The Cost of Poor Onboarding in India’s IT and Staffing Industry (2026 insights)

Introduction

Picture this: A talented software engineer joins your IT company with excitement and big dreams. Fast forward 45 days, and they’ve already submitted their resignation. Sound familiar? You’re not alone. Thecost of poor onboarding in India has become one of the biggest yet most ignored drivers of early attrition in the IT and staffing industry. In India’s fast-paced IT and staffing sectors, 20% of new hires quit within the first 45 days, and the real shocker is what this costs your business.

Poor onboarding isn’t just an HR inconvenience. The employee onboarding cost directly impacts productivity, retention, and long-term business performance. It’s a silent profit killer that drains resources, disrupts teams, and damages your employer brand. For India’s booming IT and staffing industries, where attrition rates hover between 13-28%, the price of getting onboarding wrong has never been higher.

Let’s break down the real numbers, explore what’s going wrong, and most importantly, discover how to fix it.

The Hidden Price Tag of Poor Onboarding

The true cost of poor onboarding extends much beyond salaries and becomes a substantial contributor to IT turnover costs in India. This is how much companies really pay:

Costs of Direct Replacement

The Society for Human Resource Management (SHRM) says that the average cost of hiring someone is around ₹3,62,000 ($4,700). Yes, but that’s only the beginning. It can cost anywhere from ₹35.5 lakhs to ₹40.5 lakhs to replace an employee who makes ₹30 lakhs a year. For fast-growing IT organisations, this employee onboarding cost multiplies rapidly with every new worker who quits early.

This is how it adds up:

Cost of recruitment:₹4-8 lakhs for agency fees, job postings, background checks, and all the time your top team spends interviewing people.

Training and onboarding: Another 5 lakhs were spent on training and getting someone up to speed.

Learning curve losses: ₹7 lakhs in lost output while the new hire gets used to their new job.

Knowledge drain: It costs 10 to 15 lakhs to lose institutional knowledge, client ties, and team momentum.

According to Deloitte’s research, it costs 50-60% of an employee’s yearly pay to find someone to replace them directly. When someone is in a leadership role, this multiplier goes up to 2.5x to 3x their annual salary.

How poor onboarding impacts productivity in IT Companies

Due to production delays and increased stress during the first 90 days, poor onboarding considerably raises new hire attrition in India.

81% of new employees say they felt stressed out during the hiring process. Employees can’t do their jobs when they are confused, not given enough help, or have too much knowledge. New workers who go through formal onboarding become fully productive 34% faster than those who don’t. This clearly illustrates the onboarding ROI for IT companies focusing on long-term employee retention.

Just think about it: if your new worker or recruiter spends three months learning basic systems instead of one, that’s two extra months of full pay for only some work done. If 25% of a team of 100 workers leave every year, that’s millions of dollars lost in production.

How Poor Onboarding Triggers Attrition and Quality Issues

Even scarier is the idea that one bad hire or poor onboarding experience can set off a chain of bad things. Researchers have found that when a senior employee leaves because they weren’t properly trained, others often follow within 90 days.

Quality problems also get worse during the transition period. In one study, the number of defects rose from 2.3% to 7.8% when people who worked in quality control didn’t get trained well and then left their jobs. Over the course of a few months, the costs of repairs, returns, and insurance claims can reach lakhs.

Why Poor Onboarding Hits India’s IT & Staffing Industry Harder

The onboarding challenge is especially bad in India’s tech and staffing industries. Here’s why:

Sky-High Attrition Rates

India’s IT industry is experiencing a talent retention crisis:

TCS: TCS had 13.3% turnover in Q4 FY25, up from 12.3% in Q2.
Infosys: 14.1% of employees quit on their own in Q4 FY25, up from 12.6% the previous year.
E-commerce sector: E-commerce is the industry with the most turnover 0f 28.7%.
Professional services: The turnover rate for professional jobs is 25.7%.

In FY23, the top seven Indian IT companies hired more than 3.8 lakh replacements. That’s an amazing 1,040 new employees every single day to keep the same number of employees.

The GCC Factor

Global Capability Centres (GCCs) have made things even more complicated. There are now almost 1,900 GCCs in India, and 150 have opened in the last 30 months alone. They pay 15-20% more than standard IT services companies. This means that the newly onboarded talent is always being poached, which makes poor onboarding an even more expensive mistake.

Flexi Staffing Growth

The flexi staffing business in India is growing very quickly and is expected to hit ₹2.58 lakh crore by FY27, which is 17.3% growth per year. There are 7.2 million formal contract workers, which makes it hard for staffing agencies to find and hire new employees. They also have to make sure they can scale quickly while still keeping quality and compliance. For the staffing industry, onboarding failures directly affect client trust, compliance, and long-term retention outcomes.

Common Onboarding Failures

These onboarding gaps are a primary reason for increased IT attrition costs in India and decreased IT employee retention.

Thinking of day one as a whole program:

The biggest mistake? You might think that onboarding is a one-day meeting with a PowerPoint presentation and an employee contract. In fact, an effective onboarding process should last between 30 and 90 days, during which time you should slowly introduce information, build relationships, and make sure everyone knows what to expect.

Only 12% of workers think their company does a great job with hiring. A huge amount of value is being missed by 88% of organisations.

Too much information without any context:

New hires are given five policy manuals, two handbooks, ten SOPs, and training movies on their first day on the job. By Day 3, they don’t remember much of it.

A lot of information is given to new employees during training, according to 45% of those people. Even useful resources become noise when people don’t know what’s important for their job.

Missing the human connection:

Some employees complete their onboarding through emails and recorded videos, never meeting a teammate other than their boss. This is a sobering fact. This makes it hard to connect emotionally from the start.

How to fix it? Engagement goes up by 29% at companies with strong onboarding that includes team introductions.

No clear role expectations:

Only 29% of new hires feel fully ready for their jobs after onboarding. When requirements aren’t very clear, employees waste time trying to figure out what success looks like, which slows them down and makes them more frustrated.

Generic templates for everyone:

People who work as recruitment consultants and backend engineers should not be given the same onboarding checklist. This sends the message, “We don’t value your specialised skills.” Role-specific training is very important, but it’s often forgotten.

Compliance chaos:

Rules and regulations that are hard to understand make India’s hiring even harder. Businesses have to deal with:

Signing up for the Employees’ Provident Fund (EPF).
Sign up for ESIC (Employee State Insurance Corporation).
Tax compliance for professionals.
Training in POSH (Prevention of Sexual Harassment).
State-specific laws about shops and businesses.

When KYC and compliance are done by hand, there are more delays, mistakes, and stress. Still, a lot of businesses use old-fashioned paper methods.

Zero feedback mechanisms:

If you don’t check in with them often during the first 30, 60, and 90 days, small frustrations can grow into departure letters. When businesses don’t get feedback, they miss out on quick wins that could help build trust and find problems before they get out of hand.

The Business Impact of Poor Onboarding

The cost of poor onboarding extends beyond HR metrics and immediately affects revenue, brand impression, and IT employee retention.

Damaged Employer Brand

These days, poor onboarding experiences are shared on sites like Glassdoor, LinkedIn, and business review sites. This makes it harder for you to hire top talent in the future. Word gets around quickly, especially in India’s IT hubs like Bangalore, Pune, and Hyderabad, where professional groups are very close.

Lost Innovations and Ideas

When you hire new people, they bring new ideas, views, and experiences. These useful insights never come up when they’re too busy or not interested because of a bad introduction. Your business misses out on new ideas that could give it an edge over its competitors.

Team Morale Drain

When new hires aren’t properly trained, it puts stress on the people who already work there. They have to handle their own work and spend extra time answering simple questions, fixing mistakes, and making up for lost time. This secret cost hurts team morale and may even lead to more people leaving.

Customer Experience Suffers

Service problems happen when workers aren’t interested in their jobs or aren’t properly trained. When it comes to staffing and employment, relationships are very important. A new recruiter who doesn’t understand how things work can hurt client relationships that have been built over years.

The ROI of Getting Onboarding Right

The good news is that investing in proper onboarding pays off in a way that can be measured.

The numbers speak for themselves:

This data clearly illustrates the onboarding ROI for IT companies and staffing firms engaging in structured onboarding programs.

82% more employees stay with a company that has a strong onboarding process.
70% more work gets done when training goes well.
69% of workers stay with a company for at least three years if things are done right.
Structured training cuts the time it takes for an organisation to be productive by half.

Now let’s look at a real value of ROI:

Scenario: A business that hires 100 new people every year

The cost of onboarding one person is ₹4,000,000
Total onboarding investment is ₹4 crore.
Net benefit (reduced turnover + saved admin time + faster productivity): ₹6 crore.
ROI: (₹6 crore – ₹4 crore) / ₹4 crore = 50% return

You get ₹1.50 in value for every rupee you invest in quality onboarding. That’s a strong business case.

Solutions: Building Onboarding That Works in India

Reducing the cost of poor onboarding starts with treating onboarding as a strategic retention and performance initiative, not an administrative task.

Start Before Day One(Pre-boarding)

As soon as someone says yes to your offer, the onboarding journey should begin. Send:

An email of welcome from the CEO or team leader.
Digital onboarding portals where they can fill out paperwork whenever it’s convenient for them.
Tell them what to expect on their first day.
A Company gift or a welcome kit sent to their house.

This makes the first day less stressful and shows that you’re organised and friendly.

Implement a Structured 30-60-90 Day Plan.

Split the onboarding process into manageable steps:

Day 1-30: Learn and Absorb

The goal, values, and culture of the company.
Team greetings and getting to know each other.
Training in basic methods and tools.
Set clear goals and standards at the start.

Days 31-60: Contribute and Grow

Deep dive training for special roles.
The first tasks and projects.
Regular meetings for feedback.
Building connections between departments.

Days 61-90: Own and Excel

Increasing freedom and accountability.
Review of performance and setting of goals.
Talks about career paths.
Integration into bigger company projects.

38% of early turnover happens in the first 90 days, according to research. This structured method is very important.

Assign Mentors or Buddies

Put new employees with more experienced team members who can help them learn, answer their questions, and offer social support. This makes a safety net and speeds up the process of cultural integration.

Companies that use buddy systems during onboarding say that employees are much more engaged and that ramp-up times are much shorter.

Personalise the Experience

It doesn’t work to say “one size fits all.” Make onboarding unique based on:

Role requirements: What a data scientist needs to learn is different from what a recruitment expert needs to learn.
Experience level: A new hire with 15 years of experience needs less help than a recent college graduate.
Work location: People who work from home have to put in extra work to feel linked.

60% of workers, especially those who work from home or in a hybrid setting, want more personalised onboarding experiences.

Leverage Technology

In 2025, 81% of businesses plan to invest in onboarding technology. With digital tools, you can:

Collecting and checking documents automatically will save 90% of the time it takes now.
Give your workers self-service portals where they can check on their progress.
Use microlearning tools to give just-in-time training.
Allow remote teams to use virtual training.

When companies utilize AI for onboarding, their time-to-productivity decreases by 50%, and their productivity increases by 73%.

Master Compliance from Day One

India has a lot of rules and regulations, so compliance can’t be a mistake. Make sure that your onboarding includes:

EPF Form 11 is used to register for a provident fund.
ESIC enrolment for qualified workers.
POSH training, which is required by the 2013 Act.
Verification of PAN and Aadhaar.
State-specific compliance with labour laws.
Tax registration for professionals.

A lot of this can be done automatically by digital onboarding platforms, which make sure nothing gets missed and keep audit trails.

Create Feedback Loops

Schedule check-ins at strategic intervals:

Day 7: First thoughts and immediate blockers.
Day 30: Knowing your role, resources and building relationships.
Day 60: Review of progress and remaining questions.
Day 90: Review of performance and future goals.

These talks help you find problems quickly and show your employees that you care about how they feel about their job.

Measure What Matters

Keep an eye on key measures to keep getting better:

Time to productivity: The time it takes for new employees to reach full productivity.
90-day retention rate: The 90-day retention rate is the share of workers who stay past the important first quarter.
Onboarding completion rate: How many people do everything that needs to be done?
New hire satisfaction scores: Scores for how satisfied new hires are with the onboarding experience.
Manager satisfaction: The level of satisfaction among managers about how ready they think their new employees are

Things that are measured get better.

Special Considerations for Staffing Agencies

In the staffing industry, poor onboarding has a multiplicative effect on both internal teams and placed candidates. You’re not only in charge of training your own employees; you’re also in charge of the experience of partners and temporary workers who are hired by the company.

Key strategies:

Set up different onboarding tracks for employees who work for the company and workers who were hired.
Make sure contract workers have clear ways to get help and contact you.
Give training that is specific to the client before posting.
Keep in touch regularly during the contract’s term.
Create processes that can be expanded to handle a lot of hiring.

Remember that poor onboarding of placed workers makes your business look bad and puts client relationships at risk.

Making the Change: Where to Start

Don’t freak out if you read this and realise that your onboarding needs work. Start by doing these things right away:

This Week:

Ask new employees (30-90 days) about their onboarding experience.
Mark the three most important pain points.
Make a map of your current onboarding process to see gaps.

This Month:

Make a simple onboarding plan for 30 to 60 to 90 days.
Set up a buddy/mentor program.
Set up regular times to check in.

This Quarter:

Evaluate digital onboarding platforms.
Make training courses that are specific to roles.
Train managers on an effective onboarding process.
Set up tracking and metrics tools.

The Bottom Line

India’s IT and staffing businesses lose billions of rupees every year because of poor onboarding. You can’t ignore this problem since 20% of new hires quit within 45 days, and the cost of hiring someone new can reach up to 200% of their yearly salary.

For IT leaders, minimising employee onboarding costs is one of the fastest methods to boost IT employee retention and decrease attrition expenses. The good news is that onboarding is one of the best purchases you can make in terms of return on investment (ROI). When companies get it right, they keep 82% more employees, boost output by 70%, and make their employer brands much stronger.

When skill is the only thing that sets you apart from the competition, every new hire costs a lot of money. The question isn’t whether you can pay to make training better; it’s whether you can pay not to.

Start planning for the first 90 days as you prepare for the hire process. Structure your life, show that you care, make things clear, and connect with others. Your team’s happiness, your retention rates, and your bottom line will all be better for it.

Reducing the cost of poor onboarding in India’s IT and staffing industry is crucial in today’s cutthroat economy.

FAQs

What is the cost of poor onboarding in India?

The cost of poor onboarding in India can reach 50–200% of an employee’s annual salary, including hiring, training, lost productivity, and early attrition especially in IT and staffing companies.

How does poor onboarding affect IT employee retention?

Poor onboarding lowers IT employee retention by causing confusion, stress, and disengagement. In India’s IT sector, weak onboarding is a key reason many new hires leave within the first 45-90 days.

What is the average employee onboarding cost in IT companies?

The average employee onboarding cost in IT companies ranges from ₹3-5 lakhs per hire, covering training, compliance, tools, and ramp-up time. Poor onboarding pushes this cost even higher.

Why is onboarding ROI important for staffing firms?

Onboarding ROI matters for staffing firms because strong onboarding improves retention, faster deployment, and client satisfaction, while reducing replacement costs and long-term staffing industry onboarding expenses.

How can companies reduce new hire attrition in India?

Companies can reduce new hire attrition in India by using structured 30-60-90 day onboarding plans, clear role expectations, mentors, early feedback, and digital onboarding tools.