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Mgmt 383 Chapter 7 Recruiting In Labor Markets Spring 2009
Recruiting • The process of generating a pool of qualified applicants for organizational jobs
Strategic Approach to Recruiting • Knowing the number of personnel the organization will need. • The result of the HR Plan. • Staffing Tables • HR Audits (Manpower Budgets) • Envelope Forecasts • Recruiting is only as effective as the HR Plan is accurate.
Strategic Approach to Recruiting • HR Strategic Recruiting Responsibilities: • Knowing the number of personnel the organization will need. • Identifying relevantlabor markets. • Determining whether to hire personnel or use flexible staffing (level of outsourcing). • Level of internal v. external recruiting. • Identifying critical or essential skills.
Strategic Approach to Recruiting • Consider legal ramifications of recruiting. • Addressing affirmative action requirements. • Determining the techniques most appropriate for advertising position vacancies. • Evaluating the effectiveness of recruiting efforts.
Strategic Recruiting Stages Assignment of Organizational Responsibilities Strategic Recruiting Decisions Recruiting Method Selection HRP
HR Staff Responsibilities Forecast recruiting needs. Recruiting ads & campaigns. Plans & conducts recruiting efforts. Audits & evaluates all recruiting activities Operating Mgrs’ Responsibilities Anticipate vacancies. Determine applicant KSA. Assist recruiting effort w/ information about job requirements. Provide feedback on success/failure of recruiting activities. Assignment of OrganizationalResponsibilities
Three Categorizations of Labor Markets • Labor Force Population • Applicant Population • Applicant Pool
Labor Force Population • Labor Force Population - all the individuals who are available for selection if all possible recruitment strategies are used. • Media (Newspaper Ads,Television & Radio) • Labor Unions • Professional Organizations • Job Fairs • College Recruiting
Applicant Population • Applicant Population - that portion of the labor force population that is available for recruitment using a specific recruiting approach. • Applicant Populationsize is affected by: • Recruiting Method • Recruiting Message • Applicant Qualifications Required • Administrative Procedures
Applicant Pool • Applicant Pool - that portion of the applicant population that actually applies and is evaluated for the position.
Identifying Labor Market Components Labor Force Population Applicant Population Applicant Pool Selection
Specific Labor Market Classifications • Geographic labor markets • Global labor markets • Industry/occupationallabor markets • Construction • Manufacturing • Retail trade • Educational/technicallabor markets • Specific degrees (BBA, BME, BEE) • Specific certification (CPA, PHR, GM certified mechanic) • Specific fields (IT, RNs, etc.)
EEO Ramifications of Recruiting • Disparate impact. • Eligibility for government contracts or subcontracts. • ADA/Rehabilitation Act accommodations
Strategic Recruiting Decisions • Organizational-Based Recruiting v. Outsourced Recruiting. • Regular v. Flexible Staffing • Recruiting Sources: Internal v. External • Diversity/AA Considerations
Organizational-Based Recruiting v. Outsourced Recruiting • Do our own (organizational-based [a.k.a., traditional]) or contract it (outsourced). • Examples of Outsourced recruiting • Private employment agencies • Public employment agencies • Professional Employer Organizations (PEOs) and employee leasing.
Recruiting Presence and Image • Continuous recruiting (college recruiting, e.g.) v. intensive recruiting (ad hoc). • Recruiting efforts may have a positive or negative impact on image. • Recruiting staff represents firm to outside world. • Can be tied to marketing efforts (Southwest Airlines as on of top 100 Best Companies to Work For, e.g.).
Regular v. Flexible Staffing • Regular Staffing - hiring traditional permanent employees to perform the jobs in question. • Flexible Staffing– use of nontraditional employees. • Temporary employees – fulltime employees who work for less than 90 days. Hired for short term shortages. • Independent contractors
Regular v. Flexible Staffing • Considerations in deciding whether to hire personnel or use flexible staffing. • Hiring permanent employees. • Better control • Benefit costs are usually higher • Hiring “nontraditional employees” (outsource). • Cheaper • Loss of control
Advantages of Internal Recruiting • Enhances employee morale. • Better assessment of candidate’s abilities • Lower cost for some jobs. • A motivator for good performance. • Causes a succession of promotions. • Firm has to hire externally only at the entry level.
Disadvantages of Internal Recruiting: • Inbreeding • Political infighting • Adverse reaction of those not promoted • Increased need for management development programs
Ripple Effect/MovementAnalysis (1) (2) (3) + (4) + (5) = (6) (7) (8) Level Positions Increase Retire- Termin- Primary Vacancies resulting Total beginning (decrease) ments ations Positions from promotions Positions FY 2003 in staff to be retirements, etc. to be filled on lower levels filled ________________________________________________(I) (II) (III) (IV) FY2004 I 10 -- 3 2 5 II 20 4 5 2 11 III 40 8 5 8 21 IV 80 1210 10 32 Total 150 24 23 22 69
Ripple Effect/MovementAnalysis (1) (2) (3) + (4) + (5) = (6) (7) (8) Level Positions Increase Retire- Termin- Primary Vacancies resulting Total beginning (decrease) ments ations Positions from promotions Positions FY 2003 in staff to be retirements, etc. to be filled on lower levels filled _____________________________________________________(I) (II) (III) (IV) FY2004 I10 -- 3 2 5 -- -- -- -- 5 II20 4 5 2 11 5 -- -- -- 16 III40 8 5 8 21 5 11 -- -- 37 IV80 1210 10 32 5 11 21 -- 69 Total 150 24 23 22 6915 22 21 127
Internal Recruiting Sources • Job Posting/Job Bidding Systems • Post before external recruiting. • Notifies current employees of all vacancies for which they may be qualified. • Promotions & Transfers • Dependent on quality of organizational development programs. • Must ensure that internal candidate has requisite skills.
Employee FocusedRecruiting • Current employee referrals • Recruiting former employees • Retired employees. • Female employees whose school age children permit her to return to full time work. • Luring back former employees from other employers.
Advantages of External Recruiting • New perspectives, enhanced creativity from “new blood.” • Instant qualifications (faster than training). • Provides new industry (as opposed to firm) insights. • Does not create internal political problems as new hire has no group of “political supporters” in the organization.
Disadvantages of External Recruiting • Candidate may not “fit’ the organization. • Causes morale problems when internal candidates are not selected. • Longer orientation time is required. • Difficult to assess external candidates.
External Recruiting Sources • College Recruiting (Placement Office) • Expensive and time consuming • Criteria for selecting colleges: • Reputation of the College (MIT v. NWCC) • Market competition • Past experience with graduates • School Recruiting • Career days. • Good relations may encourage specialized programs to meet your needs
External Recruiting Sources • Labor Unions • Primarily for skilled trades. • Used a good deal in the construction industry • Downside, less flexibility then nonunion labor because of CBAs.
External Recruiting Sources • Employment Agencies • Public • Private • Executive Search Firms • A.k.a. “head-hunters.” • Retainer fee system - your firm is charged regardless of the outcome of the search. • Contingency fee system - your company is only charged if the search is successful. • Fees are usually high (usually 33.3% of the first annual salary).
External Recruiting Sources • Competitive Sources • Professional associations (AOM, AMA, etc.) • Placement websites. • Placement tables at conventions. • Trade associations • American Production and Inventory Control Society (APICS) • National Association of Chain Drug Stores • Competitors • Customer (Home Depot, Lowes, Best Buy)
External Recruiting Sources • Media Sources • Media: • Newspapers • Magazines • television • Radio • Billboards (Roman Catholic Church priest story)
E-Recruiting Sources • External Computerized Databases • Electronic compilation of resumes and application forms. • Internet job boards • Monster.com • HotJobs • Profession/career websites • Shrm.org • National Society of Professional Engineers (NSPE)
E-Recruiting Sources • Employer websites • Sites provide vacancies and online applications. • Programs can sort through resumes and application forms to identify qualified candidates and match them to specific openings.
Advantages of E-Recruiting • Wider exposure of position announcements (reaches a broader audience). • Casts a wider geographic net (even globally). • Permits targeting specific audiences. • Increases applicant pool. • Reduces response time (better than snail mail).
Disadvantages of E-Recruiting • Draws more unqualified applicants (increases screening efforts). • False responses (browsing, not buying). • Qualified applicants without internet access are excluded (possible disparate impact). • Privacy concerns in light of EEO and credit reporting laws.
Legal Issues in Internet Recruiting • Are rejections resulting from screening software really based on the job qualifications? • Are protected classes being excluded? • How can applicant flow data be collected for EEO-1? • Who is a real applicant and who is “just looking”? • The informality of on-line communications may lead to improper information being disclosed (TMI).
Affirmative Action Requirements • Accuracy of goals (could become inflexible quotas). • What activities could adversely affect recruiting for goals: • Word of mouth recruiting. • Supervisor recommendations. • Unrealistic KSAs.
Media Choice Considerations • What do we want to accomplish? • Who are we trying to reach? • What should the message convey? • How should the message be presented? • Which is the appropriate medium? • Note: Media results should be tracked.
Techniques Appropriate for Advertising • Determining the techniques most appropriate for advertising position vacancies. • Employee Referrals. • Media (Newspaper Ads,Television & Radio). • Labor Unions. • Professional Organizations. • Job Fairs. • College Recruiting.
Trigger Words to Avoid • “Trigger words” to avoid in advertising: • Help wanted male (or female). • Must be young & energetic. • Patrolman. • Metermaid. • Junior executive.
Evaluating the Effectiveness of Recruiting • Possible criteria: • Quantity of applicants • Quality of applicants • Time required to fill openings • Affirmative action goals are met • Cost per applicant Recruiting Expenses . Number of recruits hired
Evaluating Recruiting Costs • Direct Costs • Advertising • Recruiter’s salaries • Travel expenses • Agency fees • Telephone expenses • Indirect Costs • The time managers spend in interviews • Corporate image
Evaluating Recruiting Benefits • Benefits • Reduced time from contact to hire. • Increased pool of qualified applicants to select from. • Improved proportion of acceptance to initial offers.
Evaluating the Effectiveness of Recruiting • Yield ratio - a comparison of the number of applicants at one stage of the recruiting process to the number at the next stage. • Selection rate - the percentage of personnel hired from a given group. • Acceptance rate - the number of applicants hired divided by the number of applicants offered jobs.
Evaluating the Effectiveness of Recruiting • Success rate - the comparison the number of applicants hired who became successful employees against the number of who did not.