The 9 stages of the employee life cycle: A comprehensive guide
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Wed, Jun 28, '23
The employee lifecycle — think of it as an essential roadmap in your organization. It's key to a company's success, guiding you from the first recruitment step to the final wave goodbye with each employee.
It's not just about hiring and firing but understanding each stage to optimize productivity, foster growth, and nurture a positive work culture.
In this article, we'll unpack the complexities of the employee life cycle, offering insights into managing and measuring each stage effectively for a thriving organizational culture.
What is the employee life cycle?
The employee life cycle refers to the entire relationship between employees and their organization. The cycle begins before hiring employees when companies attract candidates to their open positions. The cycle ends after an employee departs and becomes an advocate for the company.
Understanding the employee life cycle helps HR teams create a seamless transition as each employee moves from one stage to another. By optimizing each step in the process, you can ensure a positive employee experience while also boosting morale and productivity, not to mention lowering your recruitment costs.
The importance of optimizing the employee life cycle
Organizations cannot succeed without their employees, yet finding — and retaining — expert talent is expensive. Recruitment, onboarding, and employee retention directly impact an organization's bottom line.
The HR cycle involves recruitment fees that average $98 for each day a job ad remains online. Recruiting can take around 36 to 42 days, which is already expensive. If it takes longer to find the right candidate, your expenditure increases.
Following selection, the average cost of onboarding a new hire is around $4,700 — an increase from $4,000 a few years prior. Costs rise with seniority — hiring executives and leaders can cost up to four times more. On average, 16.45% of new hires quit after one week and 17.42% quit after one month — which could put you back at the start of the process.
Benefits of a streamlined employee cycle
Recruiting and onboarding new employees is costly, but HR teams understanding the employee life cycle can improve the process. This optimization has several benefits:
Boosted employee engagement
Engaged employees are more productive and more likely to stay with an organization longer, offsetting the initial recruitment and training costs the longer they remain employed.
Increased productivity and revenue
Organizations that provide a great employee experience can see a productivity boost and a potential revenue increase of over 50%. Although each employee's experience is unique, HR teams can make a positive impact by paying attention to employees at every stage in the life cycle.
Improved employee retention
One of the most effective ways to combat rising recruitment costs is to retain top talent. Purposeful employee life cycle management can improve employee retention. For example, research shows companies can improve new hire retention by 82% by strengthening their onboarding process.
Enhanced talent attraction
A skilled employee is worth the added cost over a poor hire, especially if they stay with the company long. Focusing on attraction before beginning recruitment can bring in more qualified candidates and potentially lower recruitment costs.
9 stages of the employee life cycle
The key to attracting and retaining talented employees is understanding and optimizing each phase of the employee life cycle. The employee life cycle is broken down into the following phases, from finding the right candidates to providing a positive offboarding experience.
The employee life cycle begins before your first contact with applicants. To attract the best candidates, you must convince them that your organization offers the best career opportunities. This means moving beyond generic job descriptions and highlighting potential career growth, setting the stage for a strong relationship with each applicant.
A few strategies to consider include:
- Advertising across multiple sources, such as prominent job boards and social media.
- Tapping into your network of alumni or existing employees for candidate recommendations.
- Enhancing your website to make your organization more attractive to potential candidates.
- Showcasing your brand, culture, and growth opportunities available to new hires. 75% of job seekers are likely to apply if the organization actively manages its employer brand.
Recruitment is the phase where you begin interacting with prospective employees. This is when candidates become more familiar with the organization, role, expectations, and requirements.
Interviewing is the core activity of this step, allowing the recruiter and prospective employee to ask questions to see and gauge fit. Clear communication is vital at this phase, as understanding the expectations of the role creates a smoother recruitment and onboarding process.
How you handle rejections also matters. When you communicate clearly and respectfully with unsuccessful candidates, you may encourage them to reapply in the future or share their experiences with their network, improving your reputation with potential candidates.
Once a candidate has been hired, the next phase is onboarding. New employees need training and resources during this period to take on their new roles. The onboarding phase is much more than a single orientation day — the process can take three to eight months as a new hire adjusts and becomes productive.
An effective onboarding process helps new employees adjust quickly while giving them the confidence they need to apply their skills and contribute to the business. Onboarding an employee correctly can have favorable outcomes, including increased productivity, longer retention, and a deeper sense of job satisfaction.
The employee life cycle engagement phase usually overlaps with onboarding and continues throughout an employee's tenure. During this critical period, employees' commitment to their roles and the organization takes shape, influencing their likelihood to stay long-term.
Employee engagement strategies can involve regular feedback and recognition, providing challenging and meaningful work, and fostering a supportive team environment. These strategies can help maintain employees' enthusiasm and productivity, even as the initial excitement of a new job fades.
When new employees begin to settle into a routine, there’s a risk they may become bored or complacent. During this time, you can involve new hires deeper into the company culture, inviting them into decision-making processes, providing ongoing learning opportunities, and reinforcing how their work contributes to the company's larger goals.
Over the course of their employment, many employees wish to develop their skills or advance their careers. In this stage of the employee life cycle, a well-designed development program or opportunities for further training become critical components. When employees feel bored, or like they have no opportunities for growth, they are more likely to look elsewhere.
One of the easiest ways to build a culture of development is to promote internal employees before you seek external candidates for a new position. Consider ongoing talent management programs that facilitate the development of hard and soft skills. Regular pay increases further contribute to an atmosphere of development, enhancing employee satisfaction.
While tangible elements like a steady paycheck and benefits motivate most people to work, intangible elements like recognition and appreciation also play a crucial role. At this stage in the employee lifecycle, regular employee recognition can boost team morale, improve workplace happiness, increase engagement and lower turnover rates.
Effective HR teams lead employee recognition efforts across the entire organization. They foster an environment where managers commend good work and peers can meaningfully acknowledge each other. A company intranet, such as Happeo, streamlines internal communications, making it easier for managers and employees to recognize good work.
Retention is a pivotal stage in the employee lifecycle. With employee turnover averages as high as 57.3% in the US, retaining employees is more critical than ever. Excessive turnover can damage your company's reputation and decrease profits as you work to find new, qualified employees.
The secret to successful retention lies in understanding and aligning with your employees' career goals. Offering them growth and development opportunities can increase their engagement and commitment to your organization. The more your top talent feels valued and sees a future within your organization, the less likely they will be enticed away.
Inevitably, an employee’s time with your company will come to an end. The offboarding phase is a formal process for separating the employee from the organization. Employers are responsible for treating departing employees with respect and care. Maintaining transparent and consistent offboarding processes can minimize negative experiences.
In the offboarding process, knowledge transfer is imperative since seasoned and skilled employees can provide valuable insights. Company knowledge management tools are essential to ensure a culture of digital knowledge transfer and minimize knowledge gaps as employees move through the cycle.
After an employee has been offboarded and moved on from an organization, the employee's life cycle concludes with the advocacy phase. Providing departing employees with a positive separation experience may earn you their endorsement.
A former employee with a positive experience is more likely to recommend your company to their friends or colleagues as they search for new employment opportunities and may even return to work for you.
Key metrics to track throughout the employee life cycle
Measuring performance is essential at every stage of the employee lifecycle. Metrics can help you track employees' progress, improve employee life cycle stages, and identify talented employees at risk of leaving early.
Consider tracking these metrics throughout the lifecycle:
- Attraction: Monitor your employer brand, analyze career page traffic, track the number of applications, and score each application for talent quality.
- Recruitment: Measure the time to hire, track offer acceptance rates, compare hire quality against organization benchmarks, and calculate hiring costs.
- Onboarding: Assess how quickly new hires become productive, gauge training effectiveness through surveys or manager feedback, and measure new hire satisfaction.
- Engagement: Survey new hires at the 90-day mark to measure their engagement rates and measure internal communications with the Net Promotor Score (NPS).
- Development: Monitor productivity, track promotion rates and frequency, count upskill or cross-skill opportunities per employee, calculate training ROI, and measure post-training productivity and performance.
- Retention: Regularly survey employees to measure engagement, track the average length of stay in a role, and monitor the attrition rate to identify potential problems.
- Offboarding: Measure the responses to exit interview questions and the completion rate of exit interviews to glean insights into the leaving process.
- Advocacy: Track alumni registration rates and measure email open rates among past employees to gauge their continued interest and engagement.
Optimize the employee life cycle with Happeo
Streamlining and improving each stage of the HR employee life cycle is vital to attracting and retaining top talent. With Happeo's all-in-one intranet, organizations can manage employees throughout the entire life cycle and enjoy many benefits, including:
- Increased productivity: Our platform offers your team the easiest way to share information and collaborate across all of the tools that power their work.
- Streamlined communication: Instead of getting bogged down by email or messaging apps, Happeo offers instant access to the information your remote or hybrid teams need to succeed.
- Improved knowledge transfer: Maintain client project knowledge or specific processes within the business, regardless of who comes and goes.
- Enhanced company culture: Help your people feel connected and recognized with a platform that facilitates intuitive collaboration and accessible communication.
- Track engagement: Use our engagement analytics feature to get data on the most viewed, liked, and commented areas of your knowledge base.