Employee Lifecycle Model (ELM): The Basics
Employee Lifecycle Model: this article explains what an Employee Lifecycle Model (ELM) is and the 7 different phases in this cycle. It also looks at the importance and benefits of this model. Finally, it discusses how the 7 phases can be applied and measured within an organisation. Enjoy reading!
What is an Employee Lifecycle Model (ELM)? The 7 Phases
Employees are the most important assets for an organisation and therefore it is important for organisations that their employees are happy and perform at their best. The Employee Lifecycle Model (ELM) can help with this, providing a practical overview of the seven different phases of an employee’s lifecycle within a company, from start (initial interest in a company) to end (leaving a company).
By going through these phases in the best possible way from an HR perspective, an organisation can ensure satisfied and engaged employees, which is crucial for a company’s success. The seven phases of the Employee Lifecycle Model are as follows:
- Attraction
- Recruitment
- Onboarding
- Engagement
- Development
- Retention
- Off-boarding
Figure 1 – Employee Lifecycle Model (ELM)
Download the Employee Lifecycle Model in high resolution
This high resolution image is exclusively for our paying Toolshero members. Click here to see if a membership is something for you!The Employee Lifecycle Model is also theoretically described in fewer (6) or more (8) phases. For instance, phase 4 (engagement) and phase 5 (development) are regularly taken together as one phase. In addition, the final phase of leaving is also sometimes split into a separate phase of ‘off-boarding’ and a separate phase of ‘advocacy’, in which former employees can act as alumni/ambassadors who in turn contribute to attracting new employees.
Importance and benefits of an Employee Lifecycle Model
The Employee Lifecycle Model is an American model inspired by customer journey mapping, which puts the customer at the centre. This is because the customer experience and satisfaction are just as valuable and important to an organisation as the employee experience and satisfaction. In going through an Employee Lifecycle Model, it is therefore useful for a company to ask the question, ‘What would you do if this employee were your customer?’.
An article from the academic journal Leadership and Management in Engineering argues that employees at every stage of the lifecycle need to believe that the work they do is important and meaningful. If people see that their employers care about them and their career, they will deliver better results and be more committed to their career with the company. So this contributes not only to quality, but also to employee retention.
A study by the Society for Human Resource Management (SHRM) shows that staff turnover at companies that are good at managing the Employee Life Cycle is as much as 50% lower than at their competitors. This too shows the importance of correctly applying an Employee Life Cycle Model.
Other benefits of an ELM for an organisation include:
- Easier recruitment of new talent
- Increased retention of top talent
- Improved brand reputation
- Increased employee engagement
- Strengthened corporate culture
- Increased productivity
- Improved customer satisfaction
How do you apply and measure the seven phases of an ELM?
The following discusses the application of each phase in the Employee Life Cycle Model and how to measure it. Several Key Performance Indicators (KPIs) are mentioned that can assess the success and impact of each phase of the life cycle. A company can gain insights from measuring these KPIs to then guide decision-making and improve processes.
Phase 1 – Attraction
Attraction is the first stage in the Employee Life Cycle and forms the foundation of the cycle. In fact, the employee life cycle begins even before applying to a company. When someone sees and considers a job opening, prior knowledge about the company can play a big role.
In this first phase, it is therefore important to market the company as attractively as possible to potential employees. Just as it is done with consumers. Consider, for example, a careers page, a dedicated blog about it and presence of the company on social media.
KPIs
- Brand awareness as an employer
- Online reviews, scores and feedback
- Quality of applicants
- Sources of the recruitment process (e.g. job board, word of mouth, social media)
Phase 2 – Recruitment
Recruitment is the second phase in the life cycle of an employee and involves more than just interviewing applicants. Several sub-phases can be distinguished within this phase. In addition to interviewing candidates, these include writing and posting the vacancy, giving correct feedback to unsuccessful candidates, supporting a successful candidate after the interview and preparing for a first working day.
KPIs
- Employee compatibility
- Quality of interviews, including feedback
- Average time to fill a vacancy
- Total cost per hire
Phase 3 – Onboarding period
The third phase in the ELM is the induction period, also known as onboarding. Crucial here is making new employees feel welcome and at ease. A clear procedure for onboarding is therefore important and also reduces downtime for the HR team and for managers and colleagues providing support.
At this stage, organisations can show that their corporate culture is supportive and proactive by, for example, providing active support to line managers and offering training and assessments. Organisations can also ensure that new employees can easily connect with their colleagues by organising social activities and using a mentor or buddy system.
KPIs
- New employee satisfaction (through feedback)
- Average time to productivity of new employees
- Retention rate of employees staying for 1 year
Phase 4 – Engagement
Involvement is the fourth stage in the ELM and is essential for the success of the company. This is because engaged employees are more productive, motivated and committed to the same company culture and values, resulting in better business results. According to international management consulting firm Korn Ferry, organisations with engaged employees generate 2.5 times more revenue than those with low levels of employee engagement.
The engagement process involves creating a conducive working environment in which employees can do their best work for the organisation. During this phase, employees are helped to feel motivated and valued, and the company culture is also promoted. Nurturing continuous engagement is critical for employee growth and development and helps improve wellbeing, job satisfaction and productivity.
KPIs
- Employee engagement and satisfaction (through feedback)
- Employee net promoter score (eNPS)
- Employee well-being, including work-life balance
- Alignment of individual employee goals with company goals
Phase 5 – Development
The fifth stage in the life cycle of an employee is development. Investing in training and talent development helps optimise the employee life cycle and also provides additional skills within an organisation in the long term. Development also includes how productive employees are, how they interact with a team, how they are trained and promoted, and their job satisfaction.
The ultimate goal of the development phase is to ensure that employees remain engaged, motivated and productive by providing them with the necessary knowledge and tools to improve their performance. When an organisation encourages development, both individuals and teams become smarter and happier.
KPIs
- 360-degree feedback
- Training costs and training feedback
- Productivity and performance metrics
- Employee promotion rates
Phase 6 – Retention
Employee retention is a crucial part of the employee life cycle and forms the sixth stage of our model. After a company has invested time and money in attracting, recruiting, training and developing an employee, it is important to do the necessary work to retain (top) talent. This prevents top performers from leaving the company and perhaps even transferring to a competitor.
Employee retention is essential because high staff turnover can have a negative impact on business performance, recruitment costs and employee morale. Regular performance reviews are therefore a proactive way to track how employees feel within the company and what they would like to see done differently, and then act accordingly.
KPIs
- Employee satisfaction index (through survey / feedback)
- Staff turnover and turnover rate
- Retention rates
Phase 7 – Off-boarding
The Off-boarding phase, also known as off-boarding, is the final phase of an employee’s life cycle, when they leave the organisation. This can be through voluntary resignation, termination of employment or retirement. This is too often a failed phase within a company, but a very important one.
This is because by parting on good terms, the employee can act as an ambassador for the company and share positive experiences with potential new employees. It also keeps the door open for the departing employee to return to the company in the future.
KPIs
- Exit interviews with departing employees
- Issuing positive references
- Maintaining team morale on departure
- Willingness to succeed within the company
Finally, in going through all seven phases using the aforementioned KPIs, it is good to make sure that surveys and interviews are not conducted in excess, to avoid survey fatigue.
Now It’s Your Turn
What do you think? Do you recognise the explanation of the Employee Lifecycle Model? Do you think this model is important for the success of an organisation? Does your organisation pay attention to it, and how? Do you have any tips or additions?
Share your experience and knowledge in the comments box below.
More information
- Cohen, E. (2017). The employee life-cycle. In CSR for HR (pp. 248-257). Routledge.
- Gladka, O., Fedorova, V., & Dohadailo, Y. (2022). Development of conceptual bases of the employee life cycle within an organization. Business: Theory and Practice, 23(1), 39-52.
- Inamdar, S. P., & Abhi, S. (2020). A Strategic approach to HR analytics: A framework for employee life cycle model. AIMA Journal of Management & Research, 14(1/4), 1-9.
- Smither, L. (2003). Managing employee life cycles to improve labor retention. Leadership and Management in Engineering, 3(1), 19-23.
How to cite this article:
Bass, S.L. (2024). Employee Lifecycle Model (ELM). Retrieved [insert date] from Toolshero: https://www.toolshero.com/human-resources/employee-lifecycle-model/
Original publication date: 11/02/2024 | Last update: 11/02/2024
Add a link to this page on your website:
<a href=”https://www.toolshero.com/human-resources/employee-lifecycle-model/”>Toolshero: Employee Lifecycle Model (ELM)</a>
Sheryl Lynn Baas
Sheryl Lynn Baas is our Communications Manager at Toolshero and you might recognize her from our learning videos. Sheryl’s academic background is in Cultural Anthropology and Development Sociology and she is the founder of the Sheryl Lynn Foundation, a non-profit for children and education in the Philippines. She’s a jack-of-all-trades and furthermore shares her gifts as a spiritual coach, presenter and DJ. Fun fact: she is former Miss Netherlands 2006.
Related ARTICLES
Absence Management: the Basics and Types
Stress and Happiness at Work
Herzberg Two Factor Theory of Motivation
Town Hall meeting: the Definition and Basics steps
Frederick Herzberg biography, theory and books
