HR Oops!
Trimming More Than the Fat
Although getting lean improves an organization’s efficiency and makes it stronger for the long
haul, some organizations are so desperate to cut costs that they starve themselves of important
human resources. Walmart needed to cut costs after the 2008 recession. They opened 13%
more stores but with 1.4 percent less workforce. Some of the cuts were at headquarters but the
question remains if they became more efficient of cut costs too deeply. Many customers
complained of longer lines, lack of product on shelves, and unable to find employees to help
with questions. Some Walmart employees responded by stating they were overwhelmed and
needed more help. In a national customer service, Walmart ranked in last place again for the 6th
year in a row. Walmart’s sales have been falling but profits have remained steady. So, the
question is, have they cut their employees too deeply to cut costs instead of concentrating on
increasing sales?
Discussion Questions with Possible Responses
1. What pros and cons of downsizing do you think apply to this example?
2. Besides reducing the workforce in its stores, how else could a retailer like Walmart
respond to a decline in demand?
HR How To
Using Temporary Employees and Contractors
Contingent workers look like an ideal solution for when a company lands a big order, needs to
catch up on administrative work, or isn’t sure demand will continue at present levels. The
company can hire workers from a temp agency, or negotiate contracts for short-term projects.
When the project or demand falls, the company doesn’t have to figure out what to do with the
workers. Additionally, the company may be able to save money because it doesn’t have to
provide benefits or withhold taxes from contract workers’ pay. The Internal Revenue Service has
guidelines for what constitutes and employee and an independent contractor. This How To box
provides some tips as follows. Companies can specify what they want a contractor to
accomplish but if they tell the workers how to do the work, or control the workers’ activities, then
the workers are employees, not independent contractors. Providing the workers with supplies or
tools and reimbursing workers for expense associate with work tend to be signs that the workers
are employees. Providing workers with benefits is a sign that workers are employees.
If a company hires workers from a temp agency and directly controls what the workers do, or if
the workers are used to perform key roles, the company may be seen by the government an
employer, or a “joint employer” with the temp agency.
Discussion Questions with Possible Responses
1. Suppose a small company does not want the headaches of administering benefits
programs, so it hires its workers from a temp agency and keeps them on for several
years. Would you expect the IRS to agree that these are not employees? Why or Why
not?
2. Suppose you work in the HR department of a company that wants to hire production
workers as independent contractors. What advice would you give management about
this idea?
Best Practices
Sources of Talent for Advanced Technology Services
Advanced Technology Services (ATS) helps solve the shortage of manufacturing employees by
providing its clients with employees with skilled workers. Many young people have been scared
off from going into manufacturing since so many job have gone to offshoring. Instead of each
individual manufacturer trying to find a few employees, ATS is source for many companies and
supplies employees as needed. In order to be a service to so many companies ATS has
developed relationships with the high school and community colleges and looks to the military
and factory closings for skilled workers.
Discussion Questions with Possible Responses
1. How does ATS’s approach to recruitment make it valuable to its clients?
2. Why is it important for ATS to recruit and train young workers instead of only hiring
experienced employees from factories that are closing?
Discussion Questions with Possible Responses
1. Bases on this description, what are some advantages of finding a candidate with social
media rather than posting jobs on the company’s website?
2. Based on this description, would you want to post a profile for yourself on LinkedIn?
Why or why not?
Discussion Questions with Possible Responses
1. What has been the financial incentive for the high-tech companies to agree not to recruit from
one another? If the arrangement had not been challenges in court, would you consider them
ethical? Why or Why Not?
2. Given that the Justice Department has seen these arrangements as possibly violating
antitrust laws, what would be the most ethical way to decide whether to recruit employees from
other companies?
ROADMAP: Review and Discussion Questions
1. Suppose an organization expects a labor shortage to develop in key job areas over the
next few years. Recommend general responses the organization could make in each of
the following areas:
a. Recruitment
b. Training
c. Compensation (pay and employee benefits)
2. Review the sample transitional matrix shown in Table 5.1. What jobs experience the
greatest turnover (employees leaving the organization)? How might an organization with
this combination of jobs reduce the turnover?
A matrix such as the sample presented in Table 5.1 is a chart that lists job categories
held in one period and shows the proportion of employees in each of those job
categories in a future period. It answers the following questions: “Where did people
who were in each category go” and “Where did people now in each job category come
from?”
3. In the same transitional matrix, which jobs seem to rely the most on internal recruitment?
Which seem to rely most on external recruitment? Why?
4. Why do organizations combine statistical and judgmental forecasts of labor demand,
rather than relying on statistics or judgment alone? Give an example of a situation in
which each type of forecast would be inaccurate.
5. Some organizations have derailed affirmative-action plans, complete with goals and
timetables, for women and minorities, yet have no formal human resource plan for the
organization as a whole. Why might this be the case? What does this practice suggest
about the role of human resource management in these organizations?
6. Give an example of a personnel policy that would help attract a larger pool of job
candidates. Give an example of a personnel policy that would likely reduce the pool of
candidates. Would you expect these policies to influence the quality as well as the
number of applicants? Why or why not?
7. Discuss the relative merits of internal versus external recruitment. Give an example of a
situation in which each of these approaches might be particularly effective.
8. List the jobs you have held. How were you recruited for each of these? From the
organization’s perspective, what were some pros and cons of recruiting you through
these methods?
9. Recruiting people for jobs that require international assignments is increasingly
important for many organizations. Where might an organization go to recruit people
interested in such assignments?
10. A large share of HR professionals have rated e-cruiting as their best source of new
talent. What qualities of electronic recruiting do you think contribute to this opinion?
11. How can organizations improve the effectiveness of their recruiters?
Managing Talent
Boeing’s high-Flying Approach to HR Planning and Recruitment
Boeing is a well-known name in the aerospace industry but they still struggle with identifying,
attracting, and retaining skilled workers. Many talented people are going to Internet companies
instead of aerospace because of the challenges in the aerospace industry. To deal proactively
with the potential employee shortage, Boeing has dedicated many years to developing a
systematic approach to talent management. They divided work groups into segments and use
predictive models to forecast business trends and workforce demographics. The HR
department uses the data to determine where they can promote, transfer, or recruit to fill needed
positions. College recruitment has become more intense and they offer jobs earlier and have
an interview process where the applicant can better understand the company culture. Boeing
has also started some partnerships with schools to better prepare future employees.
Discussion Questions with Possible Responses
1. To meet labor shortages within the company, Boeing starts with promotions and transfers.
What advantages might it experience from filling positions with current employees?
2. Besides the external recruitment sources described here, what other sources would you
recommend for Boeing? Why?
HR in Small Business
For Personal Financial Advisors, a Small Staffing Plan with a Big Impact
This case describes the decision of Robert J. Reed, a financial planner in Covington, Louisiana,
to recruit a planner to work with him so that he could grow his business, and focus on managing
the investments.
Questions
1. Is a company ever too small to need to engage in human resource planning? Why or
why not? Discuss whether you think Robert Reed planning his hiring strategy at an
appropriate time in the firm’s growth.
2. In Table 5.2, review the options for avoiding a labor shortage, and discuss how well the
options besides new hires could have worked as ways for Reed to reach his goals for
growth. As you do so, consider qualities of a financial-planning business that might be
relevant (for example, direct client contact and the need for confidentiality).
3. Suppose that when Reed was seeking to hire a certified financial planner, he asked you
for advice on where to recruit this person. Which sources would you suggest, and why?
HRM DVD Vol 3 Suggested Video with Discussion Questions and Possible Responses
Video Part 2: Recession Job Growth(6:22)
Video Summary
The country is at a crossroads regarding job growth. One in six Americans is underemployed.
The recession wiped out 15 percent of the manufacturing workforce. A decade’s worth of job
growth was lost in the recession. Experts expect elevated unemployment to last at least the next
five years. While the United States is still the world’s strongest economy, our competitive edge
is eroding.
Innovation must be the first in a three prong strategy to replace lost American jobs. In the 1960s,
launching the space program created millions of jobs and led to innovations. The defense
department began working on a computer network that became the internet, and millions of jobs
were created around this innovation alone.
History shows us you don’t save your way out of a recession, you invest your way out of it.
Research and development is the second prong of the strategy to replace lost jobs. Intel has
recently invested 7 billion dollars to create factories in Arizona, Oregon and New Mexico to
make the next generation of semiconductors, but they say high tech jobs have become hard to
fill. We are not graduating nearly the number of engineers that are coming out of China, India,
and elsewhere. Therefore the third prong of the strategy is education. We need to have
qualified, capable people to fill the positions.
Discussion Questions
1. What strategies will companies likely use to try to fill the high tech job demands?
2. What are some of the ways companies can continue to motivate their employees in a time of
a recession and extended higher unemployment.
SAP’s Inclusive Approach to Recruiting
SAP is a software company with 65,000 employees in 130 countries. SAP believes that human
resources are a source of their competitive advantage. They want to hire “young and brilliant
minds” and train them to be “sustainable.” One initiative they have is hiring employees who are
autistic. They realize that many people on the autism spectrum bring great skills such as being
highly structured or paying careful attention to details. SAP has started a pilot program to hire
autistic individual and have training and set them up with mentors. Their goal is to have up to 1
% of their workforce be employees with autism because they will help the company to think
differently and spark innovation.
Discussion Questions with Possible Responses
1. What recruiting methods described here support SAP’s need for talented workers who help
the company innovate?
2. Suggest a few other recruiting methods that would help SAP remain a strong, innovative
company.