Chapter 6: Recruiting and Labor Markets
typically have been widely used in external recruiting. Some firms have sent direct mail
using purchased lists of individuals in certain fields or industries. Internet usage has led
to media sources being available online, including postings, ads, videos, Webinars, and
many other expanding media services. In some cities and towns, newspaper ads are still
very prominent, though they may trigger job searchers to go to an Internet source for
more details.
Effectiveness of Evaluating Media Ads
HR recruiters should measure the responses that different ads generate to evaluate
the effectiveness of various sources. The easiest way to track responses to ads is to
use different contact names, e-mail addresses, or phone number codes in each ad, so
B. Competitive Recruiting Sources
Other sources for recruiting include professional and trade associations, trade
publications, and competitors. Many professional societies and trade associations
publish newsletters or magazines and have websites containing job ads. Such sources
may be useful for recruiting the specialized professionals needed in an industry.
Chapter 6: Recruiting and Labor Markets
C. Employment Agencies
Employment agencies, both public and private, are a recruiting source. Every state in
the United States has its own state-sponsored employment agency. These agencies
operate branch offices in cities throughout the states and do not charge fees to
applicants or employers. They also have websites that potential applicants can use
without having to go to the offices.
Headhunters
The size of the fees and the aggressiveness with which some firms pursue candidates
for executive and other openings have led to such firms being called headhunters.
These employment agencies focus their efforts on executive, managerial, and
professional positions. The executive search firms are split into two groups:
• Contingency firms that charge a fee only after a candidate has been hired by a
client company
D. Labor Unions
Labor unions may be a useful source of certain types of workers. For example, in
electrical and construction industries, unions traditionally have supplied workers to
employers. A labor pool is generally available through a union, and workers can be
dispatched from the hiring hall to particular jobs to meet the needs of employers.
Chapter 6: Recruiting and Labor Markets
E. Job Fairs and Creative Recruiting
Employers in various labor markets needing to fill a large number of jobs quickly have
used job fairs and special recruiting events. Job fairs have been held by economic
development entities, employer and HR associations, and other community groups to
Industry- or skill-specific events usually offer more satisfactory candidates. Such job
fairs also can attract employed candidates who are casually looking around but may not
put their résumés on the Internet.
F. Educational Institutions and Recruiting
College and university students are a significant source of entry-level professional and
technical employees. Most universities maintain career placement offices in which
employers and applicants can meet. Many considerations affect an employer’s selection
of colleges and universities at which to conduct interviews (Figure 6-8).
Chapter 6: Recruiting and Labor Markets
positive college recruiting results.
Desirable Attributes of College Recruits
For many employers, a desirable grade point average (GPA) is a key criterion for
evaluating job candidates during on-campus interviews. Attending elite universities
can also enhance the attractiveness of a candidate, but evidence suggests that, in the
School Recruiting
High schools and vocational/technical schools may be valuable source of new
employees for some organizations. Many schools have a centralized guidance or
placement office. Participating in career days and giving company tours to school
groups are ways of maintaining good contact with school sources. Cooperative
programs, in which students work part-time while attending school, may also be
useful in generating qualified future applicants for full-time positions.
VI. Internal Recruiting Methods
Filling openings internally may add motivation for employees to stay and grow in the
organization rather than pursuing career opportunities elsewhere. The most common
internal recruiting methods include organizational databases, job postings, promotions and
transfers, current-employee referrals, and re-recruiting of former employees and applicants.
Some of the common advantages and disadvantages of internal recruiting are highlighted
in Figure 6-9.
Chapter 6: Recruiting and Labor Markets
A. Internal Recruiting Databases and Internet-Related Sources
HR information technology systems allow HR staff to maintain background and
knowledge, skills, and abilities (KSA) information on employees. As openings arise,
HR can access databases by entering job requirements and then get a listing of current
employees meeting the job requirements. Employment software can sort employee data
by occupational fields, education, areas of career interests, previous work histories, and
other variables.
B. Job Posting
The major means for recruiting current employees for other jobs within the organization
is job posting, a system in which the employer provides notices of job openings and
The purpose of the job posting system is to provide employees with more opportunities
to move within the organization. When establishing and managing a job posting system,
many questions must be addressed:
• What happens if no qualified candidates respond to postings?
• Must employees inform their supervisors that they are applying for another job?
• Are there restrictions on how long an employee must stay in a job before applying
for another internal one?
• What types of or levels of jobs will not be posted?
Internet/Web-Based Job Posting
While many employers historically have had some kind of job posting system in
place for internal jobs, many companies are using proactive efforts to get employees
Chapter 6: Recruiting and Labor Markets
Effective Job Posting
For job posting efforts to be effective, especially with better-performing employees,
posting wording must be relevant and accurate. Also, the posting should be based on
Promotions and Transfers
Many organizations choose to fill vacancies through promotions or transfers from
within whenever possible. Some advantages of these programs are reducing
employee turnover, enhancing individuals’ skills and talent, and improving
C. Employee-Focused Recruiting
One reliable source of potential recruits is suggestions from current or former
employees. Because current and former employees are familiar with the employer, most
Chapter 6: Recruiting and Labor Markets
Current-Employee Referrals
A reliable source of people to fill vacancies is composed of acquaintances, friends,
and family members of current employees. Current employees can acquaint potential
applicants with the advantages of a job with the company, furnish e-mails and other
Chapter 6: Recruiting and Labor Markets
Rerecruiting of Former Employees and Applicants
Former employees and applicants represent another source for recruitment. Both
groups offer a time-saving advantage because something is already known about
them. Seeking them out as candidates is known as rerecruiting because they were
recruited previously. Former employees are considered an internal source in the
sense that they have ties to the employer; sometimes they are called “boomerangers”
because they left and came back.
HR Perspective: College Alumni Provide Important Recruiting Leads
Companies are finding out that current employees who attended college can be
relied on to help get good talent into the organization. These individuals are often
aware of other qualified students and graduates affiliated with their colleges who
would like to find work. Such candidates can be identified during conversations
among alumni who are currently employed in the company, or they can be
considered as alumni hear about job opportunities in the firm and consider
individuals they already know from their college days.
Chapter 6: Recruiting and Labor Markets
quick and inexpensive way to fill unexpected openings.
VII. Recruiting Evaluation and Metrics
To determine how effective various recruiting sources and methods have been, it is
important to evaluate recruiting efforts. The primary way to find out whether recruiting
efforts are financially effective is to conduct formal analyses as part of recruiting
evaluation.
A. Evaluating Recruiting Quantity and Quality
To evaluate recruiting, organizations can see how their recruiting efforts compare with
past patterns and with the recruiting performance of other organizations. Measures of
recruiting effectiveness can be used to see whether sufficient numbers of targeted
population groups are being attracted.
Quantity of Applicants
Because the goal of a good recruiting program is to generate a large pool of
applicants from which to choose, quantity is a natural place to begin evaluation. The
basic measure here considers whether the quantity of recruits is sufficient to fill job
vacancies. A related question is: Does recruiting at this source provide enough
qualified applicants with an appropriate mix of protected-class individuals?
Quality of Applicants
B. Evaluating Recruiting Satisfaction
Chapter 6: Recruiting and Labor Markets
The satisfaction of two groups is useful in evaluating recruiting. The views of managers
with openings to fill are important, because they are “customers” in a very real sense.
C. Evaluating the Time Required to Fill Openings
Looking at the length of time it takes to fill openings is a common means of evaluating
recruiting efforts. If openings are not filled quickly with qualified candidates, the work
and productivity of the organization are likely to suffer. Also, unfilled positions cost
money.
D. Evaluating the Cost of Recruiting
Different formulas can be used to evaluate recruiting costs. The calculation most often
used to measure such costs is to divide total recruiting expenses for the year by the
number of hires for the year:
Chapter 6: Recruiting and Labor Markets
E. General Recruiting Process Metrics
A cost–benefit analysis of recruiting efforts may include both direct costs (advertising,
recruiters’ salaries, etc.) and indirect costs (involvement of operating managers, public
relations, etc.). Cost–benefit information on each recruiting source can be calculated.
Comparing the length of time that applicants hired from each source stay in the
organization with the cost of hiring from that source also offers a useful perspective.
Yield Ratios
One means for evaluating recruiting efforts is yield ratios, which compare the
number of applicants at one stage of the recruiting process with the number at
Selection Rate
Another useful calculation is the selection rate, which is the percentage hired from a
given group of candidates. It equals the number hired divided by the number of
Acceptance Rate
Calculating the acceptance rate helps identify how successful the organization is at
hiring candidates. The acceptance rate is the percent of applicants hired divided by
Success Base Rate
Chapter 6: Recruiting and Labor Markets
A longer-term measure of recruiting effectiveness is the success rate of applicants.
The success base rate can be determined by comparing the number of past applicants
who have become successful employees against the number of applicants they
F. Increasing Recruiting Effectiveness
Evaluation of the following recruiting activities should be done to make recruiting more
effective:
• Résumé mining—a software approach to getting the best résumés for a fit from a
big database
Recruiting effectiveness can be increased by using the evaluation the data to target
different applicant pools, tap broader labor markets, change recruiting methods,
improve internal handling and interviewing of applicants, and train recruiters and
Critical Thinking Challenges
1. What labor markets should be considered when recruiting to fill an opening for a sales
representative for a pharmaceutical manufacturer?
This position is typically held by a college graduate. One of the first considerations to
address is the choice of colleges and universities to visit. Experiences with placement
2. Discuss ways a regional bank could use the Internet effectively to recruit loan officer
professionals.
The bank could use job boards, professional/career websites, and the bank’s own
website. By using all of these three sources the bank is more likely to reach the largest
number of potential applicants. However, many employers have found their own
websites to be more effective and efficient when recruiting candidates. Some of the
Chapter 6: Recruiting and Labor Markets
3. Describe how a local firm might be able to utilize college/university interns to
generate future applicants for jobs planned within the next one to two years.
The description will vary depending on the local firm that the students might use;
4. Assume you are going to look for a current job of interest to you. Utilize broad
about job possibilities for yourself.
The student’s experience will vary depending on the type of job that they are
5. Your small marketing company of about 50 workers has traditionally recruited
employees using newspaper print advertisements. Due to diminished recruiting effects
from your ads, the company is interested in using more Internet and social media
recruiting. The company president has requested that you, as HR manager, prepare an
Chapter 6: Recruiting and Labor Markets
A. What will your company need to do differently to actively use Internet recruiting
as you compete with other employers for qualified applicants?
Students will probably recommend that the company use its website as well as
social networking media such as Facebook, LinkedIn, Twitter, etc.
Case:
FedEx’s Independent Contractors: Is the Company Really Recruiting Employees?
1. Describe why FedEx’s delivery agreement blurs the line between being an employee
of the company and being an independent contractor for the company.
By definition, independent contractors are not covered by certain employment laws
and do not receive some benefits, but the loss of such protections are usually
acceptable because the independent contractor operates as a separate business entity.
Chapter 6: Recruiting and Labor Markets
2. How should the company address the interpretative problems associated with its
delivery agreement with independent contractors?
The following are some of the steps that FedEx may adopt in order to address the
interpretative problems associated with its delivery agreement with independent
contractors:
Supplemental Cases
Recruiting at Kia
This case highlights how the car manufacturer utilized an extensive recruiting process to
hire good employees at a facility located in Georgia. (For the case, go to
1. Describe how employing a large number of new workers requires strategic recruiting
planning and operational efforts, and discuss what aspects might be different in
smaller firms.
Hiring a large number of new workers requires strategic recruiting planning and
2. Discuss how utilizing the Internet, like Kia did and other employers do, is changing
how recruiting efforts are occurring for a variety of jobs in employers of different
Chapter 6: Recruiting and Labor Markets
sizes.
Utilizing the Internet is changing how recruiting efforts are occurring as discussed in
Northwest State College
This case shows how recruiting policies can work against successful recruiting when a
Questions
1. List the reasons why you would not consider a position at Northwest State if you were
a potential applicant.
Following are some of the reasons why students would not consider a position at
Northwest State:
2. Evaluate the approval procedure for applicants.
Northwest State has a recruiting policy that requires final approval of candidates by
the department head, the vice president for academic affairs, and the president of the
3. What would be the components in a recruiting system you design?
Chapter 6: Recruiting and Labor Markets
Students’ answers will vary. While answering the question, they have to keep in mind
Comments
The Northwest State College case demonstrates the need for a well-coordinated recruiting
program to meet staffing needs. It also shows a very common problem with many
recruiting programs, that of unnecessary red tape and counterproductive requirements. It is
Finally, the case demonstrates the necessity for being competitive in recruiting procedures.
Lack of competitiveness is seen in such problems as the long wait between initial contact
Enterprise Recruiting
This case highlights how a large car rental firm uses a range of recruiting approaches
1. How does having multiple recruiting means help Enterprise establish its brand?
Having multiple recruiting methods help Enterprise establish its brand because
potential employees get a distinct and positive repetitive message. When potential
Chapter 6: Recruiting and Labor Markets
career opportunities, information about Enterprise’s commitment to the environment
and to their employees, and other components. Click on “Apply Now” to see what
positions are available and where. Then evaluate how effective you feel the Web site