Chapter 5 Recruiting Applicants. Gaining Competitive Advantage “Kentucky Blue” employee referral...

Chapter 5

Recruiting Applicants

Gaining Competitive Advantage

• “Kentucky Blue” employee referral campaign—awarded prizes to ees who recruited new hires– Hospital met staffing needs– Cost per hire was $2,400 in previous

recruitment programs– Cost per hire with “Kentucky Blue” was $837

per hire

Linking Recruitment to Competitive Advantage

• Five goals:– Achieve cost efficiency– Attract highly qualified candidates– Help ensure that individuals who are hired will

stay with the company (retention)– Assist company’s efforts to comply with

nondiscrimination laws– Help a company create a more culturally

diverse workforce

Achieving Cost Efficiency

• Recruitment costs per hire typically equal one-third of a new hire’s annual salary

• Expenses—advertisement, recruiter and candidate travel, possible referral or sign-on bonuses, agency or search firm fees, recruiters’ salaries and benefits, and manager’s time

• 614 companies reported spending $3.4 billion on recruitment costs in the last 3 years

• Competitive costs gained by holding costs down, while keeping productivity levels constant (competitive advantage enhanced by keeping recruitment costs down and productivity levels constant

Attracting Highly Qualified Candidates

• HRM department must ensure that a sufficient number of qualified candidates are identified—want the best candidates– Notifying of job openings—need to locate

those individuals (capture candidates’ attention and stimulate their interest in applying for positions)


• Influencing Job Acceptance Decisions:– Best candidates will accept job offer (Discuss

Exhibit 5-1 on page 117)– Candidate’s perception of job attractiveness is

heavily influenced by the nature of the information given by the firm, how it is given and how well the applicants are treated

– Recruiter plays key role in attracting candidates (recruiter behavior is an extension of organization’s personality)


• Candidate views recruiter’s behavior as a model for the quality of interpersonal relationships and the nature of supervision existing in the organization (rudeness and disrespect for a female candidate)

Improving Retention Rates through the Use of Realistic Job Previews

• Turnover newly hired employees in the first six months (overzealous recruiters “oversell”

• RJP-Realistic Job Preview can reduce turnover by giving candidate a more realistic view (unfavorable as well as favorable) about the job and organization– Some will withdraw from process– RJPs can reduce turnover by 24%--rresult in annual

savings averaging $271,600

Achieving Legal Compliance

• Organizations can help prevent discrimination charges by targeting efforts toward underutilized groups—protected groups (blacks, Hispanics, or disabled individuals by placing ads)—discuss Exhibit5-2

Creating a More Culturally Diverse Workforce

• Competitive advantage results from a more culturally diverse workforce (reach out to seniors, minorities, welfare-to-work candidates and people from the armed forces)– Companies attracting older workers—The

Travelers, Banker’s Life & Casualty, Honeywell, Motorola and some fast-food restaurants (Let’s name a couple)

Creating a More Culturally Diverse Workforce

• Candidates with disabilities—Kreonite ( a film manufacturer)—by increasing number of employees with disabilities their turnover dropped from 32% to 10 to 12%

• Attracting members of underutilized groups is dependent on organization’s treatment of candidates during recruitment process

• Lose many because recruiters act rude, boring obnoxious, full of themselves, incompetent, barely literate and jerks (females old boy network or an interview in a hotel room)

HRM Issues & Practices

• Recruitment Planning:– Identify the Job Opening—waiting for an

employee to turn in their resignation (take organization a long time to fill the opening)

• 6 to 8 weeks to notify and screen applicants• 1 to 2 weeks to make a decision regarding a job

offer• Decision made-candidate must give two weeks

notice


• Companies should attempt to identify job openings well in advance of announced resignations (plan for openings in the short and long term)

• Questions to ask:– Are any new budgeted positions opening soon?– Is a contract under negotiation that may result in the

need for additional hires?– What is the amount of expected turnover in the next

several months


• Step Two:– “Do we need to find a new person to fill the vacant

position?”– Provide overtime to current employees or job

elimination and job redesign (i.e., incorporating the tasks of the vacant position into currently existing positions

– Address two issues—to fill with core or with contingency personnel and if core personnel are used whether to recruit them internally or externally

Core vs. Contingency

• Core personnel are placed on the organization’s payroll and are considered regular full time ees (discuss “permanent employees)

• Contingency personnel perform work for the company but are not on payroll– With a supplier agency and are loaned to the

company on a temporary basis for a fixed fee (Spherion or Account Temps)


• Suppliers:– Labor leasers, temporary employment

agencies and independent contractors– Leased and temporary work side by side with

core employees often in the same jobs• Contracts with leased employees run longer than

with temporary employees• Independent contractors are selected to perform

the entire function (i.e., maintenance work through a skilled-trades contractor)


• Bureau of Labor Statistics reported 5.6 million contingency jobs in the U.S.—4.3 percent of total workforce– 7,000 temporary staffing firms– In the future orgs will have a very small

knowledge-based full time workforce

Advantages Of Contingency Personnel

• Flexibility to control fixed employee costs(increase or decrease workers based on business conditions)

• HRM burden is relieved—supplier handles administrative work associated with payroll, insurance administration, and benefits. Supplier also screens and hires workers

• Cost Savings—Cost less than core workers due to overhead costs of payroll and insurance

• Those excel at jobs are offered full time employment

Disadvantages Of Contingency Personnel

• Need considerable orientation and training time regarding company procedures and policies

• Less loyal and committed to the “host organization”

• Receive better wages than core employees for performing the same work (inequity)

What Types of Situations Should Contingency Workers Be Used?

• Hard-to-find expertise are required

• Companies are trying to staff offices in geographic areas far from the main headquarters

• Trying to staff positions to work on projects in which high risk factors may jeopardize a company’s existing workers’ compensation rates

Internal versus External Recruiting

• Fill with current employees or applicants from the outside

• Many firms external recruitment is limited to entry-level jobs

• Those above entry level are filled through promotions (enhance employee morale and motivation)—they can advance their careers in the organization

• Results in…reduced turnover, increased job satisfaction, and better job performance


• Other advantages of internal vs. external recruitment:– Qualifications of internal candidates are well

known to employer– Recruitment is less expensive– Job openings can be filled more quickly

internally– Internal candidates are more familiar with

organizational policies and practices—result in less orientation and training


• What problems does internal recruitment bring?– Some candidates will be rejected (resentful)—

greater feelings of inequity and higher rates of absenteeism

– Workers promoted to supervisory positions in units they were already working in—friends become direct reports


• External recruitment for jobs above entry level:– Org wants new ideas and innovations– No qualified internal candidates apply– Org needs to increase percentage of

employees within a underutilized group


• Step Three: What types of individuals are we looking for to fill positions?– Specify worker requirements– Deciding whether to target a certain segment

of the applicant populationo Specifying Worker Requirements

o Duties, reporting relationships, salary range for hiring, and competencies (education, experience, knowledge, skills, and abilities)


o Deciding Whether to Target Certain Segments of the Applicant Population

o Recruiting internally—will the job be posted or should the company select “high potential” employees and groom them for the position

o Externally—inform all potential applicants or target certain types (i.e., underutilized groups or graduates from specific schools that have exceptionally strong programs (KENT STATE UNIVERSITY!!!!!)—or top performing ees from another company—raises ethical questions


• Step Four: Notify the Target Population– How to notify individuals of vacant position

(i.e., job postings, newspaper ads, campus interviews, and so forth)

– Job market fluctuates due to economic conditions—high unemployment a glut of candidates—the company may want to only attract the most qualified candidates—must clearly state job requirements in the vacancy notification (i.e., “Career Mapper”)


• Step Five: Meet with the Candidates– Most qualified are brought in for interviews

and other assessment procedures– Candidate will receive information about the

job and company

Methods of Internal Recruitment

• Computerized Career Progression Systems (e.g., AT&T)– Strengths—candidates found quickly—broad spectrum– Weaknesses—skills inventory only objective or factual info—no

subjective info (i.e., interpersonal skills, integrity

• Supervisor Recommendations– Strengths—total discretion to supervisor in selecting the

individual-know capabilities of the individual– Weaknesses—subjective—subject to bias and possible

discrimination—courts have frowned on this—all potential candidates to be notified about the position


• Job Posting—most commonly used approach to internal recruitment (includes job, salary, work schedule, and necessary worker qualifications)– Ees are concerned how they are treated during

the interview process– Strengths—all candidates notified, enhances

probability that firm’s most qualified employees will be considered for the job. Additionally—employees become responsible for their own career development and enables an ee to leave a bad work situation


• Job Posting—– Weaknesses:

• Position open for an extended period of time—a long process

• System may prevent supervisors from hiring person of their choice

• Some ees hop from job to job with no clear direction

• Bid is rejected they may become alienated from the organization


• Career Development Systems—”fast track” or high potential employees– Strengths—top performers will remain with the

org and system ensures someone is always ready to fill a position

– Weaknesses—ee not selected for grooming may become disenchanted—leave even though they may be a good ee—just not top tier. Selected ee may become frustrated if expected promotion doesn’t materialize


• Employee Referrals: identify friends and associates—ee receives a bonus (Remember the University of Kentucky?)– Strengths—15% of workers through referrals

—remain longer with the company and are better performers. And very cost effective

– Weaknesses—barrier to EEO


• Applicant-Initiated Recruitment—unsolicited resumes and applications– Strengths—efficient and low cost and

candidates are likely to be highly motivated– Weaknesses—timing problem—resumes on

file for a long time and they may have found other employment


• Help Wanted Advertisements—best known way to identify candidates (geographic recruitment area)—local area use newspaper, TV, radio, or billboard—broader audience—USA Today or Wall Street Journal– Strengths—reach large audience in a relatively short

period of time. Ensures a large applicant pool—members of protected groups apply

– Weaknesses—people hired this way don’t perform their jobs as well and are absent more frequently. Also fails to reach most qualified candidates—successful people are not currently looking for work. Also the problem when too many people respond


• Employment Agencies and Search firms

– Public agencies (OBES)– Private Employment Agencies– Executive Search Firms

• Campus Recruiting– Strengths—utilized to fill entry level positions—50% of

all managers and professionals with less than 3 years experience were recruited on campus

– Weaknesses—timely and costly--$1,500 to $6,000 cost per hire. Slow because orgs must define needs 9 to 11 months early


• On-Line Recruiting—HotJobs.com or Careerbuilder.com– Strengths$26 billion dollar business—holds

110 million job listings—much faster and reaches a much larger audience

– Weaknesses—very expensive Job Options charges $5,370 per year for unlimited access—mostly used for regional and national searches. And number of candidates generated can be an administrative burden

What is the Right Method of Recruiting?

• Type of job to be filled• How quickly job needs to be filled• The geographic region of recruitment• The cost of implementing the recruitment

method• Whether the method will attract the right

mix of candidates from an EEO perspective (Discuss Exhibit 5-4 page 135)

Chapter 5 Recruiting Applicants. Gaining Competitive Advantage “Kentucky Blue” employee referral...

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