Contingent workers, described as the “disposable American workforce” by a former secretary of labor, have a nontraditional relationship with the worksite employer and work as part-timers, temporaries, or independent contractors. The United States Government Accountability Office has estimated that so-called contingent workers make up nearly a third of the workforce. And forecasters believe that amount will rise.
Contingent workers are the human equivalents of just-in-time inventory. These disposable workers permit maximum flexibility for the employer and lower labor costs. Historically, contingent workers have been called the bookends of recessions. They are the first to go when a recession begins and the last to be recalled when the economy gets better. However, toward the end of the recent recession, many companies were reversing this trend and following the strategy of holding off on the hiring of regular full-time employees and choosing instead to use contingent workers.
Recruitment is the process of attracting enough individuals with appropriate qualifications to apply for jobs with an organization. An effective recruiting program can have a major impact on the bottom line of a company, because it is estimated that the cost of replacing just one employee when a bad decision is made is two to three times the employee’s annual salary.
Even when there is a need for additional employees, a firm may decide against increasing the size of its regular workforce. Alternatives such as outsourcing and offshoring, contingent workers, employee leasing, and overtime may all be considered before recruiting new full-time employees.
Outsourcing is the process of hiring an external provider to do the work that was previously done internally. Outsourcing has become a widespread and increasingly popular alternative, involving almost every functional area in business today.
Offshoring is the migration of all or a significant part of the development, maintenance and delivery of services to a vendor located in another country. According to a recent study, fifty-four percent of global companies engaged in offshoring expect to expand their offshoring initiatives during the next three years.
Onshoring involves moving jobs not to another country but to lower cost American cities. Some companies might like to offshore their jobs but the government may require onshore handling of certain financial, health, and defense data. This requirement often represents more than 15 percent of all IT service work.
The most commonly used alternative to hiring new employees is having existing employees work overtime. The employer benefits by avoiding recruitment, selection, and training costs, and the existing employees benefit from the increased income.
Some managers believe that when employees work for unusually long periods, the company pays more and receives less when the employees become fatigued or work at a slower pace to ensure overtime.
Like other human resource functions, the recruitment process does not occur in a vacuum. Next, we will explore some of the external factors in the environment that can significantly affect a firm’s recruitment efforts.
Of particular importance to the success of recruitment is the demand for and supply of specific skills in the labor market. A firm’s recruitment process is often simplified when the unemployment rate in an organization’s labor market is high. The number of unsolicited applicants is usually greater, and the increased size of the labor pool provides a better opportunity for attracting qualified applicants. However, if demand for a particular skill is high relative to supply, an extraordinary recruiting effort may be required. Further, the area where recruitment takes place often impact the labor market conditions. Today, the labor market for many professional and technical positions is much broader and truly global. Even in a depressed economy, top quality workers are in demand and forward thinking organizations are looking to entice these individuals to join their firms.
Some companies are focusing on actively recruiting employees from competitors’ most productive workers. This competition for specific skills has driven up pay for certain job skills. The specific type of job being recruited for can have a major impact on the recruiting process. For example, recently, tech companies were aggressively recruiting engineers, designers, computer scientists, and executives who could compete and adapt to the rapid changes that are occurring in the industry. The competition for qualified applicants was especially aggressive among workers involved in social media, mobile technology, and e-commerce even as others remain unemployed and the unemployment rate remained relatively high.
Possessing a college degree used to be the passport to securing a good job. This is often not so in the present labor market.
Many of the jobs available today do not require a college degree. Rather, skills to perform crafts such as welders, pipe fitters, painters, and machinists are needed.
New technology may require that workers have a specialized degree even though one was unnecessary 10 years ago. There has been a "skill-based technology" change in the job market. Computers have automated many of the repetitive physical and mental tasks. Workers are now being recruited who can perform tasks that cannot be automated and are nonrepetitive and more sophisticated.
Active job seekers have put their names and résumés into the job market in search of a new position.
Passive candidates are not actively looking and will want to move more slowly before making a job change. They are often hesitant to risk leaving the stability of their current job for a potentially risky new job with an unknown boss.
Legal matters play a significant role in shaping recruitment practices in the United States. The recruiting process can create potential problems if organizations do not make a real effort to ensure nondiscriminatory practices when hiring.
The Labor Department has issued guidelines concerning the online recruiting policies of federal contractors and subcontractors. Under these guidelines, companies must keep detailed records of each online job search. They must also identify what selection criteria were used and be able to explain why a person with protected status was not hired. The Equal Employment Opportunity Commission recommends that companies with more than 100 employees keep staffing records for a minimum of two years.
Companies with 50 or more employees that are subject to the rules of the Office of Federal Contract Compliance Programs are required to keep records of all their job applicants. These employers are expected to obtain the gender, race, and ethnicity of each applicant, including all internet applicants. The EEOC uses these records to determine whether a company’s hiring practices are fair or discriminatory.
A dramatic increase in the use of the Internet for recruiting has added to management’s challenge to comply with the OFCCP policies. Under the rule, there are four criteria to determine whether an individual is considered an Internet applicant:
The job seeker has expressed interest through the Internet by applying for a particular job listed on the company website.
The employer considers the job seeker for employment. If the applicant does not meet the specific qualifications spelled out in the job description, the résumé does not have to be considered.
The job seeker has indicated that he or she meets the position’s basic qualifications. If the position description calls for three years of experience, and the individual has three years of experience in previous jobs, he or she would believe that this meets the basic qualifications.
The applicant has not indicated that he or she is no longer interested in the position.
Promotion from within is filling vacancies above entry-level positions with current employees instead of outside hires. When an organization emphasizes promotion from within, employees have an incentive to strive for advancement, so this practice often improves employee morale.
Another advantage of internal recruitment is that the organization is usually well aware of its employees’ personal and job-related qualities. A good goal would be to fill 80 percent of openings above entry-level positions from within, but this needs to be balanced against the benefit of the new ideas that external hires can bring to the organization.
Many organizations are leaving newspapers and general-purpose job boards and turning instead to such avenues as social media recruiting. A majority of recruiters in 2012 believed that social media and employee referrals will surpass online job boards as the preferred way to acquire talent.
Networking is one of the best recruiting tools and sites such as Twitter, Facebook, and LinkedIn, Google+, YouTube and blogging are available to utilize social media recruiting. Social media tools are mostly free and offer added value as candidates use their own online networks, blog content, and references, which speeds up the interview process.
The recruitment process usually begins when a manager submits an employee requisition, a document that specifies job title, department, and date the employee is needed for work. Once the requisition is filed, managers work with HR to start the recruitment process.
This figure illustrates the way many firms approach the recruitment process. Initially, the manager may consider alternatives to hiring. If these alternatives are deemed inadequate, then recruitment begins with the manager submitting an employee requisition. The next step is to determine whether qualified employees are available within the firm or if it is necessary to look to external sources.
Recruitment sources are the places where qualified candidates are located, such as colleges or competitor firms.
Recruitment methods, on the other hand, are the specific means used to attract potential employees to the firm, such as online recruiting.
Finding good sources of candidates and using suitable recruitment methods are essential to maximizing a firm’s recruiting efficiency and effectiveness. Companies may discover that some recruitment sources and methods are superior to others for locating and attracting potential talent.
There are a variety of ways organizations recruit internally to fill a vacancy, and we will cover these areas next.
Job posting is a procedure for informing employees that job openings exist within the firm.
Job bidding is a procedure that allows employees who believe they are qualified to apply for posted jobs.
The job posting and bidding procedures can help minimize the commonly heard complaint that insiders never hear about a job opening until it is filled. Typically, jobs are posted internally before any external recruiting takes place.
Employee referrals represent a powerful recruiting tool for identifying top performers in the job market. It is just human nature that people do not want to recommend a person for a job unless they believe that person is going to fit in and be productive. Employee enlistment is a unique form of employee referral in which every employee becomes a company recruiter. The firm supplies employees with simple business cards that do not contain names or positions. Instead, these cards have a message that indicates that the firm is looking for talented people in specific areas, and that potential candidates should log on to the company career website to apply.
External recruitment is needed to fill entry-level jobs; to hire employees with skills not possessed by current employees; and to find employees with different backgrounds to increase diversity in the firm.
External recruitment spans a wide range of sources, which we will cover next.
Organizations concerned with recruiting clerical and other entry-level employees often depend on high schools and vocational schools. Some companies even work directly with schools to ensure a constant supply of trained individuals with specific job skills. In some areas, companies even loan employees to schools to assist in the training programs.
Many community colleges are sensitive to the specific employment needs in their local labor markets and produce students with marketable skills. Career centers often provide a place for employers to contact students, thereby facilitating the recruitment process.
Colleges and universities represent a major recruitment source for many organizations. Organizations typically find potential professional, technical, and management employees in these institutions. Career service directors, faculty, and administrators can be helpful to organizations in their search for qualified recruits.
When relevant experience is required, competitors in the same industry may be the most important source of recruits. Another name for actively recruiting employees from competitors is poaching. In many cases, the most highly qualified applicants often come directly from competitors in the same labor market.
At one time, when employees quit, managers tended to view them as disloyal, and they were “punished” with no-return policies. Those days are gone, and now “goodbye” may not be forever. Today’s young workers are more likely to change jobs and later return to a former employer than people who entered the workforce 20 or 30 years ago would be.
The unemployed often provide a valuable source of recruits. Qualified applicants join the ranks of the unemployed every day for various reasons. Companies may downsize their operations, go out of business, or merge with other firms, leaving qualified workers without jobs. This was certainly the case in the recent recession.
Hiring of former service members makes sense to a lot of employers because many of these individuals have a proven work history and are flexible, motivated, and drug-free. General Electric found an endless supply of talent in junior military officers. Many were graduates of U.S. military academies who had spent four to five years in the service. They were found to be hardworking, smart, and intense; they had leadership experience and were flexible. They are prompt, used to reporting for work on time and know the importance of a professional appearance and presence.
Self-employed workers are also good potential recruits, because these individuals may be true entrepreneurs who are ingenious and creative. For many firms, these qualities are essential for continued competitiveness in a variety of professional areas.
Some organizations have discovered it can very beneficial to hire ex-offenders. There are approximately 2.3 million criminals behind bars in the United States, so there is a steady supply of potential employees being released from prison on a regular basis.
The world of recruiting via mobile technology is moving at light-speed. More and more people are adopting mobile technology and many organizations are trying to figure out how to use mobile devices in the recruiting process. Recruiters use mobile apps to post jobs, run text message-based recruiting campaigns, create online communities for potential new hires to learn about their companies, monitor social networks for news about industries they hire for, and keep in touch with staff and outside agencies. These tasks used to have to be done from a desktop or laptop computer.
Online recruiting has truly revolutionized the way companies recruit employees and the way job-seekers search for and apply for jobs.
Most companies currently post jobs on their corporate career website. Internet recruiters are responsible for monitoring and coordinating these activities for their organization.
A virtual job fair is an online recruiting method used by an employer or group of employers to attract a large number of applicants. Online job fairs are very cost-effective and can attract more potential applicants than an in-person job fair held at one location.
Corporate career websites list the company positions available and provide a way for applicants to apply for jobs. They have become a major resource for both job-seekers and companies recruiting new employees. A career website should be used as a selling device that promotes the company to prospective job candidates and fully describes the specific opportunities available.
Weblogs, or blogs, have changed the ways in which individuals access information about jobs and companies. Google or a blog search engine, such as technorati.com, can be used to find these valuable sources of information. All you have to do is type in a key phrase like marketing jobs to find them. The blogs often have names like attorneyjobs.com and salesjobs.com. Some employers and employment agencies have also discovered that blogging is a way to do detailed and stealthy background checks on potential candidates.
General-purpose job boards, such as Monster.com and CareerBuilder.com, attract a large number of applicants. These job boards are best for job-seekers in professions that experience high turnover, like sales, but are often less effective for highly qualified applicants or those looking for work in smaller industries.
The result of an alliance among the National Association of Colleges and Employers, DirectEmployers Association, and Symplicity Corporation, it is a national recruiting network and suite of Web-based recruiting and career services automation tools serving the needs of colleges, employers, and job candidates.
.Jobs is a network of employment Web sites where any company can list job openings for free. There are 40,000 sites, with Web addresses all end in “.jobs.” The initiative is being backed by nearly 600 hundred industrial companies such as Google, American Express, IBM, Northrop Grumman and Lockheed Martin. Finding jobs on the sites is simple. Possible searches might include Nurse.jobs, Attorney.Jobs, HR.Jobs, and Sales.Jobs.
In a potential blow to headhunters and a boost to managers seeking to slash recruiting costs, certain large companies have begun pooling job candidates through a consortium known as AllianceQ. Candidates passed over by one company are invited to submit their résumés to the AllianceQ database, which other firms can then use to search for job applicants.
Niche sites are Web sites that cater to highly specialized job markets such as a particular profession, industry, education, location, or any combination of these specialties. They continue to grow in popularity and are giving the top two general-purpose job boards major competition.
Specialized contract workers’ sites are also becoming much more popular. These sites let workers advertise their skills, set their price, and pick employers. Sites such as AllFreelanceWork.com and Guru.com provide an online marketplace for freelance talent.
After years of focusing primarily on professionals, job sites are now available for blue-collar and service workers. Traditionally, there have been major differences between the ways hourly and salaried workers look for jobs. Most hourly workers pursue jobs by filling out applications rather than creating and sending out résumés. These sites allow job-seekers to complete a simple online application that can be viewed by employers; provide phone-based services to accept applications; and offer bilingual call center operators who can help job applicants through the process.
In searching for a job online, one should be alert to the fact that there are those out there who will attempt to steal personal information and set up fraudulent credit-card accounts. There are get-rich-quick scams, fraudulent websites, bogus lottery winnings, phishing e-mails, mails from African ‘dictators’ promising untold riches, and dating and lottery scams. Often crooks search for potential victims through posting a high paying job on a popular job-search Web sites. Once you apply for a job, naturally in order to conduct a thorough background check, they will need personal information such as your bank-account or credit-card number to check you out. Do not do it! True, firms use bank information, but that happens after you are hired. Countless crooks are out there waiting for a person to make a mistake.
Although online methods have greatly impacted how recruiting is done, traditional methods are still used extensively.
Advertising communicates the firm’s employment needs to the public through media such as newspapers, trade journals, radio, television, and billboards. The firm’s previous experience with various media should suggest the most effective approach for specific types of jobs. Although few individuals base their decision to change jobs on advertising, ads create awareness, generate interest, and encourage a prospect to seek more information about the firm and the job opportunities that it provides. A traditional common form of advertising that provides broad coverage at a relatively low cost is the newspaper ad. Firms using the newspaper ad attempt to appeal to the self-interest of prospective employees, emphasizing the job’s unique qualities. Recently, the use of newspaper advertising has declined because other recruiting methods are more effective and less expensive. Newspapers continue to lose readership; only two of the top 25 dailies, the Wall Street Journal and USA Today, gained readers.
Private employment agencies, often called “headhunters,” are best known for recruiting white-collar employees in exchange for a fee paid by the employer. Many private employment agencies often specialize in filling a particular niche in the job market where top candidates are in high demand.
Public employment agencies are operated by each state, but receive overall policy direction from the U.S. Employment Service. Public employment agencies have become increasingly involved in matching people with technical, professional, and managerial positions. One notable advantage is that they provide their services without charge to either the employer or the prospective employee.
Recruiters work for the employer and most commonly focus on sourcing candidates from technical schools, colleges, and universities. Career service directors at these institutions arrange interviews with students who potentially possess the qualifications desired by the firm. Recruiters then identify qualified candidates and schedule interviews within their firm.
A job fair is used by a single employer or group of employers to attract a large number of applicants to one location for interviews. From an employer’s viewpoint, a primary advantage of a job fair is the opportunity to meet a large number of candidates in a short time. Job fairs are often organized by colleges and universities to assist their students in obtaining positions.
An internship is a special form of recruitment that involves placing a student in a temporary job with no obligation either by the company to hire the student permanently or by the student to accept a permanent position with the firm. Just having a degree today is often not enough; internships are often a deciding factor in landing a good job.
Executive search firms are organizations that locate experienced professionals and executives when other sources prove inadequate. The key benefit of executive search firms is that they target ideal candidates. In addition, the search firm can often find and recruit those highly qualified individuals who are not actively looking for a job. The search firm’s task is to present top-tier candidates, and it is then up to the company to decide whom to hire.
Virtually every professional organization publishes a journal and has a website that its members for recruiting and job hunting. For example, the Society for Human Resource Management has a job referral service for members seeking new positions and for employers with positions to fill.
It is important for a company to have a positive image or employer brand in order to attract unsolicited applicants. If an organization has the reputation of being a good place to work, it may be able to attract qualified prospects even without extensive recruitment efforts. Acting on their own initiative, well-qualified workers may seek out a specific company to apply for a job. Unsolicited applicants who apply because they are favorably impressed with the firm’s reputation often prove to be valuable employees. In the Internet age, applicants can go to the firm’s corporate career Web site and walk in by making an application online.
Open houses are a valuable recruiting tool, especially in times of low unemployment. During an open house, firms pair potential hires and recruiters in a casual environment that encourages on-the-spot job offers. Open houses are cheaper and faster than hiring through recruitment agencies, but may attract a large number of unqualified candidates.
Event recruiting involves having recruiters go to and sponsor events that are attended by individuals the company is seeking. Cisco Systems pioneered event recruiting as a novel recruitment approach. For recruiting programmers in Silicon Valley, the choice events to attend and sponsor have been marathons and bike races.
Employers use sign-on bonuses to attract top talent, particularly in high-demand fields such as health care, sales, marketing, accounting, and finance. Bonuses allow allows a firm to pay a premium to attract individuals without dramatically upsetting its salary scale. Even as Wall Street continued to lay off workers, some firms were offering sign-on bonuses competition for top management talent.
Google has a unique way to get individuals interested in applying for technical positions. Google Code Jam is an international programming competition hosted and administered by Google. The competition began in 2003 as a means to identify top engineering talent for potential employment at Google. The competition consists of a set of algorithmic problems which must be solved in a fixed amount of time. Competitors may use any programming language and development environment to obtain their solutions.
TopCoder is a Glastonbury, Connecticut, company that creates software coding competitions. Internet advertising firm DoubleClick hired TopCoder to run a software coding competition contest between students from Columbia University and New York University. TopCoder identified about 100 programmers to participate in this software competition, and 10 made it to the final round.
Because each organization is unique, so are the types and qualifications of workers needed to fill positions. To be successful, a firm must tailor its recruitment sources and methods to its specific needs.
This figure shows a matrix of sources and methods of recruitment for an information systems manager. Managers must first identify the source of prospective employees before choosing the methods to attract them.
Suppose, for example, that a large firm has an immediate need for an experienced IT manager. It is likely that other firms employ such individuals. After considering the recruitment source, the recruiter must then choose the methods of recruitment that offer the best chances for attracting qualified candidates. Perhaps it would be appropriate to advertise the job in the classified section of the Wall Street Journal and to use online recruiting. Alternatively, an executive search firm may be a viable option. The goal is to identify the best methods for finding a pool of qualified applicants.
Reshoring is the reverse of offshoring and involves bringing work back to the United States. Advocates of reshoring believe that manufacturers should calculate the real impact of offshoring because there are often hidden expenses such as higher costs for travel, packaging, shipping and inventory. GE recently announced plans to reverse off-shoring of its appliance manufacturing with an investment of about $432 million in its facilities in Kentucky, Tennessee, Alabama and Indiana. Some of the reasons cited include rising costs for currency exchange, transportation, and labor in countries that were once much less expensive.