Why do I need to pick a 'stage group' when I add a new stage to the recruitment process?

The stage group determines which tab in the Candidate Listing candidates at this stage will appear in.

For instance, if the new stage is to be called 'Employment Contract' the stage group picked may be 'Contract'. 

This will ensure that all candidates reaching the stage of Employment Contract are all listed under the Contract tab in the candidate listing for the vacancy.