"For professor Ryan"

Case 1

TeleSouth

Location: Birmingham

Employees: Approximately 400

Industry: Cellular and land-based telecommunications

Background

TeleSouth was established in Birmingham in March 2002 and began commercial operations in

mid-2003. TeleSouth operates a cellular telephone network based on digital technology in

competition with Telecom Cellular and Telecom land-based systems. The parent company is

TeleSouth Corporation of Atlanta. The company has grown rapidly since start-up and by mid-

2006 employed 383 people, mostly at its prominently located Birmingham headquarters. Further

growth was planned to around 400 employees.

Like many start-up and Greenfield site companies, TeleSouth placed a great deal of emphasis on

its recruitment and selection process. Staff were recruited to a number of different functions -

sales, marketing, information technology, finance, engineering, customer services, human

resources, and legal. Recruitment was rapid; 227 people were recruited during 2005. Sixty per

cent of those recruited were aged under 30 and for many of them TeleSouth was their first

employer. The average length of service of the whole work force is less than two years. Fifty-

five per cent of employees are female and the proportion of female mangers is 43 per cent.

Approach to HRM

The following is a summary of the company's approach in the HRM areas shown.

Recruitment/Selection Induction/Orientation Socialization

 Company's public

image

 Job advertisement

 Word of mouth

 Telephone

interview

 Observations in

reception

 1st and 2nd

interview

 Psychological

assessment

 Medical

 Verbal references

 Verbal offer

 Formal orientation

course

 First days on job --

Mechanics/

housekeeping, desk,

phone, introduction to

department

 Integration into

work group

 Assimilation into

culture of

department/organization

 Development of

task skills

 Understanding of

role/ responsibilities and

fit with organization

goals

 Career anchor

 Organizational

loyalty

The Selection Process

TeleSouth had no difficulty in attracting a large number of applicants for the vacancies. It had a

progressive dynamic image and was in a leading new product market area. As the company was

growing rapidly, management structures were loose. TeleSouth therefore sought employees who

did not require detailed day-to-day supervision, but who would be able to work in an uncertain,

ambiguous fluid environment. In the selection process the employee characteristics being sought

included intelligence, flexibility and energy.

Survey work done by the company revealed that employees had a high regard for the selection

process. Through it they were made to feel special individuals on whom a lot of time and effort

was being expended. Coming through the extensive rigorous process successfully, confirmed

them as special people coming to work for a special company. The formal two-day orientation

course also treated new employees as special people. However, in the socialization phase

employees reported that they received much less individual attention and support and had the

sense of being thrown in at the deep end. They felt that their managers were so busy doing their

jobs that they could not deal with the individual concerns of the new employees.

Results

TeleSouth found that despite their carefully structured recruitment and selection process, their

well organized and presented orientation course, and their attempts at socialization, they suffered

what they considered a rather high turnover rate. Moreover, analysis of turnover revealed that it

was rising and that it particularly applied to people who had only been in the company a short

time. Nearly a quarter of the turnover was in the first six months and 50 per cent in the first

year. People who stayed beyond those early months tended to fulfill two years' service before

there was another peak of turnover. Analysis of reasons for leaving revealed that the main

reasons were for career advancement, to travel and work elsewhere, for a complete career

change, and because of dissatisfaction with the job role. Career advancement was not for higher

pay for the same job, but to move on to a similar job at a higher level. TeleSouth employees

were highly regarded in the labor market. Mobility and travel was seen as an almost inevitable

part of the lifestyle of younger employees seeking to experience a bit more of the country. The

reasons for career change were varied, but such changes could suggest a lack of good fit in the

first place. Dissatisfaction with their role meant that the actual job did not turn out as the

employees expected. More conventional reasons for leaving, such as dissatisfaction with pay,

family, or dismissal, were not significant in this case.

The Human Resource Manager was rather concerned with these findings. It was estimated that,

at a minimum, the combined direct and indirect cost of this turnover was $20,000 per person.