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Recruitment: Attracting the Right Talent

Learning Outcomes After reading this chapter, you should be able to do the following:

• Identify a wide range of sources for attracting and recruiting talent.

• Explain the strategic value of effective recruitment through combinations of internal and external applicant sources and recruitment strategies.

• Link recruitment to the strategic HRM process.

• Apply pertinent HR laws to the recruitment process.

• Discuss emerging trends, opportunities, and challenges in recruitment.

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Introduction

Introduction People are indeed the most valuable asset of an organization. Without their knowledge, skills, and talents, an organization will not be able to operate or compete effectively in the mar- ket. This is why recruitment plays a strategic role. The purpose of the recruitment process is identifying and attracting qualified talent for organizational jobs in a timely and effective manner. Organizations can find talent in internal ways and external ways. These methods are discussed in detail in this chapter.

Opening Case Study The End of Jobs?

The attraction and recruitment of talent has been at the center of employers’ attention for many years. For decades, management glibly mouthed the maxim, “Our employees are our most valuable asset.” However, there is evidence that structural changes in our society may be causing management to reconsider the value of people. Here are some recent examples.

• Goldman Sachs Group, Inc. reported that they intended to fire employees in sales and trading, investment banking, wealth management and investing and lending, and replace them, when possible, with new technology (LaCarpa, 2012).

• In the military, unmanned systems have replaced human soldiers on dull, dirty, or danger- ous missions, as robots have defused over 10,000 roadside bombs in Iraq (Myers, 2009).

• A grocery warehouse that once employed 50 to 60 workers to fill orders for grocery stores, place them on pallets, and load them on trucks for delivery, now uses robots exclusively to fill all the orders (Kelly, 2011).

• In Fresno, California, Pacific Gas and Electric used to employ 50 full-time meter readers, but with installation of digital meters that collect and transmit information to a central data center, only six meter readers remain employed (Wiseman, Condon, & Fahey, 2013).

• Using robots, Webb Wheel Products is now making 300,000 break drums annually (a 25% increase) without adding a single employee in three years (Wiseman, Condon, & Fahey, 2013).

Organizations appear to be leveraging any possible technology advantage to reduce the need for people, the once most valuable resource. Automation has enabled organizations, even entire industries, to replace workers with software and self-service technology in the service sector, and robotic technologies in manufacturing; perhaps we are witnessing a structural change of such dramatic proportion in the workplace that we are not likely to see a reduction in automation and technology.

A recent study by the Associated Press found that almost all jobs being replaced by technology are in industries that pay middle class wages, jobs that form the backbone of the middle class in Europe, Asia, and America. For instance, in the United States more than 1.1 million secre- taries vanished from the job market between 2000 and 2010 as their jobs were replaced by software that lets bosses field calls themselves and arrange their own meetings and trips. It is estimated that over two thirds of the 7.6 million middle class jobs that disappeared in Europe since 2008 were due to technological innovations. The HRM function enjoys no special pro- tection from the impact of this ongoing structural change. A negotiator with the Dutch labor union federation FNV noted that individual employees are now expected to do for themselves from

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Section 4.1 Finding Talent in the External Labor Market

4.1 Finding Talent in the External Labor Market In order to recruit strategically, an organization may need to gather information about poten- tial candidates for a job who do not work for that organization and may not have applied for a job at that organization before. These potential candidates may currently be full-time students, employed elsewhere in the same or a different industry, or unemployed. They may be actively seeking employment, or they may be content with their current situation. As you learned in Chapter 2, scanning the environment and analyzing the labor market are part of strategic HR planning. The recruitment process translates environmental scans and labor market analyses into specific actions to find and attract pools of candidates with the specific competencies and skill sets that the organization needs, wherever these candidates can be found. In this section, you will learn about a wide range of external sources of candidates and strategies that can be used to find and attract talent.

Advertising Jobs Newspapers, magazines, television, and radio are all common examples of media sources where organizations can advertise jobs. In general, the effectiveness of a job advertisement depends on two related factors: cost and reach. Cost represents a certain type of advertising media’s price; for example, television advertising is more expensive than radio advertising. That’s why many local employers with limited resources advertise on local radio.

On the other hand, cost cannot be the only consideration in selecting where to advertise a job opening. It is critically important that the advertising venue be able to reach the target audience. For example, nationwide advertising media may be necessary and justified if the pool of applicants

Opening Case Study The End of Jobs? (continued)

their computers much of what was once considered the function of HRM; where he once could walk into the employee affairs office and get answers to questions about pensions or terms of a contract, all of that is now automated and accessible from his computer (Wiseman et al., 2013).

Over a decade ago, Cardinali (2000) observed that the number of unemployable job seekers increases as the use of technology increases; and further complicating the issue is the fact that those displaced by technology are often deemed not trainable, and if they are trainable, they are frequently branded as not having sufficient working years left to be worth the training investment. What about the often-heard retort that technology creates new jobs? Yes, new jobs are indeed created, but nowhere near the rate at which technology is killing them off. The advance of technology is producing wondrous products and services, but it is also taking a toll on people because they can be so easily replaced (Wiseman et al., 2013). Corporate profits have soared as businesses embrace new labor-saving technologies, while at the same time doing everything and anything they can to avoid hiring permanent workers (Solman, 2013).

The implications of these trends are far from clear. On one hand, automation and technology are rendering many jobs obsolete. On the other hand, talented “knowledge workers” who can work with technology and collaborate effectively with others are in high demand. Per- haps the job market is shifting toward a different skill set altogether. What tomorrow’s high- demand talents are likely to be remains to be discovered by employers and employees alike.

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Section 4.1 Finding Talent in the External Labor Market

is dispersed across the nation and if the organization is willing to relocate a qualified applicant or allow him or her to work from a distance. On the other hand, a low-paying job with no relocation provisions will likely attract local candidates, and local advertisements may be sufficient for it.

There is a strategic value to integrating the two criteria of cost and reach. Ultimately, the util- ity of a job advertisement is determined by its costs and benefits, which are determined by the cost per qualified candidate reached. For example, most television advertising is expen- sive; yet, with millions of viewers, the cost per viewer reached may be minuscule. The most important strategic question is what percentage of those viewers are actually qualified for the job. If this percentage is low then the cost, per qualified applicant reached, may be prohibi- tively high. Organizations can improve these ratios by targeting their advertisements specifi- cally to television channels, programs, and airtimes that attract larger numbers of the desired pool of applicants.

As another example, advertising a job in the classifieds section of a news site is usually inex- pensive. However, qualified people who are currently employed rarely read the classifieds, so a job may have to be advertised for several weeks and on numerous sites before a qualified candidate can be found. Thus, costs may escalate per qualified candidate reached. In that case, it may be more effective to place a more expensive advertisement in a professional or indus- try journal that can more readily reach qualified candidates. Multiple media sources can also be strategically combined to target diverse applicant pools.

An organization also has to make sure that an advertisement does not generate an exces- sive number of applicants, since the process of reviewing and eliminating applicants is costly and time consuming. To avoid this problem, an advertisement should provide sufficient infor- mation about the company and clearly specify the position’s preferred qualifications and minimum competencies. Advertisements are generally costly and cost more the longer they are; a long advertisement is sometimes necessary to clearly convey the desired information. The challenge is to provide neither too much nor too little information—only enough for the advertisement to be effective. Careful and intentional choices are necessary for both a job advertisement’s content and its media sources.

Web Links Job Advertisements in USA Today

http://www.usatodayclassifieds.com/adlist.php?CategoryHeading=Careers

Browse through the jobs advertised on USA Today’s career classifieds for examples of position openings that organizations are seeking to fill through a national search.

Job Advertisements in the Chicago Tribune http://www.chicagotribune.com/

Select “Classified” from the Sections menu and click on the Jobs link to browse through jobs advertised on the Chicago Tribune for examples of position openings that organizations are seeking to fill through a regional or local search. You can also browse job openings advertised in your own area on your local newspapers’ Web sites.

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http://www.usatodayclassifieds.com/adlist.php?CategoryHeading=Careers

http://www.chicagotribune.com/

Section 4.1 Finding Talent in the External Labor Market

Employment Agencies Employment agencies are a leading source of job candidates. There are two types of employment agencies: public and private. Both types primar- ily serve the same purpose: gathering information about individuals seeking employment in the market; evaluating their qualifications, skill sets, and expe- riences through a series of interviews and tests; and then connecting them with the relevant organizations for employment.

Public employment agencies work to connect unemployed individuals— mostly blue-collar and hourly workers— with hiring employers for the purpose of getting them on an employment pay- roll, hence relieving the state of having to provide unemployment aid. To that end, both employers and individuals seeking employment must register with a local or state employ- ment office. Public employment agencies normally do not charge organizations any fee for recruiting personnel.

Web Link California Employment Development Department

http://www.caljobs.ca.gov/

This website provides an example of the services offered by a public employment agency. Search the Web for the site of a similar public employment agency in your own state. Compare the services offered and browse the jobs advertised.

Web Links (continued)

Discussion Questions 1. What types of information are included in the job advertisements you browsed? 2. What additional information would you have wanted to know as a potential candidate? 3. What are some of the main differences between local and national newspaper job

advertisements?

Yellow Dog Productions/Getty Images

The goal of employment agencies is to connect qualified individuals to organizations with job openings in a relevant field.

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http://www.caljobs.ca.gov/

Section 4.1 Finding Talent in the External Labor Market

Private employment agencies, also known as headhunters, primarily deal with white-collar employees such as executives, managers, and professionals. It is therefore crucial that organizations provide headhunters with accurate and detailed job descriptions and job speci- fications to ensure that the right candidate is recruited. There are two types of private employ- ment agencies: contingency and retainer firms. The classification depends on the method by which a private firm charges the employer. Contingency firms charge the employer only if an employee is successfully hired by the organization. On the other hand, retainer firms charge the employer a fee for bringing qualified candidates to the organization’s attention, regard- less of whether the organization eventually hires these candidates.

Web Recruiting Online recruiting has become a primary recruitment method. There are three main sources of Web recruiting:

• Web job boards and postings • Professional/career websites • Employer websites

As the name implies, job boards allow employers to post available openings online to attract qualified employees, at the same time allowing individuals who seek employment to post their resumes.

HR can also use job boards to determine compensation packages offered by other organiza- tions for similar positions and then use that information to create more competitive compen- sation packages to attract qualified individuals. However, many individuals are not seriously seeking a position: they merely post their profiles on job boards to check job availability or compensation packages offered by other organizations.

Career Web sites are employment sections on professional associations’ websites. These sites are highly specific to a certain field, specialization, or industry. There are multiple advantages associ- ated with this type of online recruiting for both employers and individuals seeking employment. For employers, professional Web sites selectively attract only professional applicants who are actually interested in a particular specialization. These sites do not attract the general popula- tion. For potential candidates, professional Web sites can significantly cut down search time and effort since candidates can directly search their areas of specialization.

Web Links Monster

http://www.monster.com/

The Ladders https://www.theladders.com/

These two Web sites are examples of private employment agencies. Search both Web sites for information about the range of services each headhunter offers for employers and for job candidates, as well as whether it can be classified as a contingency or a retainer firm.

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http://www.monster.com/

https://www.theladders.com/

Section 4.1 Finding Talent in the External Labor Market

Finally, employer Web sites feature career and employment sections that are designated for recruiting. Linking to these sections allows individuals to check job descriptions and specifi- cations and post their resumes for company consideration. A significant advantage of employer Web sites is creating a valuable database and connecting with passive job seekers who are currently not looking for a job but would be willing to interview if presented with an attractive job offer (Starner, 2006).

Colleges and Universities Conducting interviews on college and university campuses is one of the most influential and effective sources of recruiting, especially for entry-level professional and technical positions. On-campus career placement offices assist in connecting students with recruiting organiza- tions by organizing career fairs and other recruiting events (Smith, 1995). Employers con- sider many factors when they select a college or university for recruiting purposes, such as the college’s reputation, past experience with the university recruiting office or recruited individuals, the nature of the job opening, the organization’s allocated recruiting budget, the level of market competition, and the value of the talent in question.

Organizations can use many techniques to establish a successful college or university recruit- ing program. Summer internship programs are one technique. They offer organizations an initial introduction to potential permanent recruits before any long-term commitments are

Web Links Jobs at Google

http://www.google.com/about/careers/

Jobs at Southwest Airlines https://www.southwest.com/html/about-southwest/careers/

Visit these two examples of employer Web sites.

Web Links The Career Center of the Association of Accountants

and Financial Professionals in Business http://jobs.imanet.org/home/index.cfm?site_id=11711

Career Connections at the American Society of Civil Engineers http://careers.asce.org/

These are two examples of professional career Web sites. Note each job advertisement’s higher level of specialization, focus, and level of detail. Now browse the Web for professional organizations within your field, looking for sites that offer career-related links.

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http://www.google.com/about/careers/

https://www.southwest.com/html/about-southwest/careers/

http://jobs.imanet.org/home/index.cfm?site_id=11711

http://careers.asce.org/

Section 4.1 Finding Talent in the External Labor Market

made. Other influential methods for col- lege recruiting include building long- term relationships with reputable fac- ulty and staff members in certain highly regarded universities, in addition to maintaining an on-campus presence for the organization through guest speaking and other recruiting support activities.

Professional Employer Organizations and Temp Agencies Two of the channels organizations revert to when they search the market

for talented employees are professional employer organizations (PEOs) and temp agen- cies (in this term, temp is short for “temporary employment”). PEOs and temp agencies pro- vide the service of leasing talent to other organizations based on their needs. The difference between PEOs and temp agencies is that PEOs are more geared toward higher-end profes- sional employees. Moreover, PEOs share authority over the leased employee, while in most cases temp agencies maintain full control over their employees. PEOs’ first appearance in the market was in 1980 (“Professional employer,” 2009).

Both employers and employees gain several advantages from PEOs. Employers are able to secure the services of highly qualified employees whose work they might not be able to afford on a permanent basis. Moreover, the PEO bears all responsibilities associated with hiring, firing, payroll, benefits, taxes, and other administrative functions. These responsibilities allow employers to focus on their own business functions. Companies then reimburse PEOs for their services in the form of a percentage of the customer’s gross wages. However, one of the disadvantages to employers in using PEOs is the absence of employee loyalty, as employees obtain all compensation and benefits from the PEO rather than from the client, and employ- ees know that their engagement with employers is only temporary.

PEO employees enjoy great advantages, including cheaper, better, and broader choices of benefits owing to the PEOs’ large number of employees, which allows PEOs to enjoy econ- omies of scale. Another advantage to employees is better job mobility, either locally or internationally for some PEOs. In case of an international transfer, this mobility can open more doors and provide multiple venues of job opportunities for employees and their spouses. More job opportunities also translate to additional job security and job seniority retention.

Outplacement Agencies When some firms experience economic downturns that require downsizing, they retain an outplacement firm to assist terminated employees. While the assistance generally consists of counseling and training to facilitate a good person/job match, the firms often keep a job bank of computerized listings of applicants and their qualifications. For a fee, employers seeking

Frances Roberts/age footstock/Superstock

Colleges and universities are great recruiting grounds for entry level professional positions.

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Section 4.1 Finding Talent in the External Labor Market

applicants can access these data banks and find qualified and experienced employees seeking employment.

Job and Career Fairs Professional associations, the military, and underrepresented minorities (e.g., older workers, disabled citizens, and racial groups) often hold and promote job or career fairs on behalf of their constituents. Typically, the sponsor will hold such an event in a central location with a large facility. While employers actively recruiting employees may have to pay a fee to partici- pate, job fairs that are advertised well in advance will likely yield a large number of applicants. With a typical job or career fair generating around 1,600 candidates across 65 employers, many employers are now devoting their resources at job and career fairs to information ses- sions geared toward smaller groups of specifically qualified candidates, and this appears to provide both applicants and employers a valuable complement to such events (Heneman, III, & Judge, 2009).

Unsolicited Resumes and Applications Qualified employees often seek a career only within reputable organizations that have favor- ably prominent cultures and practices. The main reason individuals pursue such companies is that they believe they can grow and further develop their technical and interpersonal qual- ities there. Reputable companies also provide more stability and job security than other employers.

A reputable image within the market is advantageous to organizations. Qualified employees tend to get so attracted to those specific organizations that they send in their resumes or applications even when no immediate opening is available. This practice is the source of the term unsolicited applications. Selecting among unsolicited applications can save the organi- zation a considerable amount of money and resources that would have been spent on recruiting efforts. Moreover, employees hired through unsolicited applications will likely be more com- mitted to the organization, perform better, and provide a long-term human advantage for the organizations they seek to associate with.

Soliciting Specific Applicants Job seekers may send unsolicited resumes to organizations whose repu- tations they admire. In the same way, organizations can also solicit specific applicants based on those applicants’ recognized, unique capabilities. This is especially common in positions that

NASA/Bill Ingalls/REX/AP Images

Due to the very unique qualifications needed for employment, NASA is a good example of an organization that routinely seeks out specific job candidates.

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Section 4.2 Finding Talent Internally

require rare qualifications. Once a candidate is located, the organization invites that appli- cant to apply for the position. Candidates are usually offered an attractive package of com- pensation, benefits, working conditions, and growth and development opportunities to motivate them to accept a job or to lure them away from their current employers. Organiza- tions that routinely solicit specific applicants include the National Aeronautics and Space Administration (NASA), the Federal Bureau of Investigation (FBI), and the Central Intel- ligence Agency (CIA).

Advantages and Disadvantages of External Recruitment There are many advantages to hiring from outside the organization, using external recruiting methodologies:

• The introduction of new individuals into the organization can bring fresh ideas and perspectives, all of which promote a healthy and dynamic organizational culture.

• New individuals usually possess diverse experiences from their former jobs, enrich- ing the organization’s knowledge base and familiarizing its current employees with competitors’ products and practices.

• New hires normally require less initial training and supervision, which saves organi- zations a great deal of time, money, and effort.

The following outcomes are among the disadvantages to external recruitment:

• Selection errors can result if good candidates are not identified—i.e., candidates who have the skill sets required to fulfill the job duties and responsibilities or have the right personality, attitude, or organizational cultural background to fit into the hiring organization.

• Qualified internal candidates within the organization can be disappointed when they have unsuccessfully sought one of these openings as a promotion or a desirable lateral move. This disappointment can lead to perceptions of betrayal and violated psychological contracts; compromise loyalty and commitment to the organization; and lead to numerous morale, attitudinal, and behavioral problems.

• It may take some time for new hires to adapt to a new organizational culture or envi- ronment. This time can translate into additional cost.

Thus, a balance of external and internal recruitment is necessary.

4.2 Finding Talent Internally Internal candidates are a valuable resource that many organizations overlook when they make recruitment decisions. Sometimes, familiarity with internal candidates and their roles in particular positions obscures the possibility that they could be ideal candidates for other positions. Moreover, many organizations do not regularly update their employee databases with KSAOs and competencies that current employees acquired after they were hired. This incomplete information sends organizations looking for external candidates for job openings without realizing that they actually have what they need internally. This section offers some approaches to internal recruitment.

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Section 4.2 Finding Talent Internally

Promoting From Within Promoting from within is the internal recruitment of qualified individuals from within the organization. Cur- rent employees gain the opportunity to be informed about internally open positions through a variety of meth- ods. Internal job postings are the most prominent way an organization informs its employees of available job openings. Internal candidates can then respond to the openings they are interested in and qualified for.

Lateral Transfers A lateral transfer is another form of internal recruiting. The direction of the move is the only difference between lateral transfers and promoting from within. In promo- tions from within, the direction of recruiting is vertical: from a lower to a higher position, usually to a managerial or supervisory level. Lateral transfers reflect a horizontal move in which individuals take on new positions yet remain at the same level of the organizational hierarchy. Lateral transfers can be across departments, business units, geographic locations, product lines, or customer accounts.

Lateral transfers can provide an alternative career advancement path for talented employees who prefer to stay within their technical areas of expertise, rather than move up to a manage- rial or supervisory position. Many organizations now offer multiple career paths to accommo- date these preferences and retain talent. For example, Millipore is a cutting-edge bioscience research leader. It offers its talented research, development, and technology employees the option to advance their careers and receive higher pay in technical positions without leaving the laboratory environment or assuming managerial responsibilities. Scientists who choose a technical career path assume additional technical responsibilities, such as more challenging projects or advanced technologies.

Employee Referrals Employee referrals are a form of recruiting through which employees recommend personal or professional acquaintances, such as friends or family members, for the organization’s employment consideration. Employee referrals are one of the largest sources of recruiting, especially for large organizations. Approximately one fourth of all large organizations’ new hires are recruited through employee referrals (Crispin & Mehler, 2010).

Employee referral assists HR managers in acquiring qualified candidates in many significant ways:

• The referring person readily familiarizes potential recruits with the organization’s culture, products, and processes.

Stockbyte/Thinkstock

Managers may find the talent they are looking for within their own organization.

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Section 4.2 Finding Talent Internally

• It provides a convenient and low-cost way to reach capable individuals and creates a considerable database of qualified potential employees for future consideration within the organization.

• Individuals hired through employee referral programs have a greater tendency to stay within the organization, compared to people hired through external recruiting agencies or job advertisements (Kiger, 2007).

• Referrals provide a very useful way to recruit in many parts of the world where labor is very scarce, and in particular areas of specialization for which qualified workers are hard to find.

As a result of the importance and effectiveness of employee referrals in recruiting, many com- panies have developed employee referral programs that aim to reward employees for refer- ring qualified individuals.

Advantages and Disadvantages of Internal Recruitment Although internal recruitment might sound more appealing and easier to implement, it has its benefits and limitations, as does any other recruiting system. Internal recruitment has four important benefits:

1. It raises the morale of promoted individuals as they develop more security, sense of commitment, and loyalty to the organization.

2. Employees promoted internally become more satisfied, productive, and efficient, and their performance and work generally become better.

3. It is generally easier to make an accurate judgment about an internal employee’s skills, abilities, performance indicators, technical experience, and personality char- acteristics, which ultimately results in a better determination for job compatibility and placement.

4. Internal recruitment costs are considerably lower compared to such external sources as job agencies.

Internal recruiting also includes the following disadvantages:

1. Internal recruitment does not introduce new ideas, experiences, or cultures to the organization.

2. Current performance reviews or other organizational indicators of performance might not be a true reflection of the individual’s capacity for or efficiency in per- forming the new job. This disparity is particularly evident when high-performance internal candidates are promoted from normal to managerial or supervisory posi- tions for which they have no adequately refined leadership skills.

3. More training and development are needed for the tasks and responsibilities associ- ated with the new position for an internally promoted employee than for an exter- nally hired recruit with the relevant set of experiences. This disparity is particularly evident in internal promotions to managerial or supervisory positions.

4. Moreover, internal recruitment can create conflict and hard feelings among internal candidates who believe they are as qualified as or more qualified than the individual who has been selected for a job. These conflicts can compromise performance, both by those who did not get promoted and by the promoted candidate—who may face resentment and lack of cooperation from coworkers and subordinates. This situation

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Section 4.3 Designing an HR Talent Inventory

is especially common when the promoted individual gains authority over former coworkers.

5. Employees can grow distracted from their main job tasks and become involved instead in political engagements that might lead to promotions.

6. Internal recruitment often leads to a new opening that has to be filled. Another drawback of promoting from within is the HR time and effort required to plan and organize a search for new, qualified candidates who have the right skill set to replace an employee whom the organization has promoted. Decisions have to be made for that opening, including whether to recruit internally or externally for the posi- tion. Another internal recruitment will trigger another opening, and so on. Hiring external candidates does not trigger this cycle of promotion decisions within the organization.

4.3 Designing an HR Talent Inventory Through internal and external resources, organizations are able to have a great pool of talent comprising candidates from different backgrounds and with different skills, capabilities, and levels of experience. Organizations use these different resources to build and design talent inventories, from which they can get an idea of the strengths and potential of their available candidates. In addition, inventories are a great resource for planning for future development opportunities or prospective jobs.

The effective design of an HR talent inventory includes tracking:

• The KSAOs and competencies acquired by current employees • Promotions and lateral movements • Training and development opportunities • Performance appraisals • Changes in assigned tasks, duties, and responsibilities

This information becomes valuable when the need arises to fill a new position. For example, if an employee received a job rotation in a different department a year ago, this informa- tion can be valuable in assessing that employee’s qualifications for a lateral transfer to that department.

Moreover, since many employees may be pursuing learning opportunities at their own time and expense, informa- tion should be regularly solicited from employees in order to maintain the most up-to-date inventory possible. For example, an employee who has just completed a new college degree, learned a new language, or organized a

monkeybusinessimages/iStock/Thinkstock

This young man is learning to use a milling machine, a skill that could help him advance in his career, especially if human resources professionals within his company record his training in a talent inventory for future reference.

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Section 4.3 Designing an HR Talent Inventory

fundraising campaign for a local charity, may be a good candidate for a position that requires these skills.

An HR inventory can also include information about external candidates, including unso- licited applicants who may be suitable for future openings. Many organizations encourage applicants to send their resumes, even when immediate openings are not posted, to retain this information in the organization’s database. Rejected applicants can also be included if future openings arise for which the applicants are qualified. Finally, even “interesting” non- applicants’ information can be retained in an organization’s HR inventory, so that they can be solicited to apply again should relevant positions open up later on.

A Moment in the Life of an HR Manager The Devil You Know May Not Always Be Better

Than the Devil You Don’t Know Lori is a district HR manager of a large wireless phone service provider. In her organization, district HR managers are responsible for recruiting all the employees within their respective districts—including branch managers, supervisors, customer service representatives, and all other office staff. The company has a nationwide presence and even a few international opera- tions. The company leadership recognizes labor market variations across locations and the need for flexibility to respond to changing customer needs. Therefore, HR managers, district managers, and branch managers are given significant levels of authority over whom to hire or fire; whom to promote or demote; whether to use full-time, part-time, or temporary employ- ees to fill various positions; and even whether to staff or outsource some of the peripheral functions such as bookkeeping, administrative work, and janitorial services.

When the company hires for a managerial or supervisory position, it is common for the inter- view panel to include customer service representatives and other employees who would report to the prospective manager or supervisor. These representatives’ opinions are taken into con- sideration in the hiring decision. Senior management always emphasizes that if this model is to work, it is critical that HR managers and branch managers collaborate to make human capital decisions. Senior management knows that any interference from the head office to centralize those decisions would not be good for business since the employees closest to the client are the people who know the best way to run the operation and serve the customer base in one location.

Lori believes that any organization should start by recruiting internally. Her HRM professor in college always said that when you hire internally, you know the candidate’s strengths and weaknesses, you develop talent in your organization, and you provide a career opportunity within your company. “Better the devil you know than the devil you don’t,” he would joke. Lori wholeheartedly bought into this viewpoint—so much so that she created an electronic bulletin board to announce job openings internally. She also created an extensive internal and external employee referral program, instituted across the organization, for which she received significant recognition from the head office.

(continued)

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Section 4.3 Designing an HR Talent Inventory

A Moment in the Life of an HR Manager The Devil You Know May Not Always Be Better

Than the Devil You Don’t Know (continued) Lori has handled her responsibilities very successfully. She has become confident in her abilities as HR manager, including her unique talent in locating and attracting the right employees, both internally and externally, and matching them with the right jobs. Employ- ees whom she recruited have consistently exceeded expectations, stayed with the company longer, and had more satisfied customers than average. These results have brought Lori many compliments and made the branch managers who worked with her look very good. That’s probably why she received today’s call from Roger, the vice president of human resources.

Roger: Hello, Lori. This is Roger from the head office. Do you have a few minutes to talk?

Lori: Hello, Roger. Of course; how can I help you?

Roger: Lori, we have a recruitment dilemma, and you’re the best person to help with it.

Lori: Whatever I can do to help. What’s the problem?

Roger: It’s not really a problem. You can say we have too much of a good thing.

Lori: How so?

Roger: Here’s the situation. You know Ken, the branch manager from District 66. He left us last month, and his position is open.

Lori: Yes, and I’ve been receiving some very good resumes that I’ll send out to the inter- view panel by the end of the week.

Roger: Here’s the dilemma. I’ve been approached by three supervisors who saw the posi- tion on the bulletin board: Ben from Toledo, Carrie from Benson, and Jamie from Seattle. I’ve looked into each of them. They’re all qualified, dedicated, have proven track records, and are overdue for a promotion, but we didn’t have any openings until Ken left. How can we choose among them, and what are we going to do about the other two? Whoever we pick, we’re going to be disappointing the other two.

Lori: We also have at least two highly qualified external candidates, but you know my position on that.

Roger: Yes, I do, and I’m all for giving priority to qualified internal candidates. I also know through the grapevine that both Ben and Jamie have received unsolicited offers from competitors with higher salaries and better benefits but chose to stay with us because they like working here. A blow like this would definitely send them away. Carrie is also toying with the idea of starting her own business, and we might lose her if we don’t keep her motivated.

Lori: That’s a tough one. Maybe we should hire an external candidate this time. After all, this branch has been fully staffed through promotions and internal transfers. Maybe it is time now for some new blood and a fresh perspective.

(continued)

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Section 4.4 Linking Recruitment to the HRM Process

4.4 Linking Recruitment to the HRM Process Linking recruitment to the strategic HRM process is critical to the success of the organization. It ensures that the recruitment process is aligned with organizational strategies. As shown in Figure 4.1 and discussed in this chapter, recruitment should be informed by HR planning, job analysis, and job design. Recruitment serves as the foundation for effective selection, compen- sation and benefits, training and development, and performance appraisal. For example, an organization designs its recruitment strategy and chooses its sources of candidates based on its environmental scanning and job market analysis (HR planning), as well as the job descrip- tions and job specifications of the vacant positions (job analysis and job design). Qualified applicants are then selected, compensated, trained, rewarded, retained, promoted, or possi- bly let go, based on what they bring into the organization and on how well their qualifications align with the organization’s needs, goals, and values. Thus, recruitment is central to the HRM process.

A Moment in the Life of an HR Manager The Devil You Know May Not Always Be Better

Than the Devil You Don’t Know (continued) Roger: I can’t believe you’re the one suggesting this, Lori. How can I be sure that those

external candidates are as good as they look on paper or in the interview? You know our culture. This is going be the first time we hire an external candidate for a manager position. A lot of people will be upset about this. What’s it going to do to the morale and loyalty of our employees?

Lori: Give me some time to think about this and do some research about each of the can- didates. I’ll get back to you in the next couple of days.

Discussion Questions 1. What are the advantages and disadvantages in filling the above opening with an internal

versus an external candidate? Think about the implications for the current candidates, other employees within the branch, other managers and employees across the organiza- tion, and customers, as well as the implications for Roger and Lori.

2. What additional information would you need to gather about each of the internal and external candidates before making a decision?

3. If you chose one of the three internal candidates, how would you minimize the nega- tive impact on the other two candidates and on morale in the branch and across the organization?

4. If you chose an external candidate, how would you go about your decision to minimize the negative impact on the three internal candidates and on morale in the branch and across the organization?

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Strategic HR planning

Job analysis and job design

Attraction and

recruitment of talent

Selection and job fit

Performance appraisal/

management

Training and development

Compensation

Benefits and benefit

administration

Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

4.5 Opportunities, Challenges, and Recent Developments in Recruiting Talent

In this section you’ll explore emerging trends, opportunities, and challenges in recruit- ment. These include recruiting in a competitive environment, legal and economic issues, an employer’s ability to attract candidates, the rise of social networking, alternative work arrangements, globalization, an organization’s internal challenges, labor relations, and the expectations of both employers and employees in the recruiting process.

Competitive Challenges Nowadays, it is becoming more and more challenging for companies to acquire talented employees owing to the high demand and scarce supply for such individuals in the recruiting market. Even when unemployment rates in general are high, talented and skilled employees are in short supply. Hiring intellectually talented employees as leaders and innovators gives organizations a competitive edge among their peers in terms of performance, which trans- lates in turn into profits.

The main problem is that many older baby boomers currently occupy managerial positions. These employees are approaching retirement age, which poses a great threat to the future of organizations. It is essential that companies search for talented individuals with con- crete leadership potential in order to fill those upcoming vacant positions. Attracting quali- fied individuals in a continuously growing, competitive market is the main challenge for

Figure 4.1: Attraction and recruitment of talent

Strategic HR planning

Job analysis and job design

Attraction and

recruitment of talent

Selection and job fit

Performance appraisal/

management

Training and development

Compensation

Benefits and benefit

administration

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Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

organizations (Axelrod, Handfield-Jones, & Welsh, 2001; Fishman, 1998; Michaels, Handfield-Jones, & Axelrod, 2001; Pfeffer, 2001).

Legal Dimensions of Recruitment: Equal Employment Opportunity and Discrimination As organizations attempt to differentiate between candidates who possess requisite job skills and those who do not, it is essential that organizations strictly adhere to all the laws and regulations gov- erning recruitment. For instance, from the very earliest stages of recruitment, such as the screen- ing phase, organizations must clearly demonstrate equal opportunity for all applicants regardless of their age, sex, religion, or ethnic background. In addition, organizations must carefully review their job advertisements and other recruitment tools to ensure that the language does not sug- gest any discriminatory preferences. As you will learn in Chapter 5, organizations must clearly state and outline their job selection criteria and be able to justify the hiring or rejection decisions made regarding any applicant in case the organi- zation’s recruiting practices come under question

as being discriminatory. For that reason, companies should keep well-organized records of all recruiting activities.

Recruitment, along with all HR functions, is regulated by the Civil Rights Act of 1964. The act is divided into several sections, called titles, each of which deals with particular facets of discrimination—e.g., voting rights, public accommodations, and public education. For an employer, discrimination occurs when an employee is treated differently due to a legally pro- tected characteristic such as gender, religion, race, national origin, or ethnic background. Title VII of the act guarantees equal opportunity in employment, and it prompted the establish- ment of the Equal Employment Opportunities Commission (EEOC) to administer and enforce federal civil rights laws. Today, the EEOC enforces laws that prohibit discrimination based on ethnic background, religion, sex, national origin, disability, or age. These laws apply not only to employee recruitment and selection but to other human resources practices such as com- pensation, training, and promotion.

It is important to note that discrimination laws are highly relevant to applicants who are not yet employed by the organization. Those applicants are entitled to equal opportunities before they ever set foot in the organization. Moreover, discrimination laws also apply to nonap- plicants. For example, affirmative action policies require that employers show initiative in recruiting a diverse pool of applicants for their job openings. Organizations where women and minorities are underrepresented are required to expand their search efforts to include more women and minorities in their applicant pools. For example, an organization with a

Cultura Limited/Cultura Limited/SuperStock

As members of the baby boomer generation begin to retire, it is essential that companies have talented individuals with solid leadership skills to replace them.

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Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

predominantly white male employee base that relies on employee referrals may be asked to also use job advertisements to reach out to more women and minorities.

However, an organization will never be required to hire less qualified candidates simply because they belong to an underrepresented group. In fact, such practice is illegal because it is discriminatory. This practice is often referred to as reverse discrimination because it discriminates against the majority group. Contrary to common misconceptions, affirmative action is not about “hiring quotas” forced upon the organization by law. In fact, hiring quotas of any form are illegal in the United States. Affirmative action is primarily a recruitment phi- losophy that was originally designed to promote a wider, more inclusive applicant pool.

Economic Challenges: The Rising Costs of Recruitment In unfavorable economic conditions, organizations aggressively look into cutting costs in order to stay competitive in the market. Reducing recruiting costs is one of the areas that organizations actively pursue in such harsh economic conditions (Zeidner, 2009).

To carry out this effort effectively, the first step is to evaluate the current recruiting costs incurred by the organization. The simplest method is to divide the recruiting costs by the number of hired personnel for the year. Many elements can be added or removed from this calculation, depending on the organization’s preferences and on such considerations as test- ing expenses, training expenses, relocation packages, and bonus agreements.

Organizations attempt to lower recruiting costs through observing, effectively reducing, or possibly cutting any of these elements. For example, some organizations reduce recruiting costs in tough economic times by working out short-term discount deals with recruiting agen- cies, thereby reducing the total recruiting costs incurred by the organization (Zeidner, 2009).

However, even in tough times, it is critical that organizations perform a cost-benefit analysis when they attempt to reduce their recruiting costs. For example, as discussed earlier, cheaper recruiting methods do not necessarily reach the right talent; thus, the cost per qualified can- didate may be high. Screening large numbers of unqualified applicants may waste time and resources. On the other hand, a more specialized venue may be more expensive, but may yield the right candidates in less time. This type of cost-benefit analysis should be pursued in most HR decisions, and not just in recruitment.

Finally, some HR expenditures yield long-term returns—e.g., recruiting candidates who are qualified and motivated for the job and committed to stay with the organization. These expen- ditures should be treated as an investment rather than an expense. They yield worthwhile long-term benefits that should be taken into consideration when an organization decides whether specific costs should be incurred or eliminated.

Becoming the Employer of Choice for a Broader Pool of Applicants HR policies and guidelines directly affect an organization’s ability to recruit qualified indi- viduals and retain valuable employees. Organizational factors related to recruitment, selec- tion, training and development, and compensation and benefits, all contribute to portraying a favorable organizational image in the job market. Therefore, these factors have a direct influ- ence on attracting talent.

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Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

As you will continue to see in the “Best Companies to Work For” feature of every chapter, being recognized as an employer of choice contributes to the organization’s overall reputa- tion, which in turn attracts a wider pool of applicants. Therefore, organizations must carefully and thoroughly examine their recruiting, selection, and personnel policies, which affect both current employees and the overall attractiveness and reputation of the organization in the market and among prospective recruits. For instance, an organization is more likely to attract qualified applicants when its public image includes career growth, stability, and a favorable internal environment and culture.

Technological Developments in Recruitment: Social Networking Social networking is emerging as another effective method for recruiting qualified employ- ees. The general idea behind any social media Web site is that people are invited to join by existing members who think they would be valuable additions to the emerging community; a member can offer to communicate with any other member, but the communication does not occur until the intended recipient approves the contact, and members can then work through friends they establish in the community. Social networking as a recruiting strategy involves using the Web informally for hiring purposes through blogs, technical and special- ized online journals, informal communication with similar-minded professionals, and job recruiting websites that reach out to and solicit qualified applicants. The most commonly used social networking Web sites are Facebook, Twitter, LinkedIn, and Pinterest. LinkedIn is considered more professionally oriented than other social networking Web sites, which are oriented more toward personal and social communication.

Social networking has many advantages for both the employee and the employer. One of its most significant advantages to employers is the ability to search for candidates to fill highly specialized and unique jobs (Kravitz, 2006; Leonard, 2006). Some social networks also allow current or former employees to assess and evaluate their employers on the Web through reviews and questionnaires—helping other candidates make more informed decisions (Anthaualey, 2006). Most importantly, many social networks are free of charge, which can reduce recruitment costs.

Best Companies to Work For #1: Google

http://fortune.com/best-companies/google-1/

http://us.greatrated.com/review/google-inc2014

”Working here can make you feel that you’ve made it into the technical equivalent of Major League Baseball or the NFL—you’re at the top of your field.” What a testimony to the power and attractiveness of Google’s recruitment strategies! Google posts over 4,000 jobs each year and the applications pile up in no time. Many factors attract future “googlers”: The skyrock- eting prices of employee-owned stocks are definitely plus, but the sense of ownership and belonging to an innovative and successful organization and a great culture are priceless. Google defines conventional wisdom and changes the rules every day, both in the marketplace, with its cutting-edge technology, and in the office, with its caring and team-oriented culture. The pride of working for a company with such a positive reputation is a primary attraction and a key source of people-based competitive advantage.

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http://fortune.com/best-companies/google-1/

http://us.greatrated.com/review/google-inc2014

Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

However, it can also be risky for both employers and employees to use social networks for recruitment. For employ- ers, social networks offer their partici- pants a lot of freedom. Job candidates may therefore self-promote by sharing false information. They may also post discriminatory or offensive remarks that could later expose the organiza- tion to legal action. Similarly, employees may risk their privacy or the illegitimate use of their personal information when people involved in illegal activities pose online as potential employers.

Finally, social networking blurs the line between personal and profes- sional life. For example, employers and recruiters routinely check applicants’ Facebook pages to know more about their personal interests and lifestyles. This practice raises privacy concerns and can also be illegal if an applicant is rejected for discriminatory reasons such as religious preferences or sexual orientation. These are reasons for organizations and employees to approach social networking and other Web-based activities in the workplace (e.g., e-mail and company websites) deliberately and carefully, since they are governed by the same laws as more traditional methods.

Alternative Work Arrangements: Outsourcing, Contracting, and Contingent Workers As discussed in previous chapters, some organizations revert to outsourcing instead of recruiting and hiring. Organizations outsource to gain efficiency and lower costs for the same or better-quality products or services. When an organization specializes in delivering a par- ticular product or service on a large scale, it can afford the advantages of economies of scale.

Web Links LinkedIn

http://www.linkedin.com/

If you do not have an account on LinkedIn, create one. Make sure to use a professional photo and a polished, proofread resume. Then, start searching for current, former, and potential future professional contacts, and send them invitations.

Social Recruiting http://www.shrm.org/hrdisciplines/technology/articles/pages/socialrecruitingviral.aspx

This article examines the rising trends of social networking use in recruitment.

Bloomberg/Contributor/GettyImages

Social networking and social media can be useful recruitment tools, but employers and candidates should also be aware of the risks.

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http://www.linkedin.com/

http://www.shrm.org/hrdisciplines/technology/articles/pages/socialrecruitingviral.aspx

Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

Outsourcing is therefore common in countries where wages and salaries are lower. Outsourc- ing to other countries has been growing considerably because of technological advances in networks and transmission methods. Some of the most commonly outsourced services are payroll, legal services, and customer service.

As appealing as it sounds, outsourcing has disadvantages that can offset the advantages, such as security breaches, deficient customer service, and quality control problems. Organizations that are known for outsourcing may also have a harder time attracting and retaining talent because potential applicants or current employees may perceive them as insecure places to work. Nevertheless, outsourcing can be a viable alternative to traditional recruitment when talent is rare, unavailable, or too expensive to retain on permanent payroll. The organization can then outsource roles on an as-needed basis.

Another form of alternative work arrangement is contingent employment of temporary and contract workers. Contingency employment offers many advantages to organizations:

• It enables organizations to effectively adapt to changes in market demand. • It alleviates financial burdens associated with direct hires such as record keeping

and other administrative responsibilities and obligations. • It eliminates the costs of benefits such as retirement plans; health, life and unem-

ployment insurance; and other compensation benefits. • Outside contract employees bring their experiences from other organizations and

share them with permanent workers in the organization (Connelly & Gallagher, 2004; Matusik & Hill, 1998).

On the other hand, contingency employment can bring disadvantages to both an organization and its temporary or contract employees. Some temporary employees are discouraged by contingency employment because they cannot afford the cost of health insurance, which is usually partly or sometimes fully covered by organizations for permanent employees. For organizations, federal laws sometimes pose a hurdle since they give temporary and contract employees some rights that restrict organizations from controlling contingency employees. One example is hours of operation. Contingency employees also may not feel as much sense of commitment to the organization as permanent employees—an attitude that may lower the delivered service’s or product’s quality. However, research on the attitudes and behaviors of contingent employees is mixed on this question. New models and methods are needed to bet- ter understand how contingent workers relate to their temporary employers (Gallagher & Sverke, 2005; Van Dyne & Ang, 1998).

Web Link Justanswer

http://www.justanswer.com/

This Web site provides its customers with paid expert advice on a wide range of topics, includ- ing medical, legal, engineering, computer, mechanical, psychological, and even personal and relationship matters. Although experts are highly qualified consultants, they are hired as inde- pendent contractors, which makes them fit the classification of contingent workers.

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http://www.justanswer.com/

Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

Recruiting Globally With an increasing demand and competition for talented employees, more and more orga- nizations are resorting to either searching for talent or sourcing work globally. For many organizations, this option is much more effective and efficient than getting involved with competition in a war over talent in a limited-supply local market. Several factors must be carefully considered and analyzed by organizations before they venture into global recruiting, including:

• Cultural differences • Brand recognition • Variations in HR laws, practices, and compensation systems (Vashistha, 2007)

Global organizations may also resort to global recruitment to fill job openings overseas. Global recruitment capabilities can facilitate the assimilation of the organization’s operations in global markets by giving it a local “face” and “feel.” Global recruitment can also help build the organization’s reputation as a contributor to the local community, and local employees can have useful insights into how products and services can be adapted to the local market. Since locals do not have to relocate, they are usually easier to find and attract, and they are less likely to suffer from cultural shocks than their international counterparts. Thus, unless expatriates from the home country or from another location are needed, global recruitment offers many benefits that global organizations should consider.

Internal Challenges to Effective Recruitment: Organizational Structure, Culture, and Politics As you probably deduced from the vignette presented earlier in this chapter, organizational struc- ture, culture, and politics can affect recruitment. An organization’s image is an important factor in attracting and retaining talent. Employees are attracted to organizations that they perceive as having structures and cultures compatible with their personalities and preferences (Gardner, Reithel, Foley, Cogliser, & Walumbwa, 2009). Moreover, people who are hired because of their compatibility with corporate culture are more likely to stay longer (Hunt, 2011). For example, organizational structures that do not support internal recruitment and career development may not be attractive to candidates with high needs for growth. In fact, organizational politics and HR systems that emphasize seniority have been found to be associated with counterproductive behaviors such as hoarding information and fragmentation between workers (Finlay, 1990).

Unions, Labor Relations, and Recruitment Practices A major role of HR is to act as a mediator between employees and organizations, helping align employees’ interests with the organization’s expectations. Accordingly, organizations depend heavily on HR to keep such relations as healthy as possible. In many organizations, employees are also members of and are represented by labor unions. HR has additional responsibilities in these organizations, such as negotiating employment contracts and, when necessary, effec- tively managing and resolving problems.

The National Labor Relations Act (NLRA) of 1935 legalized unionization and collective bar- gaining. Therefore, most business organizations cannot require or prohibit their employees to unionize, nor can they discriminate against employees who do so through recruitment,

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Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

selection, training, compensation, promotion, or any other HR processes. However, union membership has been declining, and collective bargaining has decreased in importance (“Union members summary,” 2015). These reductions may be due in part to the increased litigation protecting workers’ interests, both in the United States and globally (Brown, Nash, Deakin, & Oxenbridge, 2000).

Realistic Job Previews and Psychological Contracts HR practices have a direct impact on attracting new, qualified individuals and retaining skilled personnel. HR has the recruitment responsibility to carefully and thoroughly inves- tigate and analyze jobs, creating a realistic job preview for potential hires. HR must also communicate all positive and negative aspects of the job to applicants, rather than conceal- ing some or all of the negatives, or exaggerating some of the positives, to lure in qualified job seekers. Misrepresenting a job will create a culture of organizational mistrust, make newly hired or currently available skilled personnel reluctant to remain in their positions, impov- erish performance and motivation, and eventually worsen employee turnover (Hom, Grif- feth, Palich, & Bracker, 1998).

Employers and potential employees have their own sets of expectations toward one another during the recruitment process. Potential employees expect a clear, true, fair representation of the job and of the organization in general. Organizations, in turn, expect their job appli- cants to represent their talents and abilities truthfully. This mutual relationship between employers and the employees becomes part of the psychological contract that develops over time, as discussed in earlier chapters. A psychological contract based on an honest exchange of information will likely be more conducive than dishonesty can be to a productive working relationship.

Studies show that there are five major areas of expectations for employees towards their employers:

• Career progression and growth within the organization • Challenging job duties and responsibilities that fit individuals’ capabilities • Favorable organizational culture • Adequate compensation for the tasks performed • Work-life balance

Employers also have five major expectations for employees:

• That employees demonstrate willingness, effort, and efficiency as they perform their duties and responsibilities

• That they make themselves available whenever needed in order to accomplish tasks outside their normal working hours

• That they display ethical conduct within the organization • That they maintain long-term loyalty and commitment to the organization • That they keep a positive attitude in accepting additional duties and responsibilities

that need to be performed in order to get the job done (Van de Ven, 2004)

As discussed in earlier chapters, and as is evident in these research findings, the psychologi- cal contract between employers and employees is changing. Employees are becoming more

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Section 4.5Opportunities, Challenges, and Recent Developments in Recruiting Talent

independent and in charge of their own roles and careers, while employers are expected to provide opportunities for growth and development. In this type of psychological contract, it is critical to establish mutual trust—even as early as the employers’ and employees’ interac- tions during the recruitment process.

Eye on the Goal The Financial Benefits and Costs of Effective Recruitment:

Pivotal Versus Important Jobs As emphasized in this chapter and throughout this textbook, a cost-benefit approach should be adopted for decisions regarding HRM costs. These expenditures should be viewed as invest- ments that yield long-term returns, rather than just expenses to be minimized or avoided. Recruitment costs fall into this category of expenditures that are truly investments. For exam- ple, effective recruitment can reduce the time and energy wasted on going through hundreds, or sometimes even thousands, of unqualified people’s applications. The ability to find and hire the right person for the job can save significant costs. Qualified individuals who also fit into the organization’s culture and are aligned with its goals and values are more likely to be moti- vated, productive employees who stay longer, contribute more effectively to their roles and their teams, make fewer mistakes, and require less up-front training. The benefits of finding these individuals will likely more than offset the costs of the process.

Does that long-term return mean that an organization should invest all its resources in recruitment and selection efforts, simply because the recruitment investment always pays off ? Not necessarily. As introduced in Chapter 1, Boudreau and Ramstad (2007) make a criti- cal distinction between jobs that are important and jobs that are pivotal. While many jobs in an organization can be considered important for its success, only a few jobs qualify as pivotal. Pivotal jobs are those in which improvement in employees’ talents and performances makes the largest difference in the organization’s success. These pivotal jobs should therefore receive the organization’s focused recruitment and selection resources. For example, in the context of a Disney theme park, the people in the costumes representing the characters, such as Mickey Mouse, are important. However, the park sweepers are pivotal to the success of the park. The difference between an excellent Mickey Mouse and an average or mediocre one is not very significant. After all, the employee is always inside the costume, accompanied by a supervisor, is not allowed to talk, and follows a strict daily schedule and a scripted approach when dealing with guests. On the other hand, the difference between an excellent sweeper and an average or mediocre sweeper can have a substantial impact on customer satisfaction.

Many organizations focus their recruitment resources on the Mickey Mouse equivalents of jobs in their organizations. These are important, highly visible jobs. However, these jobs may not be as pivotal as jobs that are lower in the organizational hierarchy, but where significant variation in performance can happen that can directly compromise the success of the organi- zation. For example, while managers are important, customer service representatives may be pivotal for organizational success in a service organization. Thus, investments in hiring tal- ented customer service representatives may yield higher returns than focusing on hiring the best managers. These types of strategic decisions should direct expenditure toward effective recruitment, rather than toward merely minimizing the costs of recruitment by choosing the cheapest possible sources of applicants.

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Summary & Resources

Key Points • Recruiting qualified employees is essential for sustaining organizational

competitiveness. • HR must be able to find candidates who have the attributes required to succeed in

particular roles. • Various sources of applicants can be used to find the right talent. • External sources of applicants include advertising, employment agencies, the Web,

colleges and universities, professional employment organizations, temp agencies, unsolicited applications, and soliciting specific applicants.

• Internal sources of applicants include promotion from within, lateral transfers, and employee referrals.

• It is beneficial to involve line managers and employees in the recruiting process. This involvement can help unify goals and result in attracting and recruiting the best candidates, at the right time, while the organization conforms to applicable laws, regulations, and guidelines.

The HR Manager’s Bookshelf Talent: Making People your Competitive Advantage,

by Edward Lawler http://www.amazon.com/Talent-Making-People-Competitive-Advantage/dp/0787998389

In this book, Lawler (2008) contrasts four types of organizations: structure-centric hierarchical bureaucracies, structure-centric low-cost operators, human capital-centric high-involvement organizations, and human capital-centric global competitors. The type of organization guides its strategy, structure, and processes, which should inform various HR practices in order to attract and retain the right talent. For example, structure-centric low-cost operators such as Walmart or McDonald’s focus primarily on cost. They offer low wages and limited benefits, and standardize most job tasks so that new employees can be trained quickly and efficiently to replace departing employees in a high-turnover environment.

In contrast, human capital-centric high-involvement organizations invest in their employ- ees’ training and development and attempt to retain them for longer periods of time in order to get reasonable returns on their investments. This perspective shapes recruitment and selection processes, as well as compensation, rewards, performance management, and succession systems. For example, human capital-centric high-involvement organiza- tions are likely to emphasize promotion from within the organization. On the other hand, while human capital-centric global competitors also emphasize investment in talent, their investments tend to be in the form of recruiting top talent from outside the organiza- tion, even globally, and generously paying for that unique talent, rather than attempting to develop it and promote it from within.

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http://www.amazon.com/Talent-Making-People-Competitive-Advantage/dp/0787998389

Summary & Resources

affirmative action A set of policies that require employers to show initiative in recruiting a diverse pool of applicants for their job openings.

Civil Rights Act A set of laws and regula- tions, divided into several sections or titles, each of which deals with particular facets of discrimination (e.g., voting rights, public accommodations, and public education); Title VII of the act guarantees equal oppor- tunity in employment and prohibits dis- crimination based on gender, religion, race, national origin, or ethnic background.

employee referrals A form of recruiting through which employees within the organi- zation recommend personal or professional acquaintances, such as friends or family members, for the organization’s employ- ment consideration.

employment agencies A leading source of job candidates—these are private and public agencies that gather information about candidates for employment in the market; evaluate their qualifications, skill sets, and experiences through a series of interviews and tests; and then connect candidates with the relevant hiring organizations.

HR talent inventory A system that tracks key indicators of existing talent within the organization such as the knowledge, skills, abilities, other characteristics (KSAOs), and competencies acquired by current employ- ees; their promotions, lateral movements,

and training and development opportuni- ties; and their performance appraisals and changes in assigned tasks, duties, and responsibilities.

lateral transfer A horizontal move in which an individual shifts to another position at the same level of the organizational hierarchy.

professional employer organizations (PEOs) Organizations that provide employ- ers with talent leases on a temporary basis, depending on employer needs. See also temp agencies.

realistic job preview An accurate picture of a job that communicates all its positive and negative aspects to job applicants.

recruitment process The process of identi- fying and attracting qualified talent for organi- zational jobs in a timely and effective manner.

social networking (as a recruiting strategy) The use of the Web in an informal manner for hiring purposes through blogs, technical and specialized online journals, informal communication with similar- minded professionals, and job-recruiting sites that reach out to qualified applicants.

temp agencies See professional employer organizations (PEOs).

Key Terms

Critical Thinking Questions

1. Some organizations proactively recruit (i.e., “poach”) employees from other compa- nies (especially competitors) by using organizational charts or phone directories to find the employee’s contact information. Do you think these recruiting methods are a good business practice? Are there any ethical issues with them?

2. Being extroverted is one trait that recruiters are often thought of as having, but what other KSAOs should a recruiter possess in order to be successful?

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Summary & Resources

3. Under what circumstances are broader versus more targeted recruiting methods more appropriate?

4. Some organizations use realistic job previews to present job candidates with accu- rate information about the negative (and positive) aspects of a job. Under what type of labor market conditions or for what type of job candidates would realistic job previews be more appropriate?

5. What would be the best ways to recruit people for your current job, or a job you have had in the past? What recruiting methods wouldn’t be as effective? Why?

6. Research an example of an organization that has been successful in adapting to the changing workforce and attracting the right talent. Based on what you have learned in this chapter, what are some of the strategic directions that facilitate this organiza- tion’s success in the competitive labor market?

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