Understanding the 3 Phases of the Employment Lifecycle

Happy employees make for a healthy business.  Nevertheless, the employment lifecycle can be a daunting and often problematic endeavor for employers.  We feel your pain!  That’s why we decided to break it down for you.  There are 3 phases to the employment lifecycle that will make your life so much easier: employee onboarding, employee performance management, and employee exit.

1. Employee Onboarding

“Onboarding” is a term we use to describe the hiring process; more detail can be found here.  However, this process basically consists of an employer building his or her workforce in an efficient manner that makes the employer’s company culture come to life.  If handled properly, employee onboarding can help lead to a happy, healthy business!

a. The Offer Letter and Job Description

Integral to finding the right employees for the right job is the creation of a job description.  Job descriptions operate as a snapshot of what the employer expects a candidate to do; this includes the essential functions of the job, brief descriptions of what a work day might look like, and expectations for performance.  There are a number of nuances that go into formulating an effective job description, which can be found here.

The offer letter serves a number of functions.  Ostensibly, the offer letter serves as a way to extend an offer of employment to a candidate; however, offer letters can serve as a replacement for employment contracts.  In this way, an offer letter is a means of offering at-will employment.  At-will employment means that the employer and the employee can both terminate the employment relationship at any time for any reason, with or without notice.

Please note: Although we recommend using offer letters and job descriptions, there are certain instances in which an employment contract may be more appropriate, so consult with your lawyer to decide which is best for you!  Also, if you intend to hire an Independent Contractor, you must use a different process for hiring and firing, which can be found here.

b. The Employee(er) Handbook

The employee handbook is the employer’s most precious tool for creating an effective and unique company culture that mirrors the company’s mission.  In addition, employee handbooks lay out the fundamental procedures, rules, and guidelines that employees will consistently turn to and rely on over the course of the employment lifecycle.  On a more somber note, employee handbooks must also contain policies in line with federal, state, and local laws governing the treatment of employees.  For this reason, it is usually a good idea to co-create your employee handbook with your lawyer.

c. Payroll

Pro tip: When it comes to paying employees, an awesome payroll provider makes all the difference.  Not only will a good payroll provider help you pay your employees and withhold the appropriate tax withholdings, they will also help you manage other important hiring steps, including required government filings and obtaining workers’ compensation insurance.  Feel free to reach out for recommendations!

2. Employee Performance Management

The core of the employment lifecycle is the time where the employee happily (we hope) is employed with you.  Pairing with a good employee(er) handbook, performance management is a way to monitor (and improve, if necessary) the employee’s performance on the job.  This is important for the following reasons:

a. Employee Morale

Employees need opportunities to check in with their employers.  Employees crave opportunities for growth based on both the positive and more critical feedback that they receive.  Likewise, employees thrive when given an outlet to provide feedback to their employers.  It’s a win/win!

b. Expectation Management  

Open and consistent communication about what is expected of an employee and what an employee should expect in return is crucial for a happy, high performing workforce.

c. Risk Management

Consistent employee performance management (and documenting those performance management check-ins) is a necessary risk management function for any business.  Documentation is essential if the employee begins to perform poorly and you need to exit them from the company. That leads us to…

3. Employee Exit

Perhaps the most risky phase of the employment lifecycle, employee exits signify an end to the employment relationship. Despite the elevated level of risk involved, the law has very few requirements for employee exits. Crazy, right? We will break down the legal requirements (which will be very brief) and then go into a series of “best practices” that both nurture a smooth exit and minimize that dreaded wrongful termination claim.  For simplicity, employee exits can be broken down into voluntary and involuntary.

a. Voluntary Exit

Much as it sounds, a voluntary exit is when an employee voluntarily quits or resigns.  Surprisingly, the law does not require much of anything in the event of a voluntary exit (aside from a final paycheck and accrued PTO payout, if applicable); however, there are a number of “best practices” that make the process more useful.  It is typical that an employee gives some sort of notice (2 weeks being the norm) when he or she wants to leave the employment relationship, but bear in mind that with at-will employment there need not be any notice at all.  

During the interim between notice of exit and actual exit (we will assume that you have considerate employees who have given apt notice), there are a number of documents that it is good to get in the habit of keeping.

i. The employee resignation letter (this can either be of the employee’s own making or a standard form that you have created);

ii. Some sort of “change in relationship” form that clearly signifies the end of the employment relationship and lists a reason or set of reasons, if applicable; and

iii. An exit interview and/or an exit questionnaire that allows the employee to express his or her concerns, complaints, or praises regarding employment with you, which can be very useful information to better your own practices and company culture.

The completion and maintenance of these documents creates a paper trail to help minimize risk of later problems, but also allows an employer to learn from the experiences of employees in an effort to improve the workplace. 

b. Involuntary Exit

So, here it is, the stereotypical nightmare for all employers: when employees have to get fired or laid off.  We get it, sometimes it just isn’t working it out.  But this is where a paper trail is vital to minimize the risk of disgruntled former employees.  

At the outset, the law requires that all involuntary exits be in writing.  Which, I mean, duh! In addition, the law requires that fired or laid off employees be given access to unemployment benefits and health care (in certain circumstances).  This is where things get complicated and it may be best to consult your lawyer, but here is a helpful resource.   

like the previous section, getting in the habit of forming a consistent paper trial is important.  The three documents already listed (employee resignation letter, change in relationship form, and exit interview/questionnaire) should also be present when there is an involuntary exit.

i. However, in addition to these three documents, the employer must give the employee written notification that may or may not list a reason for exit if the employee is at-will; and

ii. The Department of Labor also requires that employees who are involuntarily exited be given the COBRA election notice, which can be found and described further here.

With involuntary exits it might be a good idea to put a severance agreement in place.  These types of agreements release certain claims, provide peace of mind regarding the risks associated with the exit, and help honor the employee’s service with the company and transition them into their next steps.

Well, it looks like we have come full circle.  We know, lame joke.  However, we hope that you have learned lots along the way!  As you can see, the employment lifecycle is the single most important tool for having a healthy business because happy people make all the difference.

By:  Zachary Avina  –  06/21/17

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Disclaimer:  Although this article may be considered advertising under applicable law and ethical rules, the information in this article is presented for informational purposes only. Nothing should be taken as legal advice. Reading this article does not form an attorney-client relationship with us. An attorney-client relationship is formed through a signed engagement agreement. If you would like further information, wilkmazz pc would love to help you out! Feel free to reach out with any questions.

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