Mgmt 383Mgmt 383

Chapter 7Chapter 7

Recruiting In Labor MarketsRecruiting In Labor Markets

Spring 2009Spring 2009

RecruitingRecruiting

• The process of generating a The process of generating a pool of pool of qualifiedqualified applicants applicants for organizational jobsfor organizational jobs

Strategic Approach to RecruitingStrategic Approach to Recruiting

• Knowing the number of personnel the Knowing the number of personnel the organization will need.organization will need.• The result of the HR Plan.The result of the HR Plan.

• Staffing TablesStaffing Tables• HR Audits (Manpower Budgets) HR Audits (Manpower Budgets) • Envelope ForecastsEnvelope Forecasts

• Recruiting is only as effective as the HR Recruiting is only as effective as the HR Plan is accuratePlan is accurate..

Strategic Approach to Strategic Approach to RecruitingRecruiting

• HR Strategic Recruiting Responsibilities:HR Strategic Recruiting Responsibilities:

• Knowing the Knowing the number of personnelnumber of personnel the the organization will need.organization will need.

• Identifying Identifying relevantrelevant labor marketslabor markets..

• Determining whether to hire personnel or use Determining whether to hire personnel or use flexible staffing flexible staffing (level of outsourcing).(level of outsourcing).

• Level of Level of internal v. external recruitinginternal v. external recruiting..

• Identifying critical or Identifying critical or essential skillsessential skills..

Strategic Approach to Strategic Approach to RecruitingRecruiting

• Consider Consider legal ramificationslegal ramifications of recruiting. of recruiting.• Addressing Addressing affirmative actionaffirmative action requirements. requirements.• Determining the techniques most Determining the techniques most

appropriate for appropriate for advertisingadvertising position position vacancies.vacancies.

• Evaluating the effectivenessEvaluating the effectiveness of recruiting of recruiting efforts.efforts.

Strategic Recruiting StagesStrategic Recruiting Stages

HRPAssignment ofOrganizationalResponsibilities

Strategic Recruiting Decisions

Recruiting Method Selection

Assignment of OrganizationalResponsibilities

• HR Staff HR Staff ResponsibilitiesResponsibilities

• Forecast recruiting needs.Forecast recruiting needs.

• Recruiting ads & Recruiting ads & campaigns.campaigns.

• Plans & conducts Plans & conducts recruiting efforts.recruiting efforts.

• Audits & evaluates all Audits & evaluates all recruiting activitiesrecruiting activities

• Operating Mgrs’ Operating Mgrs’ ResponsibilitiesResponsibilities

• Anticipate vacancies.Anticipate vacancies.

• Determine applicant KSA.Determine applicant KSA.

• Assist recruiting effort w/ Assist recruiting effort w/ information about job information about job requirements.requirements.

• Provide feedback on Provide feedback on success/failure of success/failure of recruiting activities.recruiting activities.

Three Categorizations of Labor Three Categorizations of Labor MarketsMarkets

• Labor Force PopulationLabor Force Population

• Applicant PopulationApplicant Population

• Applicant PoolApplicant Pool

Labor Force PopulationLabor Force Population

• Labor Force PopulationLabor Force Population - - allall the individuals the individuals who are available for selection if who are available for selection if all possible all possible recruitment strategiesrecruitment strategies are used. are used.• Media (Newspaper Ads,Television & Radio)Media (Newspaper Ads,Television & Radio)• Labor UnionsLabor Unions• Professional OrganizationsProfessional Organizations• Job FairsJob Fairs• College RecruitingCollege Recruiting

Applicant PopulationApplicant Population

• Applicant PopulationApplicant Population - - that portion of thethat portion of the labor force population labor force population that is available for that is available for recruitment using a specific recruiting recruitment using a specific recruiting approachapproach..• Applicant PopulationApplicant Population size is affected by:size is affected by:

• Recruiting MethodRecruiting Method• Recruiting MessageRecruiting Message• Applicant Qualifications RequiredApplicant Qualifications Required• Administrative ProceduresAdministrative Procedures

Applicant PoolApplicant Pool

• Applicant Pool - Applicant Pool - that portion of thethat portion of the applicant population applicant population that actually applies that actually applies and is evaluated for the position.and is evaluated for the position.

Identifying Labor Market Identifying Labor Market ComponentsComponents

Labor Force Population

Applicant Population

Applicant Pool

Selection

Specific Labor Market Specific Labor Market ClassificationsClassifications

• Geographic labor marketsGeographic labor markets• Global labor marketsGlobal labor markets• Industry/occupationalIndustry/occupational labor marketslabor markets

• ConstructionConstruction

• ManufacturingManufacturing

• Retail tradeRetail trade

• Educational/technicalEducational/technical labor marketslabor markets• Specific degrees (BBA, BME, BEE)Specific degrees (BBA, BME, BEE)

• Specific certification (CPA, PHR, GM certified mechanic)Specific certification (CPA, PHR, GM certified mechanic)

• Specific fields (IT, RNs, etc.)Specific fields (IT, RNs, etc.)

EEO Ramifications of EEO Ramifications of RecruitingRecruiting

• Disparate impact.Disparate impact.

• Eligibility for government contracts Eligibility for government contracts or subcontracts.or subcontracts.

• ADA/Rehabilitation Act ADA/Rehabilitation Act accommodationsaccommodations

Strategic Recruiting DecisionsStrategic Recruiting Decisions

• Organizational-Based Recruiting v. Organizational-Based Recruiting v. Outsourced Recruiting.Outsourced Recruiting.

• Regular v. Flexible StaffingRegular v. Flexible Staffing

• Recruiting Sources: Internal v. ExternalRecruiting Sources: Internal v. External

• Diversity/AA ConsiderationsDiversity/AA Considerations

Organizational-Based Recruiting Organizational-Based Recruiting v. Outsourced Recruitingv. Outsourced Recruiting

• Do our own (organizational-based [a.k.a., Do our own (organizational-based [a.k.a., traditional]) or contract it (outsourced).traditional]) or contract it (outsourced).

• Examples of Outsourced recruitingExamples of Outsourced recruiting• Private employment agenciesPrivate employment agencies• Public employment agenciesPublic employment agencies• Professional Employer Organizations (PEOs) Professional Employer Organizations (PEOs)

and employee leasing. and employee leasing.

Recruiting Presence and ImageRecruiting Presence and Image

• Continuous recruiting (college recruiting, Continuous recruiting (college recruiting, e.g.) v. intensive recruiting (ad hoc).e.g.) v. intensive recruiting (ad hoc).

• Recruiting efforts may have a positive or Recruiting efforts may have a positive or negative impact on image.negative impact on image.• Recruiting staff represents firm to outside Recruiting staff represents firm to outside

world.world.• Can be tied to marketing efforts (Southwest Can be tied to marketing efforts (Southwest

Airlines as on of top Airlines as on of top 100 Best Companies to 100 Best Companies to Work For, Work For, e.g.).e.g.).

Regular v. Flexible StaffingRegular v. Flexible Staffing

• Regular StaffingRegular Staffing - - hiring traditional hiring traditional permanent employees to perform the jobs in permanent employees to perform the jobs in question.question.

• Flexible StaffingFlexible Staffing – use of nontraditional – use of nontraditional employees.employees.• Temporary employees – Temporary employees – fulltime employees fulltime employees

who work for less than 90 days. Hired for short who work for less than 90 days. Hired for short term shortages.term shortages.

• Independent contractorsIndependent contractors

Regular v. Flexible StaffingRegular v. Flexible Staffing

• Considerations in deciding whether to hire Considerations in deciding whether to hire personnel or use flexible staffing.personnel or use flexible staffing.• Hiring permanent employees.Hiring permanent employees.

• Better controlBetter control• Benefit costs are usually higherBenefit costs are usually higher

• Hiring “nontraditional employees” (outsource).Hiring “nontraditional employees” (outsource).• CheaperCheaper• Loss of controlLoss of control

Advantages of Internal Advantages of Internal RecruitingRecruiting

• Enhances employee morale.Enhances employee morale.

• Better assessment of candidate’s abilitiesBetter assessment of candidate’s abilities

• Lower cost for some jobs.Lower cost for some jobs.

• A motivator for good performance.A motivator for good performance.

• Causes a succession of promotions.Causes a succession of promotions.

• Firm has to hire externally only at the entry Firm has to hire externally only at the entry level.level.

Disadvantages of Internal Disadvantages of Internal Recruiting:Recruiting:

• InbreedingInbreeding

• Political infightingPolitical infighting

• Adverse reaction of those not Adverse reaction of those not promotedpromoted

• Increased need for management Increased need for management development programsdevelopment programs

Ripple Effect/MovementRipple Effect/MovementAnalysisAnalysis

(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 12 10 10 32 Total 150 24 23 22 69

Ripple Effect/MovementRipple Effect/MovementAnalysisAnalysis

(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 -- -- -- -- 5

II 20 4 5 2 11 5 -- -- -- 16

III 40 8 5 8 21 5 11 -- -- 37

IV 80 12 10 10 32 5 11 21 -- 69 Total 150 24 23 22 69 15 22 21 127

InternalInternal Recruiting Sources Recruiting Sources

• Job Posting/Job Bidding SystemsJob Posting/Job Bidding Systems• Post before external recruiting.Post before external recruiting.• Notifies current employees of all vacancies for Notifies current employees of all vacancies for

which they may be qualified.which they may be qualified.• Promotions & TransfersPromotions & Transfers

• Dependent on quality of organizational Dependent on quality of organizational development programs.development programs.

• Must ensure that internal candidate has requisite Must ensure that internal candidate has requisite skills.skills.

Employee FocusedEmployee Focused RecruitingRecruiting

• Current employee referralsCurrent employee referrals

• Recruiting former employeesRecruiting former employees

• Retired employees.Retired employees.

• Female employees whose school age Female employees whose school age children permit her to return to full time children permit her to return to full time work.work.

• Luring back former employees from other Luring back former employees from other employers.employers.

Advantages of Advantages of ExternalExternal RecruitingRecruiting

• New perspectives, enhanced creativity from New perspectives, enhanced creativity from “new blood.”“new blood.”

• Instant qualifications (faster than training).Instant qualifications (faster than training).• Provides new industry (as opposed to firm) Provides new industry (as opposed to firm)

insights.insights.• Does not create internal political problems Does not create internal political problems

as new hire has no group of “political as new hire has no group of “political supporters” in the organization.supporters” in the organization.

Disadvantages of Disadvantages of External External RecruitingRecruiting

• Candidate may not “fit’ the organization.Candidate may not “fit’ the organization.

• Causes morale problems when internal Causes morale problems when internal candidates are not selected.candidates are not selected.

• Longer orientation time is required.Longer orientation time is required.

• Difficult to assess external candidates.Difficult to assess external candidates.

ExternalExternal Recruiting Sources Recruiting Sources

• College Recruiting (College Recruiting (Placement Office)Placement Office)• Expensive and time consumingExpensive and time consuming• Criteria for selecting colleges:Criteria for selecting colleges:

• Reputation of the College (MIT v. NWCC)Reputation of the College (MIT v. NWCC)• Market competitionMarket competition• Past experience with graduatesPast experience with graduates

• School RecruitingSchool Recruiting• Career days.Career days.• Good relations may encourage specialized programs Good relations may encourage specialized programs

to meet your needsto meet your needs

External External Recruiting SourcesRecruiting Sources

• Labor UnionsLabor Unions• Primarily for skilled trades.Primarily for skilled trades.• Used a good deal in the construction Used a good deal in the construction

industryindustry• Downside, less flexibility then nonunion Downside, less flexibility then nonunion

labor because of CBAs.labor because of CBAs.

ExternalExternal Recruiting Sources Recruiting Sources• Employment AgenciesEmployment Agencies

• PublicPublic• PrivatePrivate

• Executive Search FirmsExecutive Search Firms• A.k.a. “head-hunters.”A.k.a. “head-hunters.”• Retainer fee systemRetainer fee system - your firm is charged - your firm is charged

regardless of the outcome of the search. regardless of the outcome of the search. • Contingency fee systemContingency fee system - your company is only - your company is only

charged if the search is successful.charged if the search is successful.• Fees are usually high (usually Fees are usually high (usually 33.3% of the first 33.3% of the first

annual salaryannual salary).).

ExternalExternal Recruiting Sources Recruiting Sources

• Competitive SourcesCompetitive Sources• Professional associations (AOM, AMA, etc.)Professional associations (AOM, AMA, etc.)

• Placement websites.Placement websites.

• Placement tables at conventions.Placement tables at conventions.

• Trade associationsTrade associations• American Production and Inventory Control Society American Production and Inventory Control Society

(APICS) (APICS)

• National Association of Chain Drug StoresNational Association of Chain Drug Stores

• CompetitorsCompetitors• Customer (Home Depot, Lowes, Best Buy)Customer (Home Depot, Lowes, Best Buy)

ExternalExternal Recruiting Sources Recruiting Sources

• Media SourcesMedia Sources

• Media:Media:

• NewspapersNewspapers

• MagazinesMagazines

• televisiontelevision

• RadioRadio

• Billboards (Roman Catholic Church Billboards (Roman Catholic Church priest story)priest story)

E-Recruiting SourcesE-Recruiting Sources

• External Computerized DatabasesExternal Computerized Databases

• Electronic compilation of resumes and Electronic compilation of resumes and application forms.application forms.• Internet job boardsInternet job boards• Monster.comMonster.com• HotJobsHotJobs

• Profession/career websitesProfession/career websites• Shrm.orgShrm.org• National Society of Professional Engineers (NSPE)National Society of Professional Engineers (NSPE)

E-Recruiting SourcesE-Recruiting Sources

• Employer websitesEmployer websites• Sites provide vacancies and online Sites provide vacancies and online

applications.applications.

• Programs can sort through resumes and Programs can sort through resumes and application forms to identify qualified application forms to identify qualified candidates and match them to specific candidates and match them to specific openings.openings.

Advantages of E-RecruitingAdvantages of E-Recruiting

• Wider exposure of position announcements Wider exposure of position announcements (reaches a broader audience).(reaches a broader audience).

• Casts a wider geographic net (even Casts a wider geographic net (even globally).globally).

• Permits targeting specific audiences.Permits targeting specific audiences.• Increases applicant pool.Increases applicant pool.• Reduces response time (better than snail Reduces response time (better than snail

mail).mail).

Disadvantages of E-RecruitingDisadvantages of E-Recruiting

• Draws more unqualified applicants Draws more unqualified applicants (increases screening efforts).(increases screening efforts).

• False responses (browsing, not buying).False responses (browsing, not buying).

• Qualified applicants without internet access Qualified applicants without internet access are excluded (possible disparate impact).are excluded (possible disparate impact).

• Privacy concerns in light of EEO and credit Privacy concerns in light of EEO and credit reporting laws.reporting laws.

Legal Issues in Internet RecruitingLegal Issues in Internet Recruiting

• Are rejections resulting from screening Are rejections resulting from screening software really based on the job software really based on the job qualifications?qualifications?

• Are protected classes being excluded?Are protected classes being excluded?• How can applicant flow data be collected How can applicant flow data be collected

for EEO-1?for EEO-1?• Who is a real applicant and who is “just Who is a real applicant and who is “just

looking”?looking”?• The informality of on-line communications The informality of on-line communications

may lead to improper information being may lead to improper information being disclosed (TMI).disclosed (TMI).

Affirmative Action Affirmative Action RequirementsRequirements

• Accuracy of goals Accuracy of goals (could become (could become inflexible quotas).inflexible quotas).

• What activities could What activities could adversely adversely affect affect recruiting for goals:recruiting for goals:

• Word of mouth recruiting.Word of mouth recruiting.

• Supervisor recommendations.Supervisor recommendations.

• Unrealistic KSAs.Unrealistic KSAs.

Media Choice ConsiderationsMedia Choice Considerations

• What do we want to accomplish?What do we want to accomplish?

• Who are we trying to reach?Who are we trying to reach?

• What should the message convey?What should the message convey?

• How should the message be presented?How should the message be presented?

• Which is the appropriate medium?Which is the appropriate medium?

• Note:Note: Media results should be tracked. Media results should be tracked.

Techniques Appropriate for Techniques Appropriate for AdvertisingAdvertising

• Determining the techniques most Determining the techniques most appropriate for advertising position appropriate for advertising position vacanciesvacancies..• Employee Referrals.Employee Referrals.• Media (Newspaper Ads,Television & Radio).Media (Newspaper Ads,Television & Radio).• Labor Unions.Labor Unions.• Professional Organizations.Professional Organizations.• Job Fairs.Job Fairs.• College Recruiting.College Recruiting.

Trigger WordsTrigger Words to Avoid to Avoid

• ““Trigger words” to avoid in Trigger words” to avoid in advertising:advertising:

• Help wanted male (or female).Help wanted male (or female).

• Must be young & energetic.Must be young & energetic.

• Patrolman.Patrolman.

• Metermaid.Metermaid.

• Junior executive.Junior executive.

Evaluating the Effectiveness of Evaluating the Effectiveness of RecruitingRecruiting

• Possible criteria:Possible criteria:• Quantity of applicantsQuantity of applicants

• Quality of applicantsQuality of applicants

• Time required to fill openings Time required to fill openings

• Affirmative action goals are metAffirmative action goals are met

• Cost per applicantCost per applicant

Recruiting Expenses . Number of recruits hired

Evaluating Recruiting CostsEvaluating Recruiting Costs

• Direct CostsDirect Costs• AdvertisingAdvertising• Recruiter’s salariesRecruiter’s salaries• Travel expensesTravel expenses• Agency feesAgency fees• Telephone expensesTelephone expenses

• Indirect CostsIndirect Costs• The time managers spend in interviewsThe time managers spend in interviews• Corporate imageCorporate image

Evaluating Recruiting BenefitsEvaluating Recruiting Benefits• BenefitsBenefits

• Reduced time from contact to hire.Reduced time from contact to hire.

• Increased pool of qualified applicants to Increased pool of qualified applicants to select from.select from.

• Improved proportion of acceptance to Improved proportion of acceptance to initial offers.initial offers.

Evaluating the Effectiveness of Evaluating the Effectiveness of RecruitingRecruiting

• Yield ratioYield ratio - a comparison of the number of - a comparison of the number of applicants at one stage of the recruiting applicants at one stage of the recruiting process to the number at the next stage.process to the number at the next stage.

• Selection rateSelection rate - the percentage of personnel - the percentage of personnel hired from a given group. hired from a given group.

• Acceptance rateAcceptance rate - the number of applicants - the number of applicants hired divided by the number of applicants hired divided by the number of applicants offered jobsoffered jobs. .

Evaluating the Effectiveness of Evaluating the Effectiveness of RecruitingRecruiting

• Success rateSuccess rate - the comparison the number of - the comparison the number of applicants hired who became successful applicants hired who became successful employees against the number of who did not.employees against the number of who did not.