CHAPTER SEVEN

"Recruitment"

LEARNING OBJECTIVES

CHAPTER OUTLINE

• What is recruitment?
• The purpose of recruitment. Why is recruitment important?
• The recruiting process
• Recruitment planning
• Sources and Methods of recruitment.
• Evaluation and control of recruitment efforts and sources.

1. RECRUITMENT DEFINED

Recruiting is the process of generating a pool of qualified applicants for organisational jobs¹. Recruitment involves searching for and obtaining qualified job candidates in such numbers that the organisation can select the most appropriate person to fill its job needs. In addition to filling job needs, the recruitment activity should be concerned with satisfying the needs of the job applicants². Consequently, recruitment does not only attracts individuals to an organisation, but also increases the chance of retaining them once they are hired³. This can be effected by recruiting people that can 'fit' within the culture of the firm.

2. THE PURPOSE OF RECRUITMENT: WHY IS RECRUITMENT IMPORTANT?

As stated above, the general purpose of recruitment is that of providing a pool of potential qualified job candidates. More specifically, the purposes of recruitment include the following⁴:

• Determine the present and future recruitment needs of the organisation in conjunction with HR planning and job analysis activities.
• Increase the pool of qualified job candidates with minimum cost.
• Enhance the success rate of the selection process by reducing the number of obviously underqualified job applicants.
• Reduce the probability that job applicants, once recruited and selected, will leave the organisation after only a short period of time.
• Increase organisational and individual effectiveness in the short and long term.
• Evaluate the effectiveness of various recruiting techniques and sources for all types of job applicants.

Apart from the traditional functions of recruitment mentioned above, quality organisations -via recruitment - can attract individuals that: have a potential to add value to the firm; be able to work in teams; and possess the new leadership skills demanded of managers in a TQM environment. Another major decision that organisations following a quality improvement programme face is who should recruit employees? Should recruitment be the preserve of management and the personnel function, or should team members be free to 'choose' their own colleagues? Traditionally, of course, managers and professional staff have performed this function. Yet, there are an increasing number of instances where teams also play an important part in the recruitment process.

3. THE RECRUITMENT PROCESS

According to the discussion in the previous paragraph, recruiting efforts aim to translate HR plans into action. Regardless of organisation size, the following decisions about recruiting must be made⁵:

• How many people does an organisation need?
• Where will the organisation get these people?
• What special skills and experience are really necessary?
• How will the organisation spread its message of openings?
• How effective are the recruiting efforts?

The basic steps in a typical recruiting process are identified in Figure 7.1.

Fig. 7.1 "The recruiting process", Mathis and Jackson, p. 206

In fairly large organisations, a manager notifies someone in the HR unit that an opening exists and needs to be filled. At the next step, the HR representative and the manager must review the job description and job specifications so that both have clear and up-to-date information on the job duties and the specific qualifications desired of an applicant. Following this review, the actual recruiting effort begins. Internal sources of available recruits through transfers, promotions, and job posting usually are checked first. Then, external sources are contacted as required, and all applicants are screened though the selection process [see chapter 8]. Lastly, follow-up is necessary to evaluate the effectiveness of the recruiting efforts and to tie those efforts back into the human resource plan and ongoing recruiting activities.

4. RECRUITMENT PLANNING

Recruitment planning begins with a clear specification of: [1] the number of people needed and [2] when they are needed. Implicit in the later specification is a time frame - the duration between the receipt of a CV and the time a new hire starts work. This time frame is sometimes referred to as 'the recruitment pipeline'⁷. The 'flow of events' through the pipeline is presented in Table 7.1.

Table 7.1 "Events and their duration comprising a hypothetical recruitment pipeline" Cascio, pp. 172

The table shows that if an operating manager send a requisition for a new hire to the HR Department today, it will take almost a month and a half, 43 days on average, before an employee fulfilling that requisition actually starts work. The HR Department must make sure that operating and staff managers realise and understand the information provided by this pipeline.

5. SOURCES AND METHODS OF RECRUITMENT

We now turn to examining the sources where potentially qualified job applicants can be found and the methods used to recruit them. Both sources and methods can be external to the organisation as well as internal.

Internal Sources. Internal sources for obtaining job applicants include: job posting; promotions and transfers; job rotation; skills inventories; current employee referrals; and recruiting former employees and applicants.

- Job Posting. A job posting system provides current employees with an opportunity to move to a better job within the organisation. Employees can be notified of all vacancies by posting notices, circulating publications, or in some other way inviting employees to apply for jobs.

Jobs should be posted before any external recruiting is done. The organisation must allow a reasonable period of time for present employees to check notices of available jobs before it considers external applicants. When employees' bids are turned down, they should be informed of the reasons⁷.

- Promotions and Transfers. Many organisations choose to fill vacancies through promotions or transfers from within whenever possible. The case for promotion-from-within rests on sound arguments. Availability of promotions from within an organisation can make employees feel more secure and therefore identify with the organisation, thus becoming more motivated to perform. Internal promotion can also be much less expensive to the organisation in terms of time and money. Although most often successful, promotions from within have some drawbacks as well. A person's performance on one job may not be a good predictor of performance on another, because different skills may be required on the new job. Other disadvantages include infighting, inbreeding and an insuing lack of varied perspectives and interests, and an organisation with this policy may end up having to pressure candidates for the promotions.

Another way to recruit internally is by transferring current employees without promotion. Transfers are often important in providing employees with the broad-based view of the organisation necessary for future promotions.

• Job Rotation. Whereas a transfer is likely to be permanent, job rotations are usually temporary in nature. Job rotation has been used effectively to expose management trainees to various aspects of organisational life. A relatively disadvantage for job rotation is the cost of relocation to the company.
• Skills Inventories. Computerised internal talent banks, or skills inventories, are used to furnish a listing of the talents, abilities and skills available for organisations. Such a listing of the skills and interests of current employees lends itself to many useful applications.
• Current Employee Referrals. A reliable source of people to fill vacancies is composed of friends and / or family members of current employees. Employees can acquaint potential applicants with the advantages of a job with the company, furnish letters of introduction, and encourage them to apply. These are external applicants coming from an internal information source. This source is usually one of the most effective methods of recruiting because many qualified people can be reached at a low cost.
• Recruiting Former Employees and Applicants. Former employees and former applicants are also good internal sources for recruitment. In both cases there is a time-saving advantage, because something is already known about the potential employee.

Former employees are considered an internal source in the sense that they have ties with the company. Some retired employees may be willing to come back to the organisation. Or, alternatively, they may recommend someone who would be interested to work for the particular organisation. The main advantage in hiring former employees is that their skills, abilities, personality and performance are already known to the company. However, many managers are not willing to take back employees who have left the organisation. This negative attitude, however, basically depends on the reasons the employee left in the first place.

Former applicants. Another source of applicants may be found in the organisational files. Although not entirely an internal source, those who have previously applied for jobs can be recontacted by mail, a quick and inexpensive way to fill an unexpected vacancy.

o External Sources.

If internal sources do not provide an acceptable candidate, many external sources are available. These sources include schools and universities, employment agencies, media sources, leasing employees, labour unions and professional and trade associations, computerised services, walk-ins and open houses⁸.

- Schools and Universities. High schools or vocational/technical schools may be a good source of new employees for many organisations. A successful recruiting programme with these institutions is the result of careful analysis and continuous contact with the individual schools. Some larger schools have a centralised guidance or placement office. Contact can be established and maintained with the supervisors of these offices. Furthermore, participating in career days and giving tours of the company to school groups are other ways of maintaining good contact with school sources. Lastly, cooperative programmes in which students work part time and receive some school credits also may be useful in generating qualified applicants for full-time positions.

At the university level, the recruitment of graduating students is a large-scale operation for many organisations. Most universities maintain placement offices in which employers and applicants can meet.

- Employment Agencies. Public and private employment agencies are a good source for temporary employees and an excellent source for permanent ones. State employment agencies provide a wide range of services, most of which are supported by employer contributions to state unemployment funds. The agencies offer councelling, testing, and placement to everyone interested. State agencies also make up a nationwide network of job and applicant information in the form of job banks.

Private employment agencies tend to serve two groups of job applicants - professional / managerial and unskilled. The agencies dealing with unskilled applicants often provide job candidates that employers would have a difficulty time finding otherwise. Many of the employers looking for unskilled labour do not have the resources to do their own recruiting or have only temporary or seasonal demands for them.

Private agencies play a major role in recruiting professional and managerial candidates. In fact, during the past ten years, the executive recruiting industry has grown phenomenally. Yet, although effective, private agencies charge considerable fees and represent a major recruiting cost to most private organisations looking for professional / managerial applicants.

Finally, at the same time that the private recruiting agencies provide applicants for full-time positions, temporary-help agencies , or temps, annually employ more than 3 million people in the USA⁹. The use of temps is growing as skilled and semi-skilled individuals find it preferable to work less than a 40-hour week or on a schedule of their own choosing. On the other hand, organisations are using temporary-help agencies more than ever because certain hard-to-get skills are available nowhere else.

- Media Sources. Media sources such as newspapers, magazines, television and radio are widely used by employers for recruiting job applicants. Newspapers, in particular, are especially convenient for positions that must be filled quickly, because there is a short lead time for placing an ad, usually two or three days at the most. However, there can be a great deal of wasted circulation with newspaper advertising, because newspapers do not aim to reach any specialised employee markets. Many employers have found that it is not cost efficient to schedule newspaper ads on days other than Sunday, the only day many job seekers read them. When using recruitment advertisements, employers should ask five questions¹⁰:

• - What do we want to accomplish?
• - Who are the people we want to reach?
• - What should the advertising message convey?
• - How should the message be presented?
• -In which medium should it run?

Table 7.2 shows the kind of information a good media advertisement should include.

Table 7.2 "What to include in an Effective Recruiting Ad" Mathis and Jackson, p. 218

-Leasing Employees. One way to deal with the increasingly complex employment regulations and costs for some small businesses is to 'lease' instead of 'own' employees. Leasing works like this¹¹: a company 'fires' its employees, who are then hired by a leasing firm. The original company then leases the employees form the leasing company for which they now officially work. The company pays the leasing company and the leasing company handles such functions as hiring, payroll, and training.

- Labour Unions and Professional and Trade Associations. Labour unions are a source of certain types of workers. In some industries, such as construction, unions have traditionally supplied workers to employers. A labour pool is generally available through a union, and workers can be dispatched to particular jobs to meet the needs of the employers. The union hiring hall is usually the contact point¹².

Other sources for recruiting are professional and trade associations, trade publications, and competitors. Many professional societies and trade associations publish newsletters or magazines containing job ads. Such publications may be a good source for specialised professionals needed in an industry.

Additionally, an employer may meet potential applicants who are currently employed by a competitor at professional associations and industry meetings. Employees recruited from these sources usually spend less time in training because they already know the industry.

- Computerised Services. A recent addition to external methods is the computerised recruiting service and use of the information highway. The latest services are interviews via satellite and recruitment ads on cable TV¹³.

• Walk-Ins. Recruitment of walk-ins is especially prevalent for clerical and service-job applicants. Individuals become applicants by walking into an organisation's employment office - they have not been referred by anyone. This method is informal and relatively inexpensive and almost as effective as current employee referrals¹⁴.
• Open Houses. Lastly, an excellent way to introduce individuals to the organisation and also attract individuals who might not otherwise apply, is the use of open houses. These are events where the firm opens its doors so that individuals can come and take a look at what the company is about and what jobs it might have available. In doing so, open houses can give the individual a realistic organisational preview and the firm a chance to look at potential applicants in an informal setting.

o Internal vs External Recruiting.

Pros and cons are associated with both with recruiting from within [internal recruitment] and hiring outside the organisation [external recruitment] to fill openings. Table 7.3 summarises some of the most commonly cited advantages and disadvantages of each type of source¹⁵.

Table 7.3 "Advantages and Disadvantages of Internal and External Sources" Mathis and Jackson, p. 210

Recruiting from within generally is thought to be a positive force in rewarding satisfactory employee performance, and many organisations use it effectively. Among the ways in which internal recruiting sources have an advantage over external sources is that they allow management to observe the potential candidate over a period of time and to evaluate that person's potential and specific job performance. Additionally, an organisation that promotes its own employees to fill job openings may give its employees added motivation to do a good job. Employees may see little reason to do more than just required if management's policy is to hire externally. This indeed is the main reason why an organisation generally considers internal sources of qualified applicants first. However, if followed exclusively, internal recruiting has the major disadvantage of perpetuating old ways of operating.

Recruiting externally, on the other hand, can infuse the organisation with new ideas. Also, it may be cheaper to recruit professionals such as accountants or computer programmes from outside than to train less skilled people recruited from within the organisation. But recruiting from outside the organisation for any but entry-level positions presents the problem of adjustment time for the new persons. Another serious drawback to external recruiting is the negative impact on current employees that often results from selecting an outsider instead of a current employee.

o Innovative Recruiting Methods. The standard approaches to recruiting just presented are appropriate most of the time. But when it is really difficult to recruit the people needed, some innovative alternatives are available¹⁶. Table 7.4 shows such alternatives.

6. EVALUATING RECRUITING SOURCES AND EFFORTS

Evaluating the success of recruiting efforts is important because this is the only way to find out whether the time and money spent in recruiting are cost effective. General areas for proper evaluation of recruiting include¹⁷:

• Quantity of Applicants. Because the goal of a good recruiting programme is to generate a large pool of applicants from which to choose, quantity is a natural place to begin evaluation. Is it sufficient to fill job vacancies?
• Quality of Applicants. In addition to quantity, there is the issue of whether the qualifications of the applicant pool are sufficient to fill the job openings. Do the applicants meet job specifications and can they perform the jobs?
• Cost per Applicant Hired. Cost varies depending on the position being filled, but knowing how much it costs to fill an empty position puts turnover and salary in perspective. The greatest single expense in recruiting is the cost of having a recruiting staff. Is the cost of recruiting employees from any single source excessive?

Furthermore, cost/benefit information on each recruiting source may be calculated. Usually, comparing the length of time applicants from each source stay in the organisation with the cost of hiring from that source offers a useful perspective. When making a cost/benefit analysis, costs may include both direct costs [advertising, recruiters' salaries, agency fees, etc] and indirect costs [involvement of operating managers, public relations, image]. Benefits to consider include the following23:

• length of time from contact to hire
• total size of applicant pool
• proportion of acceptances to offers
• percentage of qualified applicants in the pool

CASE

Run a business without employees? Impossible! Yet, today there are an increasing number of professionals and small businesses that do just that through employee leasing.

Although not designed only as a substitute for recruiting, employee leasing is a concept that has grown rapidly in recent years. Approximately 1,400 employee leasing firms handle HR for over one million workers. Introduced in 1972, it is a means of solving HR problems, including paperwork, recruiting, and turnover for small-to-medium sized organisations. The process is simple: a business signs an agreement with an employee leasing company, after which the existing staff is hired by the leasing firm and leased back to the company. The leasing firm then handles all paperwork, recruiting, and tax liabilities.

By pooling employees from many small businesses, the leasing company can usually get big-company benefits for its 'employees' that are not available to employees of smaller firms.

Yet, the services provided by leasing companies come at a high cost. Leasing firms often charge between 4% and 6% of a monthly salary for their services. Despite the high cost, however, in a study of 21 companies leasing employees all employers were found to be pleased with leasing. Their workers had more benefits, and paperwork had been reduced.

QUESTIONS

1. What are the potential disadvantages of employee leasing?

2. Which evaluation techniques could be used to assess the effectiveness of employee leasing?

Click here to send your answers

NOTES