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Recruiting and Managing in Labor Markets

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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 relevant labor 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      Strategic    Recruiting
HRP   Organizational     Recruiting    Method
      Responsibilities    Decisions    Selection
Assignment of Organizational
      Responsibilities

• HR Staff                     • Operating Mgrs’
  Responsibilities               Responsibilities
• Forecast recruiting needs.   • Anticipate vacancies.
• Recruiting ads &             • Determine applicant KSA.
  campaigns.                   • Assist recruiting effort w/
• Plans & conducts               information about job
  recruiting efforts.            requirements.
• Audits & evaluates all       • Provide feedback on
  recruiting activities          success/failure of
                                 recruiting activities.
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 Population size 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/occupational labor markets
  • Construction
  • Manufacturing
  • Retail trade
• Educational/technical labor 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/Movement
                       Analysis
   (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/Movement
                        Analysis
  (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
    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 Focused Recruiting
• 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.