Chapter 5 Human Resource Planning and Recruitment Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

5-2 3 Stages in HR Planning Process Forecasting of labor surplus or shortage Goal Setting & Strategic Planning 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 Downsizing Downsizing - planned elimination of large numbers of personnel to enhance organizational competitiveness. Long-term effects of an improperly managed downsizing effort can be negative. 4 Reasons for Downsizing: 1. reduce labor costs 2. technological changes reduce need for labor* 3. mergers and acquisitions reduce bureaucratic overhead 4. organizations change location of where they do business

5-5 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.

5-6 Employing Temporary Workers  Hiring temporary workers helps eliminate a labor shortage and affords flexibility needed to operate efficiently during demand swings.  3 Advantages: 1. Temporary workers free a company from administrative tasks and financial burdens. 2. Temporary workers are often times tested and trained by a temporary agency. 3. Many temporary workers brings an objective perspective and experience.

5-7 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.

5-8 Altering Pay and Hours Garner more hours from current employees Cut salaries Reduce contributions to 401(k) plans Reduce number of hours of all workers.

5-9 HR Recruitment Process Job Choice Recruitment Influences Job Choice Applicant Characteristics Vacancy Characteristics

5-10 Recruitment Sources Newspaper Advertising - large volume, low quality recruits JOBS

5-11 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.