Expert answer:Reading question (2)
Solved by verified expert:READING 8.1: Temporary Help Agencies and the Making of a New Employment PracticeREADING 8.2: Assessment Instruments for the Global Workforce1. COMPLETE What are the major strategic choices an organization faces concerning staffing? What are the advantages and disadvantages of each alternative? (Critical Thinking Question 3, page 355, in the textbook.) Prepare a 600 word paper.READING 9.1: Confronting the Bias Against On-Line Learning in Management EducationREADING 9.2: Becoming a Leader: Early Career Challenges Faced by MBA Graduates2. How is training likely to change in the future? (Critical Thinking Question 4, page 398, in the textbook.) Prepare a 600 word paper.
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Chapter 8
Staffing | 333
Fortune 500 employers, use temporary employees, and the rate of growth of use of such workers is
expected to be twice the rate of overall job growth between 2008 and 2018.4
Care must be used, however, in determining whether temporary employees are actually
“employees” of the organization that is contracting for their services rather than employees of the
staffing agency. In 1997, Microsoft Corp. was accused of misclassifying thousands of present and
past employees as temporary independent contractors rather than as Microsoft employees. A lower
court ruled against Microsoft who appealed the decision but then settled the case for $97 million
prior to the final ruling.5
In addition to hiring temporary employees from an agency, an organization can subcontract
work to an outside vendor; this is usually done on a project basis. Larger organizations can also
move permanent employees from department to department as needs dictate. This promotes efficiency through lower costs and flexible utilization of employees. These in-house “temporary”
employees have more permanent status, including benefits; are generally more committed to the
organization; and know the inside workings of the organization. They can be extremely useful
D vacation or sick leaves. In-house temporary employees prowhen regular employees take extended
vide the organization with more
Aflexibility and efficiency than it would garner from outside temporary employees; also, in-house employees have more variety in their work assignments.
I has greatly increased in recent years and to the point where an
The use of temporary employees
entire industry has been createdLfor the employment of temporary workers. The “contingent workforce” industry involves 5.7 million workers, or 4 percent of the U.S. workforce.6 Employees in almost
every job category are now beingY
considered and employed on a temporary-for-permanent basis without any promise or legal obligation for continued employment. Short-term temporary employment
,
has also found its way into the executive ranks, including the CEO office.7 Interim CEOs are typically
retired or laid-off senior executives who wish to return to work for a limited time commitment to help
a particular organization or contribute and build their résumés and professional networks while they
R Similar to other levels of temporary employment, contingent
seek more permanent employment.
executives can also allow a trial Y
period of employment for consideration of permanent employment.
Reading 8.1, “Temporary Help Agencies and the Making of a New Employment Practice,” traces the
Amovement and explains its current uses and potential.
rise of the temporary employment
N
Internal Versus External Recruiting
If an organization decides to hire permanent employees, the first critical question it needs to
address is whether to recruit internally or externally. Recruiting from the current employee pool
2
can benefit the organization in a number of ways. First, the organization already has performance
data on employees. Ample opportunity
has been afforded to observe the applicant’s work habits,
6
skills and capabilities, ability to get along with others, and fit with the organization.
7 motivates employees. Employees feel that the organization is
Second, promotion from within
trying to provide them with promotional
and developmental opportunities in reward for their per5
formance and loyalty. Third, training and socialization time are reduced. Current employees know
the organization, its procedures,Bpolitics, and customers and have already established relationships
with coworkers. Consequently, U
they need far less formal or informal socialization time than those
hired from the outside. Finally, internal recruiting is often much faster and far less expensive than
going outside of the organization for applicants.
Internal Recruiting at Cisco Systems
Cisco Systems, Inc. is a San Jose, CA–based multinational designer and manufacturer of networking equipment. With more than 65,000 employees worldwide, Cisco has constant and
evolving staffing needs as a leading global technology company. To assist with internal
recruiting, Cisco has developed a program called Talent Connection, which seeks to identify
qualified employees who might not necessarily be looking for another position in the company. Employees are encouraged to create profiles on an internal website that company
recruiters can peruse to recruit internal candidates, much in the same way they recruit
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
334 | Part 2
Implementation of Strategic Human Resource Management
external candidates. To date, half of Cisco’s employees have registered with Career Connection, and these internal “passive candidates” have saved the organization millions of dollars
in search-firm fees and other recruiting costs while simultaneously raising employee satisfaction with career development opportunities by nearly 20 percentage points.8
Internal recruiting can provide significant productivity gains for employers as well. A recent
study conducted at the University of Pennsylvania found that salaries received by external recruits
are, on average, 18 percent higher than those paid to internal recruits. Perhaps more important,
external recruits received lower performance reviews than internal recruits during their first two
years on the job.9 Another study that analyzed the 2,500 largest publically traded companies
around the world found that chief executives recruited from the outside are twice as likely to fail
and be forced out than those promoted from within.10 This result is attributable to the fact that
insiders typically have a strong ability to understand how to bring about change in an organizaD better returns for shareholders.11
tion. As a result, insiders typically deliver
Although internal recruiting has advantages,
this approach also has some disadvantages. First,
A
internal recruiting can become very political and competitive, particularly when coworkers apply for
the same position. Dysfunctional conflictI may result, and collegiality and interpersonal relationships
can be strained. Second, those employees not
L selected for the position can suffer from diminished morale
and performance, particularly when they feel equally or better qualified than the candidate selected.
Y inbred through excessive internal recruitment.
Third, the organization can become
Continuing to promote from within can encourage maintaining the status quo. An organization
,
that needs to improve organizational processes should usually recruit from the outside. Finally,
excessive internal recruitment can cause inefficiency by creating multiple vacancies. For instance,
if a senior-level manager leaves the organization and is replaced by a direct subordinate, that
subordinate’s job will then need to be R
filled. As this promotion chain continues down the hierarchy, an initial vacancy could spur promotions
for a large number of people. Nearly all employY
ees require a certain period of time to learn a new job. Even when an employee has worked in
A position requires adjusting to new responsibilities and
the organization for several years, a new
redefining interpersonal relationships with coworkers. Internal recruiting can exacerbate this
N
effect by creating a large number of employees having new positions. Until these employees
gain the level of competence that their predecessors had and sufficiently redefine their working
relationships, inefficiency will result.
2 and disadvantages. It is probably best utilized when the
Internal recruiting has its advantages
organization pursues a strategy related 6
to stability, faces few major threats from its external environment, and is concerned with maintaining the status quo relative to its operating systems. When
time and/or money are limited, internal7recruiting can also be beneficial.
External recruiting also has advantages and disadvantages. Not surprisingly, the advantages of
5
external recruiting are consistent with the disadvantages of internal recruiting. External recruiting
facilitates change and tends to be more
Buseful for organizations with volatile external environments. External recruiting can allow an organization to expand its knowledge base beyond that of
its existing employees and bring in newUideas and viewpoints; external recruits are not bound by
existing ways of thinking or doing things. They can bring a fresh approach to problems that have
plagued the organization. At the senior level, candidates are often recruited for their history of
bringing about high-level change in other organizations.
External recruiting, however, can be expensive and time consuming. Employees from outside
the organization will often need a longer socialization period to know the organization, its products or services, coworkers, and customers. External recruits are also unknown entities in that
the organization has no experience working with them. Although an applicant may have outstanding skills, training, or experience and may have had past success in another organization, those
factors do not guarantee similar success with a new organization or an ability to fit with a new
organization’s culture. Finally, external recruiting can have detrimental effects on the morale of
those employees who have applied for the job internally but have not been selected. Exhibit 8.1
summarizes the strategic issues surrounding internal versus external recruiting.
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
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338 | Part 2
Implementation of Strategic Human Resource Management
Because Internet recruiting is worldwide, it gives an employer global exposure to potential
applicants, which can be critical if particular language skills or cultural backgrounds are needed.
Technology-based employers have found the Internet to be a fertile recruiting ground for applicants who are technologically savvy. For example, Cisco Systems receives more than 80 percent
of its résumés electronically.20
The main reason employers use the Internet for recruiting is to attract “passive job candidates,” those who might not be actively seeking a new job. Eighty-four percent of employers
stated that the recruiting of passive job candidates was the main reason they used the Internet,
and particularly social networking sites, for recruiting. Cost-effectiveness and opportunities for
employment branding, to be discussed later in this chapter, were given as secondary reasons for
recruiting online.21
Interestingly, the strategies used by recruiters often do not fit the job search strategies being
used by applicants. Networking, or the use of personal and professional contacts to obtain employment, is the strategy of choice for the majority of job seekers: Seventy-eight percent use this
D however, find that the Internet is their top source
approach.22 Sixty-seven percent of recruiters,
23
for attracting new employees. This is A
not to say that job seekers do not use the Internet, as they
have been shown to utilize more search tactics than recruiters,24 but, rather, implies that HR professionals need to think carefully aboutItheir recruiting sources and think strategically about how
best to achieve the recruitment goals they
L have set.
Internet recruiting has become increasingly popular with employers and can cut the search
Y25 Sophisticated technology allows employers to quickly
process time by as much as 75 percent.
process large numbers of applications through the use of spiders, which are programs that search
,
résumés for specific characteristics or words. One recent survey found that the percentage of large
employers who utilize software programs to screen résumés was in the high 90 percent range.26
Employers such as Starbucks, which received 7.6 million applications for employment in the past
R nearly 1 million applications for 2,000 vacancies duryear, and Procter & Gamble, which received
ing the same time period, need to placeYa heavy reliance on electronic screening of résumés. Such
screening systems can be programmed to scan for keywords related to skills, experience, former
A means by which an employer seeks to identify appliemployers, schools attended, or any other
cants with particular backgrounds and result in significant cost savings for the employer. A typical
N
large employer spends approximately 7 percent of its recruiting budget on applicant screening and
27
tracking systems.
Many employers attempt to attract applicants by developing Web sites that provide informa2 applicants to determine if there might be an optimal
tion about the organization that can allow
“fit” between their career goals and the6 goals of the organization, guide candidates through the
application process, and even allow prospective applicants to take a virtual tour of the organiza7 up the employment process, it is also fraught with some
tion. While Internet recruiting can speed
potential challenges that must be weighed by an organization considering Internet recruiting.28
5
The first of these challenges is ensuring security. Online recruiting means that the employer
will be receiving electronic inquiries from
B unknown sources. Many of these communications will
include attached files, making viruses a security concern; another consideration is ensuring that
U access to unauthorized areas of the site. A second chalthose visiting the Web site do not obtain
lenge is that overreliance on Internet recruiting can result in a disparate impact against certain
protected classes of applicants. Studies have shown that members of certain ethnic minority
groups, women, and older individuals either may not have access to or be less likely to use the
Internet.29 A survey conducted by the Society for Human Resource Management found that 95
percent of employers utilized LinkedIn to recruit job applicants.30 Another recent study found
that 85 percent of LinkedIn users are white and 63 percent are male.31 Similarly, Facebook is
used by 58 percent of employers to recruit candidates32 and 78 percent of Facebook users
are white.33 Employers tend to use LinkedIn more for professional and managerial positions and
Facebook more for hourly positions.34 Individuals with disabilities may also have conditions that
limit or prevent their ability to easily access the Internet as well.
Consequently, employers may unintentionally screen out large groups of potential applicants who
are members of protected classes in the interest of the efficiency afforded by Internet recruiting. Finally,
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
Chapter 8
Staffing | 339
Internet recruiting can complicate reporting of data related to compliance with federal and state laws. A
difficult question arises as to whether an individual who sends an unsolicited résumé via the Internet
needs to be “counted” and considered an “applicant” for the purpose of federal reporting. The EEOC
and Office of Federal Contracts Compliance Programs (OFCCP) have continuously wrestled with the
definition of “job applicant” for reporting purposes; combining this with the greatly increased number
of job applicants that result from Internet recruiting creates a challenging situation for employers.
E-cruiting at Air Products and Chemicals, Inc.
One organization that has developed a satisfactory strategy for reporting its Internet recruiting
activities to federal agencies is Air Products and Chemicals, Inc. (APC). Based in Allentown,
Pennsylvania, APC supplies gases and chemicals to various industries as well as to the federal
government. With 16,000 employees worldwide, including 9,000 in the United States, APC
falls under the purview of theDOFCCP as a government contractor. As APC began to use the
Internet for recruiting with greater frequency, a conflict arose relative to its reporting with the
A résumés submitted electronically as an expression of interest
OFCCP. The OFCCP considered
in employment, and APC’sI reading of that résumé constituted acceptance of it, making
the submitting party an “applicant” for reporting purposes. Because the organization could
L
not control who submitted unsolicited
résumés, it found itself at a disadvantage relative to its
affirmative action goals. APC eventually solved the dilemma. Each unsolicited résumé received
Y
an automatic e-mail reply, instructing the individual to apply for a specific open position listed
on the company Web site. Only
, when a position was chosen would the individual be considered an “applicant.” In addition, applicants were required to submit information identifying
their race and gender. This system met with the OFCCP’s enthusiastic approval and has
allowed APC to reap the benefits
R of Internet recruiting while satisfying the OFCCP’s reporting
requirements for federal contractors.35
Y
A
An organization’s existing employees can often be a very valuable source for recruiting new
employees. Consumer products N
manufacturer Johnson & Johnson relies extensively on its employee
referral program to recruit new hires. Johnson & Johnson offers up to $1,500 for each employee
recruit, paid in full two weeks after the new employee’s start date.36 Hartford-based Lincoln Financial’s
referral program results in 55 percent
2 of all external hires and saves the organization more than 97
percent of the costs it would incur by using an executive search firm.37 One innovative approach to
6 themselves, as illustrated in the following vignette.
staffing has existing employees recruit
7
Staffing at St. Peter’s5Health Care
St. Peter’s Health Care is anBAlbany, New York–based hospital that, like many healthcare
institutions, suffered from a severe shortage of qualified nurses. Nurses hired from outside
U
agencies to assume unstaffed shifts not only commanded a premium price but were also
unfamiliar with operations and procedures at St. Peter’s. To alleviate this problem, St. Peter’s
launched an online bidding system by which any nurse could bid for an open shift. Nurses
must be existing employees or approved to work for the hospital and bid on shifts for a
certain pay rate per hour. Nurse managers have the authority to accept or reject any bid,
and applicants whose bids have been rejected are free to rebid at a lower pay rate. Because
the hospital cannot mandate overtime for workers, this system allows maximum flexibility
for both St. Peter’s and nurse-employees. St. Peter’s recently filled 43,400 available hours
under the bidding system at an average pay rate of $37 per hour. Two-thirds of those hours
were filled by existing employees. Outside agency nurses would have cost the hospital $54 per
hour. In addition to the cost savings, turnover among nurses has decreased from 11 percent
to below 5 percent annually, and both patient and employee satisfaction have increased.38
9781305234758, Strategic Human Resource Management, Fourth Edition, Mello – © Cengage Learning All rights reserved No distribution allowed without express authorization
340 | Part 2
Implementation of Strategic Human Resource Management
Organizations can also address their staffing needs by turning to other organizations and outsourcing all or part of their staffing. Employment agencies, more commonly called staffing agencies or staffing services, can locate and prescreen applicants for an employer. Because l …
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