The HR Life Cycle in 13 Steps

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The HR life cycle encompasses all activities as done by HR. In this article, we will explain what the HR life cycle is and we’ll go over each of the thirteen steps in this cycle. Here goes!

Contents
What is the HR life cycle?
The thirteen steps in the HR life cycle
Recap
FAQ

What is the HR life cycle?

The HR life cycle, or HR cycle, is the continuous process of integrated HR activities. The HR life cycle integrates both the HR strategy creation and execution with the employee life cycle.

This means that the cycle starts with business strategy, which is translated into HR strategy, organizational design, and HR activities, including recruiting, training & development, all the way until the employee’s exit.

The HR life cycle includes both the vertical and horizontal integration of HR activities. 

  • Vertical integration is the integration of HR activities with the HR strategy, and the integration of the HR strategy with the business strategy. 
  • Horizontal integration is the integration of HR activities with each other, which leads to increased impact. This is referred to as High Performance Work Systems, HR bundles, or integrated HR practices.

Without further ado, let’s introduce the HR cycle. In the next section, we will go over each of the steps in the HR life cycle.

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HR life cycle practices

The HR life cycle, based on Storey, Wright & Ulrich (2019).

The thirteen steps in the HR life cycle

Let’s go over the different steps. For each step, we will give a summary of the step and how it integrates with the other steps. We will also link to useful resources wherever relevant.

1. Business strategy

The organization’s business strategy should be the starting point for any HR activity. Commonly used frameworks to define the business strategy is the SWOT analysis, Porter’s Five Forces analysis, and the more contemporary business model canvas.

The business strategy translates to several strategic priorities, which are then translated into the HR strategy.

2. HR strategy

In this stage, the business strategy is translated into the people or HR strategy. The Human Resources strategy may use similar tools as in the previous stage to define the strategy and strategic priorities for HR. 

It is key here for the HR strategy to align with the business strategy. In other words, the successful execution of the HR strategy will advance business goals. 

3. Organizational design

The organizational strategy and HR strategy then need to be translated into an organization designed for success.

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This can happen in multiple ways. The most straightforward route is to take the organizational mission, goals, and competitive strategies and based on that define organizational design criteria that are then used to draw the actual design. We published a full guide on organizational design that explains this process in a lot of detail.

Organizational Design principles

4. Job & team design

Next, jobs and teams should be designed.

Job design is the process of creating jobs that help to achieve organizational objectives while being motivational for the individual employee. This process involves job analysis, a competency analysis, and the (re)designing of the job.

Next, there is team design. A team is a high-performing group of individuals. Good team design enables the different functions (or units) as they are defined in the organizational design to function well. This circles back to the successful completion of the organizational strategy.

5. HR planning

HR planning revolves around forecasting employee demand and supply. Demand will be influenced by the organizational strategy, investments in technology, and the quantity and composition of labor required in the future.

Similarly, supply is influenced by the internal and external supply, retention capacity, and the common characteristics of current employees.

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Based on supply and demand a personnel action plan will be established. This can involve active recruiting, internal movements, reskilling, and a push for automation, or a hiring stop, earlier retirement and severance packages.

6. Vision and culture

Culture building is the next step in our Human Resource life cycle. Culture starts with a clear vision of what the company will be “one day”. The culture is the more operational execution that helps to achieve that vision.

Cultural values can shape a company. A great example is Netflix, which has built a culture of excellence focusing on what they called actual values instead of nice-sounding values.

Culture is something that must be reinforced constantly. It also provides a framework that managers can use to talk to employees who display behavior that goes against the company’s values.

Culture is crucial in the HR cycle. According to Peter Drucker, a management consultant, “culture eats strategy for breakfast”. This quote emphasizes the crucial role of culture in how common goals are reached.

7. Recruitment & selection

This is where the employee life cycle starts. The first stage is recruitment and selection. This is about attracting talent and selecting the best. Common themes here are employer branding, the selection process, assessments, and talent acquisition. 

8. Onboarding and induction

Employee induction, also known as employee orientation,  revolves around bringing employees up to speed and giving them all the information they need to do their work well.

Similarly, employee onboarding is about bringing people up to speed. This is the journey from the employee joining until the employee is at optimum productivity levels. At this point, the employee is fully onboarded and at 100% productivity. This can take three to nine months, depending on the complexity of the job. 

9. Assessment and appraisal

In this stage of the Human Resource life cycle, performance management comes in. Employees are assessed and are given feedback to improve their performance. 

The performance management cycle mostly focuses on setting goals and monitoring of progress on these goals. When goals are not reached or new skills are needed, employees will be developed, and when goals are reached, the employee will be rewarded for good performance.  

Performance Management stages

10. Training & development

This stage of the Human Resource cycle is all about the development of employees. This can be to improve their current skills, teach them skills they need in order to qualify for a promotion, or general upskilling because changing times requiring changing competencies. Read our full guide on learning & development for more information about this topic. 

Value chain of learning

11. Engagement & reward

Next to building a culture that enables the company to move forward, HR is also heavily involved in creating the employee experience and other conditions that lead to employee engagement. Employee engagement is a positive, work-related state of mind, characterized by vigor, dedication, and absorption.

Oftentimes, engagement is a more important factor for employees to stay than a high reward – although fair and competitive compensation is a must-have to retain employees in the long run.

12. Career management

Career management and career pathing are a great way to help the employee grow professionally. If an employee has the ambition to become a sales manager, he or she has to go through multiple commercial functions to get there. Planning their career path will help them stay motivated, learn faster, and perform better so that they can land their dream job.

13. Exit

The final stage in the Human Resource cycle is the exit. This is when an employee exits the organization. For a great template on how to do these conversations, check our list of exit interview questions

In the best-case scenario, the employee will become a promotor of the organization. He or she can bring in new customers and candidates for vacant positions. An example is the top strategy consulting companies. After their tenure as a consultant, ex-employees often end up in senior leadership roles in multinational companies. In that position, they are likely to become future customers of their former employer.

Recap

Like any cycle, the Human resource life cycle is continuous. This means that the composition of the workforce (outflow of personnel, developed skills, current performance) and the composition of the company (culture and organizational, job, and team design) feed into the business strategy. 

As you may remember, the business strategy is founded on an analysis of the strengths of the business – and the composition of the workforce and company play a key role in shaping this strategy. This is what makes the human resource cycle a full HR life cycle and why this life cycle model visualizes both vertically integrated (business strategy leads to HR strategy leads to HR practices) and horizontally integrated (HR practices are aligned with each other) HR activities.

FAQ

What is the HR life cycle?

The HR life cycle, or HR cycle, is the continuous process of integrated HR activities. The HR life cycle integrates both the HR strategy creation and execution with the employee life cycle.

What are the various steps of the HR cycle?

HR life cycle steps include business strategy, HR strategy, organizational design, job & team design, HR planning, vision & culture, recruitment & selection, onboarding & induction, assessment & appraisal, training & development, engagement & reward, career management and exit.

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