Hire-to-Retire (H2R)

Hire-to-Retire (H2R) describes the end-to-end process of managing the entire employee lifecycle within an organisation, from initial recruitment through onboarding, performance management, development, compensation and separation. H2R is one of the four classic end-to-end ERP processes alongside Order-to-Cash, Procure-to-Pay and Record-to-Report. Modern H2R is rarely fully covered by ERP — specialist HCM (Human Capital Management) suites typically own most of the lifecycle, with payroll-and-organisational data flowing to the ERP for accounting integration.

Lifecycle stages

1. Recruitment — sourcing, applicant tracking, interview management, offer management. Specialist ATS tools: Workday Recruiting, SuccessFactors Recruiting, Greenhouse, Personio, rexx Systems
2. Onboarding — pre-boarding communications, documentation, equipment provisioning, first-day-and-first-week experience
3. Core HR and master data — personal data, organisational assignment, role, manager, payroll category, working time
4. Time and attendance — working time, absences, vacation, overtime, shift planning
5. Compensation — base pay, variable compensation, benefits, equity, salary review
6. Performance management — objectives, reviews, calibration, succession planning
7. Development and learning — training delivery, certifications, career path
8. Engagement and pulse surveys
9. Off-boarding and retire — separation, exit interview, equipment return, knowledge transfer, pension administration

ERP versus dedicated HCM

Most mid-market organisations in DACH split H2R between two systems. Specialist HCM (Personio, SAP SuccessFactors, Workday, BambooHR, rexx Systems, Atoss, P&I LOGA) owns recruitment, performance management, learning and engagement. ERP owns the organisational chart, cost-centre assignment, time-tracking integration with project accounting, and payroll-to-finance posting. For smaller operations under 100 employees, the ERP's built-in HR module (Microsoft Dynamics 365 HR, SAP S/4HANA HR, Sage HR Suite, weclapp HR) often suffices. Above that, dedicated HCM pays back through better candidate experience, manager-self-service quality and compliance depth. Integration runs both directions: HCM master data flows to ERP nightly or in real time; payroll calculations flow from HCM (or payroll specialist) to ERP for general-ledger posting.

Payroll specifics in DACH

DACH payroll is among the most regulated globally. Specialist payroll providers handle the complexity: DATEV LODAS and DATEV Lohn (Germany), P&I LOGA, SAP HCM Payroll, Sage Payroll (Germany), rexx Personal, Personalwerk, Lohn-AG. In Austria: BMD, Sage Lohn, P&I LOGA. In Switzerland: Abacus Payroll, SwissSalary, Swisscom Datatrans. Tax-relevant outputs feed the ERP through structured exports for general-ledger posting and reporting. The payroll-to-ERP integration typically runs monthly with cost-centre and wage-type allocation. Specialist providers maintain constant compliance updates — minimum wage, social-security contribution rates, tax brackets, electronic-reporting requirements (ELStAM, A1-Bescheinigungen, Sozialversicherungsmeldungen) — that in-house implementation would struggle to match.

Practical guidance

Three patterns for H2R architecture. (1) Default to specialist HCM above 100 employees. The candidate-experience and manager-experience differences are material at that scale. (2) Keep payroll with a specialist provider in all DACH jurisdictions — the regulatory complexity rewards specialisation. (3) Treat the HCM-to-ERP integration as a first-class architectural concern. Master-data ownership rules must be clear (typically HCM owns employee data, ERP owns cost-centre and organisational structure). Poorly governed integration produces reconciliation pain at every period-end and is one of the most consistent sources of HR-side frustration with ERP.

Related Topics

• Order-to-Cash
• Procure-to-Pay
• ERP