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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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:
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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:
- Workforce planning & recruitment.
- Selection and onboarding.
- Employee records & data management.
- Time & attendance.
- Compensation & benefits
- Performance management.
- Training & development.
- Offboarding, and retirement planning
To streamline the Hire to Retire process and improve efficiency while reducing costs, organizations can implement the following strategies:
- Centralize and automate the HR processes.
- Implement self-service portals for employers and employees.
- Optimize and automate recruitment processes through applicant tracking systems (ATS).
- Enhance the onboarding and training experience through digital tools.
- Promote employee career development through training programs and knowledge-sharing platforms.
- Consolidate and streamline employee benefits and retirement plans.
- Implement continuous and agile feedback and performance management practices.
- Utilize HR analytics and data-driven insights on the workforce.
- Streamline offboarding processes.
- Regularly review and optimize HCM processes.
To efficiently manage the recruitment and onboarding of new employees, the following best practices can be adopted:
- Develop a clear recruitment strategy document or SOPs, outlining the job description and eligibility requirements, responsibilities, and qualifications for each role.
- Automate the recruitment process by using the applicant tracking systems (ATS)tool.
- Make use of multiple recruitment channels for maximum reach, including digital and social media.
- Implement a structured interview process, with all types of questions asked to gauge suitability.
- Conduct extensive and thorough background checks on the candidates.
- Streamline the onboarding process, including assigning mentors or buddies to new joiners.
- Set and communicate expectations to employees clearly, including their roles, responsibilities, and performance metrics.
- Foster a welcoming and inclusive workplace.
- Seek continuous feedback to evolve and improve.