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Effective Recruitment Practices
Submitted to: Mrs. Thangam Vaidyanathan
Submitted by: Smita Choudhary Research Associate (HR) RA/08/16
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ABSTRACT The future of any enterprise lies in the hands of its manpower. Selection of good people can save a measurable portion of company’s profits and lead business to new heights. So a conscious effort must be made to ensure the recruitment of the right candidate for the job in hand. It is always in organization’s best interest to recruit the best people. Recruitment decisions should be based on hard evidence and should be taken with proper planning. Employing the incorrect person, who is not ideally suited to the job, can be an expensive mistake. "Powell's Rules for Picking People"- Look for intelligence and judgment and, most critically, a capacity to anticipate, to see around corners. Also look for loyalty, integrity, a high energy drive, a balanced ego and the drive to get things done." ---------Gen. Colin Powell (Chairman (Ret), Joint Chiefs of Staff) Former Secretary of State, United States of America When recruiting, you are the ‘brand ambassador’ for your organization. Candidates and potential employees will judge the organization by the way you speak and how you reflect your company. You should sound so excited about the new job, that everyone wants to get in there and work at it. An effective recruitment practice is one which is fair and transparent. Companies should adopt latest recruitment practices keeping in mind the situation of the labor market. Recruitment as an HR function has become very important for organizations in today’s competitive business scenario. Employees are the heart and soul of a business. Human capital is an organization’s biggest asset and recruitment is the process by which organizations get this valuable asset. Hence, effective recruitment practices are the key to the success of any organization. Recruitment is one of the most important aspects for any organization. An organization’s success or failure depends on its workforce. If you fail to plan you plan to fail---------goes an old saying. This is very true of recruitment process. Hiring of candidates should be based on a correct notion of what is required for the organization.
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A good workforce leads the organization to the path of success whereas an ordinary or below ordinary workforce leads an organization no where. Hence the future of an organization rests on its people. So, an organization’s primary task is to get the best people in and this is what we call recruitment. The purpose of recruitment is to attract the best talent for a particular position in an organization, deter unsuitable candidates from applying and create a positive image of the organization. This article sheds light on the following issues: What is recruitment? The problems associated with recruitment that organizations face and the methods to sort out these problems. Reducing employee turnover, which is a major problem faced by organizations these days. The recruitment practices being followed by various organizations, the various alternatives available for recruitment. Problems associated with recruitment Getting the right people into your company to start with gets things moving in the right direction at the very beginning. As important as attracting good employees is, it is just as important to retain them. Recently a survey showed that employee turnover can cost an organization almost 4-5 times more than an annual employee salary. A study conducted by some B-schools research showed that 80% of employee turnover is due to errors committed during the recruitment process. In today’s business environment the biggest challenge that organizations are facing is employee turnover as organizations are finding it hard to retain their top talent. People are frequently shifting jobs due to many reasons like better pay package, better working conditions, suitable working hours, scope of promotions, career advancement, etc. It’s an interesting problem and the one that should be immediately addressed because the organizations future is in the hands of its talented people. The loss of top executives jolts an organization and it takes time to recover from this setback. The new recruits may not be as efficient as the people who have left the company. This definitely hampers the organization’s efficiency and performance. It is at this point of time that the
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organization loses its competitive edge. Hence good and effective recruitment practices save an organization from this setback. Solutions to the problems The problem stated is indeed the one that needs careful attention. If proactive measures are taken well in advance, the organizations may avoid this situation and run smoothly. Organizations should adopt novel recruitment practices in order to succeed in this competitive scenario. Rehiring is also a good alternative to get your key people back. Companies need to make an effort to rehire their ex-employees to give a new lease of life to the struggling organization. These ex-employees are ideal people to revive the struggling organization. The organizations differ in terms of their size, business processes and practices. A few decisions by the recruitment professionals can affect the productivity and efficiency of the organization. Organizations can adopt different forms of recruitment practices according to its specific needs. Centralized recruitment – In centralized recruitment, the HR/recruitment department at the head office performs all functions of recruitment. Recruitment decisions for all the businesses and departments of an organization are carried out by the one central HR or recruitment department. This form of recruitment is commonly seen in government organizations. Centralized recruitment has some advantages and they are: • • • • • • It reduces administration costs It helps in better utilization of specialists It ensures uniformity in recruitment It ensures interchangeability of staff It helps in reducing favoritism In this form of recruitment, every department sends request for recruitment to their central office Decentralized recruitment – Decentralized recruitment practices are most commonly seen in organizations operating in different and diverse business areas. In cases of diverse and geographically spread business areas and offices, it becomes importantl to understand the
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needs of each department individually and frame the recruitment policies and procedures accordingly. Each department carries out its own recruitment. INTRODUCTION As organizations plan for growth they look for change and development. This can lead to the need for recruitment. The key to a successful future is having the right people in the right jobs, whether the person is a new recruit or a transfer from another area. Employing the right person can save you thousands of dollars in the long run. The right initial choice will save money by reducing turnover. Recruitment refers to the process of sourcing, screening, and selecting people for a job at an organization or firm, or for a vacancy in a volunteer-based organization or community group. Managers or administrators can carry out the task of recruitment in small organizations, but mid and large-size organizations and companies have professional recruiters to perform this task. They even outsource some of the recruitment process to recruitment agencies. Recruitment is the process of attracting prospective employees and encouraging them to apply for jobs in the organization. The recruitment industry has four main types of agencies: employment agencies, recruitment websites and job search engines, "headhunters" for executive and professional recruitment, and in-house recruitment. The stages in recruitment include sourcing candidates by advertising or other methods, and screening and selecting potential candidates using tests or interviews. Effective recruitment is a key to organizations that retain their competitive edge. Having the right processes can help you select the best potential candidates. Increasing the diversity of an organization’s workforce is a primary concern for many businesses because they believe that it can bring significant competitive advantage. Recruitment at Wipro Wipro has a rigorous recruitment process which aims to identify highly talented, extremely motivated self starters. In selecting employees, Wipro looks for both technical competence and people who fit with its values. Page 6 of 15
For experienced professionals, Wipro uses a two-step hiring process. First the candidates appear in a first round interview. If they are found promising, they proceed to the final round where they are interviewed by the division head. Entry level candidates are hired directly from engineering colleges. They pass through two screenings-one based on grades and the other on an aptitude and technical test. Except oversees hiring for sales and marketing positions, Wipro meet 35% of its recruitment needs through campus hiring and the remaining through experienced lateral hires, typically from India’s smaller IT companies. THE PROBLEM Organizations do face some problems related to recruitment. The one that is most prominent is high employee turnover. It is a huge concern to most companies as employee turnover is a costly expense especially in lower paying job roles, for which the employee turnover rate is highest. Companies take a deep interest in their employee turnover rate because it is a costly part of doing business. When a company replaces a worker, it incurs direct and indirect expenses. These expenses include the cost of advertising, headhunting fees, human resource costs, loss of productivity, new hire training, and customer retention - all of which add to the company’s cost. Companies sometimes face the problem of non-availability of talented people for recruitment. Companies also face problems of employee turnover during the state of crisis. Recruitment at Cisco Cisco has a policy of attracting the top 10-15 percent people in the networking industry. Cisco’s vision statement is “Attracting, growing and retaining great talent is critical to sustaining Cisco’s competitive advantage.” Thus effective recruitment is a powerful strategic weapon for the company. Cisco implements many effective recruitment practices. Some of them are: • The company changed the way it uses its wanted advertisements in newspapers. Through this the company directed all job seekers to its website. Page 7 of 15
Cisco launched friends program in 1996 because it realized that a candidate would approach the company if his friends inform him about better opportunities at Cisco. The company advertised the friends program in movie theatres in San Jose and received around 100 to 150 applications each week.
• • •
Cisco launched a tool called Profiler on the employment page of its website to speed up and standardize online resume submission. To speed up the hiring process, Cisco hired in-house headhunters to identify qualified candidates for managers. Cisco also encourages internal referrals for recruitment through a program called ‘Amazing People’.
MY IDEA Employee turnover can be reduced when companies properly address the issues that affect overall company morale. By offering employees benefits such as reasonable flexibility with work and family balance, performance reviews, and performance based incentives, along with traditional benefits such as paid holidays or sick days, companies can better manage their employee turnover rates. You can consider the following factors, all of which play a positive role in reducing employee turnover • Realistic job previews - Give prospective employees a 'realistic job preview' at the recruitment stage. Don’t raise any unrealistic expectation that you are not able to fulfill later. Due to technological advancements, employers can familiarize potential candidates with the organization well before they join the organization. • Make line managers accountable – Line managers should be held responsible for staff turnover in their teams. Reward managers whose record at keeping people is good. Train line managers in people management and development skills before appointing or promoting them. Re-train existing managers who have a poor record at keeping their staff.
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Career development and progression – You should give individual employees opportunities to develop their skills and progress in their careers. Consult employees – Always give employees a chance to express their 'voice'. This will help dissatisfied employees to sort out their problems before resigning. Employees resign when their grievances are not heard.
Be flexible - Wherever possible ask for individual preferences on working hours and times. Where people are forced to work in hours that do not suit their domestic responsibilities they will look for another job which can offer suitable hours.
Avoid the development of a culture of 'presenteeism' – Avoid a culture where people work for longer hours than are necessary just to impress management. Evaluation of individual commitment should be based on results achieved and not on hours put in.
Job security - Provide job security to employees. Security and stability are greatly valued by most employees. Treat people fairly - Never be partial towards employees. Unfairness is a major reason for voluntary resignations. The overall level of pay does not play a major role unless it is very low than the market rate. Unfairness in the distribution of rewards may lead to resignations.
Defend your organization – Always keep your internal e-mail addresses confidential, don’t do business with agents who have poached your staff, and enter into agreements with other employers not to poach one another’s' staff.
Effective recruitment practices to find better people 1. Reduce the unproductive time or delays in your hiring process. 2. Before beginning the search, exactly define what you want in a candidate. 3. Clearly decide what sets your company apart from competitors and plan accordingly. Don’t focus only on compensation and benefits; also focus on your culture and training opportunities. 4. For better hiring, use multiple recruitment sources. 5. Use technology in recruiting and hiring process. 6. Try to hire multi-skilled people and people who have a strong desire to learn.
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7. Provide technical training to your hiring staff. Then only they will be able to utilize technology effectively. 8. Build and manage your pool of candidates. Turnover during crisis can be controlled by implementing a mechanism that can help to build cordial relations between employees and management. The problem of non-availability of talented people can be addressed by building sound educational infrastructure. Novel Recruitment Practices Due to changes in the recruitment scenario, companies can use new methods of recruitment. These methods help in optimum utilization of available resources, both for employer as well as for employees. Some novel recruitment practices that companies can follow are as follows: Headhunters Headhunters link the employees and the employers. Some established headhunters in India are Naukri, Timesjobs, Monster and many more, which provide HR solutions to companies. These headhunters have bridged the geographical barriers as they enable employees from anywhere to look for a job anywhere. For this the employees have to register them online and nothing more. RPO (Recruitment Process Outsourcing) Recruitment Process Outsourcing has started gaining importance in the current business scenario. Companies can hand over the recruitment task to third-party specialists. This not only saves on cost and involvement, but also ensures that a specialized job is being handled by an expert of that field. This ensures that the task is done with better efficiency. Recruitment through Referrals Organizations have now understood that in order to succeed, they need to have a good bunch of employees working in close coordination with each other. Hence organizations can
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encourage employees to make referrals. This ensures that the organization always has a closely knit group of employees with no outsiders in the group. Outsourcing A company may draw required personnel from outsourcing firms. Outsourcing firms develop their human resource pool by employing people for them and make available personnel to various companies as per their needs. Poaching/raiding “Buying talent” (rather than developing it) is the latest mantra being followed by the organizations today. Poaching is employing a competent and experienced person, already working with another reputed company, in the same or different industry. Poaching is highly dominant in Indian software and the retail sectors. In the recent times, the aviation sector has been the worst hit, and state-owned airlines have lost several of their inflight crew and ground staff to the new airlines. Retail is likely to emerge as the next hotspot for poaching, as large players enter the fray and roll out their stores. The IT industry has traditionally been a happy hunting ground for poachers, for obvious reasons. Attrition rates of software and BPO companies have always been steep compared to the rest of the industries. In 2008, the top five software export firms are expected to hire 95,000 employees. With the domestic IT industry also on an upswing, skill-shortage (and subsequently, poaching) will assume larger proportions. According to Cisco, “Poaching is my recruitment policy”. E-recruitment Many big organizations use Internet as a source of recruitment. E-Recruitment is the use of technology to assist the recruitment process. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae i.e. CV through e-mail using the Internet. Alternatively job Page 11 of 15
seekers place their CV’s in worldwide web, which can be drawn by prospective employees depending upon their requirements. For successful e-recruiting, an organization should create an informative, welcoming and transparent website. Alternatives to Recruitment Instead of recruitment, companies can use some alternatives to recruitment like • • Overtime – An organization can use this method to handle short term fluctuations in work volume. Subcontracting – An organization can use this alternative to meet a sudden increase in demand for its products and services. The firm may avoid expanding its capacity immediately. • Temporary employees – These are employees who are hired for a limited time to perform a specific job. They meet short term human resource needs of an organization. It helps the organization in avoiding the expenses of recruitment. • Employee leasing – In this practice, permanent employees of a company possessing specialized skills are hired by another company on a lease basis to meet short-term requirements. • Outsourcing – This alternative is used by firms for an activity for which the firm lacks internal expertise and requires unbiased opinion. Many firms outsource their recruitment activity to save time or they do not have expertise to handle recruitment. THE DETAILS Recruitment is an important function in an organization. Hence, it must be ensured that this task is conducted in the best possible way. Studies have shown that excellent recruits can be 200% to 600% more effective than average recruits. There are many questions that should be addressed while hiring people. Some of them are: • • Has the vacancy been agreed by a responsible manager? Is there an up-to-date job description for the vacancy?
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• • • • • • • •
What are the conditions of employment for the vacancy (salary, hours of work, Has a personnel specification/candidate’s profile (in terms of physique, Has a notice of the vacancy been circulated internally? Do all potential candidates (internal or external) know where to apply and in What are the arrangements for drawing up a shortlist of candidates? What about the interviewing dates and arrangements for selection of Have the shortlisted candidates or waitlisted candidates been informed Have unsuitable candidates or waitlisted candidates been informed of their
fringe benefits, perquisites, holidays, etc.)? intelligence, aptitude, qualifications, experience, etc.) been prepared?
candidates? sufficiently in advance and asked to furnish detailed references? position in a polite way thanking them for their interest and attendance? If all the above questions are satisfactorily answered, the recruitment process will definitely become more effective and lead the organization towards success. Evaluation of effective recruitment Any recruitment effort on the part of the organization consumes organization’s resources. Hence it is essential to evaluate the organization’s recruitment policies from time to time so that valuable resources can be utilized to the full extent. Measuring the results of recruiting efforts is the best way to determine the success of a recruiting program. Evaluation of recruitment practices is necessary to provide a guide for future improvements. More importantly, if it is carried out continuously, it can provide early warning of deficiencies and gives a chance to rectify those deficiencies. Evaluation of recruitment processes assesses whether recruitment methods are:
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Delivering the quantity of staff required Encouraging applications from those with sufficient basic skills Retaining competent staff with prior experience
An effective recruitment program is evaluated on the basis of following factors: • • • • • • • The number of successful placements The number of hirings The number of offers made The number of applicants The cost involved The time taken for filling up the position Yield ratio
The recruitment practices should be evaluated from time to time and changes should be made, to match the current and future recruitment needs of the organization. Evaluation at Texas Instruments Four months after an employee is hired at Texas Instruments, his/her manager is asked to rate the employee (as part of a survey) on whether the person is "meeting", "not meeting", or "exceeding" the manager's expectations. Currently, Texas Instrument’s managers report that 97 percent of their new hires are exceeding expectations. New employees are also surveyed to see if the job they are performing is what they had expected. CONCLUSIONS It is evident, that in the current business scenario recruitment is undergoing radical changes. Successful organizations are ones that can cope with this change. Recruitment, being an integral part of an organization’s functioning needs careful attention. An organization’s fete depends on its people. Hence having the right people at right positions is the success mantra for organizations. India has a large pool of talented people. The need of the hour is to hire them and use them effectively. If you are able to recruit right people at right positions and use their talent in the right way, you are through.
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Another problem that is gripping the organizations these days is employee turnover. Organizations are not able to retain their employees. The key to retaining your employees is using the 7Ps of retention. The 7 Ps include 1. Pay 2. People 3. Power 4. Praise 5. Pride 6. Process 7. Progress If you can put in all the 7 Ps right, there is no way that you face such problem. When all the 7 Ps works simultaneously, they result in employee excellence, which ultimately improves performance, productivity and profit. Internet or web recruiting is latest recruitment practice in industries. Most of the companies have developed their own websites and lists job openings on it. These openings are sent to prospective applicants by e-mail. REFERENCES 1. Powell’s Quotation Source http://govleaders.org/powell2.htm 2. Some references have been taken from the HRM Review on recruitment published by the ICFAI University Press 3. Recruitment at Wipro has been taken from the book Case Studies in Managing Knowledge Worker published by the ICFAI University Press. 4. Recruitment at CISCO has been taken from the book Case Studies in Sales and Distribution Management published by the ICFAI University Press. 5. Questions to be addressed while hiring people from book on Human Resource Management by VSP Rao. 6. Statistics from http://www.contentwriter.in/articles/hr/employee-retention.htm 7. Statistics from http://www.vadispeople.com/vadisnew/Resources/Effective_Recruitment.pdf 8. The example of evaluation at Texas Instruments from http://www.coolavenues.com/know/hr
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