fundamentals of

Human Resource Management 4th

edition
by R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

CHAPTER 5
Planning for and Recruiting
Human Resources

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.
 What Do I Need to Know?

1. Discuss how to plan for human resources

needed to carry out the organization’s
strategy.
2. Determine the labor demand for workers in
various job categories.
3. Summarize the advantages and
disadvantages of ways to eliminate a labor
surplus and avoid a labor shortage.

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 What Do I Need to Know? (continued)

4. Describe recruitment policies organizations

use to make job vacancies more attractive.
5. List and compare sources of job applicants.
6. Describe the recruiter’s role in the
recruitment process, including limits and
opportunities.

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The Process of Human Resource Planning

• Organizations should carry out human

resource planning so as to meet business
objectives and gain a competitive advantage
over competitors.
– Human resource planning compares the present
state of the organization with its goals for the
future
– Then identifies what changes it must make in its
human resources to meet those goals

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Figure 5.1: Overview of the Human
Resource Planning Process

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 Forecasting
• Forecasting: attempts There are three major
to determine the supply steps to forecasting:
and demand for various 1. Forecasting the demand
types of human for labor
resources to predict
2. Determining labor
areas within the
supply
organization where
there will be labor 3. Determining labor
shortages or surpluses. surplus or shortage

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 Forecasting the Demand for Labor

Trend Analysis Leading Indicators

• Constructing and • Objective measures that
applying statistical accurately predict
models that predict future labor demand.
labor demand for the
next year, given
relatively objective
statistics from the
previous year.

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 Determining Labor Surplus or Shortage

• 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.

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Goal Setting and Strategic Planning

• The purpose of setting specific numerical goals is to

focus attention on the problem and provide a basis
for measuring the organization’s success in
addressing labor shortages and surpluses.
• The goals should come directly from the analysis of
supply and demand.
• For each goal, the organization must choose one or
more human resource strategies.
• Organizations should retain and attract employees
who provide a core competency (what makes it
better than competitors)
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Options for Reducing a Surplus

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Options for Avoiding a Shortage

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 Table 5.2: HR Strategies for Addressing a
Labor Shortage or Surplus

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 Test Your Knowledge

• A public accounting firm of 250 employees

realizes they have a surplus of 15 support
personnel (not auditors). What should they
do?
A. Hire temporary workers
B. Offer early retirement
C. Downsize people in those positions
D. Wait for attrition and implement a hiring freeze
for those positions

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 Recruiting Human Resources

• The role of human resource recruitment is to

build a supply of potential new hires that the
organization can draw on if the need arises.
• Recruiting: any activity carried on by the
organization with the primary purpose of
identifying and attracting potential employees.

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Figure 5.2: Three Aspects of Recruiting

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Personnel
Policies
Several personnel
policies are
especially relevant
to recruitment:

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Recruitment Sources: Internal Sources

• Job Posting: the process of communicating

information about a job vacancy:
– On company bulletin boards
– In employee publications
– On corporate intranets
– Anywhere else the organization communicates
with employees

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 Advantages of Internal Sources

1. It generates applicants who are well known to

the organization.
2. These applicants are relatively knowledgeable
about the organization’s vacancies, which
minimizes the possibility of unrealistic job
expectations.
3. Filling vacancies through internal recruiting is
generally cheaper and faster than looking
outside the organization.

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Recruitment Sources: External Sources

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 Evaluating the Quality of a Source

Yield Ratios Cost Per Hire

• A ratio that expresses the • Find the cost of using a
percentage of applicants who particular recruitment source
successfully move from one for a particular type of vacancy.
stage of the recruitment and • Divide that cost by the number
selection process to the next. of people hired to fill that type
• By comparing the yield ratios of of vacancy.
different recruitment sources, • A low cost per hire means that
we can determine which source the recruitment source is
is the best or most efficient for efficient.
the type of vacancy.

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Recruiter Traits and Behaviors

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Recruiter Characteristics and Behavior

True = A False = B
• Applicants respond more positively when the recruiter
is an HR specialist than line managers or incumbents.
• Applicants respond positively to recruiters whom are
warm and informative
• Personnel policies are more important than the
recruiter when deciding whether or not to take a job.
• Realistic job previews should highlight the positive
characteristics of the job rather than the negative.

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 Enhancing the Recruiter’s Impact

• Recruiters should provide timely feedback.

• Recruiters should avoid offensive behavior.
• They should avoid behaving in ways that might
convey the wrong impression about the
organization.
• The organization can recruit with teams rather
than individual recruiters.

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 Recruiting Exercise (2 of 2)

1. What knowledge, skills, and abilities are

required for the positions you are recruiting?
2. Will your sources of applicants be internal,
external, or both? Explain.
3. What recruiting strategies will you use?
4. What metrics will you use to measure your
recruitment success?

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 Summary
• The first step in human resource planning is
personnel forecasting. Through trend analysis and
good judgment, the planner tries to determine the
supply and demand for various human resources.
• The next step is to determine the labor demand for
workers in various job categories. Analysis of a
transitional matrix can help the planner identify
which job categories can be filled internally and
where high turnover is likely.

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 Summary (continued)
• To reduce a surplus, downsizing, pay reductions, and
demotions deliver fast results but at a high cost in
human suffering that may hurt surviving employees’
motivation and future recruiting.
• To avoid a labor shortage, requiring overtime is the
easiest and fastest strategy.
• Internal recruiting generally makes job vacancies
more attractive because candidates see
opportunities for growth and advancement.

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 Summary (continued)
• Lead-the-market pay strategies make jobs
economically desirable.
• Internal sources are usually not sufficient for all of an
organization’s labor needs.
• Through their behavior and other characteristics,
recruiters influence the nature of the job vacancy
and the kinds of applicants generated.

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