Internal and External Recruiting

MANA 5341

Dr. George Benson

benson@uta.edu

How many people do we need?• Product Demand X Labor Productivity• Turnover

Where are they coming from?• Internal Labor Market

Existing employees

• External Labor Market Potential employees

HR Planning

HR Planning

• Labor demand Strategic Planning Succession Planning Managing Retention

• Labor supply Labor markets Specific shortages

Labor SupplyLabor Demand

Forecasting Demand for Employees

• Budgeting• Statistical Techniques

Trend analysis Regression Probability models

• Qualitative Techniques Ask the experts / Delphi Technique

• Needs are then compared to current workforce to identify gaps and decide staffing actions.

• Take into account: Productivity and FTE employees Scheduling and shifts High volume / traffic times

Trend Analysis of HR Demand

1998 $2,351 14.33 164

1999 $2,613 11.12 235

2000 $2,935 8.34 352

2001 $3,306 10.02 330

2002 $3,613 11.12 325

2003 $3,748 11.12 337

2004 $3,880 12.52 310

2005* $4,095 12.52 327

2006* $4,283 12.52 342

2007* $4,446 12.52 355

BUSINESS LABOR = HUMAN RESOURCES

FACTOR PRODUCTIVITY DEMANDYEAR (SALES IN THOUSANDS) (SALES/EMPLOYEE) (NUMBER OF EMPLOYEES)

*Projected figures

Forecasting Supply of Employees

• Internal Labor Market An internal survey of Houston Police Department officers

eligible for retirement in 2004 found that 534 plan to leave that year - a 300% increase over recent years that translates into 1 in 10 officers.

• External Labor Market CVS disclosed in its annual report that it was forced to

cut pharmacy hours in 2003 due to lack to qualified pharmacists.

Forecasting Supply of Employees

• Staffing Tables• Markov Analysis• Skill Inventories• Replacement Charts• Succession Planning

Forecasting Internal Labor Supply

Staffing Tables Graphic representations of the number of

employees currently occupying certain jobs and future (monthly or yearly) employment requirements.

Markov Analysis A method for tracking the pattern of employee

promotions up through and organization.

Markov Analysis for a Retail Company

Internal Demand Forecasting Tools

Skill Inventories Databases of employee KSA’s, education, and used to

match job openings with employee backgrounds.

Succession Planning / Replacement Charts The process of identifying, developing, and tracking key

individuals for executive positions. Listings of current jobholders and persons who are

potential replacements if an opening occurs.

Replacement Charts

Forecasting Databases

PeopleSoft, SAP and Many Others

“Army Leads the Way in Forecasting Its Hiring Needs” Washington Post April 29, 2001

• (WASS) Workforce Analysis &Support System WASS holds 25 years' worth of data on Army civil service

jobs and can be used to analyze long-term workforce trends. • (CIVFORS) Civilian Forecasting System

Computerized Forecasting System Army hires 25,000 people annually

0

2000

4000

6000

8000

10000

12000

14000

16000

17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83

Strength

FY89

Median Age

42

FY89

Median Age

42

Age U.S. Citizen, Direct Hire, Appropriated Fund, Military & Civil Functions

Shifting Age Distributions in the Civilian Workforce

Since 1989• Significant decrease in age groups less than 44• Build-up of retirement eligibles

FY01

Median Age

48

FY01

Median Age

48

911 Call Center Staffing

• Call center handles a peak of 720 calls per hour.

• Average call lasts 1 minute.

• Must be fully staffed 24 hours a day taking into account variations in activity by hour and day.

• Each dispatcher must work only 40 hours in any given week to avoid paying overtime.

• Each dispatcher must have days-off according to any applicable laws and union agreements.

• Take into account the usual absence rate, including sick leave, vacation and other leave .

• Take into account the desires of the employees.

911 Call Center Staffing

• How many dispatchers do I need to answer 720 number of phone calls per hour?

• How many employees do I need to staff a certain number dispatchers per shift?

• What days and hours should the dispatchers be assigned to work?

911 Call Center Staffing

How many dispatchers do I need per shift? Peak of 720 calls per hour and 1 minute per call = 12

dispatchers

How many employees do I need to staff 12 per shift? Three 8 hour shifts X 12 dispatchers = 36 dispatchers for 24

hour coverage “Vacancy factor” is used to account for time off. 36 x 1.7 = 61.2 employees

What days and hours should the dispatchers be assigned to work? Shift Length Variations (8-10-12 or variable hours) Same days-off or rotating? Same shifts or rotating?

“Vacancy Factor”

Indicates how many persons it takes to fill a position for a single shift, taking into account vacation, sick leave, training days, and other types of leave.

1. Total the number of days-off for all dispatchers including days off per week, vacation, sick time, training days etc.

2. Divide the total by the number of employees to obtain an individual average days-off per employee.

3. Subtract the above figure from 365 (days in a year) to estimate the average "days-on” per employee.

4. Divide 365 by the above number to obtain the vacancy or factor. 911 call centers average between 1.4 to 1.7.

Mapping Human Capital

• Core knowledge workers Employees who have firm-specific skills that are directly linked to

the company’s strategy. Example: Senior software programmer

• Traditional job-based employees Employees with skills to perform a predefined job that are quite

valuable to a company, but not unique. Example: Security guard

• Contract labor Employees whose skills are of less strategic value and generally

available to all firms. Example: General electrician

• Alliance/partners Individuals and groups with unique skills, but those skills are not

directly related to a company’s core strategy. Example: Independent product label designer

Mapping Human Capital

Selection:Selection:Job OffersJob Offers

Recruitment:Recruitment:Pool of qualified and Pool of qualified and interested applicantsinterested applicants

HR PlanningHR Planning::Number of jobsNumber of jobs

to be filledto be filled

Job AnalysisJob Analysis::Job Descriptions Job Descriptions

and Minimum KSA’sand Minimum KSA’s

Process Inputs and Outputs

RECRUITMENT

Process of identifying and attracting potential job applicants who are qualified for job openings and interested in working for your organization.

Internal Recruiting

• Why recruit internally?• Why NOT recruit internally

• Open vs. Closed recruiting When should you post a job? When should you NOT post a job?

• Succession Planning Strategic Staffing @ Microsoft GE “Session C”

Succession Planning at GE

• Roughly 75 positions in top 500 are vacant each year.• GE fills about 20% from outside the organization. • Management Development Program

GE Execs prepare resumes listing their accomplishments, strengths, and ideal next moves.

CEO and top managers decide who is selected Only 360 professionals--six classes of 60--get selected.

• Special Job Assignments Lead “Work-Out” “Popcorn Stands” or “Grocery Counters”

• Coaching / Mentoring• Outside classes and learning opportunities

Opportunistic Hiring

• Companies need to hunt for talent continuously to capture people when they are ready to make a move.

Identify ideal candidates and court that person. Hire them for a specific position even if the slot is not currently

open. While they are waiting for that position they can be doing

special projects and getting to know the organization.

• GE brings in 100 people a year

• Within 18 months they are hired from the “bullpen” into line jobs within the different divisions.

External Recruiting Costs

• Average cost per hire: $9,000 for exempt

employees $900 for non-exempt(data from Saratoga Institute)

• Administrative costs Staff time Supplies

• Interview costs• Relocation expenses

• Lost productivity or overtime associated with vacant position.

Some examples:

• Dallas Morning News 30-Day Online Posting - $360 With a 7 days in paper - $500

• Monster.com 60–Day Job Posting - $395 Resume Search Starts $500

• Executive Headhunters 30% – 35% starting salary plus

expenses

Assessing Recruiting Effectiveness

• Cost per hire• Time to hire• Tenure of employees recruited • Job performance of employees recruited• Yield ratios

Applicants per source Candidates per applicant Offers per candidate Acceptance per offer New hire per acceptance

• Measure effectiveness of advertisements by coding responses.

100100505010104433

Yield Ratios

The ratio of applicant inputs to outputs at The ratio of applicant inputs to outputs at various points in the recruitment process.various points in the recruitment process.

Total ApplicantsTotal ApplicantsQualified ApplicantsQualified ApplicantsInvited to InterviewInvited to InterviewJob OffersJob OffersNew HiresNew Hires

Overall Yield:Overall Yield:

YIELDYIELD50% / 2.050% / 2.020% / 5.020% / 5.040% / 2.540% / 2.5

75% / 1.33 75% / 1.33

3% / 33.33% / 33.3

External Recruiting Sources

• Walk-ins Broad• Internet• Print advertisements• Colleges & Universities• Job Fairs• Employment agencies• Temporary agencies• Referrals from current employees• Former employees• Headhunters

Narrow

Deciding on a Source

• Quantity of applicants Large headcount vs. single jobs

• Quality of applicants Specialized skills vs. general skills

• Types of people that the media reaches• Location and Relocation• Budget• Diversity / EEO

Effectiveness of Recruitment Sources

Source: David E. Terpstra, “The Search for Effective Methods.” Reprinted from HRFocus, May 1996. © 1996 American Management Association International. Reprinted by permission of American Management Association International, New York, NY. All rights reserved. http://www.amanet.org/.

What is Most Important For You?

• Interesting work• Wage / Salary• Incentive Pay• Benefits • Growth / Development Opportunities• Job Security• Location

Choosing A Message

Messages can be tailored for individual groups:• Amount of contingent pay• Team vs. individual work and appraisals• Promotion opportunities

“Promotes from within” top consideration for MBA’s Retailing jobs – Wal Mart, Home Depot, Target

• Details about the company “Fun place to work” Environmentally friendly

• “Affirmative Action Employer”

Choosing A Message

Messages should be both attractive and accurate:• Beware of the specificity and accuracy of information

“Unlimited growth potential” Amount of travel required Nature of the work

• Salary included? Benefits described?• Selling the job vs. Realistic job preview

Self-selection Higher commitment and less turnover

Gimme an Rx! Cheerleaders Pep Up Drug Sales

• As an ambitious college student, Cassie Napier had all the right moves - flips, tumbles, an ever-flashing America's sweetheart smile - to prepare for her job after graduation. She became a drug saleswoman.

• Known for their athleticism and persuasive enthusiasm, cheerleaders have many qualities the drug industry looks for in its sales force.

• T. Lynn Williamson, Ms. Napier's cheering adviser at Kentucky, says he regularly gets calls from recruiters looking for talent, mainly from pharmaceutical companies. "They watch to see who's graduating," he said.

NYT 11/28/05

Gimme an Rx! Cheerleaders Pep Up Drug Sales

Factors That Attract Top Talent

Source: E. G. Chambers, H. Hanafield-Jones, S. M. Hankin, and E. G. Michaels, III, “Win the War for Top Talent,” Workforce 77, no. 12 (December 1998): 50–56. Used with permission of McKinsey & Co.

Realistic Job Preview

Is the Army Stretched Too Thin? Time Aug. 24, 2003

“Peacekeeping is not what the U.S. troops were trained to do. Soldiers whose combat edge has been honed inside an M-1 tank are not well equipped to provide a war's victims with food and water.”

"The worst thing you can do, in terms of retention, is to have square pegs stuck in round holes," says David Chu, the Pentagon's personnel chief. "The guy or gal who doesn't get to do what he or she signed up to do is the most dissatisfied soldier."

“An Army of One”

The new slogan drew sharp criticism from some veterans and analysts who said it emphasized individualism over collective action.

MTV and Comedy Central Army dragster and NASCAR

"I keep telling the old guys like me who are a little concerned about the nontraditional message that we're not recruiting you. Go ask your grandson or granddaughter what turns them on, and that's where you're going to find the Army.” Army Recruiter

Teens surveyed said they didn't feel that the Army was "made up of people." They thought joining the Army meant disappearing as a small cog in a large machine.