What is the employee lifecycle and why is it important?

Employee lifecycle, employee experience, employee engagement… There are many different terms floating around the HR space that have gained in importance over the past couple of years. They all promise to help businesses improve their workforce management and prevent employee attrition.

The employee lifecycle is a useful concept that can help employers evaluate and improve the overall employee experience at their organization. What does the lifecycle of an employee look like? What are the different employee lifecycle stages? How can the concept be used to improve employee engagement?

The employee lifecycle encompasses all the stages of an employee’s journey within a company. It starts the moment an employee begins to show interest in the company as a potential employer and ends with the moment he or she leaves the organization—either to retire or to start a new position.

The employee lifecycle can be divided into different stages, each of which represents an important milestone in the employee’s journey. We will look at the different stages in more detail further down.

Although the employee lifecycle follows the different stages an employee goes through during his or her time at the company, it’s far more than just the chronological order of the different steps in the employee journey.

Each stage of the employee lifecycle represents an important touchpoint between the employee and the organization and creates an opportunity for the business to improve the employee experience.

Creating a positive employee experience is important for businesses because it:

• Helps attract top talent,

• Increases employee productivity,

• Fosters employee engagement,

• Enhances employee wellbeing, 

• Reduces employee turnover, and

• Strengthens the employer brand.

Additionally, companies can use the employee lifecycle as a framework to assess the quality of the employee experience at each stage to get a better picture of the overall experience employees have when working at the company. However, it’s important to understand that the different stages are interrelated, which is why businesses must find a way to ensure a smooth transition from one stage to the next.

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There are several employee lifecycle models for differentiating between the different phases that make up an employee’s journey at a company. The number of employee lifecycle stages can differ, depending on the granularity of the model; however, it’s possible to identify the following core phases: attraction, recruitment, onboarding, development, retention, and separation. Let’s look at each phase in more detail.

Attraction

The attraction stage marks the beginning of the employee lifecycle. A key success factor for attracting new employees is a detailed talent acquisition strategy that combines a strong employer brand with an attractive benefits and compensation package. It also involves actively spreading the word about the company and keeping up a flawless corporate reputation.

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Recruitment

The recruitment process is the second stage in the lifecycle of an employee. The main aim in this stage is to create a positive recruiting experience. This includes creating bias-free hiring procedures, promoting diversity hiring, and keeping employees in the loop about the status of their application and the next steps throughout the entire recruitment phase.

Onboarding

The onboarding process is the first experience new recruits have at the company as official employees. It’s important to remember that onboarding starts well before the employee’s first day at work. Things like informing the rest of the team, sending a warm welcome email, and organizing access codes and login details for company systems and tools are as important as the first introductory team meeting. Appointing a mentor who will help the new employee settle into the role is also a great way to start a smooth onboarding.

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Development

Next in the employee lifecycle is the development phase. Learning and development (L&D) programs not only ensure that employees constantly develop their skills, but they also facilitate succession planning. Additionally, L&D opportunities can help improve employee motivation, happiness, and retention.

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Retention

After attracting, recruiting and training their new employees, businesses also need to take measures to retain their talent. Employee retention encompasses different aspects, including compensation and benefits, rewards programs, and employee recognition. Businesses shouldn’t underestimate the importance of this stage in the employee lifecycle because it is crucial for cutting turnover cost.

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Separation

The final stage of the employee lifecycle is the separation process. Properly managing employee exit is crucial, yet many businesses fail to create a smooth offboarding process. The exit stage is the employee’s last touchpoint with the organization and also the last chance to leave the employee with a lasting positive impression. Managing an employee’s departure includes conducting an exit interview, preparing all the termination paperwork in due time, and organizing a proper office farewell.

Businesses need to actively manage their employee lifecycle if they want to create a positive employee experience and enhance their reputation as an employer. Here are a few tips on how to optimize your employee lifecycle:

• Develop an employee lifecycle strategy: An employee lifecycle strategy makes sure that all the measures you take to manage the lifecycle of an employee are aligned. It also ensures that all stages are taken into consideration and that efforts are not just focused on improving the employee experience during onboarding and offboarding, for instance.

• Define company-specific stages of the employee lifecycle: The phases of the employee lifecycle as they are presented in the different frameworks aren’t set in stone. Depending on how a business operates, it might make sense to group two stages together (e. g. recruitment and onboarding) or to introduce additional stages (e. g. performance management).

• Leverage analytics to unlock the value of employee data: Employee data can provide valuable insights businesses can use to improve the employee experience. People analytics can help you unlock the value of your data by analyzing and interpreting it from different angles.

• Use an employee lifecycle management software: An employee lifecycle management system helps you manage employee data and foster engagement throughout the employee lifecycle by automating processes and enabling seamless transitions between different lifecycle stages.

• Get employee feedback: Employee feedback is a valuable source of information when it comes to assessing the overall quality of the employee experience at your organization. Getting feedback from employees at each stage of the employee lifecycle and using it to identify areas of improvement is a great way to empower employees to stay engaged with the company.

• Track the right metrics: How well you manage each employee lifecycle stage has an impact on employee engagement, motivation, and more. But in order to measure how well your organization is doing in each stage, you need to keep track of the right metrics. HR metrics you should keep an eye on include time to hire, retention rate, and employee net promoter score.

• See the bigger picture: It’s easy to be distracted by details when looking at  the different employee lifecycle stages individually. Since the stages overlap and are all connected one to another, it’s important to not get too focused on one aspect. Instead, businesses need to take a wide-angle view and always think about how employee lifecycle management will affect the overall success of the company.