Häufig gestellte Fragen
What does hire-to-retire (H2R) mean?
Hire-to-retire refers to the continuous, end-to-end HR process that covers the entire lifecycle of an employee from hiring (“hire”) to departure or retirement (“retire”). Unlike isolated individual tasks, recruiting, onboarding, personnel administration, payroll, personnel development and offboarding are connected into one coherent chain. The focus is on a continuous flow of data across departmental and system boundaries, so that personnel data captured once is available in all downstream steps. H2R is a functional process model, not a single software product that could be bought.
Which phases does the hire-to-retire process comprise?
The H2R process is typically divided into several consecutive phases, although the exact breakdown differs slightly depending on the source. Common phases are recruiting and selection, onboarding and joining, ongoing personnel administration including time and absence management, payroll and compensation, personnel development and performance management, and finally offboarding and departure. A more compact representation in five stages is also widespread, ranging from talent acquisition through onboarding, development and performance management to retirement planning and departure. Each phase generates and consumes data that, in the model, is passed along the process chain rather than being re-entered at each step.
HR in the ERP module or a dedicated HCM solution?
For small companies, the integrated HR module of the ERP system is often sufficient, because master data, contract data and payroll run along within the existing suite. As headcount grows and complexity increases in talent management, global payroll or analytics, a dedicated HCM solution gains importance; in practice, a specialised suite is often deployed from several hundred employees upwards. In the DACH mid-market, a combination is also widespread — for instance a specialist solution for personnel administration and time tracking that is connected to the ERP via an interface. The exact design depends heavily on the industry, company size and customising depth of the specific setup.
How is hire-to-retire connected to the ERP system?
In integrated systems, hire-to-retire is the functional umbrella for the HR module of an ERP system and forms the counterpart to finance- and logistics-oriented process models such as order-to-cash or procure-to-pay. The interlocking of these worlds is essential: payroll data flows into financial accounting, cost centre assignments into controlling and personnel capacities into planning. A prerequisite for end-to-end H2R coverage is that personnel master data is kept consistent as a shared foundation, which is why concepts such as master data management ensure that the same person is referenced identically in all modules. Transitions between process steps are often controlled via rule-based workflow automation — for example when an approved hire automatically triggers the creation of user accounts and access rights.
Which data protection and retention obligations must be observed in the H2R process?
Personnel data is among the most sensitive categories of data, which is why data protection requirements must be observed across the entire lifecycle and shape the end-to-end character of the process well beyond the employee's departure. In Germany, different periods apply depending on the document type: payroll accounts and wage-tax-relevant records must be retained for six years under § 41 EStG, and remuneration and social insurance documents under § 28f SGB IV until the end of the calendar year following the last social insurance audit (in practice usually around five years); records relevant to bookings and profit only need to be retained for eight instead of ten years since the Fourth Bureaucracy Relief Act (§ 147 AO, § 257 HGB), while the ten-year period continues to apply to books, annual financial statements and inventories. Once the statutory periods expire, personal data must be deleted in accordance with the GDPR, since retaining data for too long can itself constitute a violation. An H2R system should therefore map retention and deletion obligations and document the history traceably.
Is hire-to-retire the same as payroll or recruiting?
No, hire-to-retire is much broader in scope than individual HR subtasks. Payroll is only one station in the H2R chain, and applicant management covers solely the entry phase, whereas H2R spans the complete lifecycle through to departure. Moreover, H2R is not a specific program or module but a functional process model that can be supported by different systems. Related terms such as recruit-to-retire are used largely synonymously in practice and describe the same integrated end-to-end approach, merely with different wording for the starting point.