The standard HR lifecycle

The 8 stages

1. Workforce Planning →
2. Recruitment →
3. Onboarding →
4. Time & Attendance →
5. Leave Management →
6. Payroll →
7. Performance / Training →
8. Separation (End of Service)

Some stages happen once per employee (recruitment, onboarding, separation). Others happen continuously (attendance, leave, payroll). Get the continuous ones right and the one-time ones become formalities.

Stage-by-stage

1. Workforce Planning

Owner: HR + line managers + finance. Purpose: Decide how many people you need, where, doing what.

Outputs a position master — not just a headcount, but a list of roles with job descriptions, required skills, and budget. Links to the company budget (headcount cost is a large P&L line).

2. Recruitment

Owner: HR + hiring manager. Purpose: Fill approved positions.

Stages: requisition → sourcing → shortlist → interview → offer → acceptance. Usually 2-8 weeks for blue-collar roles, longer for professional roles.

3. Onboarding

Owner: HR. Purpose: Capture all the data needed to pay, manage, and deploy a new employee.

Data captured:

• Personal: name, national ID, passport (for expats), date of birth, dependents
• Contract: position, grade, start date, contract type (permanent, fixed-term), probation period
• Compensation: base salary, housing allowance, transport allowance, other benefits
• Bank: account number, IBAN (for wage protection system compliance)
• Government: GOSI number (Saudi), social insurance number (Egypt), tax ID
• Emergency contacts

Without clean onboarding data, everything downstream is broken.

4. Time & Attendance

Owner: Line managers + HR. Purpose: Record what hours each employee actually worked, plus absences and overtime.

Methods: biometric devices, mobile check-in, manual timesheet, shift scheduler. For F&B factories with multiple shifts, this is usually a biometric clock at each entrance linked to the HR system.

Outputs: monthly attendance register showing worked hours, absences (with reason codes), overtime, shift differentials.

5. Leave Management

Owner: Employee (request) → Line manager (approve) → HR (track). Purpose: Track annual leave, sick leave, maternity/paternity, unpaid leave, Hajj leave (Saudi), etc.

Each leave type has its own policy: annual entitlement, accrual method, carry-over rules, encashment rules, maximum balance.

Leave affects payroll: paid leave = no salary impact; unpaid leave = salary deducted proportionally.

6. Payroll

Owner: Payroll clerk → HR manager → Finance. Purpose: Calculate and pay each employee every month.

Monthly calculation:

Base salary
+ Housing allowance + Transport allowance + Other allowances
+ Overtime pay + Shift differential
− GOSI / social insurance employee contribution
− Income tax (if applicable)
− Loan repayments
− Unpaid leave deductions
− Advances recovered
= Net pay

Plus employer contributions:

+ GOSI / social insurance employer portion
+ End-of-service accrual
+ Any employer-paid benefits (medical, etc.)
= Total employer cost

Outputs:

• Pay slip for each employee (Arabic + English, for many MENA jurisdictions)
• Bank file for Wage Protection System (WPS in Saudi)
• Tax remittance file for tax authority
• GOSI file for the social insurance authority
• GL entry for the finance team

7. Performance / Training

Owner: Line manager + HR. Purpose: Review performance (usually annually), plan training, approve promotions and raises.

Feeds back into workforce planning (do we have the right skills?) and compensation (is this person’s salary aligned to their grade?).

8. Separation (End of Service)

Owner: HR + finance. Purpose: Process resignation, termination, retirement, or end of contract.

Calculates end-of-service gratuity per local labour law:

• Saudi Arabia: 0.5 month salary × first 5 years of service + 1 month × each year after, pro-rated
• Egypt: 1 month × each year of service for termination/end of contract, varies by specifics
• UAE: 21 days × first 5 years + 30 days × each year after

Plus:

• Unused annual leave encashment
• Pending bonuses or commissions
• Return of advances or company property
• Final GOSI settlement

All processed through payroll as the employee’s final pay.

SMB failure modes

• “We do payroll on the 5th” — 5 days of leg work, mostly Excel reconciliation, could be 30 minutes
• “Attendance is honour-system” — lost productivity and labour court exposure combined
• “End of service is calculated when they quit” — often wrong, always stressful, sometimes litigated
• “GOSI contributions are done by the accountant on paper” — fines for late or wrong filing
• “Leave is tracked by the old HR clerk who’s been here 10 years” — when she retires, nobody knows anything

Next lesson

In Lesson 3 — How AION handles HR & payroll, we’ll walk through how AION automates the continuous stages (attendance, leave, payroll) and makes the one-time stages auditable.