Human Resource Management: Gaining a Competitive Advantage Chapter Human Resource Planning and Recruitment McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc All rights reserved Learning Objectives After reading this chapter, you should be able to:  Discuss how to align a company’s strategic direction with its HR planning  Determinelabor demand for workers in various job categories  Discuss advantages and disadvantages of various ways to eliminate a labor surplus and avoid a labor shortage  Describe various recruitment policies that organizations adopt to make job vacancies more attractive  List various sources from which job applicants can be drawn, their advantages and disadvantages, and evaluation methods  Explain the recruiter’s role, limits and opportunities in the recruitment process 5-2 Stages in HR Planning Forecasting Goal Setting and Strategic Planning Program Implementation and Evaluation 5-3 Forecasting Stage of HR Planning Determine Labor Demand derived from product/service demanded external in nature Determine Labor Supply internalmovements caused by transfers, promotions, turnover, retirements, etc transitional matrices identify employee movements over time useful for AA / EEO purposes Determine Labor Surplus or Shortage 5-4 Options for Reducing an Expected Labor Surplus Option Speed Human Suffering Downsizing Pay reductions Demotions Transfers Work sharing Hiring freeze Natural attrition Early retirement Retraining Fast Fast Fast Fast Fast Slow Slow Slow Slow High High High Moderate Moderate Low Low Low Low 5-5 Options for Avoiding an Expected Labor Surplus Option Suffering Overtime Temporary employees Outsourcing Retrained transfers Turnover reductions New external hires Technological innovation Speed Revocability Fast Fast Fast Slow Slow Slow Slow High High High High Moderate Low Low 5-6 Downsizing Downsizing is the planned elimination of large numbers of personnel designed to enhance organizational competitiveness Reasons for Downsizing: reduce labor costs technological changes reduce need for labor mergers and acquisitions reduce bureaucratic overhead organizations choose to change the location of where they business 5-7 Effects of Downsizing Studies show that firms that announce a downsizing campaign show worse, rather than better financial performance Reasons include:  Long-term effects of an improperly managed downsizing effort can be negative  Many downsizing campaigns let go of people who turn out to be irreplaceable assets  Employees who survive the staff purges often become narrow-minded, self-absorbed and risk-averse 5-8 Early Retirement Programs The average age of the U.S workforce is increasing Baby boomers are not retiring early due to:  improved health  a fear that Social Security will be cut  mandatory retirement is outlawed Many employers tryvoluntary attrition among older workers through early retirement incentive programs 5-9 Employing Temporary Workers Hiring temporary workers helps eliminate a labor shortage and affords flexibility needed to operate efficiently during swings in demand 3 Advantages: temporary workers free a firm from administrative tasks and financial burdens temporary workers are often times tested by a temporary agency many temporary agencies train employees before sending them to employees 5-10 Outsourcing and Off-shoring Outsourcing is an organization’s use of an outside organization for a broad set of services Off-shoring is a special case of outsourcing where the jobs that move actually leave one country and go to another To help ensure the success of outsourcing:  Choose an established, large outsourcing vendor  Jobs that are proprietary or require tight security should not be outsourced  Start small and monitor constantly 5-11 Affirmative Action Planning Plan for various subgroups within a labor force Workforce utilization review is a comparison of the proportion of workers in protected subgroups with the proportion that each subgroup represents 5-12 HR Recruitment Process Job Choice Vacancy Characteristics Personnel Policies Job Choice Recruiter Traits &Behaviors Applicant Characteristics Recruitment Sources Recruitment Influences 5-13 Personnel Policies  Organizational decisions that affect the nature of the vacancies for which people are recruited  Characteristics of the vacancy are more important than recruiters or recruiting sources  Personnel Policies vary:  Internal versus External recruiting  Extrinsic versus Intrinsic rewards  Employment-at-will policies  Image advertising 5-14 Recruitment Sources Colleges& Universitiescampus placement services Internal Sources – Public & Private Employment Agencies - faster, cheaper, more certainty External Sources – new ideas& approaches headhunters can be expensive JOBS JOBS Electronic Recruiting – Internet Direct Applicants &Referrals - self selection, low cost Newspaper Advertising large volume, low quality recruits 5-15 Recruiters Functional Area - HR versus operating area specialist Traits - warm and informative Realism - realistic job preview - honesty 5-16 Steps to Enhance Recruiter Impact Provide timely feedback Provide timely feedback Recruit in teams Avoid rude behavior Recruit in teams 5-17 Summary  HR planning uses labor supply and demand forecasts to anticipate labor shortages and surpluses to enhance organization’s success and reduce human suffering  HR recruiting creates an applicant pool should a labor shortage occur 5-18 [...]... informative Realism - realistic job preview - honesty 5-16 2 Steps to Enhance Recruiter Impact 1 Provide timely feedback 1 Provide timely feedback 2 Recruit in teams 2 Avoid rude behavior 3 Recruit in teams 5-17 Summary  HR planning uses labor supply and demand forecasts to anticipate labor shortages and surpluses to enhance organization’s success and reduce human suffering  HR recruiting creates an applicant... Internal Sources – Public & Private Employment Agencies - faster, cheaper, more certainty External Sources – new ideas& approaches headhunters can be expensive JOBS JOBS Electronic Recruiting – Internet Direct Applicants &Referrals - self selection, low cost Newspaper Advertising large volume, low quality recruits 5-15 Recruiters Functional Area - HR versus operating area specialist Traits - warm and... Start small and monitor constantly 5-11 Affirmative Action Planning Plan for various subgroups within a labor force Workforce utilization review is a comparison of the proportion of workers in protected subgroups with the proportion that each subgroup represents 5-12 HR Recruitment Process Job Choice Vacancy Characteristics Personnel Policies Job Choice Recruiter Traits &Behaviors Applicant Characteristics...  Organizational decisions that affect the nature of the vacancies for which people are recruited  Characteristics of the vacancy are more important than recruiters or recruiting sources  Personnel Policies vary:  Internal versus External recruiting  Extrinsic versus Intrinsic rewards  Employment-at-will policies  Image advertising 5-14 Recruitment Sources Colleges& Universitiescampus placement...Outsourcing and Off-shoring Outsourcing is an organization’s use of an outside organization for a broad set of services Off-shoring is a special case of outsourcing where the jobs that move actually leave one country and go to another To help ensure the success of outsourcing:  Choose an established, large outsourcing vendor  Jobs that are proprietary or require tight security... planning uses labor supply and demand forecasts to anticipate labor shortages and surpluses to enhance organization’s success and reduce human suffering  HR recruiting creates an applicant pool should a labor shortage occur 5-18