Workforce Planning and Employment

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SPHR Exam Prep: Senior Professional in Human Resources

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This chapter is from the book

This chapter is from the book 

SPHR Exam Prep: Senior Professional in Human Resources

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Recruitment

Objective: Gain an Understanding of Recruitment

The outcome of the workforce strategic-planning process provides the organization with information as to how many employees and what types will be needed in the future. One of the possibilities is that fewer employees will be needed. That process is often referred to as decruitment. It is also possible, and frequently likely, that the organization might need additional employees but that the current workforce does not have and is not likely to be able to develop the skills needed. In that case, the organization might be involved in both recruitment and decruitment at the same time. Decruitment strategies and actions are discussed later, in the "Organizational Exit" section.

Recruitment is the process of attracting qualified applicants for the organization to consider when filling its positions. Two strategic determinations must be made initially before the process begins. The first is whether the organizations want to do its own recruiting or to contract it out. Organizations lacking internal expertise might want to have an outside vendor do the recruiting for them. The vendor might be used for all recruiting or only for specified jobs. Some organizations find that it is cost-effective to outsource all recruiting gaining access to expertise and efficiencies of scale. Other organizations find that using vendors to recruit for specific jobs is most effective and efficient.

There are several scenarios in which having a vendor perform the recruiting and initial screening might be advantageous to the organization. The first scenario involves hard-to-fill jobs. Recruitment firms often specialize in filling specific positions, such as CEO or research scientist. In these cases, outside vendors may be in a better position that the organization to attract qualified candidates. The second scenario deals with entry-level workers. Organizations often find it cost-effective to deal with employment and temporary agencies to find these types of workers.

The second strategic issue is "make or buy." The organization must decide whether to engage in a practice of internal promotions and transfers (make) to fill its positions or to go to the external labor market (buy) to fill them. The decision is driven by the outcome of the strategic workforce-planning process, which evaluates the availability and skill levels of internal applicants. It is the SPHR’s responsibility to ensure that the recruitment strategy is in alignment with organizational goals and objectives. For example, an emerging organization in a highly technical field might engage in predominantly external recruitment because it does not have the time or capability to develop expertise internally and because the technical skills required are constantly changing. However, an organization operating in a relatively stable environment and attempting to compete based on cost-leadership and efficiency might find that internal recruitment is more in alignment. Also, organizations are often constrained by labor agreements that require an internal process prior to looking for applicants externally. The decision, in practice, is not an either/or choice. Organizations often pursue both strategies, frequently simultaneously. Table 3.7 summarizes the advantages and disadvantages of internal versus external recruitment.

Table 3.7 Advantages and Disadvantages of Internal Versus External Recruiting

If the organization decides to not contract out recruitment, it must determine what types of recruitment activities to engage in and it must evaluate the effectiveness of those activities. The following sections discuss the potential methods that an organization can use to recruit both internally and externally. Also discussed are recruitment metrics used to evaluate recruitment activities.

Internal Recruiting

Internal recruiting involves recruiting current or former employees for job openings in the organization along with soliciting referrals from current employees. Various methods are discussed in this section.

Human Resource Management Information System

Sophisticated HRISs and employee databases are excellent sources of applicants. Many of these systems include data on employee training, education, and skills. In addition, some systems also include information on employee career goals and employee performance ratings. The system is able to match the requirements of a job with the characteristics and career goals of an employee to instantaneously create a potential applicant list. These employees can then be contacted, often by an automated email system, regarding their interest in a job opening.

Job Posting

Job posting is the process of advertising and publicizing job openings to employees. This might be accomplished by physically posting the opening on bulletin boards or by electronically posting them on the company’s intranet or Internet. It is then up to the employee to actually apply for the position.

Job Bidding

Job bidding is similar to job posting and is more common in unionized environments. Job bidding permits an employee to apply for a position even if no openings exist. The employee’s application is then held for a period of time, usually for a year, and the employee receives automatic consideration should the position come open. The process is often referred to as automatic consideration. Job bidding might be more efficient when openings for a job come open quite frequently. The employer can go to the job bid list without having to post each opening separately.

Former Employees

Former employees are often a good source of applicants. Former employees include three categories:

• Employees that have temporarily dropped out of the workforce For example, individuals that have elected to stay home with their young children. Often these former employees are ready to come back to the workforce or are willing to accept part-time employment.
• Retirees that might be willing to come back to the employer on a consultant or contract basis.
• Employees that have left the organization for work in another organization.

Assuming that these employees were good performers prior to their exit from the organization, they are likely to be good performers on their return. Many organizations have alumni and retiree clubs and groups to keep in touch with former employees. This frequently provides a rich base from which to recruit. Often employees leave thinking that a new organization provides a better working environment, better pay, or more challenging work, only to be disappointed. They often can be enticed back to the organization.

Former Applicants

Applicants that previously applied for positions with the organization are to some extent known quantities, depending on how far they got in the selection process. Good applicants should be reconsidered. Many organizations keep files on excellent candidates that were not selected for prior openings and re-recruit them for current positions. This method is both efficient and effective. Much of the screening might have already been done and, if the applicants were previously interviewed, they might have already been judged as acceptable.

Employee Referrals

Many organizations have active formal employee referral programs, particularly in tight job markets or where the employer has difficult-to-fill or high-turnover positions. These programs reward employees for referring applicants to the organization. Other organizations have less formal programs and encourage employees to refer potential applicants, but do not provide an incentive for doing so.

Experience and research show considerable benefit to the employee referral type of recruitment. First, employees are not likely to refer applicants that would not be good employees. They do not want to be embarrassed by the performance or conduct of their referral. Also, candidates that are referred by employees typically already have begun the orientation process and have somewhat of a realistic job preview via their relationship with the current employee. Finally, there is a positive correlation between employee referral and employee retention of those hired as a result.

There is, however, one potential problem that can associated with employee referrals. Employees tend to refer their relative and friends, who most likely are of the same ethnicity or sex as themselves. Therefore, this type of recruitment does not normally facilitate the achievement of diversity and affirmative action plan goals and can create adverse impact. This is particularly true if the organization has a past practice of discrimination.

External Recruiting

External recruiting involves obtaining applications from individual external to the organization. A threshold strategic issue for the SPHR is the determination of the appropriate external labor market from which to recruit. For lower-level jobs, the appropriate market is most likely to be the local labor market—defined as the geographical area from which most people are willing to commute. This subject is discussed in greater depth in Chapter 5.

However, a sufficient applicant pool might not be available in the local labor market for many jobs. For certain types of jobs, particularly professional jobs, the appropriate labor market is determined in terms of the profession. Recruiting is often most effective when performed inside the profession, using professional organizations and professional journals for example. For mid-level types of positions, a regional labor market might produce a better applicant pool, whereas many top-level and highly specialized jobs require recruiting nationally and even internationally.

Of course, use of the Internet, which is discussed later, facilitates a broader recruiting area. However, Internet recruiting often is not appropriate, effective, or efficient for many jobs and the critical decision affecting the success of a recruitment effort remains in the selection of the appropriate labor market from which to recruit. External recruiting can involve many methods, the most common of which are discussed in this section.

Media Advertising

Media advertising refers to recruitment using radio, television, newspapers, and so forth. This is a technical area requiring expertise not normally available within the HR function. Writing effective advertisements frequently calls for professionals in the field. Professionally done media advertising can be an extremely effective and cost-efficient recruitment method. It allows the organization to reach a large number of potential applicants, often resulting in significant savings in hiring costs. By use of appropriate outlets targeted protected groups can be reached, which facilitates diversity and affirmative action efforts. However, when poorly done media advertising can be extremely expensive.

College and School Recruiting

College and university recruiting is a good source of entry- and mid-level managers and professionals. In general, college recruiting requires a continuing relationship with the organization and its placement office, and a history of hiring the college’s graduates. These together tend to put the organization at the front of the referral queue. However, this is often an expensive proposition requiring expenditure of both staff and financial resources. Sponsoring professional clubs and providing scholarships and internships can be expensive if the organization never hires individuals from the college. Many organizations have scaled down their college recruiting efforts to focus on a few schools where they can maintain a continuing presence and hire excellent candidates in a cost-effective manner.

Two-year colleges (junior and community colleges) and technical schools can be good sources for entry-level, para-technical, and para-professional positions. The strategies associated with recruiting at these institutions are the same as for higher-level institutions—only the type of positions being recruited for is different.

High schools are a good source of blue-collar, clerical, and retail entry-level positions. Many organizations do not realize the potential of recruiting at this level, often assuming that graduates will pursue higher education. Good relationships with school counselors and athletic departments often facilitate this type of recruitment.

Labor Unions

Labor union hiring halls are often a good, and sometimes the only, source of applicants. This is particularly true in the construction trades.

Employment Agencies

As mentioned earlier in the discussion of outsourced recruitment, employment agencies and job search firms often are good sources of job candidates. First, all states have unemployment offices, displaced worker units, or similar agencies performing the same function. These are often sources of applicants.

Private employment agencies can be viable sources of applicants. These firms most frequently charge the organization a fee for referral of candidates, either on a contingency or retainer basis. Contingency-based firms receive the fee only if the applicant is hired, whereas retainer-based firms receive a fee for engaging in the search even if no one is hired. Employment agencies normally prescreen the applicants for the organization and refer only those that are qualified. The agencies often have contacts and relationships that the organization does not, and might be able to locate excellent candidates for higher-level managerial and hard-to-fill technical and professional positions. Although using employment agencies and search firms might be cost-effective and yield results that the organization could not achieve on its own, doing so can be extremely expensive. Costs for using these types of firms often run 25–30% of the yearly salary for the position being recruited.

Temporary Employment Agencies

Many private employment agencies provide temporary, part-time, or just-in-time workers. These employees are paid by the temporary agency and are not employees of the organization. Temporary agencies screen these workers and often provide training. These agencies have traditionally provided lower-level blue-collar and clerical workers, but that is no longer the case. There are now temporary employment agencies that specialize in providing technical, professional, and managerial temporary workers. There are even agencies that specialize in temporary executives up to and including CEOs.

The advantage of these agencies is in their flexibility. The employer has no continuing obligation to the employee and can, within limits, rotate them in and out of the organization. This is especially important to firms than have frequent variations in demand or are seasonal in nature. Employers pay a fee to the temporary agency and do not have to worry about employee benefits or employment taxes. In addition, organizations often use the temporary employment as a probationary period. The temporary agency permits the organization to hire these temporary workers as permanent employees for a fee.

Customers

Loyal customers are pleased with the organization’s product or services. To some extent they have made a commitment to the organization, and might be familiar with the culture, the responsibilities of some of the jobs, and the working conditions. In other words, they have a realistic job preview. Many organizations have found customers to be an excellent source of candidates. They frequently recruit actively in their retail establishments, taking job applications on the spot and providing easy access to employment information and application procedures on their websites.

Suppliers and Competitors

Employees of suppliers and competitors are often good sources of applicants. They are familiar with the industry and frequently familiar with the organization itself.

Professional and Trade Associations

Virtually all professional and trade associations provide placement services for their members and allow employers to post job openings on their website, typically for a fee. In addition, these associations normally publish newsletters or journals in which the organization can place recruiting advertisements. Most associations also have annual meetings or conventions that provide additional opportunities for the organization to recruit in person. Organizations have found professional and trade associations to be excellent sources of applicants, particularly for specialized types of jobs such as banking, finance, human resource management, and so forth. Some associations are organized around gender or ethnicity. They are good sources of candidates for organizations engaging in diversity or affirmative action initiatives.

Walk-Ins

Many organizations accept applications from individuals that visit the organization for the express purpose of inquiring about job opportunities. Walk-ins have been found to be good sources of entry-level employees. The mere fact that they have taken the time and effort to visit the organization shows some level of interest and commitment.

Job Fairs and Special Events

Job fairs held by other organizations—for example, the local chamber of commerce—tend to attract a wide variety of applicants and might provide the organization with numerous recruiting leads and applicants. However, many organizations have found that some individuals attending these types of events are merely shopping and are not really interested in changing jobs. In addition, many of the individuals tend to have low skills and might be largely unemployable. That being said, job fairs held by organizations such as professional associations (for example, the Society for Human Resource Management) can be an excellent source of candidates.

Internally held job fairs have proven to be an effective means of recruitment, particularly for entry-level blue-collar and clerical employees. Organizations often open up their facilities during the evening or on the weekend and provide free food and prizes as an incentive for potential applicants to visit. Actually visiting the work site begins the realistic job preview process and might result in better retention of applicants who are actually hired.

Organizations have also found that using special events as a recruiting tool has proven effective. A booth or kiosk at sporting and civic events could produce viable candidates.

Internet

The Internet has opened up all sorts of possibilities and associated challenges in recruiting. It provides access to a worldwide population of potential applicants. There are essentially three major sources of applicants using e-recruiting: commercial job boards, professional/trade association websites, and the employer’s website.

Many organizations have successfully used commercial job boards such as Monster.com and Hotjobs.com where, for a fee, employers can post job opportunities. Job boards have been found to provide access to a large number of qualified candidates. However, because of ease of access many of the candidates often are not seriously looking for a new job but are merely testing their competitiveness in the job market or trying to determine current compensation rates.

As discussed previously, many professional and trade associations publish job openings on their website. These can provide viable candidates for specialized positions.

Most larger employers now provide employment information on their websites. They typically find this to be an effective and efficient means of generating applications. To be effective, access to job information must be easy. Most employers provide a button on the home page that leads prospective applicant to the information. Effectiveness is increased if the web page for employment information continues the same format and theme as the home page and is consistent with the organization’s image and culture. This is an important continuation of the employer branding previously discussed.

Internet recruiting can save time because the application forms and/or resumes are readily available. Applicants can be immediately contacted via email. Internet recruiting is typically much less expensive than media advertising or onsite recruiting initiatives. Internet recruiting expands the relevant job market to the globe and has the potential to generate a large number of qualified candidates.

However, the ease of application in Internet recruiting and the wide exposure of job opening information often generate applications from those that are not qualified or that are not seriously looking for work. In fact, Internet recruiting might generate too many applications that must be screened and applicants that must be contacted, thus increasing the workload on HR. Fortunately, there are now software packages that can largely automate many of these processes.

Internet recruiting poses problems for the tracking of applicant flow data. However, recent rulings by both the EEOC and OFCCP have clarified the issue somewhat. As a general overview of that guidance, employers have to consider applications received on the Internet as applicants for applicant flow data only if the organization actually considers the applicant for an open position, if the applicant maintains continued interest and follows the organization’s standard application process, and if the applicant expresses interest and is basically qualified for a particular position.

A final concern about Internet recruiting is the potential for adverse impact caused by what is known as the digital divide. Although access to the Internet has increased dramatically, certain minority groups might have less access than other groups.

Outplacement Firms

Many organizations have formed alliances with outplacement firms. These firms provide placement assistance to individuals, many of whom have been involuntarily separated from their former employer through no fault of their own. These individuals are often excellent candidates.

Evaluating Recruitment Effectiveness

The SPHR provides leadership in evaluating the efficiency and effectiveness of recruitment activities. Efficiency evaluation is largely operational in nature, whereas effectiveness evaluation is strategic. Unfortunately, organizations tend to do a rather good job at developing efficiency metrics, but a poor job of developing effectiveness measures. The efficiency metrics provide information regarding the accomplishments of short-term objectives. However, the critical issue is the long-term strategic impact of recruitment activities on the success of the organization (effectiveness metrics).

Typical efficiency metrics are as follows:

• Quantity of applications This is a gross measure of the effect of recruitment activities with the philosophy that the more applications an organizations gets, the more likely it is to fill its openings with highly qualified individuals. Quantities can be evaluated by source, giving a gross estimate of the cost-effectiveness of television versus newspaper advertising, for example.
• Quality of applications Organizations might want to evaluate the percentage of applications that were considered qualified for the job or that were actually offered an interview. Again, this is a gross measure of the impact of the recruitment program and can be analyzed by the source of the application.
• Time to fill Most organizations evaluate the time it takes to fill a position, typically in terms of the number of days from the date the request is received in the HR department until new employee actually reports onboard. These data are then compared against goals, historical averages, and benchmarks to evaluate recruitment efficiency.
• Yield rates Yield rates were discussed earlier in this chapter. Recruitment is often evaluated in terms of yield rates from one stage of the process to another. For example, the organization needs to know what percentage of applicants were actually considered to be qualified for the job, what percentage that were qualified passed the initial screening, what percentage passing the initial screening also passed the pre-employment tests, what percentage passing the pre-employment test were offered in-person interviews, and so forth. This provides an additional measure of efficiency in that higher yield ratios reduce wasted staff effort and produce more viable candidates for the organization to consider.
• Cost per hire Many organizations track the average cost to hire employees, typically by dividing all recruitment-related expenses by the number of actual hires. The measure provides an indication of the efficiency of the recruitment program in terms of costs, but yields little information regarding effectiveness. Also, the calculation of recruitment costs is often difficult.
• Selection rates Selection rate provide some indication of efficiency because they evaluate the number of new hires against the total number of applicants. For example, if 50 hires were made from an application pool of 100, the selection rate is 50%.

However, one cannot really necessarily evaluate that metric in terms of effectiveness. Presumably, the higher the selection rate, the more efficient and effective recruitment process. But are selections being made using the "any warm body" philosophy because positions must be filled with any applicant that is minimally qualified? Selection rates along with other measures of efficiency do not give the organization any indication of the actual performance of an individual after being hired, nor do they tell the organization anything about employee retention.

• Acceptance rates Some organizations track selection rates, which are typically evaluated as the number of applicants that accept the position divided by the number of applicants that were offered the position. The higher the ratio, the more efficient the recruitment program is considered to be. However, acceptance rates can be significantly affected by outside influences that have nothing to do with the quality of recruitment efforts. For example, acceptance rates could be expected to be appreciably higher during periods of high unemployment.

This metric is frequently used to evaluate both individual recruiter and recruitment sources. When evaluating individual recruiters, the interest is in how effective the recruiter is in actually convincing the applicant to accept the job. This might be a critical issue, especially with higher-level jobs where the costs of recruiting are substantial. The organization is also interested in knowing whether the acceptance rate differs among the various recruitment methods so that it can adjust its strategies.

Effectiveness measures are those that evaluate the long-term strategic impact of the recruitment program. As discussed in Chapter 4, "Human Resource Development," in the context of evaluation of training and development there is often an inverse relationship between the value of data and analysis and its difficulty. However, this is the value added by the SPHR. The SPHR must develop metrics that strategically evaluate recruitment efforts in terms of their impact on organizational effectiveness and strategic success.

An effectiveness measure frequently overlooked is that of customer satisfaction with the recruitment process and results. In this case, customers can be defined in a number of ways. First, management satisfaction should be evaluated. Managers should be questioned as to their overall satisfaction with the recruitment process and the timeliness of actions and the quality of recruits in particular. Because managers at different levels often have different expectations, satisfaction should be surveyed at multiple levels in the organization. The second, and probably more important, customer group is the actual recruits themselves. This includes both those who were hired and those who were rejected for employment. They should be questioned about their perspectives regarding the various stages of the recruitment and selection process. These data often provide valuable information regarding recruitment effectiveness and identify areas that might need improvement.

The effectiveness of recruitment efforts should be evaluated in terms of eventual employee performance and retention. Therefore, the SPHR should lead the HR function in engaging in longitudinal studies in these areas. In the press of current requirements historical research is often ignored. Yet these data are the ones that allow the organization to fine-tune current operations. Organizations that have effective recruitment evaluation programs periodically (usually yearly) evaluate a sample of hires from previous years, correlating retention, promotion rates, and performance data with recruitment sources, selection tests, and other employment practices. Evaluation of individual recruiters can also be done using the same process. These data provide rich information as to the long-term effectiveness of recruitment programs. The potential value of these types of evaluations is, however, moderated by the nature of the organizational environment and the organizational strategies. These data have the greatest impact in planning and engaging in activities to improve the recruitment program when the environment is relatively stable.