In every organization, large or small, there’s a constant ebb and flow of employees joining and departing from the business. This is known as the employee life cycle.

In this guide, we’ll explore the different stages of the employee life cycle and how to optimize each one to build positive employee experiences, increase productivity, and achieve your revenue goals in 2024.

What is the Employee Life Cycle?

An employee’s journey with a company begins the day they become aware of that company and ends the day they leave. The employee life cycle is an organizational model used to visualize how workers engage with their company at different stages in this journey.

It’s similar to the concept of customer journey mapping, which many companies use to help them attract, engage with, and retain loyal customers for their brand. The employee life cycle follows the same principles and focuses on nurturing positive relationships and experiences for employees in both their individual roles and within the overall company culture.

Why is Optimizing Your Employee Life Cycle Important?

When you analyze every worker’s experience at each stage of their employee lifecycle with the same care and attention that you map customers’ journeys—and take action in response to the insights you uncover—you can expect significant benefits:

• You’ll be able to retain your top performers.
• You’ll establish your company as an employer of choice.
• It will become easier to recruit new talent.

It’s also good for your bottom line. Building a positive image in the marketplace and recruiting the best talent is time-consuming and expensive. If you pay close attention to employees’ experiences at every stage of their lifecycle, they’ll be more likely to stay with you long-term and become powerful brand ambassadors. Your reputation will grow organically, and you can invest the time and resources you save in other business areas.

The 7 Employee Life Cycle Stages

The employee lifecycle is broken down into seven critical moments, or stages, in an employee’s journey through any one organization. Let’s explore how to navigate each of these stages with confidence.

1. Attraction

Much like any customer, the moment a potential new hire is exposed to your brand, they will likely form some kind of opinion about you. While statistics indicate fewer workers intend to change jobs this year, 55% of Gen Z employees and 48% of Millennials are still planning to make a move. This year represents a golden opportunity for you to win the hearts and minds of jobseekers, so work on getting them to know and like you.

To do this, you need to be clear on your company image, and how you’ll make your company stand out from the crowd and appeal to prospective employees. Elements like brand awareness, company culture, and perks and benefits play a significant role during the attraction stage.

Here’s how to build a strong employer brand to attract new employees:

• Competitive Compensation: You don’t need to offer the highest salaries to attract the best talent, but be sure to benchmark and align with industry standards and make your offer appealing.
• Curated Benefits: Employee benefits are a key part of any compensation package and vital for attracting quality candidates. Be sure the benefits you offer are something employees will actually use and appreciate. There’s no point offering benefits that no one will take advantage of. Some of the most sought-after employee benefits include health insurance, PTO, financial wellness benefits (including Earned Wage Access), and employee discounts.
• Social Media: Make yourself visible, with high-quality, curated content, on the platforms where your potential employees congregate, such as LinkedIn, Facebook, Twitter, and Instagram.
• Employee Reviews: When prospective applicants looks at jobs on sites like Glassdoor, they will often take time to read reviews about the company before applying. Therefore, encourage all your current and past employees to leave reviews.
• Employee Referrals: Incentivize employees to refer talented people in their personal and professional networks to help you scale your headcount. According to one study, over 45% of employees referred by colleagues stay for more than four years. Conversely, only 25% of employees sourced through job boards stay longer than two years. In addition, referrals are favored by 82% of employers for yielding the best ROI.
• Visible Leadership: Executives and senior managers can strengthen their corporate profiles by attending conferences and seminars and contributing to leading industry publications and websites.

2. Recruitment

The recruitment phase of the employee lifecycle model involves moving the right candidates into your talent pipeline while ensuring their experience is swift and smooth so they accept your offer to come on board.

Here are some tips for getting the recruitment phase right:

• Spend Time on Job Postings: Clearly outline what a role entails, why it matters, and what the successful candidate will get out of it. Use the right language in your job advertisements to attract candidates who are not only qualified, but also a good fit for your company culture.
• Be Respectful: Implement a sound process for providing swift, courteous feedback to unsuccessful candidates.
• Automate Where Possible: An applicant tracking system can help you speed up and automate tasks like emails and other more cumbersome processes without sacrificing quality.

Consider these figures:

• Nearly 4 in 5 candidates say the overall applicant experience they receive is an indicator of how a company values its people.
• More than 6 in 10 job seekers have had a poor candidate experience, and more than 1 in 7 have shared their experience on employer review sites such as Glassdoor.

3. Onboarding

Once you’ve found the right candidate, it’s time to properly welcome them, create a great first impression, and set them up for success.

A structured onboarding process is an essential employee life cycle phase as it provides new workers with all the resources and tools they need to get settled and become productive members of the team. Without proper onboarding, new hires may be left feeling vulnerable, apprehensive, and, at worst, disillusioned. It will also potentially extend the period it takes for them to feel secure that they’ve made the right decision by accepting your job offer.

Strategies for successful onboarding include:

• Be Welcoming: Sending a welcome letter, card, or gift basket to your new employee’s home before their first day is a great ways to welcome them.
• Embed Your Culture: Treat your new hire’s first few days on the job as an opportunity to showcase your culture. As a leader, why not host an “ask-me-anything session” with new employees to help them understand your management style and your expectations of them?
• Be Structured and Strategic, Not Purely Administrative: The best onboarding programs focus on people and practical training while finding engaging ways to present the documentation that inevitably comes with joining a new company.

Why is onboarding important? Research shows that organizations with solid onboarding processes:

• Improve new hire retention by 82%, and productivity by over 70%.
• Witness a 63% improvement in year-over-year customer satisfaction.

4. Development

Most employees want to improve their skills and advance toward their career and life goals. You can accelerate these ambitions through training and development initiatives, and provide them with opportunities for growth within your organization.

Here are some tips:

• Encourage Lifelong Learning: Enroll your teams in relevant offline and online training programs and courses. This includes stepping beyond employees’ immediate roles and promoting useful life skills, such as financial literacy. For example, Payactiv’s suite of employee financial wellness benefits is designed to help employees manage their day-to-day finances, pay bills on time, save and budget, access free 1:1 financial coaching, and reach their financial goals.
• Pay Attention to Performance Reviews: These conversations should happen annually, and preferably more often. Use these sessions to discuss employees’ short- and long-term professional goals and how you can support them.
• Facilitate Internal Knowledge-Sharing: Buddy systems and mentorship programs can be highly effective in developing people’s technical skills and leadership qualities.
• Promote from Within: Challenge your company’s internal mobility structure and make a point of promoting internally rather than outsourcing, wherever possible.

5. Retention

The retention phase of the employee lifecycle model focuses on ensuring your best performers stay with you instead of quitting or accepting more attractive offers elsewhere. While a certain level of attrition is unavoidable, a sound retention strategy can help you avoid regular, unwelcome recruitment costs and promote employee happiness and longevity at your company.

Here are our top tips for retaining employees:

• Build a Healthy Work Environment: This includes a positive work culture, growth prospects, compensation, meaningful employee perks and benefits, and good interpersonal relationships.
• Show Empathy and Respect People as Individuals: Through your actions and words, demonstrate that you’re an empathetic leader, respect your employees, and are prepared to invest in their personal lives and happiness. Vacation vouchers, Earned Wage Access (EWA), and flexible scheduling options are some great ways to keep employees happy, healthy, and engaged. Also, consider offering employee assistance programs (EAPs), which are interventions aimed at supporting and rehabilitating workers suffering from physical, emotional, or mental health problems.

Did you know?

• EWA allows employees to access money they’ve already earned before their regular payday. The funds can be loaded onto a debit or prepaid card, transferred to their bank account, or simply picked up as cash at Walmart. The best EWA providers also allow employees to access their earned wages through a handy mobile app.
• Digital solutions, such as those offered by Payactiv, also allow employers to give their workers access to their shift management systems. They can view available shift openings and organise shift swaps, giving them greater flexibility when unplanned personal matters arise, such as last-minute childcare or transport issues.

6. Separation

For every worker, the employee life cycle eventually reaches separation. Sometimes this is voluntary, when the employee moves on to a new role, to start their own business, or to relocate. Other times, companies must make the difficult decision to let people go. Whatever the circumstances, when an employee leaves, here are several important things to bear in mind:

• Invite Honest Feedback: Always conduct exit interviews in order to better understand your employees’ overall experience of working at your organization. Take their feedback graciously and be prepared to initiate changes if required.
• Understand the Potential Impact on Team Morale: When people learn that one of their colleagues is leaving, it can often damage overall workplace morale, especially when the departing employee is popular and respected. Remember that the workplace isn’t just somewhere where work happens; it’s a place where deep connections and lifelong friendships are forged. To help improve morale, gently remind people that they and the company will recover from losing a valued employee and continue growing.
• Manage Handover and Succession: Make sure knowledge is handed over effectively and keep affected stakeholders (like other team members and customers) updated on your progress in filling the open role.

7. Advocacy

Even when people leave an organization, they can still be invaluable supporters of your employer brand. Employees who had a positive experience in your company (especially when the time came for them to depart) will likely recommend your organization to family, friends, and members of their professional networks who might be exploring new employment opportunities. Equally, those whose exit experience was unpleasant might damage your brand and hamper your future recruitment efforts through their criticism.

To promote employee advocacy:

• Stay in Touch: Check back with former employees when you’re looking for referrals to fill open positions. If you treated them fairly and respectfully, they should be more than happy to send quality candidates your way.
• Leave the Door Open: Just because an employee is leaving doesn’t mean that their relationship with you is completely over. Maintaining a cordial relationship also leaves the door open for employees who have left to return to your company some time in the future.

The Bottom Line

Every company is unique, and what’s relevant and appropriate for a 5,000-employee law firm will differ from a hair salon with a handful of stylists. But whatever your business, optimizing your employee lifecycle will bring great value to your company. As a leader, use these tips to build a happier, more engaged, and more productive workforce that contributes to your organization’s growth and success at every employee life cycle stage.

Contact us to find out more about how Payactiv can support your employees and business throughout the employee life cycle.

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