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Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
HUMAN RESOURCES
Presentation 3
Recruitment and Selection
Tomislav Rimac – Spring 2014
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 1
This presentation draws on ideas from Gómez-Mejía, Balkin, Cardy’s book Managing
Human Resources (Pearson, 2011, 7
th
edition) - Chapter 5
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
- Human Resource Supply and Demand
- The Hiring Process
- Selection
- Legal Issues in Staffing
AGENDA
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 3
1. HUMAN RESOURCE DEMAND
AND SUPPLY
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
HR Forecasting attempts to determine the supply and demand for various types
of human resources, and to predict areas within the organization where there will
be labor shortages or surpluses
There are three major steps to forecasting:
Forecasting the demand for labor
Determining labor supply
Determining labor surpluses and shortages
HUMAN RESOURCE FORECASTING
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 7
HR SUPPLY AND DEMAND
Labor supply – the availability of workers with the required skills to meet the firm’s
labor demand
Labor demand - the number of workers an organization needs
Human resource planning – the process an organization uses to ensure that it has
the right amount and the right kind of people to deliver a particular level of output or
services in the future
Compares the present state of the organization with its goals for the future
Identifies what changes it must make in its human resources to meet those goals
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
HUMAN RESOURCE PLANNING
Product demand Labor productivity
Internal labor
market
External labor
market
Labor demand Labor supply
Conditions and Selected Responses
1. Labor Demands Exceeds Labor Supply
Training and retraining
Succession planning
Promotion from within
Recruitment from outside
Subcontracting
Use of part-timers or temporary
workers
Use of overtime
2. Labor Supply Exceeds Labor Demand
Pay cuts
Reduced hours
Work sharing
Voluntary early retirements
Inducements to quit (e.g., severance
pay)
Layoffs
3. Labor Demand Equals Labor Supply
Replacement of quits from inside or
outside
Internal transfers and redeployment
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 9
PREDICTING LABOR
DEMAND – MACRO
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
FORECASTING DEMAND - JUDGMENTAL TECHNIQUES
Information is collected and subjectively weighted to forecast the demand for HR
Top-down approach – prediction made by top management
Bottom-up approach – lower level managers each make their own initial estimates,
which are then consolidated and the process continues up through higher levels of
management. Top management makes final estimates.
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 13
Trend Analysis - c onstructing and applying statistical models that predict labor
demand for the next year, given relatively objective statistics from the previous year
Leading Indicators - Objective measures that accurately predict future labor
demand
FORECASTING THE DEMAND FOR LABOR
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
A
Number
of
Employees
B
Ratio of Employees/
Hotels (Calculated
as Column A ÷25)
C
Projected 2003 Labor
Demand for 32 Hotels
(Calculated as Column B x 32)
Key Positions
General Manager
Resident Manager
Food/Beverage Dir.
Controller
Asst. Controller
Chief Engineer
Director of Sales
Sales Manager
Convention Mgr.
Catering Director
Banquet Manager
Personnel Director
Restaurant Mgr.
Executive Chef
Sous Chef
Exec. Housekeeper
Total
25
9
23
25
14
24
25
45
14
19
19
15
49
24
24
25
379
.
.
.
.
.
.
.
.
.
.
32
12
29
32
18
31
32
58
18
24
24
19
63
31
31
32
486
FORECASTING THE DEMAND FOR LABOR
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 15
A
% Quit
B
of
Present
Emp.
C
Proj.
Turnover
by 2003
Key Positions
General Manager
Resident Manager
Food/Beverage Dir.
Controller
Asst. Controller
Chief Engineer
Director of Sales
Sales Manager
Convention Mgr.
Catering Director
Banquet Manager
Personnel Director
Restaurant Mgr.
Executive Chef
Sous Chef
Exec. Housekeeper
Total
38
77
47
85
66
81
34
68
90
74
60
43
89
70
92
63
25
9
23
25
14
24
25
45
14
19
19
15
49
24
24
25
379
10
7
11
21
9
16
9
30
13
14
12
6
44
17
22
16
257
D
Emp.
Left by
15
2
12
4
5
8
16
15
1 5 7 9 5 7 2 9
122
32
12
29
32
18
31
32
58
18
24
24
19
63
31
31
32
486
17
10
17
28
13
23
16
43
17
19
17
10
58
24
29
23
364
E
Proj. Labor
Demand
in 2003
F
Proj.
New Hires in
Supply Analysis Supply-Demand Comp.
PREDICTING LABOR SUPPLY AND REQUIRED NEW HIRES
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
Historic departures used to predict turnover
LEVEL # EMPL TURN % Expected Vacancies Expected to Remain
TOP MGMT 100 20 % 20 80
MID MGMT 200 24 % 48 152
LOW MGMT 600 22 % 132 468
SKILLED W 600 16% 96 504
ASSY WKRS 2000 12 % 240 1760
TOTALS 3500 536 2964
AVERAGE TURNOVER PERCENTAGE = 536 / 3500 =.
VACANCY ANALYSIS
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 19
LABOR SUPPLY DETERMINANTS
The supply of labor to a particular occupation is influenced by a range of monetary and
non-monetary considerations:
The real wage rate on offer in the industry itself – higher wages raise the prospect of increased
factor rewards and should boost the number of people willing and able to work
Overtime – opportunities to boost earnings
Substitute occupations – the real wage offers in competing jobs
Barriers to entry – e.g., the introduction of minimum entry requirements or other legal barriers to
entry can restrict labor supply and force average pay and salary levels higher
Improvement in the occupational mobility of labor (e.g., more people are trained with the
necessary skills required to work in a particular occupation)
Non-monetary characteristics of specific jobs
Net migration of labor (think EU, Spain, etc.)
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
POPULATION AND LABOR SUPPLY
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 21
LABOR FORCE GROWTH
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
Based on the forecasts for labor demand and supply, the planner can compare the
figures to determine whether there will be a shortage or surplus of labor for each job
category
Determining expected shortages and surpluses allows the organization to plan how to
address these challenges
DETERMINING LABOR SURPLUS OR SHORTAGE
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 25
EQUILIBRIUM – MINIMUM WAGE – UNEMPLOYMENT
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
Downsizing
Pay
reductions
Demotions
Transfers
Work
sharing
Hiring
freeze
Natural
attrition
Early
retirement
Retraining
OPTIONS FOR REDUCING A SURPLUS
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 27
Overtime
Temporary
employees
Outsourcing
Retrained
transfers
Turnover
reductions
New external
hires
Technological
innovation
OPTIONS FOR AVOIDING A SHORTAGE
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
FORECASTING TECHNIQUES
Judgmental techniques
Rely on experts’ qualitative judgments or subjective estimates
Flexible enough to incorporate whatever factors or conditions the expert feel should be
considered
Subjective judgment may be less accurate or lead to rougher estimates
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 31
Predicting worker flows and availabilities
Succession or Replacement Charts
Skills Inventories (use of HRIS – HR Information Systems)
Labor Market Analysis
Markov Analysis (Transition Matrix)
Personnel Ratios
FORECASTING HR AVAILABILITY (Supply Analysis)
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
Predicting workers flow and availability
Succession or Replacement Charts - who has been groomed/developed and is
ready for promotion right NOW
Human Resource Information Systems (HRIS) - an employee database that can
be searched when vacancies occur
Transition Matrices (Markov Analysis) - a chart that lists job categories held in
one period and shows the proportion of employees in each of those job categories in
a future period. It answers two questions:
“Where did people in each job category go?”
“Where did people now in each job category come from?
Personnel / Yield Ratios - how much work will it take to recruit one new accountant
DETERMINING LABOR SUPPLY
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 33
FORECASTING SUPPLY – JUDGMENTAL TECHNIQUES
Executive reviews – top management makes judgments about who should be
promoted, reassigned, or let go. The process can clarify where there may be surpluses
or shortages of managers.
Succession planning – identifies workers who are ready or will soon be qualified to
replace current managers. Can highlight development needs and areas where there
may be a shortage of management-level labor.
Vacancy analysis – judgments are made about likely employee movements.
Shortages or surpluses of labor can be anticipated by comparing these judgments to
estimates of demand.
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
TRANSITION MATRIX
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 37
For every 12 applications received, only 1 looks promising enough to invite for
an interview
Of every 5 persons interviewed, only 1 is actually offered a position in the
organization
Of every 3 job offers made, only 2 accept the position
Of every 10 new workers who begin the training program, only 9 successfully
complete the program
THUS:
100 applications must be received, so that
8.33 job interviews can be held, so that
1.67 job offers can be made, and
1.11 people must be trained, so that we get
one new cost accountant!!!
PERSONNEL / YIELD RATIOS (past experience)
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – Tomislav Rimac
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014
2. THE HIRING PROCESS
Universitat Autònoma de Barcelona - Departament d’Economia de l’Empresa – ADE - Human Resources Tomislav Rimac - Spring 2014 39
Recruitment
Selection
Socialization
THE HIRING PROCESS
