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Human Resource Management:
Gaining a Competitive Advantage
Chapter 05
Human Resource Planning and Recruitment
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
5-2
Forecasting Stage of HR Planning
Determine Labor Demandderived from product/service demandedexternal in nature
Determine Labor SupplyInternal movements caused by transfers,
promotions, turnover, retirements, etc.transitional matrices identify employee
movements in different job categories over time to chart historical trends in company’s labor supply
useful for AA / EEO purposes
Determine Labor Surplus or Shortage
5-3
Options for Reducing Expected Labor Surplus
Option Speed Human Suffering
FastFastFastFastFastSlowSlowSlowSlow
HighHighHighModerateModerateLowLowLowLow
1. Downsizing2. Pay reductions3. Demotions4. Transfers5. Work sharing6. Hiring freeze7. Natural attrition8. Early retirement9. Retraining
5-4
Options for Avoiding Expected Labor Surplus
Option Speed Revocability
FastFastFastSlowSlowSlowSlow
5-5
Downsizing
Downsizing -planned elimination of large numbers of personnel to enhance organizational competitiveness.
4 Reasons for Downsizing:1. reduce labor costs2. technological changes reduce need for labor*3. mergers and acquisitions reduce bureaucratic
overhead4. organizations change location of where they do
business.* Economy wide, capital spending ratio increased over 300% between 1990-
2010, indicating employers substituting technology for labor.
5-6
Early Retirement Programs
The average age of U.S. workforce is increasing.
Baby boomers are not retiring early due to: improved health fear that Social Security will be cut mandatory retirement is outlawed collapse of the financial and housing markets made
it economically unviable to retire
Many employers try voluntary attrition among older workers through early retirement incentive programs.
5-7
Employing Temporary Workers
Hiring temporary workers helps eliminate a labor shortage and affords flexibility needed to operate efficiently during demand swings.
3 Advantages:1. temporary workers free a company from
administrative tasks and financial burdens2. temporary workers are often times tested
by a temporary agency3. many temporary agencies train employees
before sending them to employees
5-8
Outsourcing and Offshoring
Outsourcing uses an outside organization for a broad set of services.
Offshoring is outsourcing where jobs leave one country and go to another.
To help ensure the success of outsourcing: Choose an established, large outsourcing
vendor. Jobs that are proprietary or require tight
security should not be outsourced. Start small and monitor constantly.
5-9
Affirmative Action Planning
Plan for various subgroups within a labor force.
Workforce utilization review is a comparison of the proportion of workers in protected subgroups with the proportion that each subgroup represents.
5-10
HR Recruitment Process
Job Choice
Recruitment Influences
JobChoice
ApplicantCharacteristics
Personnel Policies
Vacancy Characteristics
5-11
Personnel Policies
Organizational decisions that affect the nature of the vacancies for which people are recruited. Characteristics of the vacancy are more
important than recruiters or recruiting sources.
Personnel Policies vary: Internal versus External
recruiting Extrinsic versus Intrinsic rewards Employment-at-will policies Image advertising
5-12
Recruitment Sources
Newspaper Advertising -large volume, low quality
recruits
JOBS
5-13
Recruiters
Functional Area HR versus operating area specialist
Traitswarm and informative
Realism realistic job previewhonesty
5-14
Summary
HR planning uses labor supply and demand forecasts to anticipate labor shortages and surpluses to enhance organization’s success and reduce human suffering.
HR recruiting creates an applicant pool should a labor shortage occur.
Organizations can use recruiters to influence individual’s perceptions of jobs.
5-15