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Chapter 5. Recruiting Applicants. Gaining Competitive Advantage. “Kentucky Blue” employee referral campaign—awarded prizes to ees who recruited new hires Hospital met staffing needs Cost per hire was $2,400 in previous recruitment programs Cost per hire with “Kentucky Blue” was $837 per hire.

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chapter 5

Chapter 5

Recruiting Applicants

gaining competitive advantage
Gaining Competitive Advantage
  • “Kentucky Blue” employee referral campaign—awarded prizes to ees who recruited new hires
    • Hospital met staffing needs
    • Cost per hire was $2,400 in previous recruitment programs
    • Cost per hire with “Kentucky Blue” was $837 per hire
linking recruitment to competitive advantage
Linking Recruitment to Competitive Advantage
  • Five goals:
    • Achieve cost efficiency
    • Attract highly qualified candidates
    • Help ensure that individuals who are hired will stay with the company (retention)
    • Assist company’s efforts to comply with nondiscrimination laws
    • Help a company create a more culturally diverse workforce
achieving cost efficiency
Achieving Cost Efficiency
  • Recruitment costs per hire typically equal one-third of a new hire’s annual salary
  • Expenses—advertisement, recruiter and candidate travel, possible referral or sign-on bonuses, agency or search firm fees, recruiters’ salaries and benefits, and manager’s time
  • 614 companies reported spending $3.4 billion on recruitment costs in the last 3 years
  • Competitive costs gained by holding costs down, while keeping productivity levels constant (competitive advantage enhanced by keeping recruitment costs down and productivity levels constant
attracting highly qualified candidates
Attracting Highly Qualified Candidates
  • HRM department must ensure that a sufficient number of qualified candidates are identified—want the best candidates
    • Notifying of job openings—need to locate those individuals (capture candidates’ attention and stimulate their interest in applying for positions)
attracting highly qualified candidates6
Attracting Highly Qualified Candidates
  • Influencing Job Acceptance Decisions:
    • Best candidates will accept job offer (Discuss Exhibit 5-1 on page 117)
    • Candidate’s perception of job attractiveness is heavily influenced by the nature of the information given by the firm, how it is given and how well the applicants are treated
    • Recruiter plays key role in attracting candidates (recruiter behavior is an extension of organization’s personality)
attracting highly qualified candidates7
Attracting Highly Qualified Candidates
  • Candidate views recruiter’s behavior as a model for the quality of interpersonal relationships and the nature of supervision existing in the organization (rudeness and disrespect for a female candidate)
improving retention rates through the use of realistic job previews
Improving Retention Rates through the Use of Realistic Job Previews
  • Turnover newly hired employees in the first six months (overzealous recruiters “oversell”
  • RJP-Realistic Job Preview can reduce turnover by giving candidate a more realistic view (unfavorable as well as favorable) about the job and organization
    • Some will withdraw from process
    • RJPs can reduce turnover by 24%--rresult in annual savings averaging $271,600
achieving legal compliance
Achieving Legal Compliance
  • Organizations can help prevent discrimination charges by targeting efforts toward underutilized groups—protected groups (blacks, Hispanics, or disabled individuals by placing ads)—discuss Exhibit5-2
creating a more culturally diverse workforce
Creating a More Culturally Diverse Workforce
  • Competitive advantage results from a more culturally diverse workforce (reach out to seniors, minorities, welfare-to-work candidates and people from the armed forces)
    • Companies attracting older workers—The Travelers, Banker’s Life & Casualty, Honeywell, Motorola and some fast-food restaurants (Let’s name a couple)
creating a more culturally diverse workforce11
Creating a More Culturally Diverse Workforce
  • Candidates with disabilities—Kreonite ( a film manufacturer)—by increasing number of employees with disabilities their turnover dropped from 32% to 10 to 12%
  • Attracting members of underutilized groups is dependent on organization’s treatment of candidates during recruitment process
  • Lose many because recruiters act rude, boring obnoxious, full of themselves, incompetent, barely literate and jerks (females old boy network or an interview in a hotel room)
hrm issues practices
HRM Issues & Practices
  • Recruitment Planning:
    • Identify the Job Opening—waiting for an employee to turn in their resignation (take organization a long time to fill the opening)
      • 6 to 8 weeks to notify and screen applicants
      • 1 to 2 weeks to make a decision regarding a job offer
      • Decision made-candidate must give two weeks notice
hrm issues practices13
HRM Issues & Practices
  • Companies should attempt to identify job openings well in advance of announced resignations (plan for openings in the short and long term)
  • Questions to ask:
    • Are any new budgeted positions opening soon?
    • Is a contract under negotiation that may result in the need for additional hires?
    • What is the amount of expected turnover in the next several months
hrm issues practices14
HRM Issues & Practices
  • Step Two:
    • “Do we need to find a new person to fill the vacant position?”
    • Provide overtime to current employees or job elimination and job redesign (i.e., incorporating the tasks of the vacant position into currently existing positions
    • Address two issues—to fill with core or with contingency personnel and if core personnel are used whether to recruit them internally or externally
core vs contingency
Core vs. Contingency
  • Core personnel are placed on the organization’s payroll and are considered regular full time ees (discuss “permanent employees)
  • Contingency personnel perform work for the company but are not on payroll
    • With a supplier agency and are loaned to the company on a temporary basis for a fixed fee (Spherion or Account Temps)
core vs contingency16
Core vs. Contingency
  • Suppliers:
    • Labor leasers, temporary employment agencies and independent contractors
    • Leased and temporary work side by side with core employees often in the same jobs
      • Contracts with leased employees run longer than with temporary employees
      • Independent contractors are selected to perform the entire function (i.e., maintenance work through a skilled-trades contractor)
core vs contingency17
Core vs. Contingency
  • Bureau of Labor Statistics reported 5.6 million contingency jobs in the U.S.—4.3 percent of total workforce
    • 7,000 temporary staffing firms
    • In the future orgs will have a very small knowledge-based full time workforce
advantages of contingency personnel
Advantages Of Contingency Personnel
  • Flexibility to control fixed employee costs

(increase or decrease workers based on business conditions)

  • HRM burden is relieved—supplier handles administrative work associated with payroll, insurance administration, and benefits. Supplier also screens and hires workers
  • Cost Savings—Cost less than core workers due to overhead costs of payroll and insurance
  • Those excel at jobs are offered full time employment
disadvantages of contingency personnel
Disadvantages Of Contingency Personnel
  • Need considerable orientation and training time regarding company procedures and policies
  • Less loyal and committed to the “host organization”
  • Receive better wages than core employees for performing the same work (inequity)
what types of situations should contingency workers be used
What Types of Situations Should Contingency Workers Be Used?
  • Hard-to-find expertise are required
  • Companies are trying to staff offices in geographic areas far from the main headquarters
  • Trying to staff positions to work on projects in which high risk factors may jeopardize a company’s existing workers’ compensation rates
internal versus external recruiting
Internal versus External Recruiting
  • Fill with current employees or applicants from the outside
  • Many firms external recruitment is limited to entry-level jobs
  • Those above entry level are filled through promotions (enhance employee morale and motivation)—they can advance their careers in the organization
  • Results in…reduced turnover, increased job satisfaction, and better job performance
internal versus external recruiting22
Internal versus External Recruiting
  • Other advantages of internal vs. external recruitment:
    • Qualifications of internal candidates are well known to employer
    • Recruitment is less expensive
    • Job openings can be filled more quickly internally
    • Internal candidates are more familiar with organizational policies and practices—result in less orientation and training
internal versus external recruiting23
Internal versus External Recruiting
  • What problems does internal recruitment bring?
    • Some candidates will be rejected (resentful)—greater feelings of inequity and higher rates of absenteeism
    • Workers promoted to supervisory positions in units they were already working in—friends become direct reports
internal versus external recruiting24
Internal versus External Recruiting
  • External recruitment for jobs above entry level:
    • Org wants new ideas and innovations
    • No qualified internal candidates apply
    • Org needs to increase percentage of employees within a underutilized group
internal versus external recruiting25
Internal versus External Recruiting
  • Step Three: What types of individuals are we looking for to fill positions?
    • Specify worker requirements
    • Deciding whether to target a certain segment of the applicant population
    • Specifying Worker Requirements
      • Duties, reporting relationships, salary range for hiring, and competencies (education, experience, knowledge, skills, and abilities)
internal versus external recruiting26
Internal versus External Recruiting
  • Deciding Whether to Target Certain Segments of the Applicant Population
    • Recruiting internally—will the job be posted or should the company select “high potential” employees and groom them for the position
    • Externally—inform all potential applicants or target certain types (i.e., underutilized groups or graduates from specific schools that have exceptionally strong programs (KENT STATE UNIVERSITY!!!!!)—or top performing ees from another company—raises ethical questions
internal versus external recruiting27
Internal versus External Recruiting
  • Step Four: Notify the Target Population
    • How to notify individuals of vacant position (i.e., job postings, newspaper ads, campus interviews, and so forth)
    • Job market fluctuates due to economic conditions—high unemployment a glut of candidates—the company may want to only attract the most qualified candidates—must clearly state job requirements in the vacancy notification (i.e., “Career Mapper”)
internal versus external recruiting28
Internal versus External Recruiting
  • Step Five: Meet with the Candidates
    • Most qualified are brought in for interviews and other assessment procedures
    • Candidate will receive information about the job and company
methods of internal recruitment
Methods of Internal Recruitment
  • Computerized Career Progression Systems (e.g., AT&T)
    • Strengths—candidates found quickly—broad spectrum
    • Weaknesses—skills inventory only objective or factual info—no subjective info (i.e., interpersonal skills, integrity
  • Supervisor Recommendations
    • Strengths—total discretion to supervisor in selecting the individual-know capabilities of the individual
    • Weaknesses—subjective—subject to bias and possible discrimination—courts have frowned on this—all potential candidates to be notified about the position
methods of internal recruitment30
Methods of Internal Recruitment
  • Job Posting—most commonly used approach to internal recruitment (includes job, salary, work schedule, and necessary worker qualifications)
    • Ees are concerned how they are treated during the interview process
    • Strengths—all candidates notified, enhances probability that firm’s most qualified employees will be considered for the job. Additionally—employees become responsible for their own career development and enables an ee to leave a bad work situation
methods of internal recruitment31
Methods of Internal Recruitment
  • Job Posting—
    • Weaknesses:
      • Position open for an extended period of time—a long process
      • System may prevent supervisors from hiring person of their choice
      • Some ees hop from job to job with no clear direction
      • Bid is rejected they may become alienated from the organization
methods of internal recruitment32
Methods of Internal Recruitment
  • Career Development Systems—”fast track” or high potential employees
    • Strengths—top performers will remain with the org and system ensures someone is always ready to fill a position
    • Weaknesses—ee not selected for grooming may become disenchanted—leave even though they may be a good ee—just not top tier. Selected ee may become frustrated if expected promotion doesn’t materialize
methods of internal recruitment33
Methods of Internal Recruitment
  • Employee Referrals: identify friends and associates—ee receives a bonus (Remember the University of Kentucky?)
    • Strengths—15% of workers through referrals—remain longer with the company and are better performers. And very cost effective
    • Weaknesses—barrier to EEO
methods of internal recruitment34
Methods of Internal Recruitment
  • Applicant-Initiated Recruitment—unsolicited resumes and applications
    • Strengths—efficient and low cost and candidates are likely to be highly motivated
    • Weaknesses—timing problem—resumes on file for a long time and they may have found other employment
methods of internal recruitment35
Methods of Internal Recruitment
  • Help Wanted Advertisements—best known way to identify candidates (geographic recruitment area)—local area use newspaper, TV, radio, or billboard—broader audience—USA Today or Wall Street Journal
    • Strengths—reach large audience in a relatively short period of time. Ensures a large applicant pool—members of protected groups apply
    • Weaknesses—people hired this way don’t perform their jobs as well and are absent more frequently. Also fails to reach most qualified candidates—successful people are not currently looking for work. Also the problem when too many people respond
methods of internal recruitment36
Methods of Internal Recruitment
  • Employment Agencies and Search firms
    • Public agencies (OBES)
    • Private Employment Agencies
    • Executive Search Firms
  • Campus Recruiting
    • Strengths—utilized to fill entry level positions—50% of all managers and professionals with less than 3 years experience were recruited on campus
    • Weaknesses—timely and costly--$1,500 to $6,000 cost per hire. Slow because orgs must define needs 9 to 11 months early
methods of internal recruitment37
Methods of Internal Recruitment
  • On-Line Recruiting—HotJobs.com or Careerbuilder.com
    • Strengths$26 billion dollar business—holds 110 million job listings—much faster and reaches a much larger audience
    • Weaknesses—very expensive Job Options charges $5,370 per year for unlimited access—mostly used for regional and national searches. And number of candidates generated can be an administrative burden
what is the right method of recruiting
What is the Right Method of Recruiting?
  • Type of job to be filled
  • How quickly job needs to be filled
  • The geographic region of recruitment
  • The cost of implementing the recruitment method
  • Whether the method will attract the right mix of candidates from an EEO perspective (Discuss Exhibit 5-4 page 135)