This chapter describes the process an organization uses to plan and recruit so that there will be adequate human resources. The steps described are linking business strategies to future needs, forecasting labor demand and supply, determining in what positions there will exist a labor shortage or surplus, setting goals regarding future human resource needs, and identifying strategies to solve the problems of shortages and/or surpluses. The ability to recruit successfully is described as depending upon personnel policies such as job posting (an internal strategy), level of pay in comparison to the market, and the extent of job security. The chapter describes sources for recruiting as well as the use of yield ratios and costs to evaluate the effectiveness of sources. Lastly, the role of the recruiter and how to enhance his or her impact on the candidate is presented.
After studying this chapter, the student should be able to:
1. Discuss how to align a company’s strategic direction with its human resource planning.
2. Determine the labor demand of workers in various job categories.
3. Discuss the advantages and disadvantages of various ways of eliminating a labor surplus or avoiding a labor shortage.
4. Describe the various recruitment policies organizations adopt to make job vacancies more attractive.
5. List the various sources from which job applicants can be drawn, their relative advantages and disadvantages, and the methods for evaluating them.
6. Explain the role of the recruiter in the recruitment process, the limits he or she faces, and the opportunities available.
Extended Chapter Outline
Note: Key terms appear in boldface and are listed in the “Chapter Vocabulary” section.
Opening Vignette: Unemployment
The unemployment rate in the United States dropped to 4.7 percent in 1998, its lowest level in over 25 years. For employers, this means that although demand is increasing, there is an inability to meet this demand because of a lack of qualified human resources. This labor shortage can be seen in many different industries. Yet, many companies are taking advantage of this situation to create competitive advantage. One survey found that many companies could increase revenues by 80-100 percent by just finding the workers they need.
I. Introduction—Changes in consumer demand, and in the labor market as indicated in the above vignette, create both constraints and opportunities, and employers can respond in many ways. Keys to utilizing labor markets to the organization’s own competitive advantage are:
A. Companies must have a clear idea of their current level of human resources (strengths and weaknesses).
B. Companies must be aware of where they are going in the future and how the current configuration of human resources relates to what they will need in the future.
C. Where there are discrepancies between present configurations and those needed in the future, organizations must have programs to address these issues.
II. The Human Resources Planning Process—Human resource planning is a process that defines the strengths and weaknesses of the current level of human resources, forecasts future needs for human resources that will meet the needs of business strategies, and implements strategies to ensure that adequate human resources will be available in the future (see Figure 5.1 and TM 5.1).
A. Forecasting determines the demand and supply of human resources and predicts in what positions either surpluses or shortages will exist in the future.
1. Determining Labor Demand
a. Labor demand can be predicted by the use of statistical techniques such as leading indicator (text Figure 5.2), which is an objective measure that accurately predicts future labor demand (for example, sales may be directly related to a need for...