HTR : Hire to Retire


Hire to Retire (or HTR in SAP) is the process framework that incorporates the entire lifecycle of an employee in an organization, right from the start of the hiring process till retirement or separation. It includes the whole gamut of HR activities like workforce planning, recruitment, onboarding, workforce management, and talent management such as employee and employment data, time recording, performance appraisal, payroll, compensation, and benefits, and finally, the employee’s resignation, termination, retirement or offboarding from the organization.

What is Hire to Retire in SAP?

The H2R cycle in SAP is a part of the Human Capital Management (HCM) module. This consists of various sub-modules managing different stages of the employee lifecycle. The HTR in SAP can be explained through the following stages:

  1. Workforce planning & recruitment: The stage begins with the identification of the organization’s staffing needs, creation of job requisitions, posting of job openings and ads, receiving applications, shortlisting of profiles, conducting multiple rounds of interviews, and selecting suitable candidates based on qualifications, relevant experience, and the best fit for the organization. The recruitment process followed here could be both internal and external and can be managed through the SAP Talent Acquisition module.
  2. Selection & onboarding: Once the desired candidate is selected, the offer letter is sent, and the candidate accepts the offer and joins, after which the onboarding process kicks in. This consists of processes like document verification (i.e., scrutiny of work experience letters, mark sheets, age, and address proofs, etc.), background verification or reference checks (mainly for previous employment, academic credentials, and address), paperwork including the signing of the offer letter document, and initial training and orientation sessions (providing information about the organization and bringing the newly onboarded employee up to speed on his job responsibilities). The SAP Onboarding module helps to streamline and automate these tasks, ensuring a smooth transition for the newly joined employee into the new role and organization.
  3. Employee Data Management: Throughout the employee’s tenure in the organization, their personal and professional information is documented and managed. This includes maintaining employee records, personal contact details, biometrics (for the issuance of his identity card, etc.) organization role and designation, reporting structure and hierarchy, work schedule, salary and benefits, employment contracts, and other relevant data. This information is typically stored in the centralized HR database or Human Capital Management (HCM) system.
  4. Time and Attendance: The SAP Time Management module allows employees to record their attendance, track their working hours, manage their leaves and attendance, and handle all time-related data.
  5. Performance Management: Organizations have performance management dashboards in place in the SAP HTR business process to be set and track performance goals, performance, feedback, and employee career development. This may involve regular performance reviews (continuous or ongoing, or at pre-defined intervals), goal-setting sessions, performance improvement plans, and recognition programs to motivate, reward, and engage employees. 
  6. Compensation and Benefits: Efficiently managing employee compensation and benefits is a vital part of the SAP hire to retire process. The SAP Compensation Management module determines the salary structures (after recruitment, hikes, and promotions), administers payroll, manages bonuses and incentives (which are part of variable pay), employee loans (if any), and supervises employee benefits such as health insurance, retirement plans, vacation days, sick leaves, and other allowances and perks. Side by side, the SAP Payroll module calculates employee salaries, taxes, and deductions based on pre-set rules and regulations, ensuring accurate and timely payment to employees.
  7. Talent Management – Training and Development: Training and Development is a key part of an employee’s career life cycle in an organization, helping them to enhance their skills, knowledge, and performance. Organizations invest in every resource’s training and development by helping to identify his/her training needs, providing learning and upskilling opportunities, conducting workshops and seminars, and offering various career development programs to support the employees’ professional growth, i.e., career planning and advancement. The talent management module regulates processes like performance management, goal setting, competency assessments, and career development planning, thereby facilitating talent retention and employee growth. 
  8. Employee & Manager Self-Service (ESS & MSS) portal: ESS and MSS portals provide employees and managers with self-service tools in a portal or dashboard format, to access and update relevant HR information. Employees can view their pay slips and salary breakdown, submit leave requests, update personal information, and access training material. Managers can also use these portals to approve requests, review performance data and appraisals, and manage team-related activity.
  9. Offboarding: When an employee decides to leave the organization voluntarily, through retirement or superannuation or is terminated by the organization, the offboarding process is set in motion. This involves exit interviews, clearance procedures (which include the return of company assets and settlement of outstanding dues), updating employee records to show the exit, and the issuance of the work experience letter. From a compensation & benefits perspective, the organization also initiates the process of paying the pending full and final settlement dues to the offboarded employee (like gratuity, salary, payment for the accrued leaves, etc.) in conjunction with the payroll team.
  10. Retirement and Benefits Management: For employees who are offboarded when they reach retirement or superannuation age, organizations manage their retirement benefits such as pension plans, annuities, and post-retirement healthcare coverage. This involves calculating and paying retirement benefits like employee provident fund, pension plans like national pension scheme or others (for government organizations), and facilitating the employee’s smooth transition to retirement, by managing all necessary documentation, paperwork, and legal requirements.

Thus, throughout the SAP HTR business process, organizations use various software systems, such as HR management software, talent management systems, payroll systems, and employee self-service portals, to streamline and automate HR tasks, store employee data securely, and ensure compliance and adherence with relevant regulations and policies.

The question ‘what is hire to retire in SAP’ can also be answered in greater detail through this diagram below:

HTR : Hire to Retire

How will BPX help implement the Hire to Retire cycle in SAP?

BPX can help to successfully implement your organization’s hire to retire process flow in SAP, expertly documenting, planning, and executing each stage, with all the key stages and activities in this implementation journey explained below:

1)As-Is Process:

  • During this stage, the hire to retire SAP processes currently existing within the organization are analyzed and recorded. 
  • The steps within each process are then identified and mapped to understand the current state. 
  • This includes documenting the entire recruitment and onboarding process, performance management and talent management structure, compensation and benefits administration, and the retirement or separation processes.

2)Business Blueprint (Fit-Gap & To-be):

Based on an analysis of the ‘As-Is’ processes, a business framework that can be the best fit for the organization is then developed. 

  • ‘Fit-Gap analysis’ is performed to identify the gaps between the current ‘As-Is’ processes and the desired ‘To-Be’ processes. 
  • The ‘To-Be’ processes outline the optimized and standardized procedures that the organization wants to now implement using the SAP hire to retire process.
  • This customized model includes process flow diagrams, configuration requirements, and functional specifications.

3)Master Data Migration/Item Master Configuration:

  • In this stage, the master data required for the H2R cycle in SAP is prepared and migrated into the SAP system. 
  • This includes employee master data, i.e. personal information, organizational details, employment history, and payroll and compensation data. 
  • The item master configuration involves setting up the hire to retire process flow in SAP with relevant data related to the job position, job role and description, salary structure, compensation and benefits, and other relevant master data components.

4)System Configuration / Realization:

  • This phase involves configuring the HTR in SAP based on the ‘To-Be processes’ defined in the business blueprint. 
  • The hire to retire SAP framework is tailored to align with the organization’s unique and specific requirements. 
  • The configuration process includes defining the workflows, creating the organizational structure, configuring the recruitment process, establishing the talent management function, designing the performance management SOPs, setting up the payroll rules and structure, and defining the retirement, termination, or separation process for the company for each employee.
  • Customization includes the creation of new screens, reports, or interfaces to cater to specific organizational needs.

5)User Acceptance Testing (UAT):

  • During UAT, key users and stakeholders test the SAP H2R system to ensure that it functions optimally and meets the organization’s needs, goals, and expectations. 
  • Test scenarios are then executed to validate the hire to retire process in SAP
  • This involves performing end-to-end testing of the recruitment and onboarding process, talent management workflows, performance appraisal procedures, compensation & benefit calculations, retirement processes, and other relevant hire to retire SAP activities. 
  • Feedback, issues, and challenges identified or seen during UAT are documented for timely resolution and reference purposes.

6)Go-Live Preparation (update as per feedback during UAT):

  • Based on the feedback and findings from the UAT phase, necessary refreshes and fixes are made to address any issues or gaps identified. 
  • This includes resolving configuration errors, refining process flows, modifying system settings, and conducting further testing, as and when required.
  • Documentation and training materials are updated periodically for everyone’s perusal.


  • The Go-Live phase marks the official launch of the hire to retire SAP solution. 
  • The system is available for use for all relevant users within the organization.
  • The processes defined in the business blueprint template are implemented, and employees start utilizing the hire to retire process in SAP for processes such as recruitment, onboarding, talent management, performance appraisals, compensation and benefits, and retirement, termination, and separation.

8)After Go-Live Support:

  • After the Go-Live phase, ongoing support is provided to address any issues or concerns that may arise. 
  • This includes solving any system-related errors or problems, providing guidance and assistance to users, and offering training and assistance wherever needed. 
  • The support team ensures the smooth functioning of the SAP HTR business process and assists with ongoing system maintenance, updates, and enhancements.

In the hire to retire cycle in SAP, the HCM module provides effective analytics and data integration capabilities, workflow automation, and reporting to ensure efficient HR management and compliance with all organizational policies and legal requirements.

Thus, it is the constant endeavor of BPX to help businesses successfully manage their end-to-end H2R cycle in SAP. BPX helps enterprises deliver maximum value to their employees by optimizing their overall employee experience journey. As such, specific configuration and customization needs of the SAP hire to retire framework can differ based on an organization’s specific characteristics and requirements, i.e., their size, market position, and industry in which they are based, as also their internal policies and compliance requirements, and the version of the SAP H2R system being used.

About BPX

Located in Pune India, Business Process Experts (BPX) is amongst India’s premier process management consultants offering focused and customized SAP H2R solutions. The company was founded way back in 2012, and since then, it has grown steadily to become one of the market leaders in the SAP business process landscape. BPX provides easy-to-implement process frameworks for diverse industry sectors like engineering, automobiles, banks, chemicals, garments and apparel, retail & hospitality, manufacturing, pharmaceuticals, mining, ITeS, and many others.

Led by an expert team of engineers, management & finance professionals, and SAP business process consultants, BPX and renowned sister organizations like YRC have been strategic and transformational partners for top clientele for several years now. As your trusted SAP process consultant, BPX will ensure that your business follows the industry’s best practices, reaping the benefits of a successfully tailored hire to retire process flow in SAP. All our handpicked BPX consultants have rich SAP implementation experience. They will analyze your organization’s hire to retire cycle in SAP and customize your process implementation, in keeping with your specific SAP hire to retire process requirements, configuration, scope, pain points, and issues.

If you’re a business owner or a decision-maker, seeking to implement or enhance your organization’s hire to retire process in SAP, look no further and connect with BPX now. Our seasoned team will thoroughly understand and assess your precise business needs, tailoring your SAP H2R process to ensure optimal management of your entire HCM module, and helping your organization transform and establish itself on the road to success!


The Hire to Retire process framework encompasses an employee’s entire lifecycle in the organization. It starts with workforce planning and continues with hiring and onboarding, workforce management such as employee and employment data, time and attendance recording, performance management, compensation and benefits, and talent management, finally ending with employee offboarding or retirement.

The key stages or steps in the Hire to Retire lifecycle are as follows:

  1. Workforce planning & recruitment.
  2. Selection and onboarding.
  3. Employee records & data management.
  4. Time & attendance.
  5. Compensation & benefits
  6. Performance management.
  7. Training & development.
  8. Offboarding, and retirement planning 

To streamline the Hire to Retire process and improve efficiency while reducing costs, organizations can implement the following strategies:

  1. Centralize and automate the HR processes.
  2. Implement self-service portals for employers and employees.
  3. Optimize and automate recruitment processes through applicant tracking systems (ATS).
  4. Enhance the onboarding and training experience through digital tools.
  5. Promote employee career development through training programs and knowledge-sharing platforms.
  6. Consolidate and streamline employee benefits and retirement plans.
  7. Implement continuous and agile feedback and performance management practices.
  8. Utilize HR analytics and data-driven insights on the workforce. 
  9. Streamline offboarding processes. 
  10. Regularly review and optimize HCM processes.

To efficiently manage the recruitment and onboarding of new employees, the following best practices can be adopted:

  1. Develop a clear recruitment strategy document or SOPs, outlining the job description and eligibility requirements, responsibilities, and qualifications for each role. 
  2. Automate the recruitment process by using the applicant tracking systems (ATS)tool.
  3. Make use of multiple recruitment channels for maximum reach, including digital and social media.
  4. Implement a structured interview process, with all types of questions asked to gauge suitability.
  5. Conduct extensive and thorough background checks on the candidates.
  6. Streamline the onboarding process, including assigning mentors or buddies to new joiners.
  7. Set and communicate expectations to employees clearly, including their roles, responsibilities, and performance metrics.
  8. Foster a welcoming and inclusive workplace.
  9. Seek continuous feedback to evolve and improve.

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