HRM exam 1 ch5

Outside candidates

The author of Unlock the Hidden Job Market estimates that perhaps half of all positions are filled informally (without formal recruiting). Similarly, one survey found that 28% of those surveyed found their most recent job through word-of-mouth. Nineteen percent used online job boards, 16% direct approaches from employers and employment services, 7% print ads, and only 1% social media sites (although 22% used sites like LinkedIn to search for jobs). For most employers and for most jobs, Internet-based recruiting is by far the recruiting source of choice. Most employers find that the Internet is their best choice for recruitment efforts. Social networking also provides recruiting assistance, especially for mid-level and higher management positions. Advantages - The Web is cost efficient, generating more responses more quickly and providing exposure for a longer time at less cost. Disadvantages - Gathering applications online may exclude more mature applicants and certain minorities. There are also other web recruiting practices that include networking sites, texting, an organization's personal recruiting website, and virtual job fairs. These can generate more responses more quickly and for less cost. However, they have their disadvantages, such as less diversity of applicants. Disadvantages - Online recruiting has two potential problems. First, older people and some minorities are less likely to use the Internet, so online application gathering may inadvertently exclude disproportionate numbers of older applicants (and certain minorities). To prove they've complied with EEO laws, employers should keep track of each applicant's race, sex, and ethnic group. The EEO says that, to be an "applicant," he or she must meet three conditions: he or she must express interest in employment, the employer must have taken steps to fill a specific job, and the individual must have followed the employer's standard application procedure. The second problem is Internet overload: Employers end up deluged with résumés. Self-screening helps: The Cheesecake Factory posts detailed job duties listings, so those not interested needn't apply. Another approach is to have job seekers complete a short online prescreening questionnaire, then use these to identify those who may proceed in the hiring process. Sutter Health contracted with Taleo Corporation, a recruiting applications service provider that is part of Oracle. Taleo's system screens incoming résumés, compares them with Sutter's job requirements, and flags high priority applicants. This helped Sutter cut its typical recruiting process from weeks to days. One survey of Web-based recruiting uncovered alumni from graduate business schools objections: Lack of relevant information Using mandatory formatting for resumes Privacy issues Poor graphics and difficulty in using the site Slow feedback from employers Advertising - While the internet is used a great deal, there are still reasons for using print-based ads. The best medium (internet, newspaper, etc.) should be selected based on the positions for which you are recruiting. For example, if you are seeking a highly specialized researcher, then advertising in the appropriate professional journal is your best bet.

Outside candidates

Rather than bringing people in to do the company's jobs, outsourcing and offshoring send the jobs out. Outsourcing means having outside vendors supply services (such as benefits management, market research, or manufacturing) that the company's own employees previously did in-house. Offshoring means having outside vendors or employees abroad supply services that the company's own employees previously did in-house. Rising wages in China and India, coupled with reputational issues and a desire to invest more in local communities, is prompting employers to bring jobs back. Several U.S. employers including Apple and Microsoft are shifting jobs back to the United States. Executive recruiters (also known as headhunters) are special employment agencies employers retain to seek out top-management talent for their clients. The percentage of your firm's positions filled by these services might be small. However, these jobs include key executive and technical positions. For executive positions, headhunters may be your only source of candidates. The employer always pays the fees. A recent trend is to save the cost of these fees. Employers ranging from General Electric to Sears, PepsiCo, and Campbell Soup now have their own internal executive recruiting offices handling most of their own management recruiting. A SHRM survey found that of 586 employer respondents, 69% said employee referral programs are more cost effective than other recruiting practices and 80% specifically said they are more cost-effective than employment agencies. On average, referral programs cost around $400-$900 per hire in incentives and rewards. Particularly for hourly workers, walk-ins—direct applications made at your office—are a big source of applicants. Sometimes, posting a "Help Wanted" sign outside the door may be the most cost-effective way of attracting good local applicants. On-demand recruiting services (ODRS) are recruiters who are paid by the hour or project, instead of a percentage fee, to support a specific project. For example, when the human resource manager for a biotech firm had to hire several dozen people with scientific degrees and experience in pharmaceuticals, she used an ODRS firm. A traditional recruiting firm might charge 20% to 30% of each hire's salary. The ODRS firm charged by time, rather than per hire. It handled recruiting and prescreening, and left the client with a short list of qualified candidates. College recruiting—sending an employer's representatives to college campuses to prescreen applicants and create an applicant pool from the graduating class—is an important source of management trainees and professional and technical employees. Internships Internships can be win-win situations. For students, they can mean being able to hone business skills, learn more about potential employers, and discover their career likes (and dislikes). And employers can use the interns to make useful contributions while evaluating them as possible full-time employees. A recent study found that about 60% of internships turned into job offers. Unfortunately, some internships turn into nightmares. Many interns, particularly in industries like high-fashion and media, report long unpaid days doing menial work. The New York Times recently quoted one company's manager as saying "we need to hire a 22—22—22," in other words a 22-year-old willing to work 22 hour days for $22,000 a year. Telecommuters do all or most of their work remotely, often from home, using information technology.

Forecasting the supply of outside candidates

A talent management philosophy requires paying continuous attention to workforce planning issues. Managers call this newer, continuous workforce planning approach predictive workforce monitoring. Workforce planning should logically culminate in a workforce action plan. This lays out the employer's projected workforce demand-supply gaps, as well as staffing plans for filling the necessary positions. Succession planning involves developing workforce plans for the company's top positions. Succession planning is the ongoing process of systematically identifying, assessing, and developing organizational leadership to enhance performance. It entails three steps: identify key needs, develop inside candidates, and assess and choose those who will fill the key positions.

Effective recruiting

Assuming the company authorizes you to fill a position, the next step is to build up, through recruiting, an applicant pool. Employee recruiting means finding and/or attracting applicants for the employer's open positions Effective recruiting allows a company to fill open positions while their competitors may have missed solid opportunities. If, for example, you fill open positions 50% faster than industry average, you are more likely to get better talent onboard more quickly. Effective recruiting is a challenge for several reasons. First, some recruiting methods are superior to others. Second, the success you have recruiting depends on non-recruitment issues and policies. Third, employment law prescribes what you can and cannot do when recruiting. For many firms, it's simply much easier to recruit centrally now that so much recruiting is on the Internet. Face-to-face interviewing is the usual culmination of the preliminary recruiting done through the internet. With respect to the role of the supervisor in recruiting, the HR manager charged with filling an open position is seldom very familiar with the job itself. Someone has to tell this person what the position really entails, and what key things to look or watch out for. Only the position's supervisor can do this. The recruiting yield pyramid is based on experience and solid record-keeping. In our example, if a company needs 50 entry-level accountants, using the pyramid, it will need to generate approximately 1,200 leads to fill the new-hire requirement.

Workforce planning and forecasting

Like all plans, personnel plans require some forecasts or estimates. In this case, the forecasts involve: personnel needs, the supply of inside candidates, and the likely supply of outside candidates. The basic workforce planning process is to forecast the employer's demand for labor and supply of labor. Next, identify supply-demand gaps and develop action plans to fill the projected gaps. Trend analysis means studying variations in the firm's employment levels over the last few years. Another simple approach, ratio analysis, means making forecasts based on the historical ratio between two variables. One example might include some causal factor (like sales volume) and the number of employees required (such as number of salespeople). A scatter plot shows graphically how two variables—such as sales and your firm's staffing levels—are related. Markov analysis involves creating a matrix that shows the probabilities that employees in a chain of feeder positions for a key job. "Feeder" positions are those to which a job incumbent may likely be promoted. For example a junior engineer is a feeder position for an engineer. An engineer is a feeder position for a senior engineer who might be promoted to engineering supervisor, and so forth.

Qualifications (or skills) inventories

Manual or computerized records listing employees' education, career and development interests, languages, special skills, and so on, to be used in selecting inside candidates for promotion

Workforce planning and forecasting

Manual systems are used primarily for smaller employers. For example, a personnel inventory and development record form compiles qualifications information on each employee. It will show the present performance and promotability for each position's potential replacement. Larger firms obviously can't track the qualifications of hundreds or thousands of employees manually. Larger employers therefore computerize this information. One software system is Survey Analytics' Skills Inventory Software. Markov analysis involves creating a matrix that shows the probabilities that employees in a chain of feeder positions for a key job. "Feeder" positions are those to which a job incumbent may likely be promoted. For example a junior engineer is a feeder position for an engineer. An engineer is a feeder position for a senior engineer who might be promoted to engineering supervisor, and so forth. As far as keeping information secure the employer should secure all its employee data. Much of the data are personal (such as Social Security numbers and illnesses). Legislation gives employees legal rights regarding who has access to information about them. The legislation includes the Federal Privacy Act of 1974 (for federal workers), the New York Personal Privacy Act of 1985, HIPAA (regulates use of medical records), and the Americans with Disabilities Act. Employers should keep their manual records under lock and key. Computerized records have been known to be compromised by hackers so high levels of system encryption, hashing or other tight security measures are critical.

Internal sources of candidates

Recruiting typically brings to mind LinkedIn, employment agencies, and classified ads, but internal sources—in other words, current employees or "hiring from within"—is often the best source of candidates. Job posting means publicizing the open job to employees (usually by literally posting it on company intranets or bulletin boards). These postings list the job's attributes, like qualifications, supervisor, work schedule, and pay rate. Ideally, the employer's system therefore matches the best inside candidate with the job. In practice, this doesn't always happen. For better or worse internal politics and having the right connections may well lead to placements they seem (and indeed may be) unfair and less than optimal. Some advantages of internal recruiting include the following: Current employees may be more committed Morale may go up since other employees will know about your policy Current employees may require less orientation and training than new hires The disadvantages, however, include: employees may become discontented if they apply for jobs and do not get them. There also is a potential for inbreeding-maintaining the status quo-to occur. To be effective, promotion from within requires using job analysis and posting, using personnel records, and maintaining current skill banks. Rehiring former employees has its pros and cons also. On the positive side, they are known quantities and are already familiar with the organization. But former employees may return with negative attitudes.

Workforce planning and forecasting

Workforce (or employment or personnel) planning is the process of deciding what positions the firm will have to fill, and how to fill them. It embraces all future positions, from maintenance clerk to CEO. (However, most firms call the process of deciding how to fill executive jobs succession planning.) We will see that workforce planners use various tools in their analyses. For example they scan employees' current skills based on employee biographical records, and conduct skills shortage analyses, succession planning, cross-training, and recruitment and mentoring programs. However, analyses aside, judgment should play a big role in workforce planning. Be prepared to modify any analysis based on subjective factors. Towers Watson's Internet software ("Towers Watson Workforce MAPS") helps clients manage this workforce planning process. It has dashboards (see the following four exhibits) for monitoring key metrics, for instance on recruiting and retention; a workforce scan that provides detailed analysis of the client's current workforce and historical workforce trends; a workforce projection showing projected employment and skill levels given the "status quo"; scenario modeling to let the employer compare "what if" scenarios; and an external labor scan for analyzing how the external labor market impacts the employer's workforce.

Workforce planning and forecasting

Workforce (or employment or personnel) planning is the process of deciding what positions the firm will have to fill, and how to fill them. Job analysis identifies the duties and human requirements for each of the company's jobs. The next step is to decide which of these jobs you need to fill, and to recruit and select employees for them. The traditional way to envision recruitment and selection is as a series of hurdles (Figure 5-1): 1. Decide what positions to fill, through workforce/personnel planning and forecasting. 2. Build a pool of candidates for these jobs, by recruiting internal or external candidates. 3. Have candidates complete application forms and perhaps undergo initial screening interviews. 4. Use selection tools like tests, background investigations, and physical exams to screen candidates. 5. Decide who to make an offer to by having the supervisor and perhaps others interview the candidates. We will see in this and the next two chapters that employers increasingly conduct activities 1 through 5 electronically.