarding as a part of administration since the former puts great emphasis on the experiences of employees, efficiency in workflows, effectiveness of interdepartmental interactions, providing preboarding services like electronic welcome portals, introductions to the team and its culture, and solving the issues of logistics and IT equipment provision before Day 1.

In addition to facilitating the filling in of various paperwork like tax forms and compliance forms, the standalone onboarding software goes beyond the first new employee’s month and covers the whole period of the first three months of employment. These tools provide a variety of functions, including learning paths, task lists depending on positions, tracking by managers, feedback software, etc., which minimizes the time needed for the induction of new staff and contributes to lowering the turnover level. 

Why Does Onboarding Still Feel Broken at So Many US Companies?

Despite lots of investment in contemporary HR technologies, onboarding still creates problems for both new hires and their managers at numerous US organizations. The causes for this phenomenon are related not to the lack of necessary technologies but to problems in the structure, processes, and culture of the five components involved: 

1. Paperwork Is Confused with Progression

Many companies mistakenly consider compliance with onboarding as part of their recruitment process. A typical cycle in many organizations is when the HR believes that the onboarding process is complete as soon as an employee submits their Form I-9, finishes state tax forms, and registers for benefits on the first day of work. In fact, this is not true, because completing the necessary paperwork is just the initial stage of the real process–that of onboarding. If the company fails to move on with its work of preparing the new employee for the job and making them socially integrated, the new staff member faces a lot of administrative hassle instead of feeling he or she is on the right path towards professional growth. 

2. An Absence of Cross.Department Execution 

Onboarding is not merely executing HR and legal procedures; it requires joint efforts of multiple departments and smooth communication. The legal and HR departments execute the compliance paperwork and facilitate company policies. IT manages the provision of all required hardware equipment, software licenses, security tokens, and emails. The Facilities department is responsible for organizing all necessary office supplies and equipment for the remote job. The onboarding process is conducted by the hiring managers with the help of training and building expectations, as well as introducing the new employee to the team. 

3. Dependence on Universal HRIS Checklists

Typical modules for HRIS onboarding generally utilize inflexible checklists that do not account for the specific requirements of the new role. Consequently, when a Senior Software Engineer joins the company, he/she has the exact same checklist as a Customer Success Manager or Field Sales Representative. Thus, instead of gaining knowledge in the new position, new employees go through unnecessary administration.

4. The Issue of the Detached Management Staff

Even though the hiring supervisor is the individual with the maximum influence on an employee's success, this individual usually is deprived of proper support for successful onboarding. The managers are not given comprehensive guidance on creating a 30-60-90-day approach or having frequent one-on-one meetings with the employee. As a result, employees become isolated as their managers take absence in their process of engagement.

5.  Remorse of Preboarding and Low Productivity 

The period of time between the moment of acceptance of the job offer and the first day of work (which usually lasts for 2-4 weeks) is usually marked by the absence of effective communication between the employee and employer. Therefore, lack of support and engagement may lead to the employee's regret soon after the job acceptance, which may influence turnover at an early stage of employment.

How is it different from an HRIS Onboarding Module?

1. Purpose of the Solution

• Concentrates on the process of collecting data, compliance checking (I-9 and tax documentation), payroll integration, and the process of setting records for employees.
• Concentrates on the concepts of employee involvement, preparation for the position, the joint efforts of departments and time to be productive in the role.

2. Automation Between Departments

• Works more or less isolated in the HR department; sends notifications about specific activities or makes a simple checklist for different departments.
• Offers in-depth triggers for the functioning of business processes, allowing the purchase of IT items, and granting access to the applications and Facilities settings at the same time.

3. Preboarding and First Impressions

• Controls a simple document upload system that only operates after the person is hired.
• Provides an active portal for preboarding purposes that gives a chance to watch several welcome videos, get acquainted with the culture of the company, meet the team, and find a buddy.

4. Customization and Workflow Logic

• Provides information according to set rules, which allows the checking of positions in the company.
• Utilizes adaptive conditional logic to personalize every activity, study units, and equipment requests according to demand and the user’s position in the company.

5. Scope Well Over Day One

• Once a worker has handed in everything that is necessary, arranged for their benefits, and gotten through this introductory stage, which begins with orientation, onboarding is successfully finished.
• Enhances onboarding by implementing premeditated goal-setting programs across the first 30, 60, and 90 days, supporting continuous learning, holding regular management meetings, and organizing customer satisfaction surveys. Measures basic transaction metrics related to documentation and task completion.
•  It evaluates efficiency performance metrics such as onboarding speed, manager check completion, employee welfare rate (eNPS), and actual retention/attrition risk.

How Much Does Each Option Really Cost?

1. HRIS System Module

• The cost varies between $2 and $6 per employee assistance every month (PEPM). This option is normally purchased as an add-on to the main HRIS system.
• One-time payment varying between $1,000 and $5,000 only. The entire process can be completed in 2-4 weeks since the current employee database will be used. 
• Should be either free, according to the payroll/accounting system, or available as part of the system already.

2. Independent Onboarding Software

• Varies between $6, 30-$60 for each new hire.
• One-time payment (5,000-20,000). The process can take 6-12 weeks as it includes new custom workflows creation. 
• Apparently, yearly costs can amount up to $2,000-8,000 for middleware/API linking to the IT tools such as Okta, Jamf, Slack, and others.
• Additional Expenses
• Because the HRIS system doesn’t perform automation of the IT processes, it takes HR and IT employees’ time (from 3 up to 5 hours) for processing new hires.

3. Hidden Costs of Standalone Solutions

• The introduction of software complicates the relationship with your vendors, as this requires conducting separate SOC-2 security audits, preparing new contracts, and performing other administrative tasks.
• Continuously Updated, You should update your workflow rules constantly in order to adjust to the change within your company, no matter if it happens due to changes in the teams, software, or state laws. 

When does a Standalone Tool Actually Pay for itself?

1. Hiring Scalability: 75 to 100+ Hires Per Year

When there are fewer hires, it is feasible to compensate for the gaps in your HRIS, IT ticketing system, and the work of your hiring managers. As the rate of hires increases, the amount of work required to fill those gaps seems to multiply.

• Cost Efficiency: Such a tool will save you time by automating all actions between departments (ordering the hardware as needed, providing access to applications, coordinating the activities of facilities, and initiating welcome emails).
• Financial Aspects: With the current pace of hiring at 100, this tool will facilitate saving four hours of work at a rate of $45 per hour, creating $18,000 in returns.

2. Specialized or Expensive Positions (Minimizing Upfront Turnover)

Replacing a specialized employee (for instance, software engineers, medical staff, or sales managers, etc.) may cost 1.5x to 2x their annual salary.

• Reducing Turnover: According to SHRM, effective onboarding increases employee retention by 82%.
• Cost to Company: For example, one company hiring 50 mid-level software engineers at an average salary of $120,000 could incur a turnover cost over $900,000 if it loses 5 such employees in the first 90 days. Even preventing one voluntary resignation can lead to the immediate return of $180,000, which means that the company can afford to pay for a software agreement valued between $15,000 and $25,000 multiple times.

3. Distributed Remote and Hybrid Teams (Speeds up Getting to Productivity)

Anytime a new hire works in a remote setting, Day 1 delays (late delivery of laptops or Okta login information, miscommunication between manager and employee) will considerably hinder the training process and the employee’s productivity.

• Speed of Learning: Standalone platforms will implement the use of dynamic learning tracks of 30, 60, or 90 days, which will allow achieving productivity 20% to 30% faster.
• For instance: Getting a $100,000 employee fully working 2 weeks sooner would yield $3,800 for each new employee. Thus, the gain from hiring 30 new remote workers amounts to over $114,000 in unlocked productivity. 

4. Breakeven Analysis table by Company Size

• Probably Not Justifiable: your existing HRIS system and your old-fashioned manual checklists suffice. It is very hard to recoup your $5,000 to $15,000 implementation and software outlay.
• Breakeven scenario: If your organization employs remote workers, your HRIS system gives you positive ROI. 

Onboarding Software: Standalone Onboarding ROI

1. Over 150 New Hires Annually or Rapidly Growing Tech and Healthcare Organizations: Significant Return on Investment. Within three to six months, with huge gains in cross-department productivity and high early employee retention.
2. Administrative Labor Savings: Eliminates cross-department efforts among HR, IT, and Facilities, saving you 3-5 hours of work for each hire.
3. Positive Impact on Early Employee Turnover: Decreases voluntary turnover rates in the first 90 days by more than 82% and saves you replacement costs of between 50% and 200% of an employee’s salary.
4. Acceleration of the Onboarding Process: Ideas of 30/60/90-day paths allow reducing the time to productivity by 20%-30%, saving your organization between $3,800 and more per hire.
5. Elimination of the Post-Hiring Communication Standstill: Breaks the silence between the candidate’s acceptance of the offer and the first day at work, eliminating ghosting.

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Pro-tip

In cases of implementation of standalone onboarding solutions, the major challenge lies in concentrating on dismissing only on verifying task performance instead of achieving measurable business results. To do that, pre-audit the transfers of responsibility between HR and IT, find out all the places where manual delays happen, provide every new hire employee with an experienced buddy, and create specific 30-60-90-day goals.

Conclusion

Despite the fact that the HRIS onboarding module is responsible for basic administrative issues, the standalone onboarding tool is worth every dollar if the company has more than 75 hires per year, works with remote teams or hires expensive specialists. However, this investment has a great return on capital because it can be cost-efficient in terms of facilitating HR and IT processes, reducing time lost between performance, and preventing early attrition. In order to find the best solutions appropriate for your business, make use of a SaaS marketplace where various software can be compared and purchased.