Chapter 05 - Planning for and Recruiting Human Resources Chapter Five: Planning for and Recruiting Human Resources Human Resource Management 3rd edition by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright . 116 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: THE LECTURE PLANNING FOR AND RECRUITING HUMAN RESOURCES Chapter Summary This chapter explores how organizations carry out human resource planning. At the beginning, the chapter identifies the steps that go into developing and implementing a human resource plan. Each subsequent section of the chapter has a focus on recent trends and practices, such as downsizing and outsourcing, which are prevalent to human resource management. Throughout the remaining sections, an exploration into the recruiting process will be undertaken. At the end of the chapter, a discussion will be presented on the role of human resource recruiters. Learning Objectives After studying this chapter, the student should be able to: 1. Discuss how to plan for human resources needed to carry out the organization's 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. 4. Describe recruitment policies organizations use to make job vacancies more attractive. 5. List and compare sources of job applicants. 6. Describe the recruiter's role in the recruitment process, including limits and opportunities. 117 Chapter 05 - Planning for and Recruiting Human Resources I. Introduction 1. With a bigger workforce, an established company needs more creativity to avoid layoffs. 2. Trends and events that affect the economy also create opportunities and problems in obtaining human resources. 3. To prepare for and respond to these challenges, organizations engage in human resource planning, defined as identifying the numbers and types of employees the organization will require to meet its objectives. II. The Process of Human Resource Planning 1. Organizations should carry out human resource planning so as to meet business objectives and gain an advantage over competitors. 2. 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 these goals. The changes may include downsizing, training existing employees in new skills, or hiring new employees. 3. Figure 5.1, Overview of the Human Resource Planning Process, identifies the stages of the human resource planning process. PPT Slide 5: A. Forecasting 1. The first step in human resource planning is forecasting. This is defined as the 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. 2. Forecasting supply and demand can use statistical methods or judgment. Statistical methods capture historical trends in a company's demand for labor. In situations where statistical methods are of little use, the organizations must rely on the subjective judgments of experts. 118 Chapter 05 - Planning for and Recruiting Human Resources 3. Forecasting the Demand for Labor: An organization forecasts demand for specific job categories or skill areas. There are several ways of making such forecasts: a. Trend analysis, which is constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year. These statistics are called leading indicators, which are objective measures that accurately predict future labor demand. They may include measures of the economy, actions of competitors, changes in technology, and trends in the composition of the workforce. b. Statistical planning models are useful when there is a long, stable history that can be used to reliably detect relationships among variables. These models almost always have to be complemented with subjective judgments of experts. 4. Determining Labor Supply: Determining the internal labor supply calls for a detailed analysis of how many people are currently in various job categories or have specific skills within the organization. a. One type of statistical procedure that can be used for this purpose is the analysis of a transitional matrix. This is a chart that lists job categories held in one period and shows the proportion of employees in each of those job categories. b. Table 5.1 provides an example of a transitional matrix. Matrices such as the one indicated in Table 5.1 are extremely useful for charting historical trends in the company's supply of labor. More importantly, if conditions remain somewhat constant, matrices can be used to plan for the future. PPT Slide 9: c. Historical data may not always reliably indicate future trends. Thus, planners need to combine statistical forecasts of labor supply with expert judgments. d. Besides looking at labor supply within the organization, planners should examine trends in the external labor market. 5. 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. 119 Chapter 05 - Planning for and Recruiting Human Resources 6. The \"Best Practices\" Box: A Stealthy Plan for Red 5 Studios highlights how a video game company, Red 5 Studios, developed a creative recruiting plan to attract and recruit top-notch game developers. B. Goal Setting and Strategic Planning 1. The second step in human resource planning is goal setting and strategic planning. 2. The purpose of setting specific numerical goals is to focus attention on the problems and provide a basis for measuring the organization's success in addressing labor shortages and surpluses. The goals should come directly from the analysis of labor supply and demand. 3. For each goal, the organization must choose one or more human resource strategies. 4. Table 5.2 shows major options for reducing an expected labor surplus and avoiding an expected labor shortage. The options differ widely in their expense, speed, and effectiveness. PPT Slide 15: 5. Another consideration in choosing an HR strategy is whether the employees needed will contribute directly to the organization's success. Organizations are most likely to benefit from hiring and retaining employees who provide a core competency, which is a set of knowledge and skills that make the organization superior to competitors and create value for customers. 6. Downsizing: This is the planned elimination of large numbers of personnel with the goal of enhancing the organization's competitiveness. The primary reason organizations engage in downsizing is to promote future competitiveness. According to surveys, organizations do this by meeting four objectives: a. Reducing costs b. Replacing labor with technology c. Mergers and acquisitions 120 Chapter 05 - Planning for and Recruiting Human Resources d. Moving to more economical locations 7. Some indications suggest that downsizing efforts have not lived up to expectations. According to a recent survey of 52 Fortune 100 firms, most firms that announced a downsizing campaign showed worse, rather than better, financial performance in the years that followed. 8. There are several reasons why so many downsizing efforts fail to meet expectations. These reasons include: a. Negative results b. Loss of talent c. Disrupts the social networks d. Need to rehire e. Survivors become self-absorbed and afraid to take risks f. Negative publicity 9. The \"Did You Know?\" Box: One in Three Positions Are Filled with Insiders highlights the fact that about a third of positions in large, well-known businesses are filled with internal candidates. 10. Many problems with downsizing can be reduced with better planning. 11. Early-Retirement Programs: These are another way to reduce a labor surplus. Such programs are a way to encourage older workers to leave voluntarily by offering early-retirement incentives. 12. The average age of the U.S. workforce is increasing. There are several forces that fuel the drawing out of older workers' careers such as: a. Improved health b. Decreased physical requirements of jobs c. Fear of Social Security being cut d. Insufficient employer-sponsored pensions e. Age discrimination laws f. Outlawing of mandatory retirement ages 121 Chapter 05 - Planning for and Recruiting Human Resources 13. Many organizations are moving from early-retirement programs to phasedretirement programs. In these programs, the organization can continue to enjoy the experience of older workers while reducing the number of hours that these employees work as well as the cost of those employees. 14. Employing Temporary and Contract Workers: The most widespread methods for eliminating a labor shortage are hiring temporary workers and outsourcing work. 15. Temporary Workers: Temporary employment is popular with employers because it gives them flexibility and lowers costs. 16. Agencies that provide temporary employees may handle some of the tasks associated with hiring, such as testing and training, 17. Temporary workers may offer benefits not available from permanent workers such as bringing an objective point of view to the organization's problems and procedures and providing a great deal of experience gained while working in other organizations. 18. To benefit from using contract or temporary workers, organizations must overcome the disadvantages associated with this type of labor force. One drawback is that tension often exists between temporary and permanent employees. 19. Ways in which organizations can better manage the situation of contract or temporary workers include: a. Complete downsizing efforts prior to bringing in temporary workers b. Avoid treating temporary workers as second-class citizens 20. Outsourcing: Contracting with another organization to perform a broad set of services is called outsourcing. 21. A major reason for outsourcing can save money is that the outside company specializes in the services and can benefit from economies of scale. 22. Outsourcing is logical when an organization lacks certain kinds of expertise and doesn't want to invest in developing that expertise. 23. Technological advances in computer networks and transmission have speeded up the outsourcing process and have helped it spread beyond manufacturing areas and low-skilled jobs. 24. Outsourcing manufacturing may make good sense in the short term, but it may ultimately hurt U.S. firms' competitiveness due to a decreased lack of in-house knowledge and expertise. 122 Chapter 05 - Planning for and Recruiting Human Resources 25. Organizations that are interested in outsourcing should plan how they will avoid problems like giving up direct control of a particular operation. Other problems include quality-control issues, security violations, and poor customer service. 26. Overtime and Expanded Hours: Organizations facing a labor shortage may be reluctant to hire employees, even temporary ones, or to commit to an outsourcing arrangement. They may choose to expand working hours and pay overtime to current employees instead. However, overtime is most suited for short-term labor shortages. C. Implementing and Evaluating the HR Plan 1. The final stage of human resource planning involves implementing the strategies and evaluating the outcomes. 2. When implementing the HR strategy, the organization must hold some individual accountable for achieving the goals. 3. In evaluating the results, the most obvious step is checking whether the organization has succeeded in avoiding labor shortages or surpluses. The evaluation should identify which parts of the planning process contributed to success or failure. D. Applying HR Planning to Affirmative Action 1. Many organizations have an HR strategy that includes affirmative action to manage diversity or meet government requirements. 2. Affirmative-action plans forecast and monitor the proportion of employees who are members of various protected groups. The planner can compare the proportion of employees who are in each group with the proportion each group represents in the labor market. This type of comparison is called a workforce utilization review. The organization can use this process to determine whether there is any subgroup whose proportion in the relevant labor market differs substantially from the proportion in the job category. 3. The steps in a workforce utilization review are identical to the steps in the HR planning process shown in Figure 5.1. III. Recruiting Human Resources 1. The role of human resource recruiting is to build a supply of potential new hires that the organization can draw on if the need arises. 2. Recruiting consists of any practice or activity carried on by the organization with the primary purpose of identifying and attracting potential employees. 123 Chapter 05 - Planning for and Recruiting Human Resources 3. Because of differences in companies' strategies, they may assign different degrees of importance to recruiting. In general, all companies have to make decisions in three areas of recruiting: personnel policies, recruitment sources, and the characteristics and behavior of the recruiter. Figure 5.2 shows how these aspects of recruiting can have different effects on whom the organization ultimately hires. Personnel policies influence characteristics of the positions to be filled. Recruitment sources influence the kinds of job applicants an organization reaches. And the nature and behavior of the recruiter affect the characteristics of both the vacancies and the applicants. PPT Slide 20: IV. Personnel Policies 1. An organization's personnel policies are its decisions about how it will carry out human resource management, including how it will fill job vacancies. 2. Several personnel policies are especially relevant to recruitment: a. Recruiting existing employees to fill vacancies or hiring from outside the organization b. Meeting or exceeding the market rate of pay c. Emphasizing job security or the right to terminate employees d. Images of the organization conveyed in its advertising A. Internal versus External Recruiting 1. Opportunities for advancement make a job more attractive to applicants and employees. 2. As personnel policies, decisions about internal versus external recruiting affect the nature of jobs. Promote-from-within policies signal to job applicants that the company provides opportunities for advancement. 124 Chapter 05 - Planning for and Recruiting Human Resources B. Lead-the-Market Pay Strategies 1. Pay is an important job characteristic for almost all applicants. Organizations have a recruiting advantage if their policy is to pay more than the current market wage for a job. 2. Increasingly, organizations that compete for applicants based on pay do so using forms of pay other than wages or salary. 3. Figure 5.3, Changing Nature of the \"Most Important Benefit\" Among New Job Applicants, examines how desired benefits have changed. C.Employment-at-Will Policies 1. Within the laws of the state where they are operating, employers have latitude to set policies about their rights in an employment relationship. A widespread policy follows the principle of employment at will, which holds that if there is no specific employment contract saying otherwise, the employer or employee may end an employment relationship at any time, regardless of cause. 2. An alternative to employment at will is to establish due-process policies. These policies formally lay out the steps an employee may take to appeal an employer's decision to terminate that employee. 3. In decisions about employment-at-will policies, organizations should consider not only the legal advantages of employment at will but also the effect of such policies on recruitment. D. Image Advertising 1. Advertising designed to create a generally favorable impression of the organization is called image advertising. 2. Image advertising is especially important for organizations in highly competitive labor markets that perceive themselves as having a bad image. 3. Whether the goal is to influence the perception of the public in general or specific segments of the labor market, job seekers form beliefs about the nature of the organization well before they have any direct interviewing with these companies. V. Recruitment Sources 1. Another critical element of an organization's recruitment strategy is its decisions about where to look for applicants. 2. The method and audiences the organization chooses for communicating its labor needs will determine the size and nature of the labor market the organization taps to fill its vacant positions. 125 Chapter 05 - Planning for and Recruiting Human Resources 3. Figure 5.4 summarizes major sources from which organizations draw recruits. Each source has advantages and disadvantages. A. Internal Sources 1. An organization may emphasize internal or external sources of job applicants. 2. Internal sources are employees who currently hold other positions in the organization. 3. Organizations recruit existing employees through job postings - communicating information about vacancies on bulletin boards, in employee publications, on corporate intranets, and anywhere else the organization communicates with employees. 4. For the employer, relying on internal sources offers several advantages such as: a. Generates applicants well known to the organization b. Applicants are relatively knowledgeable about the organization's vacancies c. Faster and less expensive than external recruiting B. External Sources 1. Organizations often have good reasons to recruit externally such as: a. No internal recruits available b. Bring in new ideas or new ways of doing business 2. Organizations often recruit through direct applicants and referrals, advertisements, employment agencies, schools, and Web sites. 3. Direct Applicants and Referrals: Direct applicants are people who apply for a vacancy without prompting from the organization. Referrals are people who apply because someone in the organization prompted them to do so. 4. One advantage is that many direct applicants are to some extent already \"sold\" on the organization. This process is called self-selection. A form of aided selfselection occurs with referrals. 126 Chapter 05 - Planning for and Recruiting Human Resources 5. Many job seekers use social networks to help find employment. 6. A benefit of such sources is that they cost less than formal recruiting efforts. Considering these combined benefits, referrals and direct applicants are among the best sources of new hires. 7. Some employers offer current employees financial incentives for referring applicants who are hire and perform acceptably on the job. Other companies play off their good reputations in the labor market to generate direct applicants. 8. A major downside of referrals is that they limit the likelihood of exposing the organization to fresh viewpoints. 9. Sometimes referrals contribute to hiring practices that appear unfair such as nepotism. This is the hiring of relatives. 10. Electronic Recruiting: The Internet has opened up new vistas for organizations trying to recruit talent. There are many ways to employ the Internet for recruiting. Figure 5.5 provides information taken from a survey of HR executives who responded to a survey and indicates the most effective source of recruits 11. One of the easiest ways to get into \"e-cruiting\" is simply to use the organization's own Web site to solicit applicants.Advertisements in Newspapers and Magazines: These ads typically generate a less desirable group of applicants than direct applicants or referrals and do so at greater expense. 12. Public Employment Agencies: Employers can register their job vacancies with their local state employment office and the agency will try to find someone suitable, using its computerized inventory of local unemployed individuals. 13. The government also provides funding to a variety of local employment agencies. 14. Private Employment Agencies: Private employment agencies provide much the same service as public employment agencies, but primarily serve the white-collar labor market. 15. Another difference between the two types of agencies is that private agencies charge employers for providing referrals. 16. For managers or professionals, an employer may use the services of a type of private agency called an executive search firm (ESF). People often call these agencies \"headhunters\". 17. Colleges and Universities: On campus interviewing is the most important source of recruits for entry-level professional and managerial vacancies. Participating in university job fairs is another way of increasing the employer's presence on campus. 127 Chapter 05 - Planning for and Recruiting Human Resources C.Evaluating the Quality of a Source 1. In general, there are few rules that say what recruitment source is best for a given job vacancy. It is wise for employers to monitor the quality of all their recruitment sources. One way to do this is to develop and compare yield ratios for each source. This ratio expresses the percentage of applicants who successfully move from one stage of the recruitment and selection process to the next. 2. Another measure of recruitment is the cost per hire. 3. Table 5.3 looks at examples of how HR professionals can use these measures. PPT Slide 29: VI. Recruiter Traits and Behaviors 1. The recruiter affects the nature of both the job vacancy and the applicants generated. Many applicants approach the recruiter with some skepticism and sometimes discount what the recruiter has to say. The recruiter's characteristics and behaviors seem to have limited impact on applicants' job choices. A. Characteristics of the Recruiter 1. In general, applicants respond more positively to recruiters whom they perceive as warm and informative. The impact of other characteristics of recruiters including their age, sex, and race, is complex and inconsistent. B. Behavior of the Recruiter 1. Many studies have looked at how well realistic job previews - background information about jobs' positive and negative qualities - can help organizations minimize turnover among new employees. 2. For affecting whether people choose to take a job, the recruiter seems less important than an organization's personnel policies that directly affect the job's features. 128 Chapter 05 - Planning for and Recruiting Human Resources C. Enhancing the Recruiter's Impact 1. Although recruiters may have little influence on job choice, this does not mean recruiters cannot have an impact. Researchers have tried to find conditions in which recruiters do make a difference. Based on this research, an organization can take several steps to increase the impact that recruiters have on the people they recruit such as: a. Can provide timely feedback b. Can avoid behaving in ways that convey the wrong impressions about the organization c. Can recruit with teams rather than individual recruiters 2. Figure 5.4 provides examples of behaviors for recruiters to avoid. PPT Slide 33: 129 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: Thinking Ethically When Employees Leave This case explores how downsizing carries obligations for employers and for employees who leave voluntarily to accept positions at other organizations. Questions: 1. What ethical obligations does an organization have when downsizing? Responses to this question will vary by student, but should show consideration of the organization's impact on workers, offering displacement compensation, necessary training, counseling, and outplacement services when downsizing occurs. 2. Compare those obligations with the ethical obligations of an employee who leaves an organization voluntarily. Responses will depend on responses to the first question, and students' views on the employees' obligations to serve notice at an organization, help with his or her replacement, help write a job ad, or give instructions for performing the job. Students should also indicate that employees should work hard all the way to the end of their job, not just to when they serve notice. 3. Consider the example of the New York lawyer. How would you have advised the lawyer to handle this situation? How would you have wanted to handle it if you were the employer? Student responses may vary for each part of this question. Disclosure and communication are important for both the lawyer and the employer. 130 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: CASE STUDY Thinking Ethically When Employees Leave Case Summary: This case discusses the various reasons and the various ways that employees leave their jobs. Layoffs are one reason, but employees also leave on their own accord. The case emphasizes the wisdom of negotiating a departure with tact and respect, since one may need to call on former employees or colleagues in the future. Questions: 1. What ethical obligations does an organization have when downsizing? Organizations should use downsizing as a last resort of managing a labor surplus, and should provide employees with as much notice as possible. Organizations should identify employees for downsizing through means that are fair and just. 2. Compare those obligations with the ethical obligations of an employee who leaves an organization voluntarily. Many of those obligations hold true for an employee as well. An employee should provide his or her employer with as much notice as possible, and should take as much care as possible to help minimize the disruption brought about by his or her departure. 3. Consider the example of Kathryn. How would you have advised her to handle the situation? How would you have wanted to handle it if you were the employer? Student responses can vary. Kathryn might have indicated to her boss that the boss's behavior was unacceptable and that she was unhappy. That way, the employer has a chance to correct or remedy the offending supervisory style. If, after communicating her unhappiness, Kathryn continues to suffer, it is reasonable to expect her to find more suitable employment. 131 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: Chapter Vocabulary Core Competency Direct Applicants Downsizing Due-Process Policies Employment-at-Will Forecasting Job Posting Leading Indicators Nepotism Outsourcing Realistic Job Preview Referrals Transitional Matrix Nepotism Trend Analysis Workforce Utilization Review Yield Ratio 132 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: Review and Discussion Questions 1. Suppose an organization expects a labor shortage to develop in key job areas over the next few years. Recommend general responses the organization could make in each of the following areas: a. Recruitment b. Training c. Compensation (pay and employee benefits) When an organization anticipates an upcoming labor shortage, new human resource strategies must come into play at the organization. The following responses could be undertaken to alleviate the problem in these specific areas: Recruitment - select new employees carefully while availability remains high and indoctrinate them into the organization, recruit more widely and through a variety of methods such as Internet recruiting, and utilize other nontraditional recruiting sources to fill organizational needs; Training - develop a training program that will produce \"home grown\" employees from within the company who can be taught a variety of job skills in order to fill the gap when supply is diminished; Compensation - maintain a competitive compensation/benefit system in order to attract the best of the available candidates and modify the existing system in order to diminish the affect of perceived inequity within the organization. 2. Review the sample transitional matrix shown in Table 5.1. What jobs experience the greatest turnover (employees leaving the organization)? How might an organization with this combination of jobs reduce the turnover? A matrix such as the sample presented in Table 5.1 is 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 the following questions: \"Where did people who were in each category go\" and \"Where did people now in each job category come from?\" Based on the information provided by Table 5.1, sales representatives are the jobs with the most indicated turnover within the organization. An organization with this combination of jobs may reduce turnover by providing training and preparation to individuals in order to offer promotion availability. 3. In the same transitional matrix, which jobs seem to rely the most on internal recruitment? Which seem to rely most on external recruitment? Why? The jobs that seem to rely the most on internal recruitment are the sales manager positions. The matrix data indicates that sales manager positions are primarily filled through internal promotions. The information provided by the matrix also indicates the sales apprentice positions rely on external recruitment. There is no internal talent available to fill the apprentice positions, so the organization must recruit from outside sources. 133 Chapter 05 - Planning for and Recruiting Human Resources 4. Why do organizations combine statistical and judgmental forecasts of labor demand, rather than relying on statistics or judgment alone? Give an example of a situation in which each type of forecast would be inaccurate. Statistical methods capture historic trends in a company's demand for labor while judgment methods rely on the expert's subjective reasoning. Organizations combine these two methods in order to generate the most accurate predictions of labor demand that is possible. An example of when the statistical method would not be accurate is a company that is just beginning operations. There would be no historical information to utilize in order to make future predictions. Utilizing judgment may not be accurate when the environment is so unstable that neither past experience nor expert judgment would provide a reliable base of information. 5. Some organizations have derailed affirmative-action plans, complete with goals and timetables, for women and minorities, yet have no formal human resource plan for the organization as a whole. Why might this be the case? What does this practice suggest about the role of human resource management in these organizations? Organizations may have derailed affirmative action plans because they must. For instance, they may be government contractors or be under a court-ordered decree that forces them to have such a plan. There are no legal requirements for human resource planning, therefore many organizations may not possess the expertise to recognize the need for one or the know-how to plan for one. This practice indicates the need for deeper involvement of the human resource department within the operations of the organization as a whole. 6. Give an example of a personnel policy that would help attract a larger pool of job candidates. Give an example of a personnel policy that would likely reduce the pool of candidates. Would you expect these policies to influence the quality as well as the number of applicants? Why or why not? The responses provided will vary. However, all responses should indicate understanding of the concepts. A suggested example for a personnel policy that would attract a larger pool of candidates would be to offer a method for career progression and advancement. An example of a policy that would likely decrease the candidate pool would be to offer a pay-rate that is below the market rate. Personnel policies do indeed influence the quality as well as the number of applicants for the organization. Candidates have certain expectations and needs when they apply to an organization. Policies that do not meet these needs or expectations can negatively impact the number and type of candidates responding. 7. Discuss the relative merits of internal versus external recruitment. Give an example of a situation in which each of these approaches might be particularly effective. 134 Chapter 05 - Planning for and Recruiting Human Resources Merits of internal recruitment are that the organization will be more familiar with the motivation and work habits of the candidate and it provides motivation to employees since internal promotions do occur. Merits of external recruitment include bringing fresh ideas and expertise into the organization. An example of when internal recruitment might be particularly effective is when the labor supply is very low and there is a high level of competition. An example of when external recruitment might be particularly effective includes when the organization needs innovative and modern ideas in order to remain competitive within the market. 8. List the jobs you have held. How were you recruited for each of these? From the organization's perspective, what were some pros and cons of recruiting you through these methods? The individual responses will vary, but each response should demonstrate understanding of the chapter concepts. 9. Recruiting people for jobs that require international assignments is increasingly important for many organizations. Where might an organization go to recruit people interested in such assignments? Some colleges and universities have majors in international trade or business. Students often have a double major in a foreign language and business. These individuals are more likely to be interested in going abroad. Thus, recruitment at colleges and universities could provide candidates. People who have language skills other than English may also be a possibility, particularly if they have lived in other countries. Placement of job advertisements in special-interest magazines may prove helpful. 10. A large share of HR professionals have rated e-cruiting as their best source of new talent. What qualities of electronic recruiting do you think contribute to this opinion? The student responses given for this question will vary. However, all answers provided should demonstrate the individual student's understanding of the chapter concepts on electronic recruiting. Students should mention in particular, the fact that electronic recruiting expands the labor market from which the organization can draw candidates. 11. How can organizations improve the effectiveness of their recruiters? The impact that recruiters have on the people they recruit include: (1) the organization can have recruiters provide timely feedback. Applicants dislike delays in feedback and can draw negative opinions about the organization without timely feedback being provided to them, (2) organizations can have recruiters who avoid behaving in ways that might convey the wrong impression about the organization, and (3) the organization can recruit with teams rather than individuals. 135 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: BusinessWeek Case Netflix: Recruiting and Retaining the Best Talent Case Summary This case discusses the very creative and unorthodox recruitment and compensation practices at a company that competes with digital and entertainment behemoths Blockbuster and Apple. Questions: 1. What are Netflix's personnel policies, and as described in this case? The company goes to significant lengths to recruit the best and brightest in its industry. It relies on external recruiting through a variety of means to identify and attract \"A-players\" and it pays highly. The company does not use traditional means of setting compensation rates for recruitment nor for performance reviews. Rather, it virtually spares no expense to get the talent it needs. 2. If Netflix's business strategy succeeds, it will need more employees from the competitive markets for programming and market talent. Of the options for avoiding a labor shortage see Table 5.2), which do you think would be most effective for Netflix? Why? Student answers can vary, but look for good logic and critical thinking. For example, if a student recommends overtime, have them address the fact that employees are already expected to do the work of three to four people. If a student recommends temporary employees, have them address the quality standards that Netflix requires for its talent. 3. Visit the careers section of Netflix's Web Site (http://www.netflix.com/Jobs). It is easy to learn about the jobs at the company? Does the site give a positive impression of the company as an employer? What, if any, improvements can you recommend? Student responses can vary, but should be well-reasoned. Generally, responses will likely be affirmative that this website gives a position impression and that it is easy to learn about jobs. One recommendation might be that there is more information provided about the ownership, the management, and the career paths of the company. 136 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: End of Chapter Case The Hunt for Seasonal Workers Crosses Borders Case Summary This case scenario explores the staffing challenges faced by employees in seasonal businesses. Questions: 1. If the companies described in this case cannot fill all vacant seasonal jobs with workers under H-2B visas, what other options are available for filling the jobs? Student responses can vary, but suggestions could include more aggressive, target marketing to college and university students across the United States using digital advertising and posting. Employers could also create incentives for existing employees to refer friends and family to the organization. Additionally, employers could think about creative packages to entice seasonal workers, such as housing allowances or other types of perks. 2. Which of the additional options would you recommend? Student responses will vary, but look for evidence that the student can provide a rationale. 3. What additional recruiting strategies, besides the ones described in this case, would you recommend to High Sierra Pools? High Sierra Pools should think about hiring or retaining recruiters to target seasonal workers by personally visiting colleges, universities, and other places where seasonal workers can be identified and recruited. Since newspaper advertising has proven ineffective, High Sierra Pools should use newer technologies such as internet job boards, or linking to other websites frequented by the target employee market. 137 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: Video Case Video Case: Companies Realize It Pays to Keep Mothers on Track (2:22) Amid the anticipation of having a baby, many expectant women face a big decision: whether to stay home with their child or come back to work. When they opt to stay home, the result for employers is a costly loss of skilled employees. As highly-qualified, experience workers leave to care for their children, the \"mommy drain\" has prompted many companies to take innovative steps to stop it. Fewer new mothers are returning to work, according to the U.S. Census Bureau. Of those who do, nearly one fourth go back not to their previous employer but to another company, often making a lateral move to a competitor with similar compensation, hours, and responsibilities. Many women, looking for flexibility, go to smaller firms or start their own businesses. 1 When a woman doesn't go back to her job after having a baby, HR departments must recruit and hire a replacement. One talent management group estimates that it costs companies as much as $75,000 to replace an employee with a $50,000 annual salary.2 Additional costs potentially result from job coverage, absenteeism during maternity leave, and productivity loss. How can companies reduce turnover and the burden on the HR staff? The answer is by providing meaningful support to employees from the time the pregnancy is announced. Support can mean paid maternity leave and unpaid extended leave, as well as incentives to return to work, such as onsite child care, provisions for lactation, flexible scheduling, and telecommuting. Bank of America offers as many as eight weeks' parental leave at full pay, for both mothers and fathers. Accenture enables women to take extended maternity leaves through a program in which employees set aside part of their pay to finance up to three extra months of leave, with benefits. For one Accenture manager, who was able to use the leave plus vacation time to get 7 months off with her new baby, the long leave and the option to return to work part time kept her from quitting.3 Flextime keeps many working moms on the job. \"Family comes first,\" explains a bank purchasing coordinator who is able to set her own hours as long as she completes her work. Like many U.S. businesses, her employer, Milwaukee's Pyramax Bank, offers flextime to all employees. The policy helps workers balance work and home and brings significant returns to the company. \"We save on interview time, training time, ramp-up time, mistake time,\" says bank executive Monica Baker. Large companies in accounting, consulting, and finance are implementing creative programs to fill the need for skilled workers. The programs, for both women and men, draw more women because skilled women are more likely than their male counterparts to leave high-paying jobs. One study of nearly 14,000 employees found that women ages 25 to 40 making over $75,000 a year were almost 20 percent more likely to leave their jobs than men. Other research shows that women taking career breaks are out of the work force for an average 2.2 years, and they will return to work fairly quickly if they have a feasible and appealing setup.4 At Booz Allen Hamilton, an internal rotation plan allows consultants who want a break from extensive travel to do substantive work in an internal position. For one woman returning from maternity leave, switching from being a consultant on the road two to four days a week to working in the office as a business development director has enabled her to progress on a career path. Other companies are changing performance-based pay plans, by pro-rating annual targets for example, to make sure women do not lose out on bonuses and incentives because they have taken maternity leave.5 138 Chapter 05 - Planning for and Recruiting Human Resources When Deloitte & Touche management realized that women were significantly underrepresented in the company's upper ranks, the firm launched an initiative to advance women. The company's \"Personal Pursuits\" program, begun in 2004, enables top-performing women to take leaves of up to five years and offers mentoring, training, and the chance to do paying projects during their leaves. Cathy Benko, who heads the initiative, says the program has been very promising so far.6 If a skilled professional's personal pursuits mesh with loyalty to her employer, everybody benefits. Discussion Questions 1. How does the \"mommy drain\" affect human resource planning? 2. Which of the incentives mentioned in the case would be the most successful in keeping working moms on the job or recruiting them? References 1 Sue Shellenbarger, \"The Mommy Drain: Employers Beef Up Perks to Lure New Mothers Back to Work,\" Wall Street Journal, September 28, 2006, p. D1. 2 Aaron Crecy, \"How to keep moms a part of the workforce,\" Business Insurance, May 7, 2007, p. 27. 3 Wall Street Journal, September 28, 2006. 4 Wall Street Journal, September 28, 2006. 5 Wall Street Journal, September 28, 2006. 6 Sue Shellenbarger, \"Employers Step Up Efforts to Lure Stay-at-Home Mothers Back to Work,\" Wall Street Journal, February 9, 2006, p. D1. 139 Chapter 05 - Planning for and Recruiting Human Resources ROADMAP: IT'S A WRAP! Your students can now REVIEW, APPLY, and PRACTICE the topics that you covered in Chapter Five with the following segments: REVIEW Chapter learning objectives Narrated lecture and iPOD content Test Your Knowledge: Recruitment Sources and Stages of the Strategic HRM Process APPLY Managers Hot Seat segment \"Diversity: Mediating Morality\" Video case on \"Balancing Act: Keeping Mothers on Track\" Self-Assessment: Improving Your Resume Web Exercise: Texas Instrument's Fit Check PRACTICE Chapter Quiz 140