HRM gaining a competitive advantage noe ch005

Human Resource Management:
Gaining a Competitive Advantage

Chapter 5
Human Resource Planning and
Recruitment

McGraw-Hill/Irwin

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.


Learning Objectives
After reading this chapter, you should be able to:
 Discuss how to align a company’s strategic direction with its
HR planning.
 Determinelabor demand for workers in various job categories.
 Discuss advantages and disadvantages of various ways to
eliminate a labor surplus and avoid a labor shortage.
 Describe various recruitment policies that organizations
adopt to make job vacancies more attractive.
 List various sources from which job applicants can be drawn,
their advantages and disadvantages, and evaluation methods.
 Explain the recruiter’s role, limits and opportunities in the
recruitment process.
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3 Stages in HR Planning
1. Forecasting
2. Goal Setting and Strategic

Planning
3. Program Implementation and
Evaluation

5-3


Forecasting Stage of HR Planning
Determine Labor Demand
derived from product/service demanded
external in nature

Determine Labor Supply
internalmovements caused by transfers,
promotions, turnover, retirements, etc.
transitional matrices identify employee movements
over time
useful for AA / EEO purposes

Determine Labor Surplus or Shortage
5-4


Options for Reducing
an Expected Labor Surplus

Option Speed Human Suffering
1.
2.
3.

4.
5.
6.
7.
8.
9.

Downsizing
Pay reductions
Demotions
Transfers
Work sharing
Hiring freeze
Natural attrition
Early retirement
Retraining

Fast
Fast
Fast
Fast
Fast
Slow
Slow
Slow
Slow

High
High
High

Moderate
Moderate
Low
Low
Low
Low

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Options for Avoiding an Expected
Labor Surplus
Option
Suffering
1.
2.
3.
4.
5.
6.
7.

Overtime
Temporary employees
Outsourcing
Retrained transfers
Turnover reductions
New external hires
Technological
innovation

Speed

Revocability

Fast
Fast
Fast
Slow
Slow
Slow
Slow

High
High
High
High
Moderate
Low
Low

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Downsizing
Downsizing is the planned elimination of
large numbers of personnel designed to
enhance organizational competitiveness.
4 Reasons for Downsizing:
1. reduce labor costs

2. technological changes reduce need for labor
3. mergers and acquisitions reduce bureaucratic
overhead
4. organizations choose to change the location of where
they do business

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Effects of Downsizing
Studies show that firms that announce a downsizing campaign show
worse, rather than better financial performance.

Reasons include:
 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.

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Early Retirement Programs
The average age of the U.S. workforce is
increasing.
Baby boomers are not retiring early due to:
 improved health

 a fear that Social Security will be cut
 mandatory retirement is outlawed

Many employers tryvoluntary attrition among
older workers through early retirement incentive
programs.
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Employing Temporary Workers
Hiring temporary workers helps eliminate a
labor shortage and affords flexibility needed
to operate efficiently during swings in demand.
3 Advantages:
1. temporary workers free a firm from
administrative tasks and financial burdens
2. temporary workers are often times tested by a
temporary agency
3. many temporary agencies train employees
before sending them to employees

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Outsourcing and Off-shoring
Outsourcing is an organization’s use of an outside
organization for a broad set of services.
Off-shoring 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 established, large outsourcing vendor.
 Jobs that are proprietary or require tight security should
not be outsourced.
 Start small and monitor constantly.

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Affirmative Action Planning
Plan for various subgroups within a labor force.
Workforce utilization review is a comparison
of the proportion of workers in protected
subgroups with the proportion that each
subgroup represents.

5-12


HR Recruitment Process
Job Choice

Vacancy
Characteristics

Personnel Policies

Job
Choice

Recruiter Traits
&Behaviors

Applicant
Characteristics

Recruitment
Sources

Recruitment Influences
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Personnel Policies
 Organizational decisions that affect the nature of
the vacancies for which people are recruited.
 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

5-14


Recruitment Sources
Colleges& Universitiescampus placement services

Internal Sources –

Public & Private
Employment Agencies -

faster, cheaper,
more certainty

External Sources –
new ideas& approaches

headhunters can be
expensive

JOBS
JOBS

Electronic Recruiting –
Internet

Direct Applicants
&Referrals -

self selection, low cost

Newspaper Advertising large volume, low quality
recruits

5-15

Recruiters
Functional Area
- HR versus operating area specialist

Traits
- warm and informative

Realism
- realistic job preview
- honesty
5-16


2 Steps to Enhance Recruiter Impact

1. Provide timely feedback
1. Provide timely feedback

2. Recruit
in teams
2. Avoid rude
behavior
3. Recruit in teams

5-17


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.

5-18