Chapter 05 Human Resource Planning and Recruitment Human Resource Management: Gaining a Competitive Advantage Chapter 05 Human Resource Planning and Recruitment McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Discuss how to align company’s strategic direction with its HR planning. Determine labor demand for workers in various job categories. Discuss advantages and disadvantages of ways to eliminate a labor surplus and avoid a labor shortage. Describe various recruitment policies to make job vacancies more attractive. List various sources from which job applicants can be drawn, their advantages and disadvantages and evaluation methods. Explain the recruiter’s role, limits and opportunities. 5-2

3. Program Implementation & 3 Stages in HR Planning Process 1. Forecasting 2. Goal Setting & Strategic Planning 3. Program Implementation & Evaluation 5-3

Forecasting Stage of HR Planning Determine Labor Demand derived from product/service demanded external in nature Determine Labor Supply Internal movements caused by transfers, promotions, turnover, retirements, etc. transitional matrices identify employee movements in different job categories over time to chart historical trends in company’s labor supply useful for AA / EEO purposes Determine Labor Surplus or Shortage 5-4

Options for Reducing Expected Labor Surplus Option Speed Human Suffering 1. Downsizing 2. Pay reductions 3. Demotions 4. Transfers 5. Work sharing 6. Hiring freeze 7. Natural attrition 8. Early retirement 9. Retraining Fast Slow High Moderate Low 5-5

Options for Avoiding Expected Labor Surplus Option Speed Revocability 1. Overtime Temporary employees 3. Outsourcing 4. Retrained transfers 5. Turnover reductions 6. New external hires 7. Technological innovation Fast Slow High Moderate Low 5-6

Downsizing Downsizing -planned elimination of large numbers of personnel to enhance organizational competitiveness. 4 Reasons for Downsizing: reduce labor costs technological changes reduce need for labor* mergers and acquisitions reduce bureaucratic overhead organizations change location of where they do business * Economy wide, capital spending ratio increased over 300% between 1990- 2010, indicating employers substituting technology for labor. 5-7

Possible Negative Effects of Downsizing Long-term effects of an improperly managed downsizing effort can be negative. Lower long-term profit, performance and productivity Loss of talent Disrupts social networks needed for creativity and innovation 5-8

Early Retirement Programs The average age of U.S. workforce is increasing. Baby boomers are not retiring early due to: improved health fear that Social Security will be cut mandatory retirement is outlawed collapse of the financial and housing markets made it economically unviable to retire Many employers try voluntary attrition among older workers through early retirement incentive programs. 5-9

Employing Temporary Workers Hiring temporary workers helps eliminate a labor shortage and affords flexibility needed to operate efficiently during demand swings. 3 Advantages: Temporary workers free a company from administrative tasks and financial burdens. Temporary workers are often times tested by a temporary agency. Many temporary agencies train employees before sending them to employers. 5-10

Outsourcing and Offshoring Outsourcing uses an outside organization for a broad set of services. Offshoring is outsourcing where jobs leave one country and go to another. To help ensure the success of outsourcing: Choose an established, large outsourcing vendor. Jobs that are proprietary or require tight security should not be outsourced. Start small and monitor constantly. 5-11

Affirmative Action Planning Plan for various subgroups within a labor force. Workforce utilization review is a comparison of the proportion of workers in protected subgroups with the proportion that each subgroup represents. 5-12

HR Recruitment Process Job Choice Job Choice Vacancy Characteristics Applicant Characteristics Personnel Policies Recruiter Traits & Behaviors Recruitment Sources Recruitment Influences 5-13

Personnel Policies Organizational decisions that affect the nature of the vacancies for which people are recruited. Characteristics of the vacancy are more important than recruiters or recruiting sources. Personnel Policies vary: Internal versus external recruiting Extrinsic versus intrinsic rewards Employment-at-will policies Image advertising 5-14

Recruitment Sources JOBS Colleges & Universities Internal Sources campus placement services Internal Sources faster, cheaper, more certainty Public & Private Employment Agencies - headhunters can be expensive External Sources new ideas & approaches JOBS JOBS Electronic Recruiting Internet Direct Applicants & Referrals self selection, low cost Newspaper Advertising - large volume, low quality recruits 5-15

Recruiters Functional Area Traits Realism HR versus operating area specialist Traits warm and informative Realism realistic job preview honesty 5-16

2 Steps to Enhance Recruiter Impact 1. Provide timely feedback 2. Recruit in teams 5-17

Summary HR planning uses labor supply and demand forecasts to anticipate labor shortages and surpluses to enhance organization’s success and reduce human suffering. HR recruiting creates an applicant pool should a labor shortage occur. Organizations can use recruiters to influence individuals’ perceptions of jobs. 5-18