CHAPTER 6 Recruiting and Retaining Qualified Employees
78
Chapter 6
RECRUITING AND RETAINING QUALIFIED EMPLOYEES
Opening Case: Managing Human Resources at SAS
Typically ranked as one of the best companies to work for, SAS was a late
adopter of on-line recruiting, primarily because of its low turnover rate and
extensive informal network. Once implemented, however, they realized how
much more information and people were available with this technology. They
now use the system to track internal employee movement and are better able to
fill critical positions.
CHAPTER OUTLINE
I. THE STRATEGIC IMPORTANCE OF RECRUITING AND RETAINING
TALENTED EMPLOYEES
Recruitment involves searching for and obtaining qualified job candidates in
such numbers that the organization can select the most appropriate person to
fill its job needs. It includes most, but not all, of the activities that occur
between an employer and potential employee. Effective recruitment begins
during the strategic planning process. HR professionals usually take the lead
CHAPTER 6 Recruiting and Retaining Qualified Employees
79
A. Improving Productivity
The strong competitive pressures and tight labor market conditions of the
current business environment is challenging for companies. Given this, an
B. Reducing Labor Costs
An organization that can keep its turnover rates lower than its competitors
C. Staying Competitive
Sometimes outlays for benefits (such as health insurance) do not increase
II. RECRUITING AND RETAINING WITHIN AN INTEGRATED HRM SYSTEM
A. Links to Other HRM Activities
In an integrated, strategically aligned human resource management
system, recruiting activities are developed with an understanding of how
B. The External and Organizational Environments
Of the various aspects of the global and organizational environment that
influence recruitment and retention perhaps the most important influence
CHAPTER 6 Recruiting and Retaining Qualified Employees
on recruitment and retention activities is that managers do (or do not)
understand how recruitment and retention contribute to achieving strategic
objectives.
Recent court decisions related to maintaining data on job applicants will
III. The HR Triad
HR professionals usually take the lead in designing a systematic and
IV. RECRUITING SOURCES AND METHODS
Once the recruitment objectives are specified and job analysis results have
been considered, two central issues need to be addressed: methods to use
and sources to target. Most employers use multiple methods and multiple
sources, generating a larger and more diverse pool of potential applicants
than would result from any one method or source.
A. Internal Labor Market
Current employees may be a good source for all jobs other than entry
level. Internal candidates typically go through the same recruitment
process as external applications. A variety of methods may be used.
1. Job Postings
Job openings posted electronically or on paper at work is the second
most common method of internal recruiting, after word-of-mouth. Care
81
2. Talent Inventories
This is a database containing information about the pool of current
employees. It can be a valuable source of applicants but it needs to be
maintained and organized to be useful.
a. Promotions
Recruitment activities can result in different career moves within a
b. Transfers
3. Pros and Cons of Internal Recruitment
Pros: employees feel secure and confident about their future, lower
B. External Labor Market
Rapidly growing organizations and those that need large numbers of
highly skilled professionals and managers seldom can meet their labor
needs without recruiting from the external labor market. There are many
external sources. In a tight labor market, employers need to be proactive.
When demand is low, however, job applicants become more proactive in
the process.
1. Walk-in Applicants
Sometimes applicants literally walk in to an employer’s employment
2. Electronic Media
The vast majority of companies now have a Web site that internal and
CHAPTER 6 Recruiting and Retaining Qualified Employees
The Web can reach a large number of potential employees as
described in the feature “Managing Globalization: Deloitte Touche
Tohmatsu.” The Web enables applicants to select themselves out of
the application process if the job opportunities provided are not a good
fit for them.
The Internet is not a panacea, however; Exhibit 6.3 describes the most
common problems encountered by applicants.
Teaching Note: Ask students their own experiences with web-based
applications. What were some of the benefits? What problems did they
encounter?
3. Employee Referrals
An employee may know someone he/she thinks would be a good
4. Public Employment Agencies
5. Private Employment Agencies
Private agencies are most often used to fill top management jobs,
6. Job Fairs
School job fairs can be important sources of recruits, although this
varies with the type of applicant sought. Trade and professional
7. Foreign Nationals
In some professions, such as chemical engineering, software
engineering, and others that require high-tech skills, labor shortages
1. Contingent Workers
Recruited directly or through a temporary help agency, contingent
2. Recalls and Rehires
Companies use contingent employees as part of a planned strategy,
especially where there are predictable seasonal or cyclical fluctuations
3. Advantages and Disadvantages
Contingent employees are relatively inexpensive and offer flexibility.
They have, in the case of rehires, a proven track record and valuable
experience (unless the job has changed drastically since they left!).
CHAPTER 6 Recruiting and Retaining Qualified Employees
V. USING METRICS TO MANAGE THE TALENT SUPPLY CHAIN
In manufacturing firms, supply chain management is a well-known
management technique. Typically, the term refers to procedures for
VI. RECRUITMENT FROM THE APPLICANT’S PERSPECTIVE
Exhibit 6.6 illustrates the factors that may result in an applicant’s acceptance or
rejection of a firm’s employment offer. Understand the behaviors and
preferences of the diverse workforce is key to attract applicants and retaining
employees.
A. Company Reputation
For many applicants, the reputation of the firm they work for is an
important consideration. Generally, people want to work for an
Teaching Note: Merrill Lynch, one of the most well-known firms on Wall
Street, paid $1.2 million to settle a class action sexual discrimination case.
B. The Recruitment Experience
1. Easy and Fast
Making it easy for individuals to apply for a job generally increases the
number of applications an employer will receive. User-friendly on-line
85
2. Behavior of Recruiters
Recruiter behavior makes a big impression upon recruits. Recruiter
3. Perceptions of Fit
Recruiters and the recruitment process help create a good (or bad)
impression of a company. Other considerations may include economic
VII. RECRUITING ETHICS
A. Honesty Pays
Because of the magnitude of the decision, it is important that recruiters are
honest with applicants.
1. Realistic Previews
Providing both positive and negative aspects of a job and organization
2. Multiple Sources of Information
Realistic job previews including advertisements, formal job
descriptions, film or video presentations, and samples of the actual
work. In general, more information is better and produces a more
accurate picture of the job.
B. Respectful Rejections
To avoid raising doubts about the sincerity of their recruitment efforts,
employers, when responding to rejected applicants, should be personal
CHAPTER 6 Recruiting and Retaining Qualified Employees
86
VIII. EQUAL OPPORTUNITY AND NONDISCRIMINATION
A. EEO-1 Reports
Employer Information Reports (EEO-1) must be filed by most employers
with more than 100 employees each year. These reports give an
B. Affirmative Action Programs
Affirmative action programs (AAPs) are intended to reduce employment
discrimination or to correct underutilization of qualified members of
protected groups in an organization’s relevant labor market. AAPs must
1. Federal Contractors
If a company has a federal contract greater than $50,000 and has 50
or more employees, it is referred to as a federal contractor. Executive
Order 11246 requires federal contractors to:
1. have and abide by an equal employment policy.
CHAPTER 6 Recruiting and Retaining Qualified Employees
2. Consent Decrees
Even non-federal contractors may be subject to a government–
3. Voluntary Affirmative Action
Many companies take a proactive approach to affirmative action, as
4. Public Opinion
AAPs have come under political attack in recent years. It is uncertain
Teaching Note: What does the diversity of your class look like? The
school? How do the students feel about having (not having) diversity in
the classroom and/or school?
5. Breaking the Glass Ceiling
The major challenge to employers is how to help qualified female
employees break the glass ceiling and advance to higher level
positions in the company. Exhibit 6.8 summarizes recruiting practices
that may contribute to the glass ceiling phenomenon. Companies have
CHAPTER 6 Recruiting and Retaining Qualified Employees
88
with glass ceilings and what they have done about them.
IX. RETAINING EMPLOYEES
A. Understanding the Reasons for Turnover
It is important to note that not all turnover is avoidable and not all turnover
is bad, either. However, the majority of turnover caused by dissatisfied
B. Reducing Unwanted Turnover
By improving HRM practices, employers may be able to prevent
dissatisfied employees from leaving and retain valuable workers. Working
C. Managing Layoffs
Layoffs are usually a short-term solution to difficult economic decisions or
89
1. Alternatives to Layoffs
Layoffs have many consequences, and many excellent companies do
2. Assisting Displaced Employees
In the event that a company has no alternative but to lay off
3. Timelines for Layoffs and Plant Closings
For employers with 100 or more employees, some elements of the
X. CURRENT ISSUES
A. Employee Value Propositions
The challenge for recruiting is how to appeal to an increasing diverse pool
of potential applicants. Is it possible to send a message that will appeal
equally to qualified applicants from a wide range of different backgrounds
B. Recruiting and Retaining Older Workers
Data compiled by the United Nations indicates that labor shortages are
likely to be a very real issue in the coming years, especially for high-skill
jobs. Population growth has been slowing down in most countries while
economic development has been speeding up, especially in India and
CHAPTER 6 Recruiting and Retaining Qualified Employees
90
CHAPTER 6 Recruiting and Retaining Qualified Employees
91
QUESTIONS FOR DISCUSSION AND REFLECTIVE THINKING
1. How can blogs and Web casts enable companies to improve the
effectiveness of their recruiting activities? What are the possible
difficulties that can arise from reliance on these new technologies for
recruiting?
Web recruiting will help tap into a greater diversity of individuals in terms of
2. Describe the recruiting and retention implications that might follow from
a strategic business objective of offering low-cost products to a broad
consumer market. Compare these implications to those that might
follow from a strategic objective of offering innovative business
services to owners of small businesses.
Regardless of the strategic objective, the general rule of thumb is that the
organization needs to define the right type of individual in terms of knowledge,
3. What information should be contained in a realistic job preview by a
firm seeking to attract the best college graduates? Does your answer
depend on the type of industry? On the geographic location of the job?
On whether the job involves an overseas assignment?
4. Does the age of the applicants an employer hopes to attract affect the
methods that are most likely to be effective? Visit the AARP Web site at
www.aarp.org for ideas. Explain your reasoning.
CHAPTER 6 Recruiting and Retaining Qualified Employees
5. Do you think firms such as Colgate-Palmolive, American Express, and
General Mills should address the glass ceiling problem by explicitly
stating on their Web site that they want to fill a specific percentage of
managerial positions with females? Why or why not?
6. Job applicants typically want to find a job that is a “good fit.” What is a
good fit for you? Describe how you will decide whether a job you are
offered is a good fit.
Student answers will vary.
7. Assume that the projected global shortage of labor is likely to occur.
What are the implications for recruitment and retention at firms such as
Deloitte Touche Tohmatsu and SAS Institute? Be specific.
8. What does/will an employer need to do to keep you from looking for a
job elsewhere? List the three most important considerations in order of
importance for you personally.
Student answers will vary.
CASE STUDY: DOWNSIZING: ANATHEMA TO CORPORATE
LOYALTY?
DISCUSSION QUESTIONS:
1. Why is Jim sensitive to DSI’s recruitment efforts?
93
2. What are some potential problems for the current class of engineers
recruited at DSI?
3. How could the use of contingent workers help DSI?
4. Evaluate Jim’s alternatives for reducing DSI’s labor surplus. What do you
recommend? Why?
DSI could layoff many of the newly hired engineers but offer some of them an
CHAPTER 6 Recruiting and Retaining Qualified Employees
VIDEO CASE STUDY: TEXAS INSTRUMENTS
Instructors: The following video case can be found on the companion DVD. The
video can be used in class as an introductory activity or a post-lecture activity, as
well as an online assignment for those students using CourseMate.
DISCUSSION QUESTIONS:
1. The text refers to balancing its need to control the costs of recruiting
with the need for a given sized workforce. How does Texas Instruments
balance those two needs?
2. What are some of the firm’s low cost or no cost sources of recruits?
3. Why would Texas Instruments find the use of technology to be
especially valuable as compared to some other companies?
4. How does Texas Instruments’ approach to recruiting likely to result in
an above average level of diversity?