Chapter 5

PLANNING FOR AND

RECRUITING HUMAN
RESOURCES

©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom.  No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
 What Do I Need to Know?
L O 5-1 Discuss how to plan for human resources needed to
carry out the organization’s strategy.
L O 5-2 Determine the labor demand for workers in various job
categories.
L O 5-3 Summarize the advantages and disadvantages of ways
to eliminate a labor surplus and avoid a labor shortage.
L O 5-4 Describe recruitment policies organizations use to
make job vacancies more attractive.
L O 5-5 List and compare sources of job applicants.
L O 5-6 Describe the recruiter’s role in the recruitment process,
including limits and opportunities.

©McGraw-Hill Education.
 Process of Human Resource Planning 1

HR Planning
• Helps organizations meet business objectives and gain a
competitive advantage over competitors
• Comparison of present organization with goals of future
• Identifies what changes must be made to meet goals
• Three stages: forecasting, goal setting and strategic
planning, and program implementation and evaluation

©McGraw-Hill Education.
 Figure 5.1 Overview of the Human Resource
Planning Process

Jump to long description in appendix.

©McGraw-Hill Education.
 In which step of the human resource planning
POLLING QUESTION
process is downsizing likely to occur?

A. Forecasting
B. Goal setting and strategic planning
C. Implementing and evaluating the plan
D. Applying the plan to affirmative action

©McGraw-Hill Education.
 Process of Human Resource Planning 2
Forecasting

What is it? Steps in Forecasting Process

Attempts to determine supply and 1. Forecast labor demand
demand for various types of HR to
2. Determine labor supply
predict areas within the organization
where there will be labor shortages 3. Determine labor surplus or
or surpluses shortage

©McGraw-Hill Education.
 Process of Human Resource Planning 3
Forecast Labor Demand

Trend Analysis Leading Indicators

Constructing and applying statistical Objective measures that accurately
models that predict labor demand predict future labor demand
for the next year, given relatively • Measures of economy, actions of
objective statistics from the previous competitors, changes in technology,
year trends in composition of workforce

©McGraw-Hill Education.
 Process of Human Resource Planning 4
Determine Labor Supply

Transitional Matrix
Chart that lists job categories held in Answers two questions:
one period and shows the
1. Where did people in each job
proportion of employees in each of
category go?
those job categories in a future
period 2. Where did people currently in
each job category come from?

©McGraw-Hill Education.
 Process of Human Resource Planning 5

Determine Labor Surplus or Shortage

• Planners can compare forecasts for labor demand and
supply
• Will show projected shortages and surpluses in each
category
• Allows organization to plan how to address challenges

©McGraw-Hill Education.
 Skilled Trades
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. How can HR prepare for
this reality? What should be ©Bryan Peterson/The Image Bank/Getty Images

done now to avoid the

shortage?

©McGraw-Hill Education.
 Process of Human Resource Planning 6

Goal Setting and Strategic Planning

• Numerical goals provide basis for measuring success
• Goals should come from analysis of supply and demand
• HR strategies must be used to achieve goals
• Options differ widely in expense, speed, and effectiveness
• Options to address surplus cause varying degrees of suffering
• Options to address shortage vary in terms of how easily
organization can undo change

©McGraw-Hill Education.
 Table 5.2a Options for Reducing a Surplus
Option Speed of Results Amount of Suffering Caused
Downsizing Fast High
Pay reductions Fast High
Demotions Fast High
Transfers Fast Moderate
Work sharing Fast Moderate
Hiring freeze Slow Low
Natural attrition Slow Low
Early retirement Slow Low
Retraining Slow Low

©McGraw-Hill Education.
 Table 5.2b Options for Avoiding a Shortage
Option Speed of Results Ability to Change Later
Overtime Fast High
Temporary employees Fast High
Outsourcing Fast High
Retrained transfers Slow Hight
Turnover reductions Slow Moderate
New external hires Slow Low
Technological Slow Low
innovation

©McGraw-Hill Education.
 Process of Human Resource Planning 7
Core Competency
• Knowledge and skills that make organization superior to
competitors and create value for customers
• Organizations benefit from hiring and retaining employees
who provide a core competency

©McGraw-Hill Education.
 Cold Stone Employees

Cold Stone Creamery employees give

their company the competitive
advantage with their “entertainment
factor.” The company is known to
seek out employees who like to
perform and then “audition” rather
than interview potential employees.

Courtesy of Cold Stone Creamery

©McGraw-Hill Education.
 Process of Human Resource Planning 8

Downsizing
• Planned elimination of large numbers of personnel with
four main objectives:
1. Reduce costs
2. Replace labor with technology
3. Mergers and acquisitions
4. Moving to more economical locations
• Hurts long-term organizational effectiveness

©McGraw-Hill Education.
 Process of Human Resource Planning 9

Alternatives to Downsizing
• Reducing hours
• Seen as way of spreading burden more fairly
• Less costly than layoffs that require severance pay

• Early-retirement programs
• Workforce is aging and many older workers do not want to retire
• Phased-retirement programs can be used

©McGraw-Hill Education.
 Process of Human Resource Planning 10

Options to Avoid a Shortage

• Employing temporary and contract workers
• Most widespread method to eliminate shortage
• Disadvantage; workers not as committed

• Outsourcing
• Contracting other organizations to provide broad set of services

• Overtime and expanded hours

• Workers appreciate added compensation in short-term

©McGraw-Hill Education.
 A public accounting firm of 250 employees
POLLING QUESTION
realizes they have a surplus of 15 support
personnel (not auditors). What do you think
they should do?
A. Layoff permanent employees and hire temporary
workers.
B. Offer early retirement.
C. Downsize people in those positions.
D. Wait for attrition and implement a hiring freeze for
those positions.

©McGraw-Hill Education.
 Process of Human Resource Planning 11

Implementing and Evaluating the HR Plan

• An individual must be accountable for achieving goals
• Should have authority and resources needed
• Should issue regular progress reports

• Talent management: ties planning and recruiting efforts to

organization’s strategy and employee development
• Evaluation should identify which parts of planning process
contributed to success or failure

©McGraw-Hill Education.
 Process of Human Resource Planning 12
Applying HR Planning to Affirmative Action

Workforce Utilization Review

Comparison of the proportion of • Assessment of current
employees in protected groups utilization patterns
with the proportion that each
• Forecast of how utilization is
group represents in the relevant
likely to change in future
labor market
• If forecasted underutilization
of certain groups, goals and a
plan are established

©McGraw-Hill Education.
 Recruiting Human Resources

Recruiting
• Any activity carried on by organization with primary
purpose of identifying and attracting potential employees
• Builds supply of potential hires when company needs it
• Three aspects of recruiting
1. Personnel policies
2. Recruitment sources
3. Recruiter traits and behaviors

©McGraw-Hill Education.
 Figure 5.2 Three Aspects of Recruiting

Jump to long description in appendix.

©McGraw-Hill Education.
 Personnel Policies 1
Internal versus External Recruiting
• Internal policies “promote from within”
• Opportunities for advancement more attractive for applicants
and employees

Lead-the-market Pay Strategies

• Pay important job characteristic for most applicants
• Recruiting advantage when pay for job is more than current
market wages

©McGraw-Hill Education.
 Personnel Policies 2
Employment at Will
• Employer or employee may end employment relationship at
any time unless otherwise stated in contract
• Due-process policy: employee may appeal termination

Social Presence and Reputation

• Image of organization impacts its attraction level
• The Internet provides many opportunities to build a positive
image and recruit employees

©McGraw-Hill Education.
 Recruitment Sources 1
Internal Sources

Job Postings Advantages

Communication about job vacancy to • Generates applicants who are
other employees in organization well known to organization
• Company bulletin boards • Applicants are knowledgeable
about position; minimizes
• Employee publications
unrealistic job expectations
• Corporate intranets
• Cheap and fast

©McGraw-Hill Education.
 Recruitment Sources 2
External Sources

Direct applicants and referrals

Job search and networking platforms

Help-wanted advertising

Public and private employment agencies

Colleges and universities

©McGraw-Hill Education.
 Figure 5.3 Top Recruiting Sources Reported by
Employers

Jump to long description in appendix.

©McGraw-Hill Education.
Source: Based on SilkRoad, Sources of Hire 2017: Where the Candidate
 Recruitment Sources 3
Evaluating the Quality of a Source

Yield Ratio Cost per Hire

• Percentage of applicants who • Total amount spent to fill vacancy
move from one stage of
• Divide amount spent using
recruitment and selection process
recruitment source by amount of
to the next
hires from the source
• Compare yield ratios of different
• Low cost per hire indicates an
sources to determine which is
efficient recruitment source
most efficient for each type of
vacancy

©McGraw-Hill Education.
 Recruiter Traits and Behaviors 1

Key Characteristics
• Either HR specialist or specialist of job being filled
• Applicants view warm, informative recruiters positively
• Important to provide a realistic job preview that includes both
positive and negative aspects of job
• Too positive of a job preview arouses suspicion

• Ultimately, organization’s personnel policies more

impactful than recruiter in securing job acceptance

©McGraw-Hill Education.
 Recruiter Traits and Behaviors 2

Enhancing the Recruiter’s Impact

• Recruiters should provide timely feedback; applicants
dislike delays and may draw negative conclusions
• Recruiters should avoid offensive behavior
• Organizations can recruit with teams
• Applicants view job experts as more credible than HR
• Recruiting team can include job experts and HR professionals

©McGraw-Hill Education.
Appendix of Image Long
Descriptions