5 stages of the HR cycle

How can organisations improve to ensure employees have the best possible experience?

5 stages of the HR cycle

by Evette Brink, Consultant, Strategic Pay

What does the human resources cycle involve, and how can organisations improve their approach to ensure employees have the best possible experience?

The human resources cycle is the employee journey within the organisation they work for. It begins from the moment they first encounter the organisation, and continues until the day they leave.

What are the key stages of the human resources cycle?

Also known as the employee life cycle, a well-executed human resources cycle ensures the right people are in the right role. There is a high degree of overlap between the different stages of the cycle and the overall HR strategy, and together they play a large role in the overall employee experience. When the two are managed effectively, organisations see an increase in employee commitment and productivity, as well as a decrease in staff turnover.

There are five core aspects to the human resources cycle.

1) Attraction, recruitment, selection
Attraction starts before the organisation is even looking for a new employee. It encompasses the organisation's brand, and what shapes a potential employee's overall perception of the company. As well as brand marketing, word-of-mouth plays a large role in shaping public opinion, and acts as a strong motivator or detractor.

Recruiting is about building a good candidate pipeline to ensure you have the best people available for each role. Success in selection is determined by much more than just the recruiter-candidate relationship, with your committed and loyal employees being your greatest champions.

2) Induction, orientation, onboarding
During stage two, the employer and employee layout their expectations of each other. As a business, it is important to ensure the new employee feels inspired by their new role, becomes engrained in company culture and settles within their team. Employees should feel welcome, valued and properly equipped to do their job right from day one.

What companies should work to avoid, is overselling the offer. Don't make promises that you can't actually deliver on, as employees quickly become dissatisfied if they're not experiencing what they were sold.

3) Career planning and development
Once your employee is established, the focus is on providing an opportunity for them to grow. A key part of this stage is how you deal with performance management. After each performance appraisal, you may want to reward your employees in recognition of everything they've achieved, whether intrinsically or extrinsically. You can also offer individual or team incentives for the new goals you set.

From a business development perspective, you want to find ways to improve talent and boost productivity and revenues. HR teams should work to understand and identify potential and actual specialist skills, interests and talents that they have within the business, and use this information when looking for ways to help those employees grow.

4) Retention
There's a lot of time and money invested in the cycle for each employee - losing someone means that the entire process must start again. So ensuring that you are able to retain talent past stage three is important.

In terms of the day-to-day, the best way to retain good employees is to give them the tools, environment and skill set they need in order to do their job effectively. When this doesn't happen, employees become frustrated and the organisation loses high-performing, specialised talent.

Looking further ahead, organisations must create a culture where employees feel confident that they know where they're going and what their purpose is. Career pathways should be well-defined with a sense of transparency.

5) Separation and termination phase
For many, this stage is simply a paper-pushing exercise that ticks HR boxes - but it can be extremely valuable when executed effectively.

Understanding why employees leave is a key part of retaining the best people going forward. Having a conversation about their choices early in the exit process also promotes a positive atmosphere, and helps to leave the door open for good employees to return and ultimately continue recommending your organisation to others.

An early conversation also allows you to start rectifying problems quickly. For example, if the reason for resignation is to do with management, it's likely that other employees are also experiencing difficulties and may also consider leaving the company if you don't take action quickly.

One thing organisations often neglect to manage properly is how the announcement is communicated to other staff remaining on the team. Being transparent and open prevents remaining staff from worrying about the future, and ensures they remain positive and productive.

Communicating effectively with your employees through the human resources cycle minimises their uncertainty around the future.

How can organisations improve their human resources cycle?
While the overall stages of the cycle remain largely the same, how it's implemented varies largely according to in-house resources and organisational approach. Small organisations may not have an in-house HR team to manage the cycle, while a large company may have a big HR department but be bound by budgetary constraints.

However, all organisations can be proactive in doing what they can to improve their existing employee life cycle and should consider:

  • Taking a holistic approach - Organisations should never treat the stages of the human resources cycle in isolation. Every stage impacts an employee's relationship with the organisation.
  • Consistently reviewing the approach - The labour market and needs of the work force are ever changing. What worked 20 years ago won't satisfy employees today, and HR teams must adapt and review their processes on a regular basis.
  • Part of the review is to identify problems with the approach at the various stages – figure out what is working, what isn't and why. If you have high employee turnover, for instance, then you may need to look at each stage to pinpoint where the problem is. Potential problems within your recruitment process could be that you lose your preferred candidate right at the end stages or if you are receiving a whole lot of unsuitable applications due to problems with how you are advertising and communicating the vacancy. When something doesn't go as planned, look in detail at that stage of the cycle to understand the changes required.
  • Managing communication channels - Poor communication methods and transparency are a large problem that organisations face. Improving how each stage and important announcements are communicated is critical to the smooth running of all HR processes.
  • Prioritising the onboarding process - Organisations often don't place enough emphasis on integrating their employees and making them feel a part of the team. First impressions count for a lot, and ensuring that the right people are available to meet, train and welcome new employees is a step in the right direction.

Not all companies may have the resources in-house to ensure their HR cycle is properly designed and effectively implemented. Invest in the right support to:

  • Identify what you need from each stage.
  • Write and analyse job descriptions, job evaluation and sizing.
  • Provide crucial benchmarking data and market insight.
  • Develop pay-related policies, strategies and systems around remuneration and reward from the top level down.

The right partner will help you to improve or develop every stage of your human resources cycle.

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