PART TWO

RECRUITMENT AND PLACEMENT

C H A P T E R

F i v e

Personnel Planning and Recruiting

Lecture Outline

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Strategic Overview Planning and Forecasting Forecasting Personnel Needs Forecasting the Supply of Inside Candidates Forecasting the Supply of Outside Candidates The Need for Effective Recruiting Why Recruiting is Important What Makes Effective Recruiting a Challenge? Organizing How You Recruit Measuring Recruiting Effectiveness The Recruiting Yield Pyramid Internal Sources of Candidates Using Internal Sources: Pros and Cons Finding Internal Candidates Rehiring Succession Planning Improving Productivity through HRIS Outside Sources of Candidates Recruiting via the Internet Advertising Employment Agencies Temp Agencies and Alternative Staffing Offshoring/Outsourcing White-Collar & Other Jobs Executive Recruiters On-Demand Recruiting Services College Recruiting Telecommuters Military Personnel Single Parents Older Workers Recruiting Minorities and Women Welfare-to-Work The Disabled Developing and Using Application Forms Purpose of Application Forms Application Guidelines Using Application Forms to Predict Performance

In Brief: This chapter explains the process of forecasting personnel requirements, discusses the pros and cons of methods used for recruiting job candidates, describes how to develop an application form, and explains how to use application forms to predict job performance. Interesting Issues: The Internet has changed the face of recruiting, particularly in advertising for applicants. Employers can now reach more potential applicants in less time, and less expensively. However, this tool has generated some challenges. Employers may get too many applicants, or fail to reach certain segments of the population.

ANNOTATED OUTLINE I. Planning and Forecasting A. Forecasting Personnel Needs Forecast revenues, and then estimate the size of the staff required to achieve this sales volume. 1. Trend Analysis means studying a firms employment levels over a period of years to predict future needs. Copyright 2011 Pearson Education 65

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Ratio Analysis means making forecasts based on the ratio between (1) some causal factor, like sales volume, and (2) number of employees required, like number of salespeople. The Scatter Plot shows graphically how two variables (such as a measure of business activity and a firms staffing levels) are related. Using Computers to Forecast Personnel Requirements The use of software programs can enable employers to quickly translate projected productivity and sales levels into forecasts of personnel needs, while estimating how personnel requirements will be affected by various productivity and sales levels.

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B. Forecasting the Supply of Inside Candidates 1. Manual Systems and Replacement Charts Simple manual devices can be used to keep inventories and development records to compile qualifications information on each employee. Personnel replacement charts show the present performance and promotability for each positions potential replacement. Position replacement cards can also be created for each position to show possible replacements as well as their present performance, promotion potential, and training. Computerized Information Systems are used to track the qualifications of hundreds or thousands of employees. The system can provide managers with a listing of candidates with specified qualifications after scanning the database. The Matter of Privacy Employers must balance an individuals right to privacy while making HR information legitimately available to those in the firm who need it.

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Forecasting the Supply of Outside Candidates This may involve considering general economic conditions and the expected rate of unemployment. Helpful sources include: Business Week, Fortune, the Economist, the Wall Street Journal, and prepared reports from the U.S. Council of Economic Advisors, the regional Federal Reserve banks, the Bureau of Labor Statistics of the U.S. Department of Labor, the National Science Foundation, the U.S. Public Health Service, the U.S. Employment Service, and the U.S. Office of Education. II. The Need for Effective Recruiting Recruiting is a more complex activity than most managers think it is. Recruitment efforts should make sense in terms of the companys strategic plans. Some recruiting methods are superior to others, depending on who you are recruiting for and what your resources are. The success you have with your recruiting actually depends on non-recruitment HR issues and policies, including pay levels. Applicants should be pre-screened to determine that they have a real interest in the job. A companys image may also contribute to success or failure in recruitment efforts. Know Your Employment Law: PreEmployment Activities. The key question in all recruitment procedures is whether the method limits qualified applicants from applying. It is generally best to avoid limiting recruitment efforts to just one recruitment method; use multiple sources to reach out as widely as possible. Copyright 2011 Pearson Education 66

A. Organizing the Recruitment Function Companies make a choice to centralize their recruiting efforts or to decentralize to various locations. Advantages of centralizing are that it is easier to apply the companys strategy priorities company-wide. In addition, it reduces duplication, makes it easier to spread the cost of new technologies over more departments, and builds a team of recruitment experts, and makes it easier to assess the effectiveness of the function. However, if divisions are autonomous or needs are varied, decentralization is a more sensible choice. 1. Line and Staff Cooperation Since the recruiting HR manager is seldom responsible for supervising the performance for the vacant position, he/she must communicate with the supervisor to find out exactly what the job entails. B. Measuring Recruiting Effectiveness Assessing the quality of each recruitment source will help HR managers to determine where the most cost effective recruiting sources are and thus determine where they want to direct their recruiting dollars, Prescreening selection devices shown in Table 5-1 are helpful tools to get quick assessments on whether applicants are qualified. C. The Recruiting Yield Pyramid is used by some employers to calculate the number of applicants they must generate to hire the required number of new employees. Figure 5-7 illustrates the pyramid. NOTES Educational Materials to Use

III.

Internal Sources of Candidates A. Finding Internal Candidates To be effective, promotion from within requires using job posting, personnel records, and skill banks. B. Rehiring Rehiring former employees has its pros and cons. On the positive side, they are known quantities and are already familiar with the organization. But former employees may return with negative attitudes. Current employees may perceive that the way to get ahead is to leave and come back. C. Succession Planning Planning ensures a suitable supply of successors for senior or key jobs. It can include the following activities: determining the projected need for managers and professionals by company level, function, and skill; auditing current executive talent to project the likely future supply for internal sources; planning individual career paths based on objective estimates of future needs and assessments of potential; career counseling based on the needs of the individual and the firm; accelerated promotions, with development targets against the future needs of the business; performance-related training and development; planned strategic recruitment to fill short-term needs and to provide people to meet future needs; and actually filling the positions.

IV. Outside Sources of Candidates A. Recruiting via the Internet Most employers find that the Internet is their best choice for recruitment efforts. Social networking also provides recruiting assistance. Figure 5-8 lists top online recruiting job sites. Copyright 2011 Pearson Education 67

1. Advantages The Web is cost efficient, generating more responses more quickly and providing exposure for a longer time at less cost. 2. Disadvantages Gathering applications online may exclude higher numbers of older applicants and certain minorities. An employer may also get too many applications because of the Webs broad reach and speed. Applicant tracking has required a specific definition for what constitutes an Internet applicant. For an individual to be considered an Internet applicant: The employer has acted to fill a particular position. The individual has followed the employers standard procedures for submitting an application. The individual has indicated an interest in the particular position. 3. Using Applicant Tracking ASP Web-based ads generate so many applicants that most firms are installing tracking systems to help attract, gather, screen, compile and manage applications. 4. Designing Effective Internet Ads and Systems Employers have only about four minutes to get job seeker attention, so ease of use is key in design. Figure 5-9 shows effective and ineffective ads. Many job sites may have ads from recruiters with questionable legitimacy. Potential applicants should be cautious about giving out such personal details as Social Security numbers. NOTES Educational Materials to Use

B. Advertising 1. 2. 3. The Media The best medium should be selected based on the positions for which you are recruiting. Constructing the Ad Many experienced advertisers use a four-point guide called AIDA (attention, interest, desire, action) to construct their ads. Employment Ads and Image recent studies show that it pays for employers to formulate marketing campaigns aimed at making themselves more attractive to potential recruits.

C. Employment Agencies 1. Public and Nonprofit Agencies Every state has a public, state-run employment service agency supported by the Department of Labor, in part through grants and other assistance, such as a nationwide computerized job bank. Many professional and technical societies, and public welfare agencies have units that try to help their members or people in special categories find jobs. Private Agencies charge fees for each applicant they place. Typically, market conditions determine whether the candidate or employer pays the fee.

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D. Temp Agencies and Alternative Staffing Copyright 2011 Pearson Education 68

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Benefits and Costs The benefits of contingency staffing include increases in overall productivity, and time and expenses saved by not having to recruit, train, and document new employees. The costs include fees paid to agency and individuals psychological reference to their place of employment. Many employers use temporary agencies as a way to test drive prospective employees before hiring them.

2. Alternative Staffing refers to the use of nontraditional recruitment sources. Know Your Employment Law: Contingent Workers Temp workers can pose legal risks to the employer. Wal-Mart was raided by federal agents who found illegal contract workers handling after-hours store cleaning. In a case with Microsoft, a federal court held that despite their temp titles, the temps were actually regular Microsoft employees, eligible for benefits. Temporary workers, like all workers, have significant legal rights. The degree to which the client firm controls temp agencies employees activities determines how many rights these employees have, and the dual employment view is espoused by many courts. The basic prescription is to treat the temp employee in all ways as if the agency is in fact his employer. 3. Guidelines for Success: See Figure 5-8. Provide honest information to both temp agencies and temp workers about the length of the job assignment; implement personnel policies that ensure fair, non-discriminatory treatment of temp workers; use independent contractors and permanent part-time employees to complement the conventional temp agency workforce; consider the potential impact on regular full-time employees before hiring temp workers; provide the necessary training and orientation for temp workers; and beware of legal snares in payroll decisions. E. Offshoring/Outsourcing White-Collar and Other Jobs Hiring workers abroad is becoming more and more common. There are several specific issues that the HR manager should keep in mind when considering this option. F. Executive Recruiters, also called headhunters, are special employment agencies retained by employers to seek out top-management talent for their clients. 1. Pros and Cons Recruiters can be useful and can save a managers time, but they can be more interested in persuading you to hire a candidate than in finding the one who will really do the job. 2. Guidelines Make sure the recruiting firm is capable, meet the individual who will handle your assignment, and ask how much the firm charges. Never rely on the recruiter to do all the reference checking. When Youre On Your Own: HR and Small Business Expanding the Management Team This dialogue talks about entrepreneurs engaging the services of a search firm to help them select the right candidate when the time comes for them to expand. While the initial cost of doing so could appear to be intimidating, there are many good reasons to consider this as an option when it comes to key management positions, including identifying a high-quality pool of candidates, time and energy of the business owners, as well as potential legal pitfalls. When the opportunity costs are considered, there is little money actually saved by doing it themselves. Copyright 2011 Pearson Education 69

G. On-Demand Recruiting Services (ODRS) This service provides short-term specialized recruiting to support specific projects without the expense of retaining traditional search firms. Basically, recruiters get paid by the hour or project, instead of a percentage fee. Two trends technology and specialization are changing the executive search business. Executive recruiters are being more specialized, and large ones are creating new businesses aimed specifically at specialized functions or industries. H. College Recruiting involves sending employers representatives to college campuses to prescreen applicants and create an applicant pool of management trainees, promotable candidates, and professional and technical employees. 1. Recruiting Goals are to determine whether a candidate is worthy of further consideration, and to attract good candidates. The schools reputation and the performance of previous hires from that source affect school selection. On-Site Visits are usually extended to good candidates. Internships are a recruiting approach that can be a win-win situation for the employer and the student. For employers, interns can make useful contributions while being evaluated for possible full-time employment. Students are able to hone business skills, check out potential employers, and learn more about their likes and dislikes.

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I. Referrals and Walk-Ins are alternatives for identifying potential candidates. Referrals tend to generate high-quality candidates. Walk-in candidates may be attracted by posting a Help Wanted sign.

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Recruiting Source Use and Effectiveness Figure 5-12 summarizes a survey of best recruiting sources. Table 5-2 gives guidelines to improve a firms recruiting efforts. The experiences of Cheesecake Factory, Borders, and Barnes & Noble are related. K. HRIS an integrated technology approach to recruiting. Elements should include a requisition management system, a recruiting solution, screening services and hiring management software. NOTES Educational Materials to Use

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Recruiting a More Diverse Workforce A. Single Parents Formulating an intelligent program for attracting single parents should begin with understanding the considerable problems they often encounter in balancing work and family life. B. Older Workers With the entire population aging, many employers are encouraging retirement-age employees not to leave, or are actively recruiting employees who are at or beyond retirement age by making their companies an attractive place in which older workers can work. An image of older workerfriendliness and flexibility in scheduling are vital. The New Workforce Supervising older workers, especially when the manager is 20-30 years younger can be a challenge. Maintaining authority Copyright 2011 Pearson Education 70

and earning respect through hard work and getting to know employees are some of the keys to success in this situation. C. Recruiting Minorities requires employers to tailor their way of thinking and to design HR practices that make their firms attractive to them. D. Welfare-to-Work The Federal Personal Responsibility and Welfare Reconciliation Act of 1996 prompted many employers to implement programs to attract and assimilate former welfare recipients. E. The Disabled Employers can do several things to tap into this huge potential workforce. The Department of Labors Office of Disability Employment Policy offers several programs, and all states have local agencies that provide placement services and other recruitment and training tools. NOTES Educational Materials to Use

VI.

Developing and Using Application Forms A. Purpose of Applications Forms Application forms are a good way to quickly collect verifiable and fairly accurate historical data from the candidate. B. Application Forms and the Law Employers should carefully review their application forms to ensure they comply with equal employment laws. Questions to review include those asking about dates of graduation, arrest records, emergency contacts, physical disabilities, marital status, and housing arrangements.

C. Using Application Forms to Predict Job Performance Some firms use application forms to predict which candidates will be successful and which will not by conducting statistical studies to find the relationship between (1) responses on the application form and (2) measures of success on the job. Know Your Employment Law: Mandatory Arbitration Though mandatory alternative dispute resolution clauses are generally enforceable, management should remember that individual agreements can be struck down by the courts, based on the merits of the agreement. Such clauses can inhibit recruiting, since they may have a negative impact on image. NOTES Educational Materials to Use

DISCUSSION QUESTIONS 1. What are the pros and con of five sources of job candidates? The text lists several sources of job candidates, both internal and external. The student should clearly identify the differences, as well as comparative strengths and weaknesses of each. There are at least the following sources to choose from: advertising, employment agencies, executive recruiters, state job services, college recruiting, referrals, employee database, internal, and talent searches. Copyright 2011 Pearson Education 71

2. What are the four main types of information application forms provide? The application form is a good means of quickly collecting verifiable, and therefore potentially accurate, historical data from the candidate. It usually includes information on education, prior work history, and other experience related to the job The application form can provide four types of information: 1. substantive matters (such as education and experience); 2. applicant's previous progress and growth; 3. stability based on previous work history; and 4. prediction of job success. 3. How, specifically, do equal employment laws apply to personnel planning and recruiting activities? The student should be able to discuss the areas in which the laws and regulations covered in Chapter 2 apply to the issues of planning and recruiting. This would include constraints on sources used for candidates (i.e. not excessive reliance on referrals), the wording of questions asked on application forms or in interviews, and planning decisions that must not be overly detrimental to a protected group. 4. What are five things employers should keep in mind when using Internet sites to find job candidates? Keyword searches, dont recycle your newspaper ads, give quick feedback, ensure privacy, applicant tracking, etc. What are the five main things you would do to recruit and retain a more diverse workforce? The student should first be able to identify groups that would create a diverse workforce. Examples found in the text are: single parents, older workers, minorities and women, welfare recipients, and global candidates. In order to retain these employees, students would first need to understand the needs of each group, and then create plans and programs that accommodate these specific needs. For example, to attract and keep single mothers, employers could give employees schedule flexibility, and train the supervisors to have an increased awareness of and sensitivity to the challenges single parents face.

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INDIVIDUAL AND GROUP ACTIVITIES 1. Working individually or in groups, bring to class several classified and display ads from the Sunday help wanted ads. Analyze the effectivenss of these ads using the guidelines discussed in the chapter. The effectiveness should be analyzed using the following list: attracts attention, develops interest, creates desire, and prompts action.

2. Working individually or in groups, develop a forecast for the next five years of occupational market conditions for various occupations such as accountant, nurse, and engineer. Be sure that the forecasts that the students develop are grounded in information gleaned from these sources. They should do an adequate analysis of the statistics. 3. Working individually or in groups, visit the local office of your state employment agency. Come back to class prepared to discuss the following questions: What types of jobs seem to be available through this agency, predominantly? To what extent do you think this particular agency would be a good source of professional, technical, and/or managerial applicants? What sort of paperwork are applicants to the state agency required to complete before their applications are processed by the agency? What other services does the office provide? What other opinions did you form about the state agency? The answers to this will vary greatly by state and local offices. Generally, these agencies may be more oriented to unskilled than skilled positions; rarely do they handle professional and managerial positions...although some do quite a bit. Although students may come back with a negative view of these offices, help them to understand the valuable role that they do play. A special note of courtesy: make sure that you have discussed this assignment with the local agency office. Surprise visits by several groups during busy periods can create some especially negative relations between the office and your school. Make sure they are welcome and expected. Copyright 2011 Pearson Education 72

4. Working individually or in groups, find at least 5 employment ads either on the Internet or in a local newspaper that suggest that the company is family friendly and should appeal to women, minorities, older workers, and single parents. Discuss what theyre doing to be family friendly. Students should identify statements in the ad that would suggest that theyre aiming to be family friendly. 5. Working individually or in groups, interview a manager between the ages of 25 and 35 at a local business who manages employees 40 or older. Ask the manager to describe three or four of his or her most challenging experiences managing older employees. Students should probe the manager to see if he/she mentions that the older employee found the experience challenging as well.

6. The HRCI Test Specifications appendix at the end of this book lists the knowledge
someone studying for the HRCI certification exam needs to know in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development). In groups of 4-5 students, do four things: (1) review that appendix now; (2) identify the material in this chapter that relates to the required knowledge the appendix lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and (4) if time permits, have someone from your team post your teams questions in front of the class, so the students on other teams can take each others exam questions. Examples of multiple-choice questions are as follows:

1. Trend Analysis, Ratio Analysis, and Scatter Plots are all methods of: a. recruiting b. forecasting personnel needs (correct answer) c. on-demand recruiting services d. qualificatios inventories
2. Contingent staffing: a. is potentially risky for employers b. is beneficial in terms of productivity c. costs employers more than permanent workers d. all of the above (correct answer) 3. Selection Devices that can be used to screen applicants are: a. structured interviews (correct answer) b. job descriptions c. qualifications inventories d. none of the above

4. Qualifications Inventories and Replacement Charts are examples of tools to: a. finding contingent workers b. forecasting the supply of internal candidates (correct answer) c. recruiting a more diverse workforce d. ratio analysis
EXPERIENTIAL EXERCISES & CASES Experiential Exercise: The Nursing Shortage This is a good exercise for students to create a recruiting approach for nursing jobs and use their creativity and what they have learned in the chapter. Copyright 2011 Pearson Education 73

Application Case: Ya Kun Kaya Toast 1. How would you forecast the manpower needs of Ya Kun? As stated in the case, each outlet requires 10 Full-Time Equivalent (FTE). To provide for employees going on leave and absenteeism, we add a 10% allowance, making it 11 FTE. Let n be the number of outlets in a given year. Let e be the projected number of outlets Ya Kun plans to open in the next year. Let t be the estimated number of resignations over the next year. Let p be the estimated number of personnel who are promoted to store manager or transferred to the headquarters in the next year. Total number of new outlet staff required in the next year = Total number of manpower required in one years time Total number of manpower required now + Estimated number of resignations over the next year + Estimated number of promotions over the next year. Total number of manpower required in one years time = 11 (n + e) Total number of manpower required now = 11n Total number of new outlet staff required in the next year = 11 (n + e) - 11n + p + t = 11 e + p + t 2. What are the advantages and disadvantages of Ya Kuns hiring part-time workers? Advantages of part-time workers include: a) Flexibility in scheduling as they help to fill in the gaps when the full-time workers go on leave or are taken ill.

b) Complement the full-time workers. c) Allows Ya Kun to tap into a larger available pool of job applicants as many more people may be willing and able to work part-time as opposed to full-time.

d) They may be deployed strategically during peak hours. Disadvantages include: a) b) c) They may be less committed to the company. It may be more difficult to integrate them as they only work occasionally. Having too many part-time workers may affect teamwork.

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3. A good attitude and commitment are two important attributes that Ya Kun looks for in its job applicants. Is a job interview an effective method to assess these two attributes? What else can Ya Kun do to get reliable information on these two attributes? A job interview may not be the most effective method to assess these two attributes as they are not directly observable during the interview process. In order to obtain reliable information on these two attributes, managers of Ya Kun may: a) Ask the job applicants for referrals in the application pack, and contact the referrals to obtain information regarding these two attributes. b) Use critical incidence interviews to test if the job applicants have past examples of these attributes. c) Provide job applicants with a realistic job preview by telling them about all the challenges and worst case scenarios that their staff face. This allows the applicants to have a better idea of the job and make a better-informed choice of whether to take up the job or not. d) Use role-playing exercises where the applicants play the role of the staff, and the managers the customers, so that the managers may observe how the applicants may potentially react when they are actually working for Ya Kun. 4. What suggestions would you make to Ya Kun to improve its recruiting processes? Ya Kuns low turnover rate and large pool of hardworking committed workers indicates that its recruitment processes are working well. However, to improve their recruiting process, Ya Kuns managers may choose to: a) Use more internal referrals as employees know what kinds of applicants will fit well with the prevalent company culture. b) Hire a larger ratio of part-timers to full-timers as this allows them greater flexibility in scheduling. c) Convert part-timers to full-timers if they perform well and if they are open to the switch.

d) Maintain contact with the staff who have left the company so that they can be informed of any new positions in the company. Continuing Case: Carter Cleaning Company Getting Better Applicants 1. First, how would you recommend we go about reducing the turnover in our stores? The students should base their responses on the information presented in the advertising section of the chapter, and their response should include placing and constructing ads that will attract candidates who will find the job attractive. 2. Provide a detailed list of recommendations concerning how we should go about increasing our pool of acceptable job applicants, so we no longer have to hire almost anyone who walks in the door. (Your recommendations regarding the latter should include completely worded advertisements and recommendations regarding any other recruiting strategies you would suggest we use.) The students should review the section on outside sources of candidates, and their responses should include advertising and the possible use of employment and/or temp agencies. Translating Strategy into HR Policies and Practice Case: The Hotel Paris Copyright 2011 Pearson Education 75

The New Recruitment Process The continuing case study of Hotel Paris is discussed here. In this example, HR manager Lisa Cruz must formulate functional policies and activities that support the hotels competitive strategy, by eliciting the required employee behaviors and competencies. Questions 1. Given the hotels stated employee preferences, what recruiting sources would you suggest they use, and why? Though the local paper may bring in applicants, the development of a succession plan will ensure that lower-level employees are ready to move into higher levels when an opening occurs. College recruitment and employee referral may also be a good resource. The company should begin using selection testing, particularly in the areas of integrity and conscientiousness testing. 2. What would a Hotel Paris help wanted ad look like? Figure 5-9 displays effective and non-effective ads. Elements from these should be incorporated into student responses, which will vary. The hotel should consider developing a recognizable logo and color scheme, along with a standard format for ads. That formats use should be mandatory across the various hotels. 3. How would you suggest they measure the effectiveness of their recruiting efforts? The number of qualified applicants per position, percentage of jobs filled from within, the offer-toacceptance ratio, acceptance by recruiting source, turnover by recruiting source, and selection test results by recruiting source are used by other hotels, and should be considered for use by Hotel Paris.

KEY TERMS
employment or personnel planning trend analysis ratio analysis scatter plot computerized forecast The process of deciding what positions the firm will have to fill, and how to fill them. Study of a firm's past employment needs over a period of years to predict future needs. A forecasting technique for determining future staff needs by using ratios between sales volume and number of employees needed. A graphical method used to help identify the relationship between two variables. The determination of future staff needs by projecting a firm's sales, volume of production, and personnel required to maintain this volume of output, using computers and software packages. Manual or computerized systematic records, listing employees' education, career and development interests, languages, special skills, and so on, to be used in forecasting inside candidates for promotion. Company records showing present performance and promotability of inside candidates for the most important positions. A card prepared for each position in a company to show possible replacement candidates and their qualifications. Copyright 2011 Pearson Education 76

qualifications inventories

personnel replacement charts position replacement cards

recruiting yield pyramid

Calculating and using the historical arithmetic relationships between recruitment leads and invitees, invitees and interviews, interviews and offers made, and offers made and offers accepted. Posting notices of job openings on company bulletin boards is an effective recruiting method. The process of ensuring a suitable supply of successors for current and future senior or key jobs. The use of nontraditional recruitment sources. These services provide short-term, specialized recruiting services usually paid for by the hour or project, rather than on a percentage fee. The form that provides information on education, prior work record, and skills. Finding and/or attracting applicants for the employers open positions. Online systems that help employers attract, gather, screen, compile, and manage applicants.

job posting succession planning alternative staffing on-demand recruiting services (ODRS) application form employee recruiting applicant tracking systems

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