The Employee Life Cycle and Why It's Important
- Human Resources
6 min. Read
Last Updated: 01/20/2023
Table of Contents
What Is the Employee Lifecycle?
The employee life cycle is an HR model that tracks the entire journey an employee takes at your organization, and is a visual way to identify key steps in the employee experience. By understanding the full employee life cycle model, HR teams can develop and execute best practices for managing employees during each stage.
The employee life cycle begins with recruitment and pre-employment, and concludes with separation and advocacy. Specifically, key touchstones of an employee's journey include these stages:
- Attracting and recruiting
- Retention and engagement
- Offboarding and separation
Why Is the Employee Life Cycle Important?
How you handle notable employee milestones can directly correlate to workforce performance. The biggest benefit of creating a positive employee life cycle is that it encourages you to evaluate and continually improve the employee experience at every stage. And the better the experience an employee has with your company, the more likely they are to continue working for you. This can translate into increased retention rates, reduced turnover and associated costs, and a boost in your reputation as an employer.
The Employee Life Cycle Stages
Understanding each of the employee life cycle phases is useful for planning each stage of an employee's interactions with the business. Attracting and retaining employees largely hinges on what you do (or don't do) at each of these stages.
Attracting and Recruiting Stage
It's a competitive market for attracting top job applicants. That's why one of the most important steps many companies can take to increase their retention rate is to focus on hiring the right people in the first place. To do this, a solid recruiting phase of the employee life cycle involves:
- Developing a strong applicant tracking strategy: Sources such as job boards and social media can help raise your employer profile and result in candidates seeing new jobs as they become available and apply to them. An increased employer profile can also allow potential candidates a glimpse into your company brand and culture.
- Focusing on potential growth: As you craft your job descriptions and interview candidates, don't just focus on the immediate responsibilities. Focus on how the person in the role may grow their career through opportunities such as training, certifications, and the ability to take on more complex projects or responsibilities over time. Describe a possible path to advancement at your business, and help candidates see how they can grow with your company throughout their career.
- Considering internal candidates: Recruiting from within may help you retain talented workers who are looking for a change and build on existing institutional knowledge.
- Clearly communicating during the rejection process: You'll likely meet individuals who might be strong candidates, but you ultimately choose someone else. As you inform these individuals, it's important to provide clear, timely, and professional communication during the rejection process. After all, the way in which you turn down a candidate can say as much about your recruiting process as it does about the company as a whole.
The sooner you help a new hire become engaged with your organization, the more you increase the chances that they will stay with your business for years to come. Onboarding is designed to help new employees adjust to their jobs quickly, while gaining the skills and knowledge needed to make a desired contribution to the business. This often includes getting up to speed on the social and performance elements of their new positions. In this way, they can achieve the highest levels of productivity within the company.
In general, onboarding describes a series of events that enable new employees to learn what they need to do to meet the responsibilities of their new positions. This is different from orientation, which is the initial welcome a company provides, and usually takes place over the course of a single day.
It's during the onboarding process that new employees become integrated into the workplace and gain the training and knowledge needed to thrive over the long-term. Onboarding an employee the right way can favorably affect workplace efficiency, accelerate training and development, and help drive results in a healthier, more collaborative company culture.
A well-crafted and robust employee training and development program is an important piece of the talent management cycle. Not only can it help develop the skills and expertise needed within your business, but it's also critical in developing your organization's future leaders.
Building a culture of development also means finding opportunities to promote from within. A quick glance at some of the potential advantages of promoting from within illustrates other key advantages for the development and retention stages of the employee life cycle:
- Internal candidates who are recognized for demonstrating value, knowledge, and experience further their own engagement and satisfaction with the business.
- Hiring from within can have value in terms of marketing the company as an "employer of choice."
- An internal promotion can save significant amounts of time and money, especially compared to the expenses incurred from advertising job openings, training a new hire, and additional costs.
Retention and Engagement Stage
You simply can't afford to let retention and engagement efforts fall by the wayside these days. Even businesses with a single employee can't ignore the possibility of an employee quickly going from the engagement stage to the offboarding stage in today's competitive labor market. Half of respondents in the 2022 Paychex Pulse of HR Survey admitted they're struggling with retention efforts. The solution is tracking what matters most to employees, and then continually addressing those needs. Fortunately, survey respondents reported that HR tools and technology have enabled them to better listen and respond to the needs of their workforce, starting from day one of employment, in order to:
- Improve engagement
- Boost their ability to train and build skills
- Enhance communication and collaboration
Employee engagement and a strong corporate culture can help your team remain enthusiastic about their work — translating to employees who are more productive, are happy staying with the business for the long-term, and feel motivated to make meaningful contributions.
What can you focus on to address retention and engagement?
- Communicating the company's mission and values: Employees should understand how their particular role within the company relates to the overall mission.
- Offering opportunities for training: Training opportunities and resources are abundant these days, whether it's learning tools and technologies, industry conferences, or online training resources to help employees hone their skills and knowledge.
- Encouraging initiative: If employees feel they are making a difference and contributing to the company's success, they may feel more confident in their work and find ways to become productive on their own.
- Provide benefits: Competitive salaries alone generally aren't enough these days to attract and retain top workers. A solid benefits program can contribute toward improving employee engagement by alleviating some of the stress employees may feel outside of work when securing quality health care, saving for retirement, or handling their finances, for example.
- Monitor engagement throughout the year: Continuously keeping an eye on engagement through employee surveys or other types of feedback can signal when you need to step up your efforts. Ask respondents about job satisfaction and specifically include questions about current strategies associated with engagement to identify areas for concern and improvement.
- Employee recognition: When your team feels appreciated, they are more likely to contribute at a higher level while wanting to remain with the company. Managers should also be tasked with creating an effective feedback loop through employee performance reviews and ongoing feedback throughout the year.
Offboarding and Separation Stage
Offboarding is the formal separation process between an employee and the business. While onboarding employees is generally a happy occasion, the offboarding process can be a bit more challenging. Still, an employee leaving is an inevitable part of the employee life cycle.
Employees who leave a business (whether as a result of a personal decision or because their employment has been involuntarily terminated) still deserve respect and proper treatment from their employers. There's an additional reason for going about the process in the right way: In today's ultra-competitive labor market, a poorly executed separation may leave bad feelings all around and increase the risk for potential non-compliance with applicable employment laws. A respectful, effective offboarding policy helps to ensure that separations take place in a positive environment, and, when appropriate, leaves open the possibility that the ex-employee may someday return to work again at your business.
Following a separation of employment checklist is a good starting point to help you follow best practices, maintain compliance, and present the business in a positive light during a delicate process. Keep in mind that employment termination can be complicated, and depending on the situation (e.g. applicable state laws, your industry, type of employee, etc.), you may want to seek advice for additional, appropriate actions.
The notion of "it's a small world" is perhaps never truer than in the business world. An employee's departure doesn't necessarily mean the end of their relationship with your company. Past employees may return to work for you, work for one of your customers, or be tapped by potential applicants about their experience with the company.
Take care in the separation stage and beyond to deliver a positive experience for the employee. An individual who leaves on good terms may be more inclined to recommend your business to potential customers, employees, or even their personal networks later on. Otherwise, you risk damaging the brand and making future recruiting or sales that much more difficult.
Manage Your Employees with Human Resource Services
Careful attention to each stage of the employee life cycle is always important, but the fierce competition for today's top talent demands that HR teams make this a priority. Strategic workforce planning can help companies better manage the full life cycle of talent management, from before Day 1 to well after an employee's time at the business has ended. Integrated HR technology that streamlines and automates essential HR processes — recruiting, hiring, performance management, engagement initiatives, and more — can help support your employees and make them feel valued, no matter where they are in the cycle of employment.