Article of the week 37 – 2023

Monitoring the Employee Life Cycle in Customer Service

What is the Employee Life Cycle?

The Employee Life Cycle (ELC) is a model that shows the different phases that employees go through in companies. The life cycle begins when an employee learns about a company or a job posting, continues through their recruitment, hiring and onboarding in their time with the company, and finally extends to their exit and „alumni“ experience, which is how you treat former employees as well.

In times of „Arbeiterlosigkeit“, i.e. the lack of manpower in the market, which Dr Sebastian Dettmers (CEO Stepstone) describes in his book of the same name, the shortage of skilled workers has and will continue to worsen. Therefore, as managers we must intensively deal with how we want to work with our employees in a structured way – here the model of the employee life cycle supports us.

Phases in the Employee Life Cycle

There are now various models, from:

4 phases

(Recruitment, Onboarding, Development, Retention) to

7 phases

(Attraction, Recruitment, Onboarding, Development, Retention, Exit, Alumni)

up to

11 phases

(Attraction, Recruiting, Interviewing, Onboarding, Engagement, Development, Retention, Recognition, Offboarding, Separation, Alumni)

In the end, these all have the same intention – to define the process of how we want to live the employee life cycle in the company and to set up corresponding measures to find satisfied and well-trained employees and to bind them to the company as permanently as possible.

How do I monitor whether my measures are working?

Each of these phases in the cycle has its own challenges and needs to be closely monitored so that you can react quickly to any little stones in the gears. Using the 4-phase model as an example, you can work with the following KPIs:

Recruitment

Time to hire: The number of days from the publication of a vacancy to the hiring of a candidate. The lower this number, the better. According to the German Federal Employment Agency, a call centre agent position (see vacancy time, subject to social security contributions, without temporary work) remained unfilled for an average of 154 days in 2022.
Offer acceptance rate: A higher offer acceptance rate means that you do a good job of preparing, interviewing, and finding the right match for vacancies and that your remuneration and benefits are competitive.
Quality of hire: This is a metric that determines how well a new employee meets the job requirements. To measure this, you need to work with the manager concerned. Here it is important to define the relevant key points in advance (job requirements incl. the target skills with proficiency factors).
Cost to hire: This includes all costs, such as job advertisements, interviews, travel expenses and, if applicable, the time of HR and you invest as well. It is useful to determine this cost per hire because it creates awareness, as excessive spending on hiring will affect your budget.

Onboarding

Ramp time: When your new employees start, how long do they need to be productive and effective? A shorter ramp time shows that the training and handover to the team is efficient and effective.
New hire engagement: It is important to get new employees excited about the company and its culture. A survey after the first 3 months or a differently structured feedback process can help you assess the success of new hire engagement.
Training effectiveness: Training an employee quickly is not worth much if they don’t know how to do their job well. In addition to ramp time, it is advisable to measure training effectiveness through interim tests or discussions with the respective supervisor/team lead.

Development

Productivity: Productivity is one of the most important KPIs in any organisation. Employee performance and the expected learning curve are defined beforehand and then continuously aligned to ensure productivity.
Regular feedback: Managers and employees should provide regular feedback. Many companies use quarterly reviews and an annual review. In day-to-day operations, weekly one-on-one meetings are also useful to discuss priorities, address challenges and develop the employee.
Promotion rate: A high promotion rate indicates that you are doing a good job for both the position and the company and that employees are successful in their roles. It is also a sign that you are rewarding top performers to retain them permanently.

Retention

Employee engagement: Employee engagement is a strong indicator of the likelihood that an employee will stay with the company. This is one of the most common and critical HR metrics. It is usually collected through employee surveys.
Turnover rate: A high rate of employees leaving the company is an expensive problem and will hurt your company in the long run. Low turnover is a signal that employees are happy, fairly compensated and committed.

You can certainly think of other measurement points that you either already have in place or would like to measure in the future.

Conclusion: Why is the Employee Life Cycle important?

In whatever way you measure it, attracting new employees is costly. Keeping employees happy and engaged can help increase the average length of time employees stay with your company. Therefore, improving employee life cycle management will have a lasting impact on the future of your business.

Planning and reviewing the Employee Life Cycle will help you improve the employee experience, which will benefit your business in many ways – from more productive employees to improved customer retention and minimising recruitment and training costs. Once an employee completes the training, they can develop business-specific expertise that makes them even more valuable. As employees‘ knowledge and skills grow, it can be a challenge to retain them permanently – and this challenge needs to be addressed in a structured way.

Bernhard H. Aulenkamp – Senior Consultant

junokai