The human resources cycle

From the moment a company starts the process of recruiting an employee to the time that person leaves the company, the individual is in a cycle that is managed by the human resources (HR) department.

How it works

People are a significant cost to any organization—and of great value. Many CEOs talk about staff as their most important asset, and US industrialist Henry Ford famously said: “You can take my factories, burn up my buildings, but give me my people and I’ll build the business right back again.” The HR department is there to ensure that the right people are in the right roles so that the company can deliver the business strategy and maintain its competitive edge. The complexity of the business influences the stages in the HR cycle, but the basic elements are the same.

Recruit

A business identifies the need to fill a role, and attracts applicants. CVs are assessed and interviews held to find the best candidate.

Employ

Once terms are agreed and a contract signed, the candidate becomes the company’s employee.

Reward

An induction program explains the new role and introduces the team. HR
gives a briefing on pay, tax, and benefits such as leave, insurance, and pensions.

Manage performance

The company sets targets and helps individuals to improve performance so they contribute to business results and get the most out of their job.

Develop

The business has processes to help people improve their skills, competencies, and knowledge, through formal or informal learning, both on and off the job.

Transition

The company helps its employee to move into a new role, which may be in another business it owns…

Exit

…or to leave the company, which may be through resignation, redundancy, or retirement.

NEED TO KNOW

National employment laws Employment practice is regulated
by a raft of laws— for example, in the US federal Equal Employment Opportunity laws prohibit any discrimination on the grounds of sex, race, disability, age, sexual orientation, or religion at any stage of the employment cycle.

“Hire people smarter than
you and get out
of their way.”

Howard Schultz