Future human resource needs are determined by the organization’s strategic direction. Demand for human resources (its employees) is a result of demand for the organization’s products or services. On the basis of its estimate of total revenue, management can attempt to establish the number and mix of human resources needed to reach that revenue. In some cases, however, the situation may be reversed. When particular skills are necessary and in scarce supply the availability of satisfactory human resources determine revenues. This relationship would be the case for managers of an upscale chain of assisted living retirement facilities who find themselves with more business opportunities than they can handle. The managers’ primary limiting factor in building revenues is their ability to locate and hire a qualified nursing staff to fully meet the needs of the residents. In most cases, however, the overall organizational goals and the resulting revenue forecast provide the major input in determining the organization’s human resource requirements.
After it has assessed both current capabilities and future needs management is able to estimate shortages – both in number and in kind and to highlight areas in which the organization is overstaffed. A program can then be developed that matches these estimates with forecasts of future labor supply. Employment planning not only guides current staffing needs but also projects future employee needs and availability.
Recruitment and Selection:
Recruitment: The process of locating, identifying, and attracting capable applicants.
Once managers know their current staffing levels – whether understaffed or overstaffed they can begin to do something about it. If one or more vacancies exist, they can use the information gathered.
Through job analysis to guide them in recruitment that is the process of locating, identifying, and attracting capable applicants. On the other and, if employment planning indicates a surplus management will want to reduce the labor supply within the organization and will initiate downsizing or layoff activities.
Where does a manager recruit candidate?
Candidates can be found by using several sources, including the World Wide Web. Exhibit offers some guidance. The source that is used should reflect the local labor market, the type or level of position and the size of the organization.
Exhibit Traditional Recruiting Sources:
Internal searches: Low costs build employee morale; candidate are familiar with organization
Limited supply; may not increase proportion of protected group employees.
Advertisements: Wide distribution can be targeted to specific groups.
Generate many unqualified candidates.
Employee referrals: Knowledge about the organization provided by current employees; can generate strong candidates because a good referral reflects on the recommender
May not increase the diversity and mix of employees
Public employment agencies: Free or nominal cost
Candidates tend to be lower skilled although some skilled employees available
Private employment agencies: Wide contacts; careful screening; short term guarantees often given. High cost
School placement: Large centralized body of candidates: Limited to entry level positions
Temporary help services: Fill temporary: Expensive
Employee leasing and independent contractors: Fill temporary needs but usually for more specific longer term projects.
Little commitment to and organization other than current project
Are certain recruiting sources better than others?
Do certain recruiting sources produce superior candidates? The answer is generally yes. The majority of studies have found that employee referrals generally produce the best candidates. The explanation for this finding is intuitively logical. First, applicants referred by current employees are prescreened by those employees. Because the recommenders know both the job and the person being recommended they tend to refer well qualified applicants. Second, because current employees often feel that their reputation in the organizations is at stake with a referral, they tend to make referrals only when they are reasonably confident that the referral won’t make them look bad. For example, about 20 percent of Wipro Spectramind’s 7,000 odd work force in India comes through employee referrals. However, management should not always opt for the employee referred candidate: Employee referrals may not increase the diversity and mix of employees.