What is the employment life cycle?
The employment life cycle covers all the phases of an employee’s relationship with your company – from recruitment planning right through to separation when the employee leaves. Managing this HR life cycle is a critical success factor for businesses today. An employee’s HR lifecycle is their entire experience with a company, from the moment they first communicate about a position to the day they leave the organisation. In a nutshell, it refers to an employee’s journey with the company. Keeping track of a company’s employee life cycle is important because it gives managerial and HR staff a consistent series of steps to follow throughout each employee’s time with the company. It’s easy to neglect some stages and focus more on others, but in the end, all stages of the human resources life cycle are crucial for your company to be successful in the long term.
Stages of the employee life cycle
The HR life cycle consists of several stages. They are all important for successful HR management.
No matter how successful your company is, it’s key to attract great talent in order to remain successful. Finding good employees should be a priority. Before you even post any vacancies, you need to develop a strong employer brand. If you work for a well-known global enterprise, this stage is naturally easier than if you represent a small business. Potential new hires ideally need to have heard of your business and be able to see that you have a great culture and are generally an attractive employer. Your relationship with an employee doesn’t begin on their first day or the moment they sign their employment contract – in fact, it starts the second they become aware of your organisation and are first exposed to your employer brand.
The recruitment stage is the period in which you actively try to identify the best candidates for your team and then interview them to make sure they’re a good fit. This phase will be your first contact with the potential new employee. You can find talent, for example, through referrals by existing staff or by using a recruitment platform such as Indeed. Take a look at our comprehensive Hiring Resources that will guide you through this and all other stages of the human resources life cycle.
Once you have recruited the best candidate for a role, the all-important onboarding stage commences. Managers and HR need to work together to ensure new starters have a successful first day and a good impression of their new employer. It’s all about making new hires feel welcome and giving them as much information about their new role as possible. A solid onboarding process typically involves an induction or orientation session, introducing the new team member to their new colleagues, having IT set up their login details and email address, and generally answering any questions they may have. Put your onboarding process in writing, and set up some best practices.
A 2012 Gallup study found that there is a strong correlation between employee engagement and performance. Individuals who scored in the top half for employee engagement were almost twice as likely to achieve good business results as those in the bottom half. The study further found that highly engaged teams were 22% more profitable and 21% more productive than their less engaged counterparts. Engaged employees also tend to stay in their role longer than those who lose interest in their tasks after a while. What’s more, staff members who are engaged with the work they do will naturally perform better. So, ensuring your staff are engaged benefits both them and the company.
The development stage can help staff grow and learn new skills. As an employer, you should encourage continuous professional development (CPD) and training to give your employees the opportunity to continually improve. You might even want to look into establishing an effective in-house talent development program. Your employees’ new skills might enable them to secure a promotion or take on new responsibilities as part of their current roles. Either way, your business will benefit and they will feel more satisfied. You may even want to consider giving them a pay rise in return for their efforts and newly acquired knowledge.
While employee attrition is a natural part of any business, you should avoid a high staff turnover rate. Not only does this make you look unattractive as an employer, but it’s also costly because you keep having to recruit new talent. According to Australia’s Human Resources Director magazine, it costs companies a staggering $18,982 on average to hire a single employee. You can improve employee retention, for example, by hiring the right types of people to start with, fostering an attractive and open culture, recognising your team’s achievements, and listening to staff feedback and acting upon it, to name just a few aspects. If your staff feel valued and appreciated, they will want to stay on. Some employers also choose to offer innovative perks, such as unlimited working from home or student loan repayment help, to remain attractive to staff in the long term.
At some stage, all employees will reach the point of separation from their employer, be it for health reasons, retirement or because they have found a new opportunity. Whatever their reason, it’s always advisable to separate on good terms, even if their departure was unexpected. From an HR perspective, employee exits should be as non-disruptive as possible. Many companies conduct exit interviews to discover the reasons for the individual leaving and to obtain any feedback that might be useful for retaining other employees in the future. If you are experiencing a high staff turnover rate or your key staff seem to be stagnating and you are unsure why, for example, exit interviews can be especially useful. Finally, organise a smooth transition of duties and prepare their last payroll. Any employee leaving will also affect the other team members in some way, so make it part of your HR lifecycle process to check in with your remaining staff and encourage them to look forward.
Why is the employment life cycle important?
Once you understand the whole employee life cycle from start to finish and each of the stages your employees go through, you’ll be able to optimise every stage and thus attract the right candidates and create a better employee experience.
Strong employer brand
Remember that the many individual moments an employee experiences at work play a role in how they feel about their employer’s culture and brand. And employer branding is, of course, crucial when it comes to attracting new talent and retaining current staff. Even after employees leave, they will talk about your company and, if they had a good experience, can become your brand advocates.
Every stage matters
Attracting talent, keeping staff engaged, and developing and retaining employees is an ongoing process. It can involve different strategies depending on which stage the employee is at in their personal employment life cycle. While many companies tend to focus on the early stages of an employee’s life cycle, specifically attracting talent and recruitment, ongoing training and development are just as crucial for retaining employees. Even an employee’s separation stage – when they leave the company – can end up having a positive impact and lead to attracting and hiring skilled new talent.
Reviewing and planning around HR life cycle stages can help your company improve the overall employee experience. This, in turn, benefits the business in many ways – from more productive staff to improved customer loyalty. After all, a strong team is the backbone of any organisation’s success – so invest in a solid employment life cycle in your company, and you will reap the benefits very soon. When you’re ready to take the first step in the human resources life cycle, browse our FAQs about hiring on Indeed to get you started.