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Human Resources Management MG 6123 Spring 2013 Professor Marc S.

Miller

fundamentals of

Human Resource Management 4th


by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

edition

CHAPTER 5

Planning for and Recruiting Human Resources


McGraw-Hill/Irwin Copyright 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.

What Do I Need to Know?


1. Discuss how to plan for human resources needed to carry out the organizations strategy. 2. Determine the labor demand for workers in various job categories. 3. Summarize the advantages and disadvantages of ways to eliminate a labor surplus and avoid a labor shortage.
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What Do I Need to Know? (continued)


4. Describe recruitment policies organizations use to make job vacancies more attractive. 5. List and compare sources of job applicants. 6. Describe the recruiters role in the recruitment process, including limits and opportunities.

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The Process of Human Resource Planning


Organizations should carry out human resource planning so as to meet business objectives and gain a competitive advantage over competitors.
Human resource planning compares the present state of the organization with its goals for the future Then identifies what changes it must make in its human resources to meet those goals
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Figure 5.1: Overview of the Human Resource Planning Process

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Forecasting
Forecasting: attempts to determine the supply and demand for various types of human resources to predict areas within the organization where there will be labor shortages or surpluses. There are three major steps to forecasting: 1. Forecasting the demand for labor 2. Determining labor supply 3. Determining labor surplus or shortage

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Forecasting the Demand for Labor


Trend Analysis Constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year. Leading Indicators Objective measures that accurately predict future labor demand.

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Determining Labor Supply


Transitional matrix: a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period. It answers two questions: 1. Where did people in each job category go? 2. Where did people now in each job category come from?

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Table 5.1: Transitional Matrix Example for an Auto Parts Manufacturer

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Determining Labor Surplus or Shortage


Based on the forecasts for labor demand and supply, the planner can compare the figures to determine whether there will be a shortage or surplus of labor for each job category. Determining expected shortages and surpluses allows the organization to plan how to address these challenges.

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Goal Setting and Strategic Planning


The purpose of setting specific numerical goals is to focus attention on the problem and provide a basis for measuring the organizations success in addressing labor shortages and surpluses. The goals should come directly from the analysis of supply and demand. For each goal, the organization must choose one or more human resource strategies. Organizations should retain and attract employees who provide a core competency (what makes it better than competitors)
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Options for Reducing a Surplus


Downsizing Pay reductions Work sharing Early retirement Demotions Hiring freeze

Transfers Natural attrition

Retraining
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As the average age of many workers in skilled trades grows, the coming demand for workers in many trades is expected to outstrip supply in the United States. There is a potential for employers in some areas to experience a labor shortage because of this.
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Options for Avoiding a Shortage


Overtime Temporary employees Turnover reductions Technological innovation
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Outsourcing

Retrained transfers

New external hires

Table 5.2: HR Strategies for Addressing a Labor Shortage or Surplus

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Test Your Knowledge


A public accounting firm of 250 employees realizes they have a surplus of 15 support personnel (not auditors). What should they do?
A. B. C. D. Hire temporary workers Offer early retirement Downsize people in those positions Wait for attrition and implement a hiring freeze for those positions
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Implementing and Evaluating the HR Plan


When implementing the HR strategy, the organization must hold some individual accountable for achieving the goals. That person must also have the authority and resources needed to accomplish those goals. Regular progress reports should be issued. The evaluation of results should not only look at the actual numbers, but should also identify which parts of the planning process contributed to success or failure.
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Applying HR Planning to Affirmative Action


Workforce Utilization Review: a comparison of employees in protected groups with the proportion that each group represents in the relevant labor market. The steps in a workforce utilization review are identical to the steps in the HR planning process. The organization must assess current utilization patterns, then forecast how they are likely to change in the near future. If the analyses forecast underutilization of certain groups, then goals and a plan will be established.

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Recruiting Human Resources


The role of human resource recruitment is to build a supply of potential new hires that the organization can draw on if the need arises. Recruiting: any activity carried on by the organization with the primary purpose of identifying and attracting potential employees.

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Figure 5.2: Three Aspects of Recruiting

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Personnel Policies
Several personnel policies are especially relevant to recruitment:

Internal versus external recruiting Lead-the-market pay strategies Employment-at-will policies

Image advertising

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Image advertising, such as in this campaign to recruit nurses, promotes a whole profession or organization as opposed to a specific job opening. This ad is designed to create a positive impression of the profession, which is now facing a shortage of workers.

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Recruitment Sources: Internal Sources


Job Posting: the process of communicating information about a job vacancy:
On company bulletin boards In employee publications On corporate intranets Anywhere else the organization communicates with employees

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Advantages of Internal Sources


1. It generates applicants who are well known to the organization. 2. These applicants are relatively knowledgeable about the organizations vacancies, which minimizes the possibility of unrealistic job expectations. 3. Filling vacancies through internal recruiting is generally cheaper and faster than looking outside the organization.
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One in Three Positions Are Filled with Insiders

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Recruitment Sources: External Sources


Direct applicants Public employment agencies

Referrals Advertisements in newspapers and magazines Electronic recruiting Private employment agencies

Colleges and universities

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Figure 5.3: External Recruiting Sources Percentage of Employees Hired

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Evaluating the Quality of a Source


Yield Ratios
A ratio that expresses the percentage of applicants who successfully move from one stage of the recruitment and selection process to the next. By comparing the yield ratios of different recruitment sources, we can determine which source is the best or most efficient for the type of vacancy.

Cost Per Hire


Find the cost of using a particular recruitment source for a particular type of vacancy. Divide that cost by the number of people hired to fill that type of vacancy. A low cost per hire means that the recruitment source is efficient.

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Table 5.3: Results of a Hypothetical Recruiting Effort

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Your Experience
In your last job search, what was your experience with a recruiter or other point of contact before you were offered the job?
A. B. C. D. E. Lousy, I didnt take the job Lousy, but I took the job anyway Great, but I didnt take the job Great, I took the job The experience wasnt memorable.

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Recruiter Traits and Behaviors


Characteristics of the Recruiter

Behavior of the Recruiter

Enhancing the Recruiters Impact

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Recruiter Characteristics and Behavior


True = A False = B
Applicants respond more positively when the recruiter is an HR specialist than line managers or incumbents. Applicants respond positively to recruiters whom are warm and informative Personnel policies are more important than the recruiter when deciding whether or not to take a job. Realistic job previews should highlight the positive characteristics of the job rather than the negative.

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Figure 5.4: Recruits Who Were Offended by Recruiters

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Enhancing the Recruiters Impact


Recruiters should provide timely feedback. Recruiters should avoid offensive behavior. They should avoid behaving in ways that might convey the wrong impression about the organization. The organization can recruit with teams rather than individual recruiters.

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Recruiting Exercise (1 of 2)
You are the regional HR director of the restaurant chain (e.g., Ruby Tuesdays or TGI Fridays) and responsible for recruiting all staff for the restaurants in your region. One of the stores in your region needs to hire servers.

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Recruiting Exercise (2 of 2)
1. What knowledge, skills, and abilities are required for the positions you are recruiting? 2. Will your sources of applicants be internal, external, or both? Explain. 3. What recruiting strategies will you use? 4. What metrics will you use to measure your success?

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Summary
The first step in human resource planning is personnel forecasting. Through trend analysis and good judgment, the planner tries to determine the supply and demand for various human resources. The next step is to determine the labor demand for workers in various job categories. Analysis of a transitional matrix can help the planner identify which job categories can be filled internally and where high turnover is likely.

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Summary (continued)
To reduce a surplus, downsizing, pay reductions, and demotions deliver fast results but at a high cost in human suffering that may hurt surviving employees motivation and future recruiting. To avoid a labor shortage, requiring overtime is the easiest and fastest strategy. Internal recruiting generally makes job vacancies more attractive because candidates see opportunities for growth and advancement.

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Summary (continued)
Lead-the-market pay strategies make jobs economically desirable. Internal sources are usually not sufficient for all of an organizations labor needs. Through their behavior and other characteristics, recruiters influence the nature of the job vacancy and the kinds of applicants generated.

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