Chapter # 5

Planning for and Recruiting

Human Resources
The Process of Human Resource Planning
• Organizations should carry out human resource planning so as to meet business
objectives and gain a competitive advantage over competitors.
• Organizations should have clear idea of the strengths and weaknesses of their
existing internal labor force.
• Human resource planning compares the present state of the organization with its
goals for the future.
• It identifies then what changes to make in human resource to meet organizational
goals.
• The process consists of three stages:
1. Forecasting
2. Goal setting and strategic planning
3. Program implementation and evaluation.
Overview of the Human Resource Planning Process
Forecasting
• Forecasting attempts to determine the supply & demand for various
types of human resources to predict areas within the organization
where there will be labor shortages or surpluses.

Three major steps in forecasting

1. Forecasting the demand for labor
2. Determining labor supply
3. Determining labor surplus or shortage
Forecasting the Demand for Labor
• Usually, an organization forecasts demand for specific job categories
or skill areas.
• Trend Analysis:- Constructing and applying statistical models that
predict labor demand for the next year, given relatively objective
statistics from the previous year. These statistics are called leading
indicators
• Leading Indicators:- Objective measures that accurately predict future
labor demand
Determining Labor Supply
• After forecast the demand, organizations needs indication of the labor
supply.
• Changes can be expected in the near future as a result of retirements,
promotions, transfers, voluntary turnover, and terminations.
• Transitional Matrix:- 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 two questions:
1. “Where did people who were in each job category go?”
2. “Where did people now in each job category come from?”
Transitional Matrix: Example for an Auto Parts
Manufacturer
Determining Labor Surplus or Shortage
• Based on the forecasts for labor demand and supply, the planner can
compare the figures to determine whether there will be a shortage or
surplus of labor for each job category.
• Determining expected shortages and surpluses allows the organization
to plan how to address these challenges.
Goal Setting and Strategic Planning
• The purpose of setting specific numerical goals is to focus attention on the
problem and provide a basis for measuring the organization’s success in
addressing labor shortages and surpluses.
• The goals should come directly from the analysis of labor supply and demand.
• For each goal, the organization must choose one or more human resource
strategies. A variety of strategies is available for handling expected shortages
and surpluses of labor.
• The options differ widely in their expense, speed, and effectiveness. Options
for reducing a labor surplus cause differing amounts of human suffering. The
options for avoiding a labor shortage differ in terms of how easily the
organization can undo the change if it no longer faces a labor shortage.
Reduction in Surplus
1. Downsizing:-The planned elimination of large numbers of personnel with the
goal of enhancing the organization’s competitiveness.
2. Reducing Hours:- A way to spread the burden more fairly is cutting work hours,
generally with a corresponding reduction in pay.
3. Early-Retirement Programs:- Another popular way to reduce a labor surplus is
with an early-retirement program.
4. Work Sharing
5. Hiring Freeze
6. Pay Reduction
7. Demotion
8. Transfer
Options for Avoiding a Shortage
1. Overtime
2. Temporary Employees
3. Outsourcing
4. New External Hires
5. Technological Innovation
6. Retrained Transfers
7. Turnover Reduction
Implementing and Evaluating the HR Plan
• When implementing the HR strategy, the organization must hold some
individual accountable for achieving the goals.
• That person also must have the authority and resources needed to
accomplish those goals.
• Regular progress reports should be issued.
• In evaluating the results, the most obvious step is checking whether the
organization has succeeded in avoiding labor shortages or surpluses.
• The evaluation of results should not only look at the actual numbers, but
should also identify which parts of the planning process contributed to
success or failure.
Applying HR Planning to Affirmative Action
• Affirmative-action plans forecast and monitor the proportion of employees who are
members of various protected groups (typically, women and racial or ethnic
minorities).
• The planner can compare the proportion of employees who are in each group with
the proportion each group represents in the labor market. This type of comparison is
called a workforce utilization review.
• The steps in a workforce utilization review are identical to the steps in the HR
planning process.
• The organization must assess current utilization patterns, then forecast how they are
likely to change in the near future.
• If these analyses suggest the organization is underutilizing certain groups and if
forecasts suggest this pattern is likely to continue, the organization may need to set
goals and timetables for changing.
Recruiting Human Resources
• The role of human resource recruitment is to build a supply of potential new
hires that the organization can draw on if the need arises.

• Recruiting:- Any activity carried on by the organization with the primary

purpose of identifying and attracting potential employees.
• The goals of recruiting (encouraging qualified people to apply for jobs) and
selection (deciding which candidates would be the best fit) are different.
• There are three aspects of recruiting:
1. Personnel policies,
2. Recruitment sources,
3. Recruiter traits and behaviors
Three Aspects of Recruiting
1. Personnel Policies
• An organization’s personnel policies are its decisions about how it will carry out human
resource management, including how it will fill job vacancies.
• Several personnel policies are especially relevant to recruitment:
1. Internal versus external recruiting
2. Lead-the-market pay strategies
3. Employment-at-will policies
Employment at will, which holds that if there is no specific employment contract
saying otherwise, the employer or employee may end an employment relationship at any
time. An alternative is to establish extensive due-process policies, which formally lay out the
steps an employee may take to appeal an employer’s decision to terminate that employee.

4. Image advertising
2. Recruitment Sources: Internal Sources
• Internal sources are employees who currently hold other positions in
the organization.

• Job Posting:- The process of communicating information about a job

vacancy on company bulletin boards, in employee publications, on
corporate intranets, and anywhere else the organization communicates
with employees.
Advantages of Internal Sources
1. It generates applicants who are well known to the organization.
2. These applicants are relatively knowledgeable about the
organization’s vacancies, which minimizes the possibility they will
have unrealistic expectations about the job.
3. Filling vacancies through internal recruiting is generally cheaper and
faster than looking outside the organization.
One in Three Positions are Filled with Insiders
Recruitment Sources: External Sources
• Direct Applicants:- People who apply for a vacancy without prompting
from the organization.
• Referrals:- People who apply for a vacancy because someone in the
organization prompted them to do so.
• Advertisements in Newspapers and Magazines
• Electronic Recruiting
• Public Employment Agencies
• Private Employment Agencies
• Colleges and Universities
External Recruiting Sources: Percentage of
Employees Hired
Evaluating the Quality of a Source
• It is wise for employers to monitor the quality of all their recruitment
sources. Such as;
• Yield Ratio:- A ratio that expresses the percentage of applicants who
successfully move from one stage of the recruitment and selection
process to the next.
• Cost Per Hire:- The cost of using a particular recruitment source for a
particular type of vacancy. Then divide that cost by the number of
people hired to fill that type of vacancy.
• A low cost per hire means that the recruitment source is efficient; it
delivers qualified candidates at minimal cost.
Results of a Hypothetical Recruiting Effort
3. Recruiter Traits and Behaviors
• It includes the recruiter characteristics and the way he/she behave.
• The recruiter affects the nature of both the job vacancy and the applicants
generated.
• Characteristics of the Recruiter:- Applicants respond more positively
when the recruiter is an HR specialist than line manager or incumbents.
• Applicants respond positively to recruiters who are warm and informative.
• Personnel policies are mor important than the recruiter when deciding
whether or not to take a job.
• Realistic Job Preview:- Background information about a job’s positive and
negative qualities.
Enhancing the Recruiter’s Impact
• Recruiters should provide timely feedback.
• Recruiters should avoid offensive behavior.
• They should avoid behaving in ways that might convey the wrong
impression about the organization.
• The organization can recruit with teams rather than individual
recruiters.