1. 1-1 McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved Human Resource Management Gaining a Competitive Advantage Chapter 5 Human Resource Planning and Recruiting

2. 5-2 Learning Objectives After reading this chapter, you should be able to: Discuss how to align a company’s strategic direction with its human resource planning. Determine the labor demand for workers in various job categories. Discuss the advantages and disadvantages of various ways of eliminating a labor surplus and avoiding a labor shortage. Describe the various recruitment policies that organizations adopt to make job vacancies more attractive. List the various sources from which job applicants can be drawn, their relative advantages and disadvantages, and the methods for evaluating them. Explain the recruiter’s role in the recruitment process, the limits the recruiter faces, and the opportunities available.

3. 5-3 Stages in Human Resource Planning Forecasting Goal Setting and Strategic Planning Program Implementation and Evaluation

4. 5-4 Forecasting Stage of Human Resource Planning Determining Labor Demand –derived from product/service demanded –external in nature Determining Labor Supply –internal movements caused by transfers, promotions, turnover, retirements, etc. –transitional matrices identify employee movements over time –useful for AA / EEO purposes Determining Labor Surplus or Shortage

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

6. 5-6 Strategies for Reducing an Expected Labor Surplus OptionSpeedExtent of Human Suffering Fast Slow High Moderate Low 1. Overtime 2. Temporary employees 3. Outsourcing 4. Retrained transfers 5. Turnover reductions 6. New external hires 7. Technological innovation

7. 5-7 Downsizing Downsizing is the planned elimination of large numbers of personnel designed to enhance organizational competitiveness. Reasons for downsizing include: –need to reduce labor costs –technological changes reduce need for labor –mergers and acquisitions reduce bureaucratic overhead –organizations choose to change the location of where they do business

8. 5-8 Effects of Downsizing Studies show that firms that announce a downsizing campaign show worse, rather than better financial performance. Reasons include: –The long-term effects of an improperly managed downsizing effort can be negative. –Many downsizing campaigns let go of people who turn out to be irreplaceable assets. –Employees who survive the staff purges often become narrow-minded, self-absorbed, and risk-averse.

9. 5-9 Early Retirement Programs The average age of the U.S. workforce is increasing. Baby boomers are not retiring early for several reasons: –improved health of older people –a fear that Social Security will be cut –mandatory retirement is outlawed Many employers try to induce voluntary attrition among older workers through early retirement incentive programs.

10. 5-10 Employing Temporary Workers Hiring temporary workers helps eliminate a labor shortage. Temporary employment affords firms the flexibility needed to operate efficiently in the face of swings in demand. Other advantages include: –temporary workers free a firm from many administrative tasks and financial burdens –temporary workers are often times tested by a temporary agency –many temporary agencies train employees before sending them to employees

11. 5-11 Outsourcing and Offshoring Outsourcing is an organization’s use of an outside organization for a broad set of services. Offshoring is a special case of outsourcing where the jobs that move actually leave one country and go to another. To help ensure the success of outsourcing: –Choose an outsourcing vendor that is large and established. –Jobs that are proprietary or require tight security should not be outsourced. –It is a good idea to start small and monitor constantly.

12. 5-12 Affirmative Action Planning It is important to plan for various subgroups within a labor force. A comparison of the proportion of workers in protected subgroups with the proportion that each subgroup represents is called a workforce utilization review. The steps required to execute an affirmative action plan are identical to the steps in the generic planning process discussed earlier.

13. 5-13 The Human Resource Recruitment Process Job Choice Recruitment Influences Job Choice Applicant Characteristics Personnel Policies Recruiter Traits and Behaviors Recruitment Sources Vacancy Characteristics

14. 5-14 Personnel Policies 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

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

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

17. 5-17 1. Provide timely feedback 2. Avoid rude behavior 3. Recruit in teams Steps to Enhance Recruiter Impact 1. Provide timely feedback 2. Avoid rude behavior 3. Recruit in teams