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Liverpool John Moores University
The Role of Recruitment and Selection
Strategies in Supporting Employee Retention
within a Complex International Labour Market
Course Name: Module Name: Module Code: Submission Date: Submitted to:
Master of Business Administration Managing Resourcing Strategy MGTPDM006 May 2009 Ron Bray
Submitted By: Tom Jacob
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Contents
Introduction Recruitment Strategies and Issues Recruitment Process Recruitment Sources Recruitment Issues
Selection Tools and their Limitations Application Forms Interview Psychometric Tests Curriculum Vitae
Employee Retention & Organisational Goals Training Leadership Pay
Role Of Hard and Soft Approach Hard Approach (Michigan) Soft Approach (Harvard)
Conclusion Reference
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Introduction In the increasingly complex environment of globalization, technological advancements &
‘war for talent’, employers are finding that they have to invest more time, energy and
resources to staff attraction and retention than ever before. Over the years, the growth of
managerial and research jobs have outpaced the growth of available talent. ‘Recruitment,
retention and turnover survey 2008’ reported a 17.3% employee turnover rate for the UK
(CIPD 2009), with levels going up to 20.4% in some organizations. The survey also noted that
only 20% of employees have been in their current job for more than five years. With
recruitment becoming increasingly costly & time consuming and demand for skilled people
going up, high turnover rates will negatively impact an organisation’s performance.
Employee retention starts with good recruitment and selection strategies. The ability to
select and recruit the right fit for, not only the job, but also the group and the organization is
critical when it comes to employee retention. This is particularly important in today’s global
labour market where cultural, ethnic, and religious diversity is a reality.
The first part of this report evaluates recruitment strategies and issues when it comes to
attracting talent in an international dimension. The report then assesses different selection
tools with recognition of their limitations and their potential for selecting specific criteria.
The report goes on to analyze how right recruitment and selection strategies can help
achieve the organisational goals by supporting employee retention. The last part of this
report looks at the role of hard and soft approaches in determining organisations’
recruitment and selection strategies.
Recruitment Strategies and Issues Recruitment strategy is defined as a comprehensive mix of recruitment processes & sources,
defining targets, and approaching these targets with a view to hire (HRM Advice 2009). It
defines clear actions and steps to be taken by an organization so that it can be the employer
of choice for its target audience and has to be based on an organizational scan and market
research.
A recruitment strategy will define the following:
Target group
How to approach the target group
Recruitment sources & processes
(hrmadvice.com 2009)
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Recruitment Process
A recruitment process will provide an organisation with a pool of qualified job candidates
from which judicious selection can be made to fill vacancies. Successful recruitment begins
with proper employment planning and forecasting. Through proper HR planning, an
organization can prepare for job openings by analysing future needs and current staff levels.
(Richardson & UNPAN 2009). Successful recruitment begins with formulation of recruitment
policy followed by a HR gap analysis within the organization. These processes, if completed
properly, will lead to the Job Analysis.
Job Analysis
A job analysis will document the job requirements, the work that needs to be performed and
the time it should be performed in. More than just describing the work that needs to be
done, it will develop compensation plans, selection & promotion criteria, future training
assessment and performance appraisals of the job (Gael 1984). Job analysis methods include
observation, examination of reports & incident investigations, feedback from colloquies
and/or managers and surveys.
In today’s global market, it should also look the locational flexibility demanded by the job.
This is especially true in the case of jobs like ‘development managers’ in Tesco, who are
expected to move from country to country (tesco 2009), developing its’ stores.
Job Description
This is a legally binding, written document -a result of job analysis- which will provide the
employee or candidates an idea of what he/she is expected to do. This will detail the skills &
experience needed and responsibilities of the job. It will also specify who the person will
report to. This is also used for EEOC purposes and other recordkeeping.
In our day and age, job descriptions should also provide information on health & safety
issues, right to work issues (like visa needed), and the companies’ non-discrimination
policies.
Person Specification
This specifies what skills, experience, education and training are needed to do the job.
Examples are industry specific qualifications like CIMA or experience in a supervisory
position for five years. Some jobs may also need employees to be security screened or
checked against specific databases. Examples are people working with children and these
who work in defence industry.
This is a very important step because the person should not only fit for the job, but also for
the team and the organization. Qualities like ability to work in a team and/or fit in with the
organizational culture are very important when it comes to employee retention.
Care should be taken to make sure that the person specification doesn’t discriminate on the
basis of sex, age, culture or religion. Companies should ensure equity and adherence to
equal opportunity and other laws.
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Compensation Plan
Pay and/or other compensations (like bonus and special facilities like car) will always depend
on the nature of the job and the availability of skilled personal. But it is essential that it is
competitive and motivational. If not paid well, the company will risk losing employees.
Paying too much is also risky as seen by the recent events in banking sector (BBC 2009). This
might also create a tendency to hang on to the job rather than excel in it.
Method of Recruitment
Companies can outsource (using specialised agencies) or use the in-house HR department to
recruit. The decision will usually depend on the nature and volume of the job. While an
agency can save time and have a ready register of jobseekers with special expertise, they
might also act in their self interest.
Recruitment Sources
A company can recruit internally -promotion, transfers and referrals- or externally. Both
sources have their own benefits and disadvantages. Raymond Noe (2000) note that a
mixture of both should be used to fill the vacancies in the company as this will ensure that
new blood can bring in new ideas while the old guard can provide necessary stability.
Internal Recruitment
In this case, the job vacancy is filled internally by one of the existing staff members. It can
either be a promotion or relocation or a referral. In Internal Recruitment, the job is not
advertised externally.
Advantages Disadvantages
Builds on skills & expertise of existing staff
Ensures return on any investment in training
Motivates existing staff
Quicker and cheaper
Fits the organizational culture
Avoid redundancies
Not big enough pool of applicants
Will create a different vacancy to fill
Less resistant to change
Chance for favouritism & discrimination
Risk losing out on better external personal
Methods of Recruitment: Job Posting, Referrals & Internal Exams
Most companies use the bulletin boards, company newsletters and office memorandums to
advertise job openings. ASDA’s official policy is to advertise its job internally for a minimum
of two weeks (ASDA 2009). In large organizations (especially semi private) with large pool of
staff like Indian Railways (upscexam 2009), an internal examination is used as away to
shortlist candidates from potentially large number of internal applications. Referrals are
usually word-of-mouth advertisements that are a low-cost-per-hire way of recruiting.
External Recruitment
When personal are recruited from outside the organization, it is known as external
recruitment. Companies which are growing quickly and that operate in industries with high
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turnover will usually recruit externally. It is also noted that companies with stalled growth
might also try to recruit externally to regenerate growth
Advantages Disadvantages
Big pool of candidates
Can acquire new skills and competencies
Think out of the box
Install a sense of competition in staff
Fresh ideas & new way of doing things
Can regenerate growth
Long process of recruitment
Costly
Unproven compared to existing staff
New employee may not fit the culture
Might demoralise the existing staff
Methods of Recruitment: Outsourcing, Recruitment agencies, Consultancies, Advertising, Campus selection & Open day
Employment agencies can be used to outsource the recruitment process. They will send the
shortlist of competent candidates from which the ideal one selected. They are usually used
when the position is low level and volume is high. Consultancies provide much more
specialised ‘upmarket’ services with a personal touch. They are also called head-hunters.
Outsourcing is used to divert noncore activates so that the company a can focus in its
specialised field. This is usually cheap and can deliver better results. An obvious example is
the 3 Mobile UK who has outsourced its customer service to India. Campus selection has
always been popular with companies as they provided fresh ideas on the cheap. The obvious
disadvantage is the lack of experience. Tata Consultancy Services is one of the biggest
recruiters of freshers from Indian universities. The most common and expensive method,
advertising will bring in a large number of applications. If the vacancy is a low level one,
companies usually tend to conduct an open day.
Recruitment Issues in relation to International Labour Market
When it comes to attracting the best talents internationally, many of the traditional methods
stop short of delivering. Issues like language, culture, beliefs, political factors and ethnic
issues will create headaches for any HR department who operate globally.
Aligning the company culture with the local culture will be a big hindrance when recruiting
globally. Nestlé found out that its hand on approach created problems at its Perrier sites in
France while it struggled to implement its own quality control checks in China (Guardian
2008).
The local laws and accounting practices will also be problematic when measuring employee
performance. It was evident when Hindustan Motors/Mitsubishi’s restructuring plans were
challenged in the Indian Supreme Court.
Relocation issues with relation of political factors will also create problems for a global
company. Obama administration has restricted companies from sourcing cheap labour from
Asian countries (Bloomberg 2009). Shell (2009) is finding it hard to recruit high level
engineers to Columbia due to the lack of security.
Also worth a mention is that right to work problems faced by the new EU member citizens in
UK (BBC 2009). The same goes for the students in UK who are not allowed to work more
than 20 hours.
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Selection Tools and their Limitations Choosing the right screening tool is very important. Selecting a tool will depend on the job
which is in question. It will also depend on the goals and objectives of the organization
(Tanke, 2000). Often, two or more tools are used in conjunction. Commonly used tools are
application forms, assessment, intelligence tests, psychometric tests, personality tests,
résumé and work sampling.
Application Forms
Application forms are very popular with 93% of UK companies using it (Shackleton and
Newell, 1991). Park (1999) notes that online application forms eases data capture and
standardization. He also cites that employer can get information relevant to the job rather
than what the applicant chooses to say. Care should be taken when designing an application
form as it can be legally challenged in court.
Limitations
Lacks the human touch
Long forms may put off some candidates.
Are self reports, so open to faking
Interview
This is where the applicant is personally accessed by one or more people. It can reveal the
applicant’s cognitive, oral & social skills and person-organisation fit (Harris 1999). Interviews
are divided in to Unstructured, Semi-structured and Structured.
Limitations
Interviewer bias
Subjectivity
Difficult to implement in large volumes.
Psychometric Tests
These tests are used to measure psychological aspects of the candidate. Attainments,
Aptitude & Intelligence tests are used to evaluate a person’s personality, ability and
motivation. The main problem with this type of tests is that it cannot differentiate
individuals.
Limitations
Misinterpretation of results
Factors like environment, gender and age can affect the candidates
Absence of rules and regulations.
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Curriculum Vitae
A summary of the personal history, CV is the most commonly used selection tool. It is best
used to short listing. As it is written by the candidates themselves, the claims should be
taken with a pinch of salt.
Limitations
May include irrelevant information
Filtering out good CVs is a problem
Recruiters may be seduced by subtle elements of the CV
Employee Retention & Organisational Goals Developing an effective HR system that can supplement the organisational goals is critical for
the functioning and success of a firm in the competitive business arena. Vertical Integration,
a traditional view of things, takes the top down approach. In this approach, HR department
is given a supporting role of looking after staffing and training of personnel. Importance is
given to the organizational objectives and HR is seen as the tools to achieve these goals. The
main focus is on developing competencies and skills required to realize the organizational
goals. So, these goals are first set, and are transferred down as departmental goals. The HR
will fit in with the organization, and will relate to the organizational culture. In this approach,
the organization keeps a tight control over the work force. Examples are Wal-Mart and
ASDA.
When it comes to recruitment and selection, main concerns are matching the selection
strategy with the overall strategy, monitoring the internal personal flow to match the
emerging business strategies and matching key personal to business strategies
Training
Developing skills and competencies required for the organization is a key in the vertical
integration. It is noted that it is not an individual development, but the emphasis is on the
skills required by the company. Workers are encouraged to learn “how things are done our
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way”. An obvious example is the automotive industry where the workers are expected to
integrate themselves in to the way the company works. In ASDA, most of the training given
to the employees is to increase productivity.
Leadership
In a traditional setup, the work force will look up to the leadership for motivation. Tight
control and deadlines are kept to maximise the productivity of the workforce. Managers
and supervisors use a hands-on approach. There are precise reporting procedures to be
followed in this setup.
Pay
In a traditional setup, the biggest motivational factor is the pay check. An example is the
Software sector. Microsoft, a follower of the hard approach, pays industry leading salaries to
their workers.
Role of Hard and Soft Approach
Hard Approach (Michigan)
Fombrun, Tichy &Devanna (1984) developed a theory which states that Human Recourse
should be considered very much like equipment or raw materials. The aim is obtain HR
cheaply, use it sparingly, and to develop and exploit it as much as possible. Here HR
strategies will be a tight fit to the organizational strategy. The emphasis is on finding the
best person for the job. This method is very practical and effective, especially in the present
business climate. This approach likens humans to robots who will sing to a particular tune all
day long.
When it comes to selection strategy in a hard approach, the idea is to get a person who can
do the job most efficiently. This is mostly attained by recruiting a person with vast
experience in the job. Training and developing the employees are linked to the
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organizational strategy. Hard approach usually alienates the work force, which will have a
negative effect on employee retention. A low motivation level in the workforce is another
result of hard approach.
ASDA supermarket follows a resource based HR system where every employee has his/her
rigid duties to follow. The competitiveness of the industry forces ASDA to drain every bit of
productivity out of its workforce to gain competitive advantage.
Soft Approach (Harvard)
Often compared to the Theory Y approach, this system takes the view that Human Resource
can be a source of sustained competitive advantage. Soft Approach hypotheses that
employees work best when they have an emotional stake in the organization. The most
important difference between hard approaches comes from the fact that control comes
through commitment of the employee. Soft approach considers HR as a vital function of an
organization. It focuses on team work and job satisfaction. The Harvard system can find
parallels in the Japanese management styles which give importance to people.
Soft approach can be seen in Google where the employees are asked to use 20% of their
working time to their own pet products. It is then no surprise that Google is one of the
companies with lowest turnover rate. Google succeed in creating an emotional bondage
with the employees
It is clear that a soft approach can retain staff much better than hard approach. But a hard
approach is more attractive at times like recession.
Conclusion In the increasingly complex labour market, right recruitment and selection strategies will
help companies win and retain talented staff. An increasingly mobile workforce coupled with
the global opportunities is making employee retention difficult. Proper job analysis will lead
to a good job description which can attract the right man for the job. Sourcing is also
important and will depend on the nature and the volume of the vacancy. The selection tool
used is also critical as the wrong tool can create wrong results. A soft approach to the work
force is beneficial to the company as it creates emotional bonding which will act as a barrier
when it comes to changing jobs.
Reference Gael, S. (1984), Job analysis: a guide to assessing work activities, Michigan: Jossey-Bass
Noe, R.A. (2000), Human resource management: gaining a competitive advantage, London:
McGraw-Hill
Harris, M.M. (1999), ‘What is being measured?’ in Eder, R.W. & Harris, M.M. The Employment
Interview Handbook, Sage, pp.143-57
Shackleton, V., Newell, S. (1991), ‘Management selection: A comparative study survey of methods
used in top British and French companies’, Journal of Occupational and Organizational Psychology,
vol.64, pp.23-36
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Park H.R. (1999), Graduates in the eyes of employers, London: The Guardian
McCourt, W. & Eldridge, D (2003), Global human resource management: managing people in
developing and transitional countries, New York: Edward Elgar Publishing
Tanke, M.L. (2000) Human resources management for the hospitality industry, London: Cengage
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Fombrun, C.J., Tichy, N.M., & Devanna, M.A. (1984), Strategic human resource management, New
York : Wiley
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http://www.upscexam.com/railways_examinations/
