Human Resources Planning and Recruitment

1. Human Resources Planning and Recruitment The major challenges of HRM all center on the idea that organizations increasingly compete on the basis of the talents and capabilities of their employees. In this chapter we focus on meeting these needs through effective human resources planning. Human Resource Planning Human Resources Planning (HRP) is the process of anticipating and making provisions for the movement of people into, within, and out of an organization. • Its purpose is to deploy these resources as effectively as possible, where and when they are needed, in order to accomplish the organization's goals. Consider these facts about the U.S. labor force: • Between 2000 and 2010, employment will rise from 146 million to 168 million workers. • By 2010, the average age of the workforce will be 41, up from 34.7 in 1979. Yet while the group of workers age 45 to 54 will have increased by 52 percent, the group between 25 and 44 will have shrunk by more than 10 percent. • The fastest-growing segment of the workforce will be Asian Americans (37 percent increase) and Hispanics (36 percent increase), an increase primarily effected through immigration. 1

2. Human Resources Planning and Recruitment • Women will make up approximately 48 percent of the workforce (and 58 percent of college graduates) in 2010. • Today nearly one-third of the workforce is composed of part-timers, temporary workers, and the self-employed. • The percentage of workers who have been with their employer for at least ten years has risen since the early 1990’s, up from 54 to 57.6 percent. • The five occupations expected to experience faster-than-average growth are technicians, service workers, professionals, sales representatives, and executive and managerial employees. These occupations require the highest education and skill levels. • Over the next ten years another 1.3 million high-tech job opening will be created. However, the fastest- growing sector will be service industries. • Two and a half million functionally illiterate Americans enter the workforce each year. HRP and Strategic Planning • As organizations plan for their future, HR managers must be concerned with Meshing HRP and strategic planning for the organization as a whole. HRP and strategic planning are linked in the three primary ways discussed next. Linking the Planning Processes (step 1) Through strategic planning, organizations set major objectives and develop comprehensive plans to achieve those objectives. • Human resources planning relates to strategic planning on both the front end and the back end of this process. 2

3. Human Resources Planning and Recruitment • On the front end, human resource planning provides a set of inputs into the strategic formulation process in terms of what is possible, that is, whether thetypes and numbers of people are available to pursue a given strategy. • On the back end, strategic planning and HRP are linked in terms of implementation concerns. Mapping an Organization’s Human Capital Architecture (figure 4.2) (step 2) • Core Knowledge workers: This group of employees has firm- specific skills that are directly linked to the company’s strategy. These employees typically are engaged in knowledge work that involves considerable autonomy and discretion. • Traditional job-based employees: This group of employees has skills that are quite valuable to a company, but not unique. • Contract labor • Alliance/partners Ensuring Fit and Flexibility (step 3) The third primary way that HRP and strategic planning are connected is in aligning the policies, programs, and practices in HR with the requirements of an organization’s strategy. HR policies and practices needs to achieve two types to fit: • External fit (or external alignment) focuses on the connection between the business objectives and the major initiatives in HR. 3

4. Human Resources Planning and Recruitment • Internal fit (or internal alignment) means that HR practices are all aligned with one another to establish a configuration that is mutually reinforcing. For example, job design, staffing, training, performance appraisal, compensation, and the like would all focus on the same behavioral targets. HRP and Environment Scanning Environmental scanning is the systematic monitoring of the major external forces influencing the organization. Some of these economic factors are: • Economic Factors • Competitive trends • Technological changes • Political and legislative issues • Social Concerns • Demographic trends By scanning the environment for changes that will likely affect an organization, managers can anticipate their impact and make adjustments early. 4

5. Human Resources Planning and Recruitment Elements of Effective HRP Managers follow a systematic process, or model, when undertaking HRP. The three key elements of the process are: forecasting the demand for labor, performing a supply analysis, and balancing supply and demand considerations. ForecastingDemand for Employees A key component of HRP is forecasting the number and type of people needed to meet organizational objectives. A variety of organizational factors, including competitive strategy, technology, structure, and productivity, can influence the demand for labor. Forecasting is frequently more an art than a science, providing inexact approximations, rather than absolute results. •There are two approaches to HR forecasting: quantitative and qualitative. > Quantitative Approaches Quantitative approaches to forecasting involve the use of statistical or mathematical techniques; they are the approaches used by theoreticians and professional planners. One example is trend analysis, which forecasts employment requirements on the basis of some organizational index and is one of the most commonly used approaches for projecting HR demand. > Qualitative Approaches Management forecasts are the opinions (judgments) of supervisors, department managers, experts, or other knowledge about the organization’s future employment needs. 5

6. Human Resources Planning and Recruitment Forecasting Supply of Employees Once an organization has forecasts its future requirements for employees, it must then determine if there are sufficient numbers and types of employees available to staff anticipated openings. Internal Labor Supply An internal labor analysis may begin with the preparation of staffing tables. • Staffing Tables are graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs. • Another technique, called Markov analysis, shows thepercentage of employees who remain in each job from one year to the next, as well as the proportions of those who are demoted, transferred, or exit the organization. • Other techniques are more oriented toward the types of employees and their skills, knowledge, and experiences. • Skills inventory can also be prepared that list each employee’s education, past work experience, vocational interests, specific abilities and skills, compensation history, and job tenure. • Both skills and management inventories-broadly referred to as talent inventories- can be used to develop employee replacementcharts, which list current jobholders and identify possible replacement should openings occur. 6

7. Human Resources Planning and Recruitment External Labor Supply • When an organization lacks an internal supply of employees for promotions, or when it is staffing entry-level positions, managers must consider the external supply of supply of labor. • Many factors influence labor supply, including demographic changes in the population, national and regional economics, education level of the workforce, demand for specific employees skills, population mobility, and governmental policies. Balancing Supply and Demand Considerations • Through HRP, organizations strive for a proper balance demand considerations. Demand considerations are bases on forecasted trends in business activity. Supply considerations involve the determination of where and how candidates with the required qualifications are to be found to fill vacancies. Recruiting Within the Organization Recruitment is the process of locating potential applicants and encouraging them to apply for existing job opening. Advantages of Recruiting from Within • An organization can capitalize on the investment it has made in recruiting, selecting, training, and developing its current employees. 7

8. Human Resources Planning and Recruitment • Promotion serves to reward employees for past performance and is intended to encourage them to continue their efforts. • Promotion gives other employees reason to anticipate that similar efforts by them will lead to promotion, thus improving morale within the organization. The Labor Market • The labor market, on the area from within applicants are to be recruited, will vary with the type of position to be filled and the amount of compensation to be paid. • Recruitment for executives and technical personnel who require a high degree of knowledge and skill may be national or even international in scope. Outside Sources of Recruitment • The outside sources from which employers recruit will vary with the type of position to befilled. Here are some examples: 8

9. Human Resources Planning and Recruitment Advertisements • One of the most common methods of attracting applicants is through advertisements. While newspapers and trade journals are the media used most often, radio, television, billboards, posters, and electronic mail are also utilized. Unsolicited Applications And Resumes • Many employees receive unsolicited applications and resumes from individuals who may or may not be good prospects for employment. Internet Recruiting • According to a Society for Human Resources Management study, 96 percent of all job seekers use the Internet, making it their most commonly used search tactic, whereas 88 percent of recruiters use the Internet to get the word out about new positions. Employee Referrals • The recruitment effort of an organization can be aided by employee referral. Executive Search Firms • Executive search firms (often called ”headhunters”) help employers find the right person for a job. 9

10. Human Resources Planning and Recruitment Educational Institutions • Educational institutions typically are a source of young applicants with formal training but with relatively little full-time work experience. Professional Organizations • Many professional organizations and societies offer a placement service to members as one of their benefits. Labor Unions • Labor unions can be a principal source of applicants for blue-collar and some professional jobs. Public Employment Agencies • Each of the fifty states maintain an employment agency that administer its unemployment insurance programs. Private Employment Agencies • Charging a fee enables private employment agencies to tailor their services to the specific needs of their clients. Temporary Help Agencies Employee Leasing • Employee leasing is the process of dismissing employees who are then hired by a leasing company (which handles all HR-related activities) and contracting with that company to lease back the employees. 10

11. Human Resources Planning and Recruitment Diversity Management: Recruiting Protected Classes Recruitment of Women • Women constitute the largest number among the protected classes, accounting for 40 percent of all positions in management and professional occupation―a dramatic increase from 34 percent in the 1980’s. • Contrary to a once-common belief, most women do not go to work merely to “get out of the house” or to fulfill psychological needs. • Like men, they work for varying reasons, but primarily because of economic necessity. • More than 60 percent of all women in the workforce have been responsible for supporting themselves, and three out of five of them are heads of households. Recruitment of Minorities • Since the passage of the Civil Rights Act of 1964, many members of minority groups have been able to realize a substantial improvement in their social and economic well-being. Recruitment of the Disabled • Currently, half of the 29 million disabled Americans between the ages of 21 and 64 are working. Altogether, people with disabilities account for 14 percent of the workforce. • The most frequently cited advantages of employing disabled people include their dependability, superior attendance, loyalty, and low turnover. 11