In order to answer this question we need to understand the different stages that an employee goes through whilst employed by an organisation, these different stages, are referred to as the employee lifecycle.

Essentially, the employee lifecycle can be viewed in terms of distinct stages.:

1. Recruitment and selection

The first stage of the employee lifecycle is recruitment and selection. At this stage an organisation sets out to attract talent, potential employees. This begins with the undertaking of a job analysis, which results in the development of the job description and the person specification.

It is concerned with recruiting a number of applicants, from which to generate a pool of candidates. From this pool the employer is able to select the most suitable candidate. Employers need to have a robust recruitment and selection strategy in place in order to ensure they employ the right people (Steptoe-Warren 2013).

2. Performance

In the performance stage of the employee life cycle an organisation is concerned with how an individual performs in their role within the organisation. When we talk about performance we are referring to the outcomes and accomplishments of an employee.

Performance is a two way process between the employer and the employee where the goals of the organisation are identified, and the individuals performance objectives are agreed in line with these goals (Steptoe-Warren 2013).

3. Development

This stage is about developing an employee. It is concerned with identifying what motivates an individual, as well as recognising an employee's career aspirations, and developing a career plan.

If an organisation fails to develop their employees they risk losing them to the competition. This can be costly for the organisation, as there is the financial cost of having recruited, selected and trained the employee (Steptoe-Warren 2013)

4. Succession

At the succession stage the organisation identifies key roles within the company that arise as a result of retirement, promotions, internal transfers or growth. The employer also identifies those individuals with the potential to assume greater responsibility in the organisation.

5. Transition

This is the final stage of the employee life cycle where the employee leaves the organisation due to a new job, redundancy, retirement or other reasons.