Employee Life Cycle

What the employee life cycle is

The employee life cycle (دورة حياة الموظف), also written employee lifecycle, is the complete course of an employee’s relationship with an organisation, from the moment of contracting until the end of service. It is viewed as a series of connected stages, not as a set of separate procedures.

The concept covers the whole relationship, not one part of it. It opens with the contract that starts the relationship and closes when the employee’s service ends, and every procedure the organisation carries out for the employee in between falls inside it as part of one of its stages.

The stages of the employee life cycle

The employee life cycle runs through six stages, set out here in the order in which the relationship moves through them:

1. Contracting. It covers the job offer, then the employment contract and its documentation, then the opening of the employee file and the employee’s documents. The offer comes first, the contract follows it and is documented, and the file is opened to hold the employee’s records. Article 51 of the Saudi Labor Law (نظام العمل) requires the contract to be written in two copies, one held by each party, and to be documented as the Implementing Regulation (اللائحة التنفيذية) specifies.
2. Onboarding. It covers the handover of the employee’s duties and access rights, and the probation period. Article 53 of the Labor Law applies a probation period only where the contract provides for it expressly and specifies its duration, and caps it at 180 days in all cases. Under Article 53 of the Labor Law, either party may end the contract during the probation period. The stage as a whole is described under employee onboarding.
3. Daily operations. It covers attendance and departure, leave and leave balances, and overtime. It is the stage that records when the employee attends and leaves, the leave the employee takes against the balance, and the hours of overtime the employee works.
4. Pay. It covers the components of the salary, the allowances and the deductions, and then the payment of the salary. Pay is assembled from those components, allowances are added and deductions applied, and only then is it paid.
5. Development. It covers performance appraisal, promotion and training. On appraisal, the model work regulation (النموذج الموحّد) provides for performance reports on every worker at least once a year, prepared by the worker’s direct superior, approved by the authorised person and notified to the worker.
6. End of service. It covers the reason the service ended, the final entitlements and the exit clearance. The reason is recorded, the entitlements due on leaving are settled, and the exit clearance is completed.

Why the employee life cycle is treated as a cycle rather than as steps

The employee life cycle is treated as a cycle because the outputs of each stage are inputs to the stages after it. What is recorded at one stage is what a later stage works from, as the links below show.

The start date in the contract sets the length of service. The date on which the employee commences work, as the contract states it, is the date from which the length of service is counted.

The length of service sets the leave balance and the end of service award. Both entitlements are measured against it. Article 109 of the Labor Law sets annual leave at no fewer than 21 days a year, rising to no fewer than 30 days once the worker has completed five consecutive years with the employer; how the balance accrues is set out under annual leave balance. Article 84 of the Labor Law computes the end of service award at half a month’s wage for each of the first five years and a month’s wage for each year after that, on the basis of the last wage, and in proportion for part of a year; the method is set out under end of service calculation.

Hours of lateness in the attendance record go into the payroll run. The lateness recorded during daily operations is carried into the payroll run of the pay stage, so the pay stage takes those hours from the attendance record.

An unused leave balance goes into the final settlement. Article 111 of the Labor Law gives a worker who leaves before taking accrued leave the right to a wage for the days not taken, and an entitlement to leave pay for part of a year in proportion to the time worked in it. While the worker is in service, Article 109 of the Labor Law does not allow the leave to be waived or taken as cash instead, so it is on leaving that the unused balance is paid. The timing of the final settlement is set out under wage payment dates and the final settlement.

Royal Decree M/44 of 1446H, in force since 19 February 2025, amended Articles 51 and 53 of the Labor Law. That decree did not amend Articles 84, 109 or 111 of the Labor Law.

When the stages of the employee life cycle are managed in separate files, an error comes to light late. It can surface at the final settlement (التسوية النهائية), at a point where correcting it has become a dispute rather than an adjustment.

Where the employee life cycle breaks in practice

The employee life cycle can break not at a particular stage but in the transition between stages. The break can take forms such as these:

• Data that is not updated. It is entered at contracting and then left unchanged when the employee’s job title or wage changes.
• Leave approved verbally. It is granted by word of mouth, so it is never deducted from the leave balance.
• A salary change made only in payroll. It is applied in the payroll run but not documented in the contract.

These are small errors when they occur and large ones at the final settlement, because the last entitlement is calculated from these same data.

How the employee life cycle differs from the employee journey

The employee life cycle describes what the organisation does at each stage: procedures, documents and entitlements. The employee journey describes what the employee feels during those same stages.

The first is managed through records, while the second is measured through surveys.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.