fundamentals of

Human Resource Management 4th

edition

by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 5

Planning for and Recruiting

Human Resources
McGraw-Hill/Irwin

Copyright 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.

What Do I Need to Know?

1. Discuss how to plan for human
resources needed to carry out the
organizations strategy.
2. Determine the labor demand for
workers in various job categories.
3. Summarize the advantages and
disadvantages of ways to eliminate
a labor surplus and avoid a labor
shortage.
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What Do I Need to Know?

(continued)

4. Describe recruitment policies

organizations use to make job
vacancies more attractive.
5. List and compare sources of job
applicants.
6. Describe the recruiters role in the
recruitment process, including limits
and opportunities.
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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.
Human resource planning compares the
present state of the organization with its
goals for the future
Then identifies what changes it must make
in its human resources to meet those goals
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Figure 5.1: Overview of the

Human Resource Planning Process

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Forecasting
Forecasting:
attempts to
determine the
supply and demand
for various types of
human resources to
predict areas within
the organization
where there will be
labor shortages or
surpluses.

There are three

major steps to
forecasting:
1.Forecasting the
demand for labor
2.Determining labor
supply
3.Determining labor
surplus or shortage

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Forecasting the Demand for

Labor
Trend Analysis
Constructing and
applying statistical
models that predict
labor demand for
the next year,
given relatively
objective statistics
from the previous
year.

Leading Indicators
Objective
measures that
accurately predict
future labor
demand.

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Determining Labor Supply

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
in each job
category go?
2. Where did people
now in each job
category come
from?

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Table 5.1: Transitional Matrix

Example for an Auto Parts
Manufacturer

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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.

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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
organizations success in addressing labor
shortages and surpluses.
The goals should come directly from the
analysis of supply and demand.
For each goal, the organization must choose
one or more human resource strategies.
Organizations should retain and attract
employees who provide a core competency
(what makes it better than competitors)
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Options for Reducing a

Surplus

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As the average age of many workers in skilled trades

grows, the coming demand for workers in many trades is
expected to outstrip supply in the United States. There is a
potential for employers in some areas to experience a labor
shortage because of this.

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Options for Avoiding a

Shortage

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Table 5.2: HR Strategies for

Addressing a Labor Shortage or
Surplus

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Test Your Knowledge

A public accounting firm of 250
employees realizes they have a
surplus of 15 support personnel (not
auditors). What should they do?
A.
B.
C.
D.

Hire temporary workers

Offer early retirement
Downsize people in those positions
Wait for attrition and implement a
hiring freeze for those positions
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Implementing and Evaluating the

HR Plan
When implementing the HR strategy, the
organization must hold some individual
accountable for achieving the goals.
That person must also have the authority and
resources needed to accomplish those goals.
Regular progress reports should be issued.
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.
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Applying HR Planning to
Affirmative Action
Workforce
Utilization Review: a
comparison of
employees in
protected groups with
the proportion that
each group represents
in the relevant labor
market.
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 the analyses forecast
underutilization of
certain groups, then
goals and a plan will
be established.

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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.
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Figure 5.2: Three Aspects of

Recruiting

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Personnel
Policies
Several
personnel
policies are
especially
relevant to
recruitment:

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 Image advertising,
such as in this
campaign to recruit
nurses, promotes a
whole profession or
organization as
opposed to a
specific job
opening.
This ad is
designed to create
a positive
impression of the
profession, which is
now facing a
shortage of
workers.

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Recruitment Sources: Internal

Sources
Job Posting: the process of
communicating information about a
job vacancy:
On company bulletin boards
In employee publications
On corporate intranets
Anywhere else the organization
communicates with employees

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Advantages of Internal
Sources

1. It generates applicants who are well

known to the organization.
2. These applicants are relatively
knowledgeable about the organizations
vacancies, which minimizes the
possibility of unrealistic job expectations.
3. Filling vacancies through internal
recruiting is generally cheaper and faster
than looking outside the organization.

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One in Three Positions Are

Filled with Insiders

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Recruitment Sources: External

Sources

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Figure 5.3: External Recruiting

Sources Percentage of Employees
Hired

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Evaluating the Quality of a

Source
Yield Ratios

Cost Per Hire

A ratio that expresses the

percentage of applicants who
successfully move from one
stage of the recruitment and
selection process to the next.
By comparing the yield ratios of
different recruitment sources,
we can determine which source
is the best or most efficient for
the type of vacancy.

Find the cost of using a

particular recruitment source
for a particular type of vacancy.
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.

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Table 5.3:
Results of a Hypothetical
Recruiting Effort

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Your Experience
In your last job search, what was
your experience with a recruiter or
other point of contact before you
were offered the job?
A.
B.
C.
D.
E.

Lousy, I didnt take the job

Lousy, but I took the job anyway
Great, but I didnt take the job
Great, I took the job
The experience wasnt memorable.
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Recruiter Traits and

Behaviors

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Recruiter Characteristics and

Behavior
True = A False = B
Applicants respond more positively when the
recruiter is an HR specialist than line managers
or incumbents.
Applicants respond positively to recruiters whom
are warm and informative
Personnel policies are more important than the
recruiter when deciding whether or not to take a
job.
Realistic job previews should highlight the
positive characteristics of the job rather than the
negative.
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Figure 5.4:
Recruits Who Were Offended by
Recruiters

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Enhancing the Recruiters

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.
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Recruiting Exercise

(1 of 2)

You are the regional HR director of

the restaurant chain (e.g., Ruby
Tuesdays or TGI Fridays) and
responsible for recruiting all staff for
the restaurants in your region.
One of the stores in your region
needs to hire servers.

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Recruiting Exercise

(2 of 2)

1. What knowledge, skills, and abilities

are required for the positions you are
recruiting?
2. Will your sources of applicants be
internal, external, or both? Explain.
3. What recruiting strategies will you
use?
4. What metrics will you use to
measure your success?
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Summary
The first step in human resource planning is
personnel forecasting. Through trend
analysis and good judgment, the planner
tries to determine the supply and demand
for various human resources.
The next step is to determine the labor
demand for workers in various job
categories. Analysis of a transitional matrix
can help the planner identify which job
categories can be filled internally and
where high turnover is likely.
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Summary

(continued)

To reduce a surplus, downsizing, pay

reductions, and demotions deliver fast
results but at a high cost in human suffering
that may hurt surviving employees
motivation and future recruiting.
To avoid a labor shortage, requiring
overtime is the easiest and fastest strategy.
Internal recruiting generally makes job
vacancies more attractive because
candidates see opportunities for growth and
advancement.
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Summary

(continued)

Lead-the-market pay strategies make jobs

economically desirable.
Internal sources are usually not sufficient
for all of an organizations labor needs.
Through their behavior and other
characteristics, recruiters influence the
nature of the job vacancy and the kinds of
applicants generated.

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