Career Development Plan Part I - Job Analysis and Selection

1. What factors are most important to consider in developing a recruitment policy?

2. Under what circumstances does it make sense to retain an executive search firm?

3. Do alternative recruitment sources yield differences in the quality of employees and in their “survival” rates on the job?

4. How can we communicate as realistic a picture as possible of a job and organization to prospective new employees? What kinds of issues are most

crucial to them?

5. If I lose my current job, what's the most efficient strategy for finding a new one?

In a recent workplace forecast, executives identified greater demand for high-skilled workers compared with low-skilled workers and a labor shortage as two of the top three most important economic trends that will affect the workforce in the near term. This has forced employers to use creative recruitment tactics in order to attract competent staff. Consider California-based video game maker Electronic Arts, for example. The company's Web site provides rich content, offering a virtual tour, with unique pages for each location—domestic and international—to celebrate individual cultures. It also uses an interactive profiling tool to provide real-time communication with talent. The objectives? Appeal to creative people, give them reason to return, make the Web site a destination (emphasize the “cool” factor), and position Electronic Arts as “the place” to be. Here is what two other leading-edge companies are doing to find and attract top talent.

Cisco Systems

Cisco's recruiters target “passive job seekers,” people who are happy and successful where they are. Because this group is not very accessible, Cisco had to learn how to lure them. It began by holding focus groups with ideal recruitment targets, such as senior engineers and marketing professionals from competitors, to find out how they spend their free time (lots of movies), what Web sites they visit, and how they feel about job hunting (they hate it). Then the real work started.

Cisco learned how to reach potential applicants through a variety of routes not usually used in recruiting, such as infiltrating art fairs, microbrewery festivals, and even home-and-garden shows. In Silicon Valley, the first-time home buyers that such events attract tend to be young achievers at successful technology companies. Cisco recruiters work the crowds, collecting business cards from prospects and speaking to them informally about their careers.

The way the company uses newspaper help-wanted ads has also changed dramatically. Rather than listing specific job openings, the company runs ads featuring its Internet address and an invitation to apply at Cisco. Directing all job seekers to its Web site is a major benefit. There it can post hundreds of job openings and lots of information about each one. Because most prospects visit Cisco's Web site from their jobs, Cisco can even tell where they work.

To accelerate and standardize online résumé submission, Cisco uses a tool called “Profiler” on its employment Web page. Profiler asks applicants to provide educational and employment information by choosing appropriate selections from a series of pull-down menus. Because most people log on to Profiler from work (peak usage of Cisco's employment page occurs between 10 a.m. and 3 p.m.), they risk being caught in the act by a boss who is just dropping by. To deal with this, there is an “Oh No! My Boss Is Coming” button, which quickly fills the screen with “Seven Habits of a Successful Employee.” The employment page also includes a virtual tour of the company's campus in Silicon Valley. The entire kit gets prominent play on the company's home page, thus ensnaring curious passers-by.

Home Depot

The Home Depot, which sells everything from hardware to lumber to plumbing supplies for home improvement projects, automated its hiring and promotion system as one part of the settlement of a sex discrimination lawsuit. For a company with more than 1,700 stores, more than 300,000 employees, and almost $65 billion in annual revenues, recruiting and hiring are everyday activities.

At a cost of $10 million, the company installed computer kiosks in every store. Computerized staffing helped to ensure that a broader pool of applicants, including women, would be considered for jobs. Job seekers' applications go into a companywide network. In the first two years after the system was introduced into all Home Depot stores, the number of female managers increased by 30 percent and the number of minority managers by 28 percent.

Rather than feeling displaced by the system, hiring managers are happy to get help from the computerized system, which handles initial screening. Applicants, who apply at kiosks in stores or by calling a toll-free number, are given a 40- to 90-minute basic skills test that helps weed out unqualified applicants before live interviews. Managers say that has meant better candidates, which, in turn, has helped reduce turnover by 11 percent.

Other retailers, such as Target, Publix supermarkets, and Hollywood Video, have also automated their application processes, but where the Home Depot breaks new ground is in using its system for promotion decisions as well as for initial hiring decisions. Here's how the promotion system works.

Employees are required to register for jobs they might want in the future, and they are encouraged to update their profiles regularly at the kiosks sitting in employee break rooms. Let's say a cashier wants to become an assistant manager. What he doesn't know is that he needs to work first as a sales associate. The computer will point that out, along with some helpful hints about what to do each step of the way. Managers can interview and promote only people who have registered an interest in the position, and they must interview at least three people. This new way of doing things is not negotiable, and five managers have been dismissed for not using the system, according to a Home Depot attorney.

Challenges

1. Why do you think creative approaches to recruitment, like those used at Electronic Arts, Cisco, and Home Depot, are necessary?

2. Finding talent is one thing. Keeping it is another. Do you see any links between employee recruitment and retention?

3. What should a company measure to determine if its recruiting efforts are effective?

Sources: Schramm, J., & Burke, M. E. (2004, June). SHRM 2004-2005 workplace forecast. Alexandria, VA: Society for Human Resource Management; Cascio, W. F., & Fogli, L. (2004, Apr.). Talent acquisition: New realities of recruitment, selection, and retention. Workshop presented at the annual conference of the Society for Industrial and Organizational Psychology, Chicago; Sellers, P. (2002, June 24). Something to prove. Fortune, pp. 88-98; Nakache, P. (1997, Sept. 29). Cisco's recruiting edge. Fortune, pp. 275, 276; Daniels, C. (2000, Apr. 3). To hire a lumber expert, click here. Fortune, pp. 267-270.

Recruitment is a form of business competition, and it is fiercely competitive. Just as corporations compete to develop, manufacture, and market the best product or service, so they must also compete to identify, attract, and hire the most qualified people. Recruitment is a business, and it is big business.1 It demands serious attention from management because any business strategy will falter without the talent to execute it. Certainly the range of recruitment needs is broad. A small manufacturer in a well-populated rural area faces recruitment challenges that are far different from those of a high-technology firm operating in global markets. Both need talent, although different types of talent, to be successful in their respective markets. Regardless of the size of a firm, or what industry it is in, recruitment and selection of people with strategically relevant abilities is more important than ever. Let's begin our treatment by examining the “big picture” of the employee recruitment and selection process, along with some important legal issues. Then we'll focus specifically on the processes of planning, managing, and evaluating recruitment efforts. We will address the special issues associated with recruiting people for international assignments in Chapter 16.

Recruitment begins, as Figure 6-1 indicates, by specifying human resource requirements (numbers, skills mix, levels, time frame), which are the typical result of job analysis and workforce planning (WP) activities. Conceptually (and logically), job analysis precedes WP in Figure 6-1 because, as we noted in Chapter 5, it is necessary to specify the work to be done and the personal characteristics necessary to do the work (competencies, knowledge, skills, abilities) before the numbers and types of people needed to do the work can be specified. Not shown in Figure 6-1, although critically important to the overall recruitment/selection process, are strategic business objectives. For example, recruitment and selection strategies for new employees are likely to differ considerably depending on whether a company's objective in hiring, say, new salespeople, is to identify candidates who are able to execute “cold calls” for new customers as opposed to servicing existing, long-term customers.

* For purposes of clarity and simplicity, relevant activities are shown only for recruitment, screening, and selection—the topics of this and the following chapter.

Past the selection stage, we are no longer dealing with job candidates, we are dealing with new employees. Typically, the first step in their introduction to company policies, practices, and benefits (technically, this is called “socialization”) is an orientation program. Orientation may take up several hours or several weeks; it may be formal, informal, or some combination of the two. As we shall see in Chapter 8, orientation has more significant and lasting effects than most people might expect.

Placement occurs after orientation; placement is the assignment of individuals to jobs. In large firms, for example, individuals may be selected initially on the basis of their potential to succeed in general management. After they have been observed and assessed during an intensive management training program, however, the organization is in a much better position to assign them to specific jobs within broader job families, such as marketing, production, or sales. (There are instances in which employees are selected specifically to fill certain positions; these are so-called “one-shot” selection placement programs.) The technical expertise and the resources necessary to implement optimal placement programs (select, orient, then place) are found mostly in very large organizations, such as the military.

Once new employees are selected, oriented, and placed, they can be trained to achieve a competent level of job performance. As we shall see in Chapter 8, training is very big business.

Finally, in the performance management process managers provide feedback to employees regarding their past and present job performance proficiency, as well as a basis for improving performance in the future. The first time a manager appraises a new employee's performance, it is like pushing the button that starts a continuous loop—more precisely, a continuous feedback loop encompassing the employee's performance, the manager's appraisal of it, and the communication between the two that comprises an ongoing performance management system.

RECRUITMENT POLICIES

As a framework for setting recruitment policies, let us consider four different possible company postures:2

1. Passive nondiscrimination is a commitment to treat all races and both sexes equally in all decisions about hiring, promotion, and pay. No attempt is made to recruit actively among prospective minority applicants. This posture fails to recognize that discriminatory practices in the past may block prospective applicants from seeking present job opportunities.

2. Pure diversity-based recruitment is a concerted effort by the organization to actively expand the pool of applicants so that no one is excluded because of past or present discrimination. However, the decision to hire or to promote is based on the best qualified individual, regardless of race or sex.

3. Diversity-based recruitment with preferential hiring goes further than pure diversity-based recruitment; it systematically favors women and minorities in hiring and promotion decisions. This is a “soft-quota” system.

4. Hard quotas represent a mandate to hire or promote specific numbers or proportions of women or minority group members.

Both private and government employers find hard quotas an unsavory strategy for rectifying the effects of past or present unfair discrimination. Nevertheless, the courts have ordered “temporary” quotas in instances in which unfair discrimination has obviously taken place and where no other remedy is feasible.3 Temporary quotas have bounds placed on them. For example, a judge might order an employer to hire two African-American employees for every white employee until the number of African-American employees reaches a certain percentage of the employer's workforce.

Passive nondiscrimination misses the mark. This became obvious as far back as 1968, when the secretary of labor publicly cited the Allen-Bradley Company of Milwaukee for failure to comply with Executive Order 11246 by not actively recruiting African Americans. The company was so well known in Milwaukee as a good place to work that it usually had a long waiting list of friends and relatives of current employees. As a matter of established business practice, the company preferred to hire referrals from current employees; almost no public recruiting was done for entry-level job openings. As a result, because almost all the present employees were white, so were almost all the referrals.

As noted in Chapter 3's discussion of legal issues in employment, preferential selection is a sticky issue. However, in several landmark cases the Supreme Court established the following principle:4 Staffing decisions must be made on a case-by-case basis; race or sex may be taken into account as one factor in an applicant's favor, but the overall decision to select or reject must be made on the basis of a combination of factors, such as entrance test scores and previous performance. That leaves us with pure diversity-based recruitment as a recruitment and selection strategy. Indeed, in a free and open competitive labor market, that's the way it ought to be.

Recruitment policies ultimately depend on the structure and functioning of internal and external labor markets. Let us therefore discuss labor market issues in some detail.

Unfortunately, it is not possible to define the geographical boundaries of a labor market in any clear-cut manner.7 Employers needing key employees will recruit far and wide if necessary. Indeed, for certain types of jobs and certain firms, the Internet has made recruitment from global labor markets a reality. In short, employers do not face a single, homogeneous market for labor but rather a series of discontinuous, segmented labor markets over which supply-and-demand conditions vary substantially.8 Economists focus on this fact as the major explanation for wage differences among occupations and among geographical areas.

Of practical concern to managers, however, is a reasonably accurate definition of labor markets for planning purposes. Here are some factors that are important for defining the limits of a labor market:9

· Geography.

· Education and/or technical background required to perform a job.

· Industry.

· Licensing or certification requirements.

· Union membership.

Companies may use one or more of these factors to help define their labor markets. Thus, an agricultural research firm that needs to hire four veterinarians cannot restrict its search to a local area since the market is national or international in scope. Union membership is not a concern in this market, but licensing and/or certification is. Typically a doctor of veterinary medicine degree is required along with state licensure to practice. Applicants are likely to be less concerned with where the job is located and more concerned with job design and career opportunities. On the other hand, suppose a brewery is trying to hire a journey-level plumber. The brewery will be looking at a labor market defined primarily by geographic proximity and secondarily by people whose experience, technical background, and (possibly) willingness to join a union after employment qualify them for the job.

· Formal and informal practices that determine how jobs are organized and described.

· Methods for choosing among candidates.

· Procedures and authorities through which potential candidates are generated by those responsible for filling open jobs.

In an open internal labor market, every available job is advertised throughout the organization, and anyone can apply. Preference is given to internal candidates by withholding outside advertising until the job has been on the internal market for several days. Finally, each candidate for a job receives an interview.

A great deal of research suggests that employers change their policies in response to changes in market conditions.11 For example, as labor becomes increasingly scarce, employers may change their policies in the following ways:

· Improving the characteristics of vacant positions, for example, by raising salaries or increasing training and educational benefits.

· Reducing hiring standards.

· Using more (and more expensive) recruiting methods.

· Extending searches over a wider geographical area.

As we have seen, legal considerations are an important component of recruitment policies. Workforce utilization is a central issue in this area.

LEGALITIES: LEGALITIES OF RECRUITMENT: WORKFORCE UTILIZATION

Workforce utilization is simply a way of identifying whether or not the composition of the workforce—measured by race and sex—employed in a particular job category in a particular firm is representative of the composition of the entire labor market available to perform that job. To see what considerations this implies, let's consider this situation: There is a town in which the percentage of qualified arc welders is 10 percent female and 15 percent African American. Now let's say that a firm in this town needs and has on staff 20 arc welders, of whom none are female and three are African American. If the representation of the workforce reflects the representation of qualified arc welders in the town, we should expect to find 20 × 0.15 = 3 African-American arc welders, and 20 × 0.10 = 2 female arc welders. Yet no female arc welders are employed at the firm. Now can you begin to see what workforce utilization is all about?

In computing workforce utilization statistics, begin by preparing a table, such as Table 6-1, which examines the job group “managers.” (Similar analyses must also be done for eight other categories of employees specified by the EEOC.) This table shows that of 90 managers, 20 are African American and 15 are female. However, labor market data indicate that 30 percent and 10 percent of the available labor market for managers are African American and female, respectively. Hence, for workforce representation to reach parity with labor market representation, 0.30 × 90, or 27, of the managers should be African American and 0.10 × 90, or 9, should be female. The recruitment goal, therefore, is to hire seven more African Americans to reach parity with the available labor force. What about the six excess female managers? The utilization analysis serves simply as a “red flag,” calling attention to recruitment needs. The extra female managers will not be furloughed or fired. However, they may be given additional training, or they may be transferred to other jobs that might provide them with greater breadth of experience, particularly if utilization analyses for those other jobs indicate a need to recruit additional females.

*Under the “utilization” column, the −7 for African Americans means that according to the relevant labor market, the African Americans are underrepresented by 7 managers, and the +6 for females means that not only are the females adequately represented, but there are 6 more female managers than needed to meet parity according to the relevant labor market.

Recruitment frequently is treated as if it were a one-way process—something organizations do to search for prospective employees. This approach may be termed a “prospecting” theory of recruitment. In practice, however, prospective employees and managers seek out organizations just as organizations seek them out. This view, termed a “mating” theory of recruitment, appears more realistic. Recruitment success (from the organization's perspective) and job search success (from the candidate's perspective) both depend on timing. If there is a match between organizational recruitment efforts and a candidate's job search efforts, conditions are ripe for the two to meet.

For organizations and candidates actually to meet, however, three other conditions must be satisfied. There must be a common communication medium (e.g., the organization advertises in a trade journal read by the candidate), the candidate must perceive a match between his or her personal characteristics and the organization's stated job requirements, and the candidate must be motivated to apply for the job. Comprehensive recruitment planning efforts must address these issues.

Recruitment begins with a clear specification of (1) the number of people needed (e.g., through workforce forecasts and utilization analyses) and (2) when they are needed. Implicit in the latter is a time frame—the duration between the receipt of a résumé and the time a new hire starts work. This time frame is sometimes referred to as “the recruitment pipeline.” The “flow” of events through the pipeline is represented as in Table 6-2. The table shows that if an operating manager sends 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. Among organizations with 1 to 500 employees, one survey found that, in practice, the average length of the pipeline is 41 days.15

In deciding where, when, and how to implement recruitment activities, initial consideration should be given to a company's current employees, especially for filling jobs above the entry level. If external recruitment efforts are undertaken without considering the desires, capabilities, and potential of present employees (e.g., the six excess female managers shown in Table 6-1), a firm may incur both short-and long-run costs. In the short run, morale may degenerate; in the long run, firms with a reputation for consistent neglect of in-house talent may find it difficult to attract new employees and retain experienced ones. This is why soundly conceived action plans (that incorporate developmental and training needs) and management succession plans are so important.

One of the thorniest issues confronting internal recruitment is the reluctance of managers to grant permission for their subordinates to be interviewed for potential transfer or promotion. As one reviewer put it, “Most supervisors are about as reluctant to release a current employee as they are to take a cut in pay.”18 To overcome this aversion, promotion-from-within policies must receive strong top management support, coupled with a company philosophy that permits employees to consider available opportunities within the organization.

Advertising available jobs internally began in the early days of affirmative action, as a means of providing equal opportunity for women and minorities to compete. It served as a method of getting around the “old boy” network, where jobs sometimes were filled more by “who you knew” than by “what you knew.” Today job posting is an established practice in many organizations, especially for filling jobs up to the lower executive level.

Openings are published on company intranets, on bulletin boards, or in company newsletters. Interested employees must reply within a specified number of days, and they may or may not have to obtain the consent of their immediate supervisors.19 Some job posting systems apply only to the plant or office in which a job is located, while other companies will relocate employees.

Job Posting at Nortel Networks and Corning.

Employee Referrals at MasterCard.

MasterCard pays current employees $1,000 for referrals of hourly workers and $2,000 to $3,000 for referrals of professionals. What makes its program different, however, is that MasterCard pays its employees immediately for anyone hired from their referrals. Initially there was concern that some employees might make bad referrals just to get the money. That concern ended when one employee pointed out that it was the employee's responsibility to make the referral, and then it was the responsibility of HR and the hiring manager to make the decision to hire, meaning that if a bad hiring decision was made, why punish the employee?

By changing the program to pay the employee immediately upon the hire of a candidate he or she referred, MasterCard generated goodwill among its employees, and within one year it quadrupled the number of referrals from current employees. Subsequent research revealed that the referral program pays for itself nearly tenfold in terms of the savings in recruitment and retention costs, and that has helped convince some very skeptical upper managers of the value of the program.24

In the health care field, Hospital Corp. of America operates an internal pool of 2,000 itinerant registered nurses who circulate among the company's 83 hospitals in 19 cities on 13-week assignments. The nurses get a monthly housing allowance, even if they stay with their families or friends, and they keep accruing benefits and seniority rather than starting anew each time they take an assignment.28 The Travelers Corporation established a pool of temporaries made up of its own retirees.

In-house temporary employees are generally protected by the same civil rights laws, worksite safety requirements, minimum wage and overtime provisions, and other labor and employment laws.29 From a management perspective, it is especially important to survey customers (in-house departments that use temporary workers) periodically to ensure that they are meeting customer expectations. If not, then corrective action is necessary.

To meet demands for talent brought about by business growth, a desire for fresh ideas, or to replace employees who leave, organizations periodically turn to the outside labor market. Keep in mind, however, that the recruitment practices of large and small firms differ considerably. Those of larger firms tend to be more formal and bureaucratic than those of smaller firms. In addition, many job seekers have distinct preferences regarding firm size, and they actively seek those types of employers to the exclusion of those who do not meet their preferences. It might be argued, therefore, that large and small firms comprise separate labor markets.30 In this section we describe four of the most popular recruitment sources: university relations, executive search firms, employment agencies, and recruitment advertising. Because they are both time consuming and expensive, large employers are more likely to use university relations and executive search firms.

What used to be known as “college recruiting” is now considerably broader in many companies. Companies have targeted certain schools that best meet their needs and have broadened the scope of their interactions with them.31 Such activities may now include—in addition to recruitment—gifts and grants to the institutions, summer employment and consulting projects for faculty, and invitations to placement officers to visit company plants and offices.

PricewaterhouseCoopers (PwC) is an example of a company that works college campuses aggressively. It focuses on four main areas: early identification, team involvement, ongoing activities, and internships. PwC identifies promising students through involvement in campus clubs and participation in classrooms and presentations. At the same time, a senior member of the company—often a partner—coordinates PwC's recruiting/business efforts and meets regularly with faculty and deans. That person treats the university as a client and is supported by a recruiter. The company supports student activities but also builds relationships with faculty and deans. “Students are changing on a yearly basis,” says the partner responsible for college recruiting in the United States, “but the faculty and deans are there for a long time. We have ongoing dialogues with them about what is happening in our business today, and what we're looking for.”32

What Management Consultants Really Do33

Would-be recruits at Booz, Allen & Hamilton use online resources to research job possibilities. The firm launched a Web site featuring consultants as they work on projects for pro bono clients. Visitors to the site can follow consultants' progress and see how they deal with clients, team members, and their friends and families outside of work. The weekly episodes are edited video clips rather than live streaming video, and each one features interactive questions and answers plus detailed information about each of the project's consultants. While some might criticize this approach for making consultants even more visible to executive recruiters, Booz Allen is not concerned. Said one partner: “The reality of the workplace right now is that if a headhunter wants to find our staff, they can.” How true. Booz Allen is not alone in promoting online employee videos to applicants. Some firms have 24-hour “recruit cams” tracking the workplace, while others, such as Lehman Brothers Holdings Inc., feature detailed “day-in-the-life” employee profiles. All are attempting to provide realistic previews to prospective new hires.

To enhance the yield from campus recruitment efforts, employers should consider the following research-based guidelines:34

1. Establish a “presence” on college campuses beyond just the on-campus interviewing period (as ExxonMobil has done).

2. Upgrade the content and specificity of recruiting materials. Many are far too general in nature. Instead, provide more detailed information about the characteristics of entry-level jobs, especially those that have had a significant positive effect on the decisions of prior applicants to join the organization. (See the Company Example of Booz, Allen & Hamilton.)

3. Devote more time and resources to training on-campus interviewers to answer specific, job-related questions from applicants.

4. For those candidates who are invited for onsite company visits, provide itineraries and agendas prior to their arrival. Written materials should answer candidates' questions dealing with travel arrangements, expense reimbursements, and whom to contact at the company and how.

5. Ensure that the attributes of vacant positions are comparable to those of competitors. This is true for large and small organizations. Some of the key job attributes that influence the decisions of applicants are the opportunities for creativity or to exercise initiative, promotional opportunities, and long-term income potential. They tend to rank starting salary as less important than these factors.35

Such firms are retained typically to recruit for senior-level positions that command salaries that exceed $150,000. The reasons for doing so may include a need to maintain confidentiality from an incumbent or a competitor, a lack of local resources to recruit executive-level individuals, or insufficient time. To use an executive search consultant most effectively requires time and commitment from the hiring organization. It must allow the consultant to become a company “insider” and to develop knowledge and familiarity with the business, its strategic plans, and its key players.36

· The firm has defined its market position by industries rather than by disciplines or as a jack-of-all-trades.

· The firm understands how your organization functions within the industries served.

· The firm is performance oriented and compensates the search salesperson substantially on the basis of assignment completion.

· The firm combines the research and recruiting responsibilities into one function. Doing so allows the researcher/recruiter to make a more comprehensive and knowledgeable presentation to targeted candidates on behalf of the client.

· The firm uses primary research techniques for locating sources. Secondary research techniques in the form of computerized databases, files of unsolicited résumés, and directories can identify qualified candidates, but finding top performers requires a more personalized approach. In fact, only 1 in 300 unsolicited résumés is likely to be shown to a client, and only 1 in 3,000 of these job seekers may get a job.38

· The firm is organized to function as a task force in the search for candidates, particularly where they are being recruited for multiple assignments or when placement speed is essential.

· The firm is a member of the Association of Executive Search Consultants (AESC) and subscribes to AESC's practice standards and code of ethics.

Compared with other recruitment sources, executive search firms are quite expensive. Total fees may reach 30 to 35 percent of the compensation package of the new hire, although more clients are now negotiating fixed-fee arrangements. Fees are often paid as follows: a retainer amounting to one-third the total fee as soon as the search is commissioned; one-third 60 days into the assignment; and a final third upon completion, plus expenses. If an organization hires a candidate on its own prior to the completion of the search, it still must pay all or some portion of the search firm's fee, unless it makes other arrangements.39

These are some of the most widely available and used outside sources. However, there is great variability in size and quality across agencies. To achieve the best results from this channel, cultivate a small number of firms and thoroughly describe the characteristics (e.g., education, training, experience) of candidates needed, the fee structure, and the method of resolving disputes. Be aware, however, that the Equal Employment Opportunity Commission's enforcement guidance is quite clear that there is no defense if a temporary staffing agency participates in a discriminatory staffing request from the client company.40

The Internet is a popular medium among job seekers and employers alike.

When this medium is mentioned, most people think of want ads in the local newspaper. But think again. This medium has become just as colorful, lively, and imaginative as consumer advertising. Today companies approach job candidates in much the same way as prospective customers: carefully identified and targeted, attracted to the company and its brand, and then sold on the job. Corporate home pages on the Internet are often designed with potential recruits in mind, as they're frequently the first place job seekers look when they begin to evaluate companies. GE Power Systems highlights links to information about diversity, employee benefits, and balancing work and family. Accenture and Enterprise Rent-a-Car are just two of the many companies that provide compelling materials on their Web sites about why people should work there.42

COMPANY EXAMPLE: HELP WANTED

Online Job Search

Prodded by the emergence of the dual-career family (60 percent of all families54), firms are finding that many managers and professionals, men and women alike, are reluctant to relocate unless the spouse will be able to find suitable employment in a new location. “If I can't work, I won't move.” That is what more and more companies are hearing from the spouses of prospective transferees, and it is not music to their ears.55 Spouse employment assistance typically includes job counseling, fees to placement agencies, contacts outside the company, and the costs of printing résumés.56

An increasingly common recruiting inducement, independent of any relocation assistance, is the sign-on bonus. Originally used in the sports world, signing bonuses are now common among executives, professionals (particularly in high-technology firms), and middle-level executives, as companies seek to buttress the eroding bonds between them and their employees. For example, to lure former stockbrokers who are willing to retrain to become financial advisers to wealthy clients, banking giant UBS offers signing bonuses equal to 100 percent of the revenue a broker produced in the previous 12 months.57

What's a company to do if things don't work out and the new person simply walks away with the cash? Firms such as General Electric and Owens-Corning require that the entire amount be repaid if the person leaves within one year, and 50 percent if he or she leaves within two years. After that, the repayment gradually drops to zero.58

Now that we have examined some of the most popular sources for internal and external recruiting, it seems reasonable to ask “Which sources are most popular with employers and job applicants?” Among employers, evidence indicates that

· Informal contacts are used widely and effectively at all occupational levels.

· Use of public employment services declines as required skills levels increase.

· The internal market is a major recruitment source except for entry-level, unskilled, and semiskilled workers.

· Larger firms are the most frequent users of walk-ins, write-ins, and the internal market.59

In practice, most applicants use more than one recruitment source to learn about jobs. Hence, designation of “the” recruitment source they used is misleading and ignores completely the combined effect of multiple sources. In fact, the accumulated evidence on the relationship between recruitment sources, turnover, and job performance suggests that such relationships are quite weak.60 In light of these results, what may be more important than the source per se is how much support and information accompanies source usage, or the extent to which a source embeds prescreening on desired applicant characteristics.61

Source: Gere, D., Scarborough, E. K., & Collison, J. (2002, Oct.). SHRM/Recruitment Marketplace, 2002, Recruiter budget/cost survey. Alexandria, VA: Society for Human Resource Management.

Employers need to establish contacts in the groups targeted for recruitment based on credibility between the employer and the contact and credibility between the contact and the targeted groups. This is known as “relationship recruiting.” Allow plenty of lead time for the contacts in the targeted groups to notify prospective applicants and for the applicants to apply for available positions.

Various community or professional organizations might be contacted (e.g., Society of Mexican-American Engineers and Scientists, National Society of Black Engineers), and leaders of those organizations should be encouraged to visit the employer and talk with employees. Another source is Finding Diversity— a comprehensive listing of more than 300 diversity recruitment tools.63 It includes Web sites, e-mail lists, newspapers, magazines, journals, career fairs, conferences, and other resources to help recruiters search for talent.

Finally, recognize two things: (1) It will take time to establish a credible, workable diversity-oriented recruitment program, and (2) there is no payoff from passive nondiscrimination. Progressive firms such as Kraft General Foods and Dun & Bradstreet are revamping their decentralized recruitment systems in order to develop a coordinated recruitment effort. They have begun by gathering data on who, when, and where they recruit, and how they fare with different groups. The goal is to create a consistent corporate image that will support recruiting efforts across the board.64

Finding and matching candidates to open requisitions entails more manual paper processing. Papers must then be copied and forwarded to hiring managers for review, tracked manually with notes and comments, and refiled manually. Individuals are identified as future candidates or as employees, if they have been hired. The process is cumbersome and time consuming.

With Hiring Gateway from Yahoo! Resumix, automation replaces the entire manual process. Hiring Gateway is a Web-based recruiting and hiring process that takes companies from job requisitions through matching candidate qualifications to documented job requirements, then through the interviewing and hiring decision-and-offer process, to finally having new hires report on board. The software creates a self-service environment that allows hiring managers to create requisitions, permits candidates automatically to upload and edit their résumé information, and allows recruiters to use its “KnowledgeBase” technology to create statements of qualifications that are tied to each individual job as well as to apply screening questions and keyword searches, among other filters.

Source: Reproduction with permission of Yahoo! Inc. 2005 by Yahoo! Inc. YAHOO! And the YAHOO! Logo are trademarks of Yahoo! Inc.

Developed over the past 15 years, KnowledgeBase draws on more than 20,000 business competencies and 250,000 rules related to various job skills and qualifications. For example, it

· Recognizes the contextual meanings of words within the résumé. Thus, it can distinguish between John Harvard, a candidate; 140 Harvard Street, an address; Harvard University, a school; and Harvard, ID, a town. Simple keyword-based systems are much less efficient, because they will return all résumés containing the word “Harvard.” Those resumes will then require subsequent analysis and classification.

· Knows when and how to draw logical inferences, such as using “experience managing a fast-growing team” as a proxy for “team-building skills.”

· Understands different résumés that contain industry-specific terminology, syntax, and lingo.

Using integrated communication tools such as Yahoo! Instant Messenger, online scheduling, and automatic e-mail reminder alerts, Hiring Gateway enables recruiters, hiring managers, and interviewers to collaborate easily and intuitively in real time to pursue their top candidates.

How does the system work in practice? Firms such as Texas Instruments, Disney, Vanguard Group, and United Parcel Service have found that Yahoo! Resumix has cut their cost-per-hire by up to 50 percent and shortened their hiring cycles by an average of 48 percent.65 That's a competitive advantage! Hiring Gateway is a type of hiring management system. Here are others.

COMPANY EXAMPLE: MANAGEMENT SYSTEMS TO TRACK AND CONTACT APPLICANTS

Application service providers such as BrassRing Systems, Icarian, and Recruitsoft enable companies to tap into sophisticated hiring management systems (HMSs). Such systems collect applications in a standardized format, screen them, determine where they came from (e.g., job boards or classified ads), monitor the progress of applications, and calculate how long it takes to fill various jobs (BrassRing) or to get a new employee working productively (Recruitsoft). All the application data remain in electronic form, so the systems allow employers to act quickly on the applications—checking references, getting comments from hiring managers, and making e-mail contact with applicants. Union Pacific's HMS allows applicants to check the status of their applications, letting candidates feel more involved in the process and spurring the organization to move things along quickly. Only about 10 percent of large companies today use the latest-generation HMS software, but the number is growing rapidly.66

The reason for evaluating past and current recruitment operations is simple: to improve the efficiency of future recruitment efforts. To do this, it is necessary to analyze the performance of the various recruitment sources systematically. Consider collecting the following kinds of information:67

· Cost of operations, that is, labor costs of company recruitment staff, operational costs (e.g., recruiting staff's travel and living expenses, agency fees, advertising expenses, brochures, supplies, and postage), and overhead expenses (e.g., rental of temporary facilities and equipment).

· Number and quality of résumés by source.

· Acceptance/offer ratio.

· Analysis of post-visit and rejection questionnaires.

· Salary offered—acceptances versus rejections.

Cisco Systems diligently measures the outcomes of its recruiting efforts. For example, Cisco's cost per hire is just $6,556 versus an industry average of $10,800. The most important statistic, however, is 45 days. This is the average time it takes Cisco to fill an open job. How avidly does Cisco pursue candidates online? It has software that tracks where visitors to its Web site go after leaving. It then places employment banner ads on those sites.69

In fact, when an organization has an efficient recruiting infrastructure in place, it may be difficult to beat the Internet. Lockheed Martin Corp., which receives more than a million résumés a year and has about 3,000 jobs open at any given time, cut the hiring process from weeks to as few as three days by using résumé management software and filtering tools.

Several studies have examined the recruitment process from the perspective of applicants. Findings indicate that characteristics of recruiters (personable, informative, trained) affect the perceptions of candidates, but not their intentions to accept job offers.70 Neither the job function (HR versus line management) nor the gender of the recruiter seems to make much difference to candidates.71 Other research has shown that job attributes (supervision, job challenge, location, salary, title) as well as recruitment activities (e.g., behavior during the interview) are important to applicants' reactions. The most important effects on interview outcomes, however, are candidates' perceived qualifications (e.g., ability to express ideas and demonstrated initiative).72 In short, recruitment may be viewed as a market-exchange process in which employers attempt to differentiate their “products” (job opportunities) among “consumers” (job applicants) who vary in their levels of job-relevant knowledge, abilities, and skills.73

Timing issues in recruitment, particularly delays, are important factors in the job choice decisions of applicants.74 Research indicates that (1) long delays between recruitment phases are not uncommon; (2) applicants react to such delays very negatively, often perceiving that “something is wrong” with the organization; and (3) regardless of their inferences, the most marketable candidates accept other offers if delays become extended. What are the implications of these findings? In a competitive marketplace, top talent disappears quickly. If you want to compete for it, streamline the decision-making process so that you can move fast.

RJPs administered after hire also have positive effects. They help to reduce turnover, help new hires cope with work demands, and signal that the employer is concerned about the well-being of its new hires.79

Longitudinal research shows that RJPs should be balanced in their orientation. That is, they should enhance overly pessimistic expectations and reduce overly optimistic expectations. Doing so helps to bolster the applicant's perceptions of the organization as caring, trustworthy, and honest.80

A final recommendation is to develop RJPs even when there is no turnover problem (proactively rather than reactively). They should employ an audiovisual medium and, where possible, show actual job incumbents.81

Nevertheless, RJPs are not appropriate for all types of jobs. They seem to work best (1) when few applicants are actually hired (i.e., the selection ratio is low), (2) when used with entry-level positions (since those coming from outside to inside the organization tend to have more inflated expectations than those who make changes internally), and (3) when unemployment is low (since job candidates are more likely to have alternative jobs to choose from).82

ETHICAL DILEMMA Online Résumés and Personal Privacy

Millions of people will transmit their résumés over the Internet this year. Is this a recruiting bonanza for employers? In one sense, yes, because they can scan online job boards using keywords to identify candidates with the educational background, training accomplishments, and workplace experience that they need. On the other hand, there are some very serious privacy concerns for job seekers and employee relations concerns for employers, and they should be recognized.83

Résumés posted at one site can be traded or sold to other sites, they can be stolen by unscrupulous headhunters or duplicated and reposted by roving “spiders,” and current employers can locate them as well. The Internet is so vast that many people think their résumés are safe there. Think again: A number of factors can wrest control from a job seeker. Here is one.

In the name of protecting company secrets, some corporations have begun to assign HR staff members to patrol cyberspace in search of wayward workers. Their objective is to reassign employees who are circulating their résumés online and who therefore have one foot out the electronic door, off of sensitive projects. Fair enough. But such a practice can also be viewed as an invasion of an employee's privacy and right to search for a job that might make better use of his or her skills. What do you think? Is it ethical for current employers to search the Internet in an effort to identify employees who have posted their résumés online?

This scenario has happened all too frequently over the last decade (as a result of mergers, restructurings, and downsizings), and it is expected to occur often this decade as economic conditions change.86 You are a mid-level executive, well-regarded, well-paid, and seemingly well-established in your chosen field. Then—whammo!—a change in business strategy or a change in economic conditions results in your layoff from the firm you hoped to retire from. What do you do? How do you go about finding another job? According to management consultants and executive recruiters, the following are some of the key things not to do, followed by some suggestions for posting an Internet résumé.87

· Don't panic. A search takes time, even for well-qualified middle-and upper-level managers. Seven months to a year is not unusual. Be prepared to wait it out.

· Don't be bitter. Bitterness makes it harder to begin to search; it also turns off potential employers.

· Don't kid yourself. Do a thorough self-appraisal of your strengths and weaknesses, your likes and dislikes about jobs and organizations. Face up to what has happened, decide if you want to switch fields, figure out where you and your family want to live, and don't delay the search itself for long.

· Don't drift. Develop a plan, target companies, and go after them relentlessly. Realize that your job is to find a new job. Cast a wide net; consider industries other than your own.

· Don't be lazy. The heart of a good job hunt is research. Use reference books, public filings, and annual reports when drawing up a list of target companies. If negotiations get serious, talk to a range of insiders and knowledgeable outsiders to learn about politics and practices. You don't want to wind up in a worse fix than the one you left. Unfortunately, research indicates that only about 5 percent of job applicants do any research on a company before an interview.88

· Don't ignore your family. Some executives are embarrassed and don't tell their families what's going on. A better approach, experts say, is to bring the family into the process and deal with issues honestly.

· Don't lie. Experts are unanimous on this point. Don't lie, and don't stretch a point—either on résumés or in interviews. Be willing to address failures as well as strengths. Discuss openly and fully what went wrong at the old job. A recent study found that “reason for leaving last job” was the single most fibbed-about topic among executive job candidates. “Results and accomplishments” was a close second. Hmm. Coincidence?89

· Don't jump the gun on salary. Always let the potential employer bring this subject up first. But once it surfaces, thoroughly explore all aspects of your future compensation and benefits package.

People who are currently employed may decide to engage in job search for any one or more of the following reasons: to establish a network, to demonstrate their marketability to their current employers, or to develop other job choices to compare with their current positions. A recent study using currently employed managers found that they engaged in more job search behavior to the extent they were more agreeable (trusting, compliant, caring), neurotic (anxious, insecure, poorly emotionally adjusted), and open to experience (imaginative, nonconforming, autonomous). In addition, managers higher in cognitive ability searched more actively, perhaps in an effort to ensure that their “hidden” abilities are recognized.91 What are the implications of these results for organizations? Assuming the manager is someone you want to retain, communicate clearly that he or she is valued and that there are rich opportunities within the organization. This is exactly what Home Depot does.

Home Depot's stock-purchase plan allows all employees to buy stock at any time for a 15 percent discount off the company's stock price, set once a year. The payoff: Home Depot's employee turnover is as much as 20 percent lower than the average in the retail industry.92

IMPACT OF RECRUITMENT ON PRODUCTIVITY, QUALITY OF WORK LIFE, AND THE BOTTOM LINE

Human Resource Management in Action: Conclusion

A close fit between individual strengths and interests and organizational and job characteristics almost guarantees a happy “marriage.” On the other hand, because the bottom line of recruitment success lies in the number of successful placements made, the effects of ineffective recruitment may not appear for years. For this reason alone, a regular system for measuring and evaluating recruitment efforts is essential. Moreover, it's difficult to manage what you can't measure.93 Consider that the first-year turnover rate for new hires can be as high as 50 percent at some companies and in some industries.94 It seems more important than ever to assess whether the costs associated with that kind of turnover are outweighed by easier and improved selection procedures, better employee retention, lower training needs and costs, or higher levels of productivity. SAS Institute, the world's largest, privately owned software company, provides extensive benefits and work/life programs, as it enjoys a 4 percent annual turnover rate, versus 20 percent for the industry. It ploughs the savings in turnover back into improving the business and the quality of life of its employees.95 Finding, attracting, and retaining top talent is now and will continue to be an important management challenge with direct impacts on productivity, quality of work life, and the bottom line.

Human Resource Management in Action

GE Medical Systems invents and makes CT scanners, magnetic resonance imagers, and other biomedical equipment that requires some of the most demanding software coding and electrical engineering anywhere. It's an innovation power-house, with more than 80 percent of its equipment sales coming from products no more than three years old. The company competes for talent with the likes of Intel, Cisco Systems, Microsoft, and Hewlett-Packard and hires about 500 technical workers a year.

IMPLICATIONS FOR MANAGEMENT PRACTICE

Talent is what makes firms go. Recruitment is therefore a strategic imperative and an important form of business competition. Given the substantial costs of recruitment and training, employers must consider the needs of employees if they wish to attract and retain top talent. American Express Travel-Related Services adopted this view in introducing its KidsCheque and FamilyCheque programs to subsidize child care and elder care for employees, more than 70 percent of whom are female.96 Its experience suggests that the following elements should be part of any successful recruitment program:

· Always view recruitment as a long-term strategy.

· Be responsive to employees' needs.

· Develop benefits that genuinely appeal to the employees being hired.

· Promote recruitment benefits to the target audience.

· Audit the recruitment programs in place.

How did the senior HR officer at American Express Travel-Related Services sell the program to hard-nosed senior managers? He emphasized its business advantages; that is, he presented it less like a typical human resources plan and more like a marketing plan—focusing on the goal of differentiating the company in the labor market and placing it ahead of the competition. He emphasized again and again the importance of acting immediately to obtain a first-mover advantage.

Brands and reputations have always been important in product markets. Today they are just as important in labor markets.97 American Express has a well-known brand and an excellent reputation. It wanted to leverage both of these in its recruitment efforts.

What were the results of the program? Within weeks of introducing the program in Jacksonville, Florida, for example, almost 80 percent of eligible employees had signed up. In addition, the company began to receive résumés from people who had heard about KidsCheque from the local media and who were interested in joining American Express as a result. It also received telephone calls from HR managers at other companies interested in instituting similar programs.98

In terms of employee referrals, fully 10 percent of them result not just in an interview, but in a hire. In comparison, just 1 percent of people whose résumés come into GE Medical are even called for an interview. Nothing else—not head-hunters and not internships—even comes close to that kind of yield. The company doubled the number of employee referrals by taking three easy steps:

1. The program is simple and rewarding—no complex forms and no bureaucracy. The referring employee receives a small goodie such as a gift certificate at a local retail store simply for referring a qualified candidate.

3. The company begins asking new employees for referrals almost from their first day on the job because if the new employee comes, say, from Motorola, for the first three months he/she is still one of them and remembers everybody. Nine months later, he/she is one of GE's. That, of course, is the goal.

Recruitment is a form of business competition, and it is fiercely competitive. It begins with a clear statement of objectives, based on the types of knowledge, skills, abilities, and other characteristics that an organization needs. Objectives are also based on a consideration of the gender and ethnic group representation of the workforce, relative to that of the surrounding labor force. Finally, a recruitment policy must spell out clearly an organization's intention to evaluate and screen candidates without regard to factors such as race, gender, age, or disability (where these characteristics are unrelated to a person's ability to do a job successfully). The actual process of recruitment begins with a specification of workforce requirements—numbers, skills mix, levels, and the time frame within which such needs must be met.

Recruitment may involve internal or external labor markets, or both. Internal recruitment often relies on succession plans, job posting, employee referrals, or temporary worker pools. Many external recruitment sources are also available. In this chapter we discussed four such sources: university relations, executive search firms, employment agencies, and recruitment advertising, with special emphasis on online job search. In managing and controlling recruitment operations, consider using a hiring management system that calculates the cost of operations and analyzes the performance of each recruitment source, because recruitment success is determined by the number of hires who actually perform their jobs successfully.

· recruitment

· initial screening

· selection

· orientation

· placement

· performance management

· passive nondiscrimination

· pure diversity-based recruitment

· diversity-based recruitment with preferential hiring

· hard quotas

· labor market

· workforce utilization

· job posting

· realistic job preview

Kenneth T. Sandmeyer, a man who patrols the shop floor in a three-piece suit and provides holiday turkeys to all hands, exudes old-school attitudes about how to run a business. But that does not extend to having unusually high employee recruitment standards.

“Don't give us your best and brightest,” the 57-year-old head of Sandmeyer Steel Company tells people who may know someone looking for a job. “Give us the people who are average or mediocre and don't know what they want to do with their lives.”

Yet Sandmeyer has trouble finding workers to meet even his modest standards. His predicament is a measure of how hard it is for many small American manufacturers to find workers these days, for reasons that embrace culture, education, and demographics.

Indeed, what Sandmeyer calls the people problem is getting worse in many parts of the country, hastening America's decline as a manufacturer and undermining the ability to compete against countries such as Japan and Germany, where factory work has higher status and the numbers of skilled workers are larger.

The problem is particularly bad in urban areas such as Philadelphia, where the middle class has higher aspirations, the poor have no skills, and the television-weaned youth of both groups are shocked to discover that some modern factories are often noisy, smelly, dirty, and uncomfortably hot or cold.

Sandmeyer calls the people problem his biggest worry in managing his family's stainless steel company in the northeast corner of the city: “It's held down our growth. We have not been able to gain as much market share as we would have, had we had more productive and capable employees.”

With imaginative searching that enlisted the aid of a local priest—and has resulted in 30 to 40 percent of its workforce being foreign-born—Sandmeyer Steel has largely managed to fill its ranks. It has succeeded despite stiff competition from large employers that typically offer similar pay but more training, more prestige, better employee benefits, and less physical discomfort.

“It's hot and dirty work; it's heavy manufacturing,” Sandmeyer acknowledged of his plant. “Instead of air conditioning,” he said, “we open every window and door when it gets over 90, and everybody gets free soda.”

Questions

1. Serious labor shortages do exist in many places, but these are not the only reasons for the recruiting problems experienced by many small businesses. What are some others?

3. What special advantages does a small business have over a large one? How can you incorporate these into the recruitment process?

1Schramm, J., & Burke, M. E. (2004, June). SHRM 2004-2005 workplace forecast. Alexandria, VA: Society for Human Resource Management. See also Wellner, A. S. (2001, Jan.). Employers join forces to recruit. HRMagazine, pp. 86-96; Leonard, B. (2001, Feb.). Recruiting from the competition. HRMagazine, pp. 78-85.

2Seligman, D. (1973, Mar.). How “equal opportunity” turned into employment quotas. Fortune, pp. 160-168.

3Replying in the affirmative (1987, Mar. 9). Time, p. 66.