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Recruiting, Interviewing, Selecting, and Orienting New Employees
Recruiting, Interviewing, Selecting, and Orienting New Employees
Recruiting, Interviewing, Selecting, and Orienting New Employees
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Recruiting, Interviewing, Selecting, and Orienting New Employees

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A genuine classic, Recruiting, Interviewing, Selecting & Orienting New Employees is a practical guide to the employment process. Extensively revised, it contains forms, guidelines, and ready-to-use interview questions as well as advice on reference checking, interview methods, documentation issues, orientation programs, and applicant testing.

From recruitment to orientation, this updated and accessible guide covers it all. Recruiting, Interviewing, Selecting & Orienting New Employees has long been the go-to reference on every aspect of the employment process. Packed with forms, checklists, guidelines, and ready-to-use interview questions, the revised and updated edition provides readers with practical information on topics including interview methods, documentation issues, reference checking, orientation programs, and applicant testing.

This updated edition has been brought completely up to date, addressing new legislation on FMLA, immigration, record keeping, I-9 compliance, and much more. Full of insights on the latest staffing challenges, this comprehensive guide explores changes in technology, such as virtual interviews and recruitment, web-based orientations, and the use of electronic files and social media. Nothing is more important to the productivity of an organization than its hiring program. Recruiting, Interviewing, Selecting & Orienting New Employees provides readers with the tools they need to get employees on board and ready for long-term success.

LanguageEnglish
PublisherThomas Nelson
Release dateMay 21, 2019
ISBN9781400212439
Recruiting, Interviewing, Selecting, and Orienting New Employees
Author

Diane Arthur

DIANE ARTHUR is president of Arthur Associates Management Consultants, Ltd., a human resources development firm. She has more than 30 years of experience as a consultant, workshop leader, and lecturer, and is the author of several books on human resources management.

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    Recruiting, Interviewing, Selecting, and Orienting New Employees - Diane Arthur

    PREFACE

    The primary focus of Recruiting, Interviewing, Selecting & Orienting New Employees, Sixth Edition , published first in 1986, then in 1991, again in 1998, yet again in 2006, and most recently in 2012, remains unaltered: It is still an employer’s comprehensive guide through the four stages of the employment process identified in the book’s title.

    The book’s wide-based readership remains the same as with previous editions: HR generalists and specialists who need in-depth information about the entire employment process; non-HR professionals whose jobs encompass select employment-related responsibilities; and seasoned HR practitioners looking for a refresher and update on one or more recruiting, interviewing, selecting, or orientation subcategories. The methods and techniques described continue to be applicable to all work environments: corporate and nonprofit, union and nonunion, technical and nontechnical, large and small. They also pertain to both professional and nonprofessional positions. Additionally, the book continues to be useful as a reference for training workshops in various aspects of the employment process, and as a text for college and other courses dealing with employment issues.

    This newly modified and expanded sixth edition offers the same easy-to-follow format as the last two versions; that is, four distinct sections that replicate the topics identified in the book’s title. This compartmentalized approach meets the needs of readers wanting to focus on one or more stages of the employment process at any given time.

    That said, much has changed with regard to hiring over the past several years. Many of these changes are attributable to the experiences, interests, needs, and expectations of Millennials, born between 1977 and 1995, and the newest generation of Centennials, born 1996 and later. These populations, driven increasingly by technology and social media, have greatly influenced and altered many aspects of the entire hiring process from recruitment sources through job expectations and workplace integration. Their impact is far reaching, presenting businesses with their own unique set of employment requirements and conditions and requiring employers to remain flexible and open-minded when it comes to hiring. With Millennials having taken over Baby Boomers in population, employers choosing to solely implement traditional hiring practices are likely to be left wondering why they are not attracting or retaining top talent.

    Millennials and Centennials do not pose the only employment challenges: Businesses cannot afford to overlook the expectations of members of Generation X (born 1965–1976), or the many Baby Boomers (1946–1964) and Traditionalists (born before 1946) who are opting to delay or bypass retirement.

    Given the conflicting values, needs, and expectations of varying demographic groups, it can be tempting to abandon hiring techniques that have worked in the past, believing they are no longer applicable. However, just as remaining steadfast in past practices may result in a stale work environment, abandoning tried and true techniques can also prove perilous.

    The overall goal of successful hiring remains the same as it has always been: the need to integrate what has previously worked with regard to employment with those changes that will enable organizations to compete and thrive. This can best be achieved by acknowledging what is new and different while retaining the essence of what leads to the best match between applicants and job openings when it comes to the four stages of the employment process: recruiting, interviewing, selection, and orientation. Hence, the contents of all fifth-edition chapters have been carefully reviewed, updated, expanded, and otherwise modified as needed. In addition, several topics have been added, including data-driven recruitment using predictive analytics; reducing recruitment costs; sidestepping common prerecruitment mistakes; recruitment roles and responsibilities; additional questioning techniques; how to avoid receiving illegal information; techniques for interviewing over- and underqualified applicants; respective documentation responsibilities; legal guidelines for references and background checks; and the impact of social networking on the hiring process.

    As with previous editions, readers are cautioned on two points: First, any reference made to specific publications, websites, services, or institutions is for informational purposes only and is not to be considered an endorsement. Second, this book is not intended to provide legal advice.

    Recruiting, interviewing, selecting, and orienting new employees are tangible skills. How well you practice these skills will directly affect many common organizational problem areas, such as remaining competitive and balancing employer expectations with those of employees. By diligently implementing the methods described in this book, your organization can greatly improve its employment efforts and levels of employee productivity.

    —D. A.

    PART 1

    RECRUITMENT—

    FINDING

    POTENTIAL

    EMPLOYEES

    1

    RECRUITMENT

    FORECAST

    Forecasts of any sort can be tricky, and this is no less true when it comes to predicting recruitment trends. There are countless factors that challenge an organization’s hiring efforts, many of which are outside our control, such as economic instability; political initiatives; mergers and acquisitions; decisions by senior management; budgetary restraints; and initiatives by competitors. So what can employers do to ensure that their hiring efforts result in the best possible workforce? Actually, more than you might think. It starts with an awareness of what was, as well as what is: that is, comparing what has worked in the past with current and evolving recommended initiatives; exploring the ramifications of hiring in today’s gig economy; assessing the upside of predictive analytics for data-driven recruitment; creating a profile for success unique to a particular work environment; exploring ways to minimize recruitment costs; and creatively competing for talent.

    What’s New Is Old and Vice Versa

    The objective of recruitment has historically been and will continue to be finding the best person for the job. This doesn’t always mean the most qualified (more on this later), but it does come down to striving to find the best fit. That fit refers not only to fitness for the job, but to fit within the organization’s culture, as well.

    To achieve this objective, begin recruitment initiatives with a carefully thought-out and executed balancing act between what you have done in the past with what you may have read or heard about, or perhaps what your competition is doing. Ask yourself whether established policies and practices will help or hinder your hiring efforts. For example, adhering to traditional recruitment sources and methods may result in reaching a limited talent pool; however, relying exclusively on high-tech resources could exclude demographic groups that do not readily embrace technology.

    The factors to consider as you evaluate how to best approach recruitment are not new; what may be different, however, is how you view or utilize them. Here are some questions to ask yourself as you evaluate the effectiveness of your approach to recruitment and strive to strike a balance between implementing what’s new and maintaining a we’ve always done it this way approach.

    What Impact Will the Current Unemployment Rate Have on Our Recruitment Efforts?

    This is a good place to start. Interpreting and reacting to unemployment numbers and trends can be dizzying, leaving organizations to question the wisdom of their thinking and wondering what they may need to do in response to the most recent unemployment report. Some opt to stand pat and not change anything when it comes to recruitment; others evaluate what their competitors are doing and follow suit; and some conduct complex cost analyses as they consider the pros and cons of hiring versus leaving vacated positions open.

    Another way of putting this is, what effect does supply and demand have on your recruitment efforts? Generally, a rule of thumb when considering unemployment numbers is to remind oneself of who’s got the current advantage: employers or applicants. Higher unemployment rates increase the number of applicants in relation to the number of job openings. That puts employers in the so-called driver’s seat, allowing them to be highly selective and more conservative in their salary and benefits offerings. Lower rates of unemployment put employers in a less desirable position as they often struggle to fill jobs. Qualified individuals are in the enviable position of negotiating a hiring package that could exceed budgeted amounts.

    This awareness helps employers establish a proactive way of thinking as they stay ahead of the numbers and draw conclusions from past trends while at the same time anticipating recruitment needs. While not foolproof, this approach can prevent you from being caught off guard and left scrambling, trying to figure out what to do when the economic roller coaster ride changes direction.

    Do I Need to Fill This Job?

    One way to protect yourself during times of economic turmoil is to ask yourself if you need to fill an opening. Just because there’s money in the budget to fill a job doesn’t mean you should. Let’s say Aaron, a longtime employee in Payroll, decides to retire. He’s performed his job well over the years, and has contributed to the efficiency of the department. The position is therefore approved to be filled, the assumption being that it’s necessary. But just because a task needs to be performed does not mean a particular employee should be the one to perform it.

    Before proceeding with a replacement, ask yourself some key questions: How will filling this job help meet departmental and organizational goals? Are the tasks performed essential? If so, are these tasks that could be distributed among other employees without creating an undue hardship? Is a full-time replacement necessary when someone working part-time might be sufficient? Should we consider hiring a contingent or gig worker, on an as-needed basis? Could the job be outsourced?

    That last question concerns control of an internal job function being turned over to an outside enterprise and will likely have the greatest impact on a department in a number of possible ways, including finding the appropriate business to perform the work, transferring information efficiently and with discretion, and assuring other employees that their jobs are not slated for elimination. The greatest upside of outsourcing is likely to be payroll and overhead cost savings. It may also allow an organization to better focus on core business initiatives, thereby increasing efficiency; providing faster and better services; and saving on infrastructure and technology. There may also be time zone advantages.

    How Much Does Recruitment Cost?

    The Society for Human Resource Management (SHRM) has reported that the average cost-per-hire (CPH) is $4,129.¹ In reality, this can cost considerably more or less, depending on the uniqueness and level of the job opening: Harder-to-fill and executive level jobs often take longer and cost more. Regardless of the job’s specifications, however, it’s wise to factor in both internal and external expenses when calculating a job’s anticipated CPH. Internal costs include employee referral programs, salaries of HR recruiters and hiring managers for the anticipated amount of time to be spent on the selection process, as well money invested in the expected learning and development curves for new hires. External costs encompass those connected with a wide range of possible recruitment sources, and may also include applicant tracking system fees, video interviewing tools, test providers, assessment centers, drug testing, background checks, and relocation expenses. There may also be additional unplanned hiring costs, such as reimbursement of travel expenses for applicants flying in for interviews.

    What Is Our Competition Doing with Regard to Filling Similar Jobs?

    Every form of business has competition: Do you know how your competitors find their applicants? Start by visiting their websites—most have a section devoted to job opportunities. Locate jobs that you have in common and review their job descriptions and the language they use to attract would-be employees. Compare what you’re reading with what you offer on your career page. (If you don’t currently have one, this may be the time to pull one together.) Focus on how they describe their work environment and specific job openings. Important, too, is how easy they make it to apply.

    Next, explore your competition’s social media presence. The most likely sites will be Facebook, LinkedIn, and Twitter. Do they share company success stories? Promote their brand? Sell their work environment as a great place to work? These are all important recruitment elements.

    Finally, don’t overlook personal contacts who work for your competitors as a source of information. Exchanging information about recruitment techniques and applicants that may not be suitable for one environment or job opening can often yield just what another company needs. If you don’t know anyone personally, consider calling the HR department, explaining that you’re interested in bartering information, telling them what you’re looking for, and asking what you can offer them in return.

    How Aware Are We as to What’s In Right Now When It Comes to Recruitment?

    Being proactive and staying informed are critical aspects for success when it comes to virtually any aspect of running a business, and this is no less true when it comes to recruitment. The problem is that new, oft-times trendy, approaches to hiring can be rendered ineffective almost as soon as they become known. Consider these once-used, now passé, techniques: requiring applicants to succeed at winning a designated online game before moving forward in the hiring process; asking potential contenders non-job-related questions such as, What breed of dog would you most like to be and why?; and asking applicants to submit an essay describing their favorite ice cream flavor and how it relates to their greatest strength.

    Hiring more gig workers, ensuring web pages are optimized for display on mobile screens, and applying a greater emphasis on employer branding are increasingly viewed as steps that yield positive recruitment results. Other tried and true approaches that continue to generate a viable applicant pool while acknowledging applicant preferences will be discussed in Chapter 4.

    Recruiting in a Gig Economy

    Variations on phrases abound. Consider the famous line from Romeo and Juliet as Juliet proclaims, What’s in a name? That which we call a rose by any other name would smell as sweet.² Now reflect on one of many variations, written by Gertrude Stein more than three hundred years later: A rose is a rose is a rose is a rose.³ Shakespeare’s line suggests that the importance of a person or thing is because of who or what they are—not because of what they are called. Popular interpretations of Stein’s statement can be summarized as, things are what they are, or, it is what it is. Essentially, then, different words expressing the same sentiment.

    Now let’s fast-forward to the twenty-first century, abandoning literature for recruitment. One current trend that has gained traction is recruiting in a gig economy. By definition, this refers to short-term, temporary contracts or freelance assignments as opposed to full-time, permanent jobs. This is not new. There have always been work-for-hire individuals, originally referred to as temps, and then relabeled contingent workers. Renaming them yet again, this time as gig workers, doesn’t change what they do or their relationship with an employer. So why is this a point for discussion in a chapter about recruitment forecasts? The answer is because it has become increasingly popular, to the extent that, according to a study by Intuit, we are on the brink of seeing 40 percent of all jobs being occupied by gig workers.

    One reason for this emphasis on a gig economy has to do with the impact of our current digital age. Gig workers rely heavily on a platform economy for securing assignments; that is, plugging directly into websites and apps to reach potential employers. These platforms effectively serve as matchmakers or intermediaries between employers and gig workers, with many tasks increasingly being performed remotely, resulting in instances where employers and workers never actually have any face-to-face contact with one another.

    While anyone can become a gig worker, it should come as no surprise to learn that many are Millennials and Centennials, child- and/or elder-caregivers, people with disabilities, and those who have varying personal commitments such as balancing work and school that preclude them from committing to a regular work schedule. There are even people with steady jobs who scout platforms to see if there’s a market for their skills and interests to supplement a steady paycheck.

    Advantages and Disadvantages of a Gig Economy

    There are advantages and disadvantages of a gig economy for both employers and individuals. By relying on gig workers, employers can save considerably on recruitment and hiring costs, salaries, and benefits. They are also able to scale more readily as business needs change. Should it become necessary to convert a short-term gig assignment into a full-time permanent job, employers can turn first to the independent contractor who is already familiar with the job, thereby saving on recruitment and the typical learning curve associated with new hires.

    On the negative side, employers report that gig workers are less committed to a company’s goals and tend to function outside of the organizational culture. Also, the very nature of the work relationship precludes them from being taught new tasks, coached, disciplined, or promoted.

    Gig workers enjoy greater flexibility in terms of where, when, and how often they work than do employees. They are also exposed to different styles of management and not bound by contracts restricting future employment with competitors. Furthermore, gig assignments can turn into full-time employment opportunities if mutually desired. There is a downside, however. The lack of a regular salary and benefits, especially health care, is a primary concern. There are also inconsistent employment opportunities, the burden of tracking and paying their own taxes, and an overall feeling of instability that can be overwhelming in a fluctuating economy. In addition, there are limited opportunities to interact with employees and fewer employment rights.

    The Legal Status of Gig Economy Workers Versus Employees

    Most work environments abide by the general understanding that gig workers are independent contractors, and as such are not entitled to set wages, overtime, breaks, reimbursement of expenses, workers’ compensation, unemployment benefits, or any other benefits provided by employers for their staff. It is the lack of benefits that has compelled many gig workers to initiate lawsuits challenging their status of independent contractor as opposed to employee.

    The distinction between the two is not clear cut, and misclassification can have significant consequences. Broadly defined, an employee is someone who works for another in return for financial or other compensation. Based on that statement, all workers would be considered employees; however, this is usually not the case.

    The Internal Revenue Service (IRS) has a vested interest in these classifications and can impose heavy penalties if employers misclassify individuals either by mistake or with the intent of avoiding employment-related expenses. It will sometimes allow businesses that have misclassified employees as independent contractors to remedy the situation through the Voluntary Classification Settlement Program (VCSP). Employers are advised to seek the advice of legal counsel should they wish to avail themselves of this program or seek guidance regarding specific scenarios.

    There are two tests that can help employers determine whether a worker is, in fact, an employee: the common law test and the economic realities test.

    Common Law Test

    The common law test is used by the IRS in determining whether an individual should be classified as an employee or a worker/independent contractor. If the business provides benefits to the individual, reimburses them for expenses, provides supplies and a place in which to work, or if the relationship between the two is long term and exclusive, then it’s more likely that person will be considered an employee. On the other hand, if the employer only pays for specific projects and does not make any financial contributions to or on behalf of the individual, then it’s likely they will be considered a worker.

    Then there is the matter of control: Does the employer have control over how the individual performs a given job? That would likely mean the person is an employee. Or is the work assigned and completed without supervision? Now we’re probably talking about an independent contractor or freelance worker. Additionally, if the person provides services only to one employer, that person is probably an employee. This is one of the reasons some businesses have policies prohibiting second jobs. Services provided to more than one business generally means the individual is an independent contractor.

    Economic Realities Test

    The economic realities test has to do with whether an individual is economically dependent on a business for continued employment. If the person has a continuing relationship with the employer then they are likely to be classified as an employee. If the work relationship is for a particular project for a limited time, then we’re probably describing an independent contractor. Stated another way, employees rely on the employer to earn a living; independent contractors are self-reliant.

    Another important factor in the economic realities test concerns the individual’s impact on the business. If the person’s work is an integral part of the business, then they are likely to be classified as an employee. If the work is peripheral to the business, then that person is probably an independent contractor.

    Employers are urged to stay current with regard to these tests and other means for evaluating an individual’s employment status.

    Data-Driven Recruitment Using Predictive Analytics

    Recruitment can be an arduous and fruitless task. Frustration arises when you know the skills and attributes you’re looking for in an employee, but you either don’t seem to be able to attract applicants who possess them, or it takes a great deal of time and money to do so. Should this happen, you may want to consider data-driven recruitment.

    Data-driven recruitment goes beyond traditional data processing software, relying on analytics to narrow the recruitment process. There are three forms of analytics: Descriptive analytics define what has happened in the past; predictive analytics uses historical data to make predictions about the future; and prescriptive analytics suggest courses of action as well as likely outcomes. Our focus will be on predictive analytics where, as with competency-based questions, past events largely determine the likelihood of a future outcome. (See Chapter 7 for more on competency questions.)

    How Predictive Analytics Works

    Predictive analytics relies on the accurate collection and processing of data. The more sources you explore, the more viable your predictions are likely to be. Processing collected data begins with cleaning it. This involves identifying and removing inaccurate information and replacing, modifying, or formatting it to ensure consistency with similar data. Effectively, you are preparing the information for use in a predictive model: a process that sorts through information and relies on probability to forecast outcomes. Numerous types of predictive models may be considered, depending on your desired outcomes, including linear models, decision trees, neural networks, and cluster models. Unless you have in-depth knowledge as to which one to use and when, it’s best to consult with a data analytics expert.

    Benefits of Data-Driven Recruitment Using Predictive Analytics

    Overall, predictive analytics narrows down options for finding the most suitable applicants effectively and expeditiously. That said, relying on predictive analytics to recruit employees can initially seem sterile and contrary to the human side of human resources. While it may not be for everyone—and is not generally recommended as the sole approach to recruitment—numerous benefits to predictive analytics have been cited. Among other benefits, proponents claim that predictive analytics:

    ◼ Helps recruiters more effectively and efficiently navigate a large pool of applicant data in order to find employees who will reflect job, departmental, and organizational objectives.

    ◼ Allows continuous and accurate monitoring and tracking of your applicants to help your business meet diversity targets such as gender, ethnicity, and veteran status.

    ◼ Provides consistency in data collection (for instance, by only accepting applications via an organization’s website, eliminating the need to analyze individual resumes and manually input data).

    ◼ Delivers automated resume ranking, shortlisting, and prescreening of applicants.

    ◼ Offers faster turnaround time from recruitment to hiring.

    ◼ Enables recruiters to fill numerous openings in a short period of time, such as for cyclical or seasonal jobs.

    ◼ Assists in finding applicants with unique qualifications for hard-to-fill jobs.

    ◼ Results in a reduction in turnover by considering applicants with specific expertise from particular work environments who are most likely to be a good fit for your corporate culture.

    ◼ Helps businesses maximize responses to their job postings based on factors such as industry and location.

    Data-Driven Terms

    When you read about or try to learn something new, and you come across unfamiliar terms, does that only increase your level of confusion? What’s the point of a definition if you have to look up every other word of the definition? Since data-driven recruitment is still relatively new, let’s look at some of the buzzwords to help demystify the process.

    Algorithm: an automated step-by-step procedure or set of guidelines describing how to perform a particular task or attain a specific objective.

    Artificial Intelligence: the simulation of intelligent behavior by computers.

    Big Data: extremely large sets of statistics that are analyzed by computer to help with problem-solving and decisionmaking.

    Data Mining: the process of discovering patterns, anomalies, and correlations within large data sets, used to predict outcomes.

    Data Visualization: the selection and presentation of data in an understandable way that provides meaningful insights toward the end goal of making a decision.

    Machine Learning: the development of computers that can access data, build trends, and add to algorithms.

    Performance-Based Recruitment Advertising: helps employers optimize their job advertising budget.

    Programmatic Advertising: an automated system to determine where and when job ads will appear, as well as how much it will cost to target specific demographics.

    Real-Time Job Matching: technology that ranks applicants according to their skills and experience in relation to the job’s requirements, as well as their preferences and interests, while also identifying the employer’s preferences to ensure the best fit.

    Taxonomy: the classification and categorization of various factors associated with recruitment, such as job titles, skills, and common search terms used as the basis for job matching.

    Success Profiles

    Success profiles identify the core competencies and attributes needed for successful job performance. In addition, they isolate the proficiencies of individuals who are most likely to meet departmental and organizational goals as well as reflecting key characteristics of the corporate culture. Adding these factors to experiences and industry knowledge, the result is often a smaller pool of qualified applicants, allowing employers to be maximally selective. While not foolproof, success profiles provide employers with another tool for securing the best fit for each job.

    Success profiles are most effective when used as a supplement to job descriptions (which will be examined in Chapter 2 as part of prerecruitment activities). For now, suffice it to say that job descriptions focus specifically on the tasks to be performed and the skills needed to perform those tasks, while success profiles emphasize the results that need to be achieved.

    Success Profile Components

    Developing a success profile begins with defining the purpose of the job. Easy, right? Maybe not. Think about some job titles in your organization, starting with your own. Are you able to come up with a statement that clearly defines its role? Let’s say you can: How likely is it that your characterization is the same as that of other incumbents, coworkers, employees in other departments, HR, managers, company executives, clients, or customers? Gathering information from as many sources as possible should reveal enough common denominators, enabling you to come up with a purpose that satisfies nearly everyone’s perspective. If not, you need to determine whose viewpoint weighs most heavily.

    Next comes clarifying your definition of what constitutes success. Are these individuals who generate the highest sales or greatest profits? Achieve the greatest levels of customer satisfaction? Bring in the most clients? Are great team players? Finish tasks most expeditiously? Learn new tasks quickly? Exhibit outstanding leadership qualities? Take on additional responsibilities without hesitation? Serve as mentors for others? Are you tempted to say, I want all of this? If so, you’re likely to have jobs that remain open indefinitely. Success profiles can only work if you establish realistic expectations.

    Isolate core competencies and skills needed to support your definition of what constitutes success. Let’s say you’ve identified effective leadership as a key component in order to succeed as a project manager. Some of the skills you might seek include decisionmaking, strategy development, team management, critical thinking, and being results-driven. Once you’ve done this you’ll be able to assess actual experiences as they relate to these competencies, as well as be able to evaluate outcomes.

    Finally, project ahead: What will success look like in the future? This can be tricky, but by drawing from what your organization has previously achieved and examining long-term organizational goals, you can get a pretty good idea as to what success will look like in a year, in three years, or five years down the road. While evaluating an employee’s potential is hard to do and often inadvisable, this step can help ensure that you are being realistic about the qualities you’re looking for in a successful employee.

    Reduce Recruitment Costs

    Chapter 4 will explore specific recruitment sources; here, we’ll consider ways in which employers can reduce recruitment costs. Just how much does it cost to hire a new employee? While the numbers vary greatly with much depending on the nature and level of the position, consider this quote from the 2017 SHRM pdf on Employee Turnover: Research suggests that direct replacement costs can reach as high as 50 to 60 percent of an employee’s annual salary, with total costs associated with turnover ranging from 90 to 200 percent of annual salary. Examples include turnover costs of $102,000 for a journeyman machinist, $133,000 for an HR manager at an automotive manufacturer, and $150,000 for an accounting professional. If these estimates strike you as high, keep in mind that in addition to the obvious direct costs associated with turnover, there are numerous other costs.

    Let’s look at some of these direct and indirect recruitment costs.

    Examples of Direct Recruitment Costs

    ◼ Expenditures associated with specific recruitment sources, such as advertising or agency fees. With regard to the latter, many link their actual fee with the starting salaries of selected applicants.

    ◼ A portion of salaries for employees involved in the recruitment process, including members of HR, hiring managers, and other staff members involved in varying aspects of the process.

    ◼ The cost of background and reference checks, as well as drug tests and other preemployment assessment tests if outside sources are used.

    ◼ Separation or severance costs. While not mandatory, most businesses incur some degree of termination-related expenses when an employee leaves. Specific costs will depend on whether an employee retires, is terminated, or leaves voluntarily. These costs may include accrued paid time off, such as unused vacation, personal, and sick days; continued health insurance; stock shares; and placement services to help with job searches.

    Examples of Indirect Recruitment Costs

    ► Reduced or lost productivity incurred during the recruitment process.

    ► Loss of or reduced business while positions remain vacant.

    ► Overtime paid to employees when they cover the work of departing employees.

    ► Decreased morale on the part of employees who have to cover the work left behind by departing employees.

    ► Production and service delays.

    ► Decreased productivity rates that frequently occur when voluntary turnover increases.

    ► Reduced innovation and growth that frequently occurs when productive employees leave.

    ► The ripple effect that may occur when good employees depart, as colleagues wonder whether they should also be looking for new jobs.

    Avoid High Recruitment Costs

    Here are two simple and irrefutable facts: (1) In order to fill jobs, you have to spend time and money. (2) The longer the recruitment process takes, the more it costs. The goal, of course, is to minimize time (and hence, expenditures). Here are some tips:

    ◼ Strengthen your employer brand and establish name recognition in a way that will generate interest on the part of would-be employees. What keywords, terms, or images does your organization want people to think of when they hear your name or see your logo? This should be an ongoing venture, started well before it’s time to recruit.

    ◼ Hire the best fit the first time. Granted, there’s a lot more to keeping good employees from wanting to leave than selecting the best fit at the outset, but it’s a really good place to start. Be clear about your hiring objectives and don’t settle. This will go a long way toward reducing future turnover rates.

    ◼ Focus on retention. Creating strategies to reduce employee turnover will reduce the need to recruit as frequently. Treating employees well, ensuring that they remain happy and engaged, are well paid, and receive good benefits and perks will reduce the likelihood that they’ll look for alternative employment.

    ◼ Resist relying on what’s worked in the past. Recruitment sources that once yielded a qualified applicant pool may no longer meet your needs. Explore all possible sources each time you have an opening.

    ◼ Invest in a modern recruitment management system. If recruitment costs are an issue, consider installing one or upgrading your existing system. Modern recruitment management systems integrate social media recruiting, online assessments, real-time analytics, and detailed applicant tracking into the recruitment process to help optimize the hiring process. Organizing all your recruitment-related information in one centralized cloud-based location allows HR to sort and rank applicants to determine where they fit best. Hiring managers can also easily participate in the process.

    Compete for Talent

    If someone were to ask you the most foolproof way of competing with other employers for the best applicants you might be inclined to say, Offer them more money and better benefits. At first glance, this sounds plausible: Who doesn’t want more money or better benefits? Unfortunately, in order to offer more, you have to get those applicants to be interested in your company over someone else’s. This can be especially problematic when you’re going up against a big name in your field. And let’s be realistic: Even if you do succeed in attracting these top performers, you may not be in a position to match what industry giants can afford to offer when it comes to salaries and benefits. Competing for talent poses particular concern when you’re vying for those proficient in specialty niches like artificial intelligence and cybersecurity.

    The degree of competition depends largely on the state of the economy. When unemployment numbers are low, rivalry between employers for top performers is fiercer. On the other hand, when more people are out of work, employers believe they can be more selective, offer less, and take their time deciding. This last statement, while inherently correct, can prove to be a trap: The economic pendulum is always in motion, and employers are advised to practice effective recruitment techniques regardless of whether employers or applicants hold the better hand at any given time—history has shown that it will change.

    Develop a Strategy

    Find out what your competition is saying or doing to lure applicants in their direction. More than likely, the process starts with promoting their brand. This is easier to do if you’re Apple or Google, but every organization has unique qualities that will appeal to target audiences. Consider holding focus groups with your employees, asking what first attracted them to the company and what’s special about working there. Also ask what they would like to see offered, and think about whether any of these ideas are possible to implement. You might ask employees who have worked elsewhere—especially for your competition—what previous employers offered that they miss having. You may be surprised to learn what can make a difference: Perks such as on-site wellness programs, gym memberships, and birthdays off without having to use their paid time off (PTO) bank of hours can amount to being a tie-breaker.

    Consider some of the perks employers offered in 2017:

    IKEA: lockers and showers, quiet rooms, and a coworker-only restaurant serving a different meal daily for $3.00; some locations provide gyms and lactation rooms for new moms.

    Bain & Company (Best Place to Work in 2017): annual two-day global Bain World Cup soccer tournament open to all employees.

    Goldman Sachs: gender reassignment surgery.

    Facebook: free housing for interns.

    Starbucks: full tuition reimbursement for an online bachelor’s degree and stock options.

    Whole Foods Market: 20 percent store discount to all full- and part-time employees.

    In-N-Out: free burger and fries during each shift.

    Deloitte: two sabbatical programs: an unpaid one-month sabbatical for any reason, or a three- to six-month sabbatical for personal or professional growth opportunities with 40 percent pay.

    Gap: free access to the San Francisco Museum of Modern Art to corporate employees and casual style of dress.

    Microsoft: annual $800 StayFit reimbursement program toward the cost of gym memberships and fitness programs, up to 50 percent matching of an employee’s 401K plan. (According to SHRM, the average company in the U.S. matches 6 percent.)

    Amazon: gives new moms more control over easing back into work.

    Southwest: access to Clear Skies, an employee assistance program that provides confidential counseling, work/life services, legal consultations, and cash bonuses for reaching certain metrics.

    Genentech: on-site car washes, haircuts, childcare, mobile spa, and dental care.

    Would you want to work for a company that offered some of these perks? Do you currently offer any of these? If not, could you? Do they trigger thoughts of what you might be able to offer that could attract top performers? Don’t overlook or underestimate the importance of promoting your work environment as one in which employees can grow professionally, are surrounded by motivated colleagues, are valued, and are treated with respect.

    Now determine how you’re going to get your message out there. Repeatedly promote your brand on social media platforms and through other recruitment sources (see Chapter 4) by identifying your values, defining your culture, highlighting what sets you apart, and showing what you do for your employees. Keep your message clear and concise, using buzzwords or catchy phrases to help would-be employees remember your message. Invite individuals whose values and objectives align with yours to contact you even if they don’t see a specific job opening that’s of immediate interest. Set up exploratory interviews (face-to-face or virtual) and encourage them to keep in touch for future job opportunities. This can prove to be a real time- and money-saver down the road.

    Once you start attracting applicants, move quickly: Set up interviews and make decisions before your top picks receive (and accept) offers from your competition. It’s fine to want to compare viable applicants; but waiting too long can result in a lost opportunity.

    If you are recruiting for positions in countries where the infrastructure is different from what an expat would experience elsewhere, you will also want to factor in geographic and unique cultural demands when you establish your recruitment strategy. Better yet, create a separate plan for international markets.

    SUMMARY

    Attempts at forecasting recruitment trends often fall short. Many employers opt to stay true to past practices despite the onset of new trends. Others integrate the latest techniques with existing employment practices. Examples of what’s currently in include an increased reliance on gig workers, implementing a data-driven approach to recruitment using predictive analytics, and creating success profiles that identify the core competencies and attributes needed for successful job performances. There are also new approaches to what recruiters have long been doing, such as factoring in different approaches to reducing recruitment costs and how best to compete for talent.

    Considering the impact of the current unemployment rate, how necessary it is to fill an opening, total recruitment costs, and how competitors approach their job openings can shed light on how best to proceed. Then you can weigh the advantages and disadvantages of past recruitment practices with current advances. A carefully executed balancing act between the two could well result

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