WHo is able to complete this discussion?

Source Cited:

Cascio, W. F., & Aguinis, H. (2019).

(8th ed.). Retrieved from https://www.vitalsource.com

Chapter 11

11 Recruitment

Wayne F. Cascio, Herman Aguinis
Learning Goals

By the end of this chapter, you will be able to do the following:

11.1 Describe the recruitment process as a talent supply chain
11.2 Explain the three sequential stages of recruitment and key activities that affect each one
11.3 Identify fundamental questions to address when planning for recruitment
11.4 Discuss the pros and cons of hiring internally versus externally
11.5 Explain why a positive organizational image and employer brand help attract candidates
11.6 Know the fundamental questions about internal recruitment that all organizations need to address
11.7 Craft a strategy for increasing the diversity of an organization’s workforce
11.8 Identify situations in which realistic job previews will and will not work well

Whenever human resources must be expanded or replenished, a recruiting system of some kind must be established. Advances in technology, coupled with the growing intensity of competition in domestic and international markets, have made recruitment a top priority as organizations struggle continually to gain competitive advantage through people. Recruitment is a business, and it is big business (Bersin, quoted in Deloitte, 2015; Overman, 2008). It demands serious attention from management because any business strategy will falter without the talent to execute it. According to former Apple CEO Steve Jobs, “Recruiting is hard. It’s finding the needles in the haystack. I’ve participated in the hiring of maybe 5,000-plus people in my life. I take it very seriously” (Jobs, 2008).

This statement echoes the claims of many recruiters that it is difficult to find good workers and that talent acquisition is becoming more rather than less difficult (Kandefer, 2017; Maurer, 2017b; Ryan & Delaney, 2017). As an example, consider how the Internet has revolutionized the practice of recruitment. For the nearly 20% of the world’s workforce who change jobs each year, there are more than 50,000 job-recruitment sites globally, as well as the ability to research employers and to network (Maurer, 2016a).

About a third of LinkedIn’s revenue comes from corporate customers who buy rights for their recruiters to use LinkedIn’s software as a service. This rapid evolution is expected to continue, with dynamic, customized job postings that use cookie-based targeting to communicate job advertisements to relevant individuals based on their online behaviors and the incorporation of mobile technology to access Internet-based job information (Dineen & Allen, 2014; Maurer, 2016c). The result? A “leveling of the information playing field” brought about by Web technology.

Organizations recruit periodically in order to add to, maintain, or readjust their total workforces in accordance with HR requirements. Building on the ideas shown in Figure 3.2, the external staffing supply chain, Figure 11.1 illustrates the recruitment process as a talent supply chain.

In Figure 11.1, attract describes the overall process of generating and inducing interest among suitable applicants for potential employment opportunities in the organization. Source is the process of generating a pool of applicants. Assess is the evaluation of knowledge, skills, and abilities, and other characteristics in order to perform a job. Employ is the process of moving the desired candidate into employment. Note, however, that some of the activities associated with each function overlap other functions.

The logic of recruitment calls for sound strategic workforce planning systems (talent inventories, forecasts of workforce supply and demand, action plans, and control and evaluation procedures) to serve as a base from which to launch recruiting efforts. This will be evident as we begin to examine the operational aspects of the recruitment function.

In this chapter, our objective is to describe how organizations search for prospective employees and influence them to apply for available jobs. Accordingly, we consider recruitment planning, operations, and evaluation, together with relevant findings from recruitment research, and we include organizational examples to illustrate current practices. Figure 11.2, from Dineen and Soltis (2011), serves as an overarching framework for the processes described in this chapter. It integrates earlier views of recruitment in terms of sequential stages (Barber, 1998; Breaugh, Macan, & Grambow, 2008), while also integrating contextual/environmental and “key-process” issues (Rynes & Cable, 2003). As shown in Figure 11.2, two key decision points (application and job choice) separate these primary recruitment stages. Within each stage, the framework also identifies important subcategories.

Figure 11.1 The Recruitment Process as a Talent Supply Chain

Figure 11.2 An Integrated Model of the Recruitment Process

Three contextual/environmental features affect all recruitment efforts, namely, characteristics of the firm (the value of its “brand” and its “personality”; Cascio & Graham, 2016; Lievens & Slaughter, 2016); characteristics of the vacancy itself (is it mission critical?); and characteristics of the labor markets in which an organization recruits. Likewise, three sequential stages characterize recruitment efforts: generating a pool of viable candidates, maintaining the status (or interest) of viable candidates, and “getting to yes” after making a job offer (postoffer closure).

Figure 11.1 also identifies key activities that affect each of these three stages. These include strategies for targeting potential candidates and for communicating information to them (“messaging strategies”); issues related to screening viable candidates and interactions with organizational agents (recruiters, managers, and employees encountered during site visits); and issues related to actual job offers (e.g., timing, “exploding” offers that disappear after specified periods of time). Finally, Figure 11.2 identifies some key processes that affect the outcomes of each stage of the recruitment process, for example, social networking and information processing (seen through the lens of the elaboration likelihood model; Jones, Shultz, & Chapman, 2006) at the candidate-generation stage; communication, rapport building, and signaling to maintain viable candidates; and negotiation, decision making, and competitive intelligence at the postoffer stage. Space constraints do not permit us to discuss each of the issues, activities, and processes shown in Figure 11.2, but we present it here because it is rich in implications for advancing both the theory and practice of recruitment. Let’s begin by considering recruitment planning.
Recruitment Planning

The process of recruitment planning begins with a clear specification of HR needs (numbers, skills mix, levels) and the time frame within which such requirements must be met. This is particularly relevant to the setting of workforce diversity goals and timetables. Labor-force availability and internal workforce representation of women and minorities are critical factors in this process. In the United States, the Census Bureau provides such information based on national census data for specific geographic areas.

Beyond these issues, two other important questions need to be addressed, namely, whom to recruit and where to recruit (Breaugh, 2008; Ployhart & Kim, 2014; Rynes, Reeves, & Darnold, 2014). Answers to both questions are essential to determining recruitment objectives. For example, a prehire objective might be to attract a certain number of applications for pivotal or mission-critical jobs from passive job candidates—those who are not currently looking for a job. Objectives are also critical to recruitment evaluation, namely, if an employer wishes to compare what it hoped to accomplish with recruitment outcomes.

Having established recruitment objectives, an organization should be able to develop a coherent strategy for filling open positions. Among the questions an employer might address in establishing a recruitment strategy are (a) when to begin recruiting, (b) what message to communicate to potential job applicants, and (c) whom to use as recruiters. As Breaugh (2012) has noted, answers to these questions should be consistent with the recruitment objectives previously established. In terms of messages, consider the finding that satisfaction with coworkers enhances older-worker engagement (Avery, McKay, & Wilson, 2007). Messages to recruit older workers might therefore be geared toward enhancing perceptions of fit with immediate coworkers (person–group fit). Such messages might also build on the findings of a study by Rau and Adams (2005) that targeted EEO statements, the opportunity to transfer knowledge, and flexible schedules, all of which positively influenced attraction of older workers.
Internal Recruitment

Primed with a comprehensive workforce plan for the various segments of the workforce (e.g., entry level, managerial, professional, and technical), recruitment planning may begin and internal candidates should be considered first. There are four key advantages to recruiting internally (Breaugh, 2014; Maurer, 2016b). First, there is less transition time moving into new jobs. Current employees are already familiar with an employer’s products, people, and operating procedures. Second, there is a greater likelihood of filling a position successfully. In contrast to external candidates, an employer has considerably more information about internal candidates (e.g., past performance, temperament, work ethic). Third, it is generally cheaper to fill a higher level position internally than it is to fill it from outside. Fourth, assuming that those promoted from within are seen as deserving, there is a positive impact on the motivation levels of other employees.

At the same time, however, organizations must confront a common problem: the reluctance of managers to grant permission for their subordinates to be interviewed for potential transfer or promotion. In a recent survey, fully half of 665 firms reported talent hoarding as a serious problem (Lublin, 2017). To overcome this aversion, promotion-from-within policies must receive strong top-management support, coupled with a company philosophy that permits employees to consider available opportunities within the organization and incentives for managers to release them. At EY (formerly Ernst & Young), Johnson & Johnson, and PepsiCo, pay is now determined, in part, by how well a manager does at nurturing people. Technology consulting firm Avanade shifts leaders to new roles every few years to ensure that high-potential employees get noticed (Church, 2017; Lublin, 2017).

With respect to timing, the effective use of “in-house” talent should come first. If an organization undertakes external recruitment efforts without considering the desires, capabilities, and potential of present employees, it may incur both short- and long-term costs. In the short term, morale may degenerate. Over the longer term, an organization with a reputation for consistent neglect of in-house talent may find it difficult to attract new employees or to retain experienced ones. In light of those concerns, organizations are making wider use of job postings (via company intranets, on internal social media, or in company newsletters), employee referrals (one way to attract “passive” candidates; Ryan, 2017), and temporary worker pools (Kauflin, 2016).
External Recruitment

Today, firms are hiring externally to fill jobs at all levels (Cappelli & Keller, 2017). To do that well, begin by estimating three key parameters: the time, the money, and the staff necessary to achieve a given hiring rate (Hawk, 1967). The basic statistic needed to estimate these parameters is the number of leads needed to generate a given number of hires in a given time. Certainly, the easiest way to derive this figure is on the basis of prior recruitment experience. If accurate records were maintained regarding yield ratios and time-lapse data, no problem exists, since trends may be determined and reliable predictions generated (assuming labor-market conditions are comparable). Yield ratios are the ratios of leads to invites, invites to interviews, interviews (and other selection instruments) to offers, and offers to hires obtained over some specified time period (e.g., six months or a year). Time-lapse data provide the average intervals between events, such as between the extension of an offer to a candidate and acceptance or between acceptance and addition to the payroll.

If no experience data exist, then it is necessary to use “best guesses” or hypotheses and then to monitor performance as the operational recruitment program unfolds. For the moment, however, suppose ABC Engineering Consultants is contemplating opening two new offices and needs 100 additional engineers in the next six months. Fortunately, ABC has expanded in the past, and, on that basis, it is able to make predictions like this:

With technical candidates, we must extend offers to 2 candidates to gain 1 acceptance, or an offer-to-acceptance ratio of 2:1. If we need 100 engineers, we’ll have to extend 200 offers. Further, if the interview-to-offer ratio has been 3:2, then we need to conduct 300 interviews, and, since the invites-to-interview ratio is 4:3, then we must invite as many as 400 candidates. Finally, if contacts or leads required to find suitable candidates to invite are in a 6:1 proportion, then we need to make 2,400 contacts.

Figure 11.3 Recruiting Yield Pyramid—Engineering Candidates, ABC Engineering Consultants

With respect to timing, the effective use of “in-house” talent should come first. If an organization undertakes external recruitment efforts without considering the desires, capabilities, and potential of present employees, it may incur both short- and long-term costs. In the short term, morale may degenerate. Over the longer term, an organization with a reputation for consistent neglect of in-house talent may find it difficult to attract new employees or to retain experienced ones. In light of those concerns, organizations are making wider use of job postings (via company intranets, on internal social media, or in company newsletters), employee referrals (one way to attract “passive” candidates; Ryan, 2017), and temporary worker pools (Kauflin, 2016).
External Recruitment

Today, firms are hiring externally to fill jobs at all levels (Cappelli & Keller, 2017). To do that well, begin by estimating three key parameters: the time, the money, and the staff necessary to achieve a given hiring rate (Hawk, 1967). The basic statistic needed to estimate these parameters is the number of leads needed to generate a given number of hires in a given time. Certainly, the easiest way to derive this figure is on the basis of prior recruitment experience. If accurate records were maintained regarding yield ratios and time-lapse data, no problem exists, since trends may be determined and reliable predictions generated (assuming labor-market conditions are comparable). Yield ratios are the ratios of leads to invites, invites to interviews, interviews (and other selection instruments) to offers, and offers to hires obtained over some specified time period (e.g., six months or a year). Time-lapse data provide the average intervals between events, such as between the extension of an offer to a candidate and acceptance or between acceptance and addition to the payroll.

If no experience data exist, then it is necessary to use “best guesses” or hypotheses and then to monitor performance as the operational recruitment program unfolds. For the moment, however, suppose ABC Engineering Consultants is contemplating opening two new offices and needs 100 additional engineers in the next six months. Fortunately, ABC has expanded in the past, and, on that basis, it is able to make predictions like this:

With technical candidates, we must extend offers to 2 candidates to gain 1 acceptance, or an offer-to-acceptance ratio of 2:1. If we need 100 engineers, we’ll have to extend 200 offers. Further, if the interview-to-offer ratio has been 3:2, then we need to conduct 300 interviews, and, since the invites-to-interview ratio is 4:3, then we must invite as many as 400 candidates. Finally, if contacts or leads required to find suitable candidates to invite are in a 6:1 proportion, then we need to make 2,400 contacts.
A recruiting yield pyramid for these data is presented in Figure 11.3.

Increasingly, companies are using artificial intelligence to screen résumés. Here are some typical yield ratios (Weber, 2012): Of 1,000 people who notice a job posting online, approximately 200 will begin the application process. Of those, approximately 100 people complete the application process, and of those, a hiring manager reviews approximately 25 résumés. Roughly four to six candidates will be invited to interview for the vacancy, one to three finalists will complete the final steps of the qualification process, and one person will be offered the position. He or she accepts 80% of the time.
Figure 11.4 Time-Lapse Data for Recruitment of Engineers
Additional information, critical to effective recruitment planning, can be derived from time-lapse data. For ABC Engineering Consultants, experience may show that the interval from receipt of a résumé to invitation averages four days. If the candidate is still available, he or she will be interviewed five days later. Offers are extended, on average, three days after interviews, and, within a week after that, the candidate either accepts or rejects the offer. If the candidate accepts, he or she reports to work, on average, three weeks from the date of acceptance. Therefore, if ABC begins today, the best estimate is that it will be 40 days before the first new employee is added to the payroll. With this information, the “length” of the recruitment pipeline can be described and recruiting plans fitted to it. A simple time-lapse chart for these data is presented in Figure 11.4. Data on 350,000 cases from Glassdoor indicate that companies take an average of 23 days to screen and hire new employees (excluding the time from acceptance to report for work) (Shellenbarger, 2016). Time to fill averages 42 days (Society for Human Resource Management, 2016c).

All of this assumes that intervals between events in the pipeline proceed as planned. In fact, longitudinal research indicates that delays in the timing of recruitment events are perceived negatively by candidates, especially high-quality ones, and often cost job acceptances (Boswell, Roehling, LePine, & Moynihan, 2003; Bretz & Judge, 1998; Chapman, Uggerslev, Carroll, Piasentin, & Jones, 2005; Rynes & Cable, 2003; Wright, 2017). In addition, time to fill can be misleading, especially if measures of the quality of new hires are ignored (Maurer, 2015b). Here is a simple example: It is one thing to know that a firm’s sales openings average 55 days to fill. It’s another thing to know that the difference between filling them in 55 versus 30 days costs the firm $30 million revenue, or that a 20% improvement in quality of hire will result in an $18 million productivity improvement.

Note, however, that these yield ratios and time-lapse data are appropriate only for ABC’s engineers. Other segments of the workforce may respond differently, and widespread use of the Internet by job seekers in all areas may change both yield ratios and time-lapse data. From the perspective of job seekers, it takes people who apply online an average of three more weeks to get a job than if they contacted the employer directly and six more weeks compared to a personal referral (Maurer, 2016a). Of course, the time period also depends on labor-market conditions. As we noted on Chapter 10, a labor market is a geographic area within which the forces of supply (people looking for work) interact with the forces of demand (employers looking for people) and thereby determine the price of labor. However, since the geographic areas over which employers extend their recruiting efforts depend partly on the type of job being filled, it is impossible to define the boundaries of a local labor market in any clear-cut manner (Newman, Gerhart, & Milkovich, 2016). If the supply of suitable workers in a particular labor market is high relative to available jobs, then the price of labor generally will be cheaper. By contrast, if the supply is limited (e.g., suppose ABC needs certain types of engineering specialists who are unavailable locally), then the search must be widened and additional labor markets investigated in order to realize required yield ratios.
Table 11.1 Advantages and Disadvantages of Internal Versus External Recruitment
In traditional internal labor markets, employees are brought into organizations through a small number of entry-level jobs and then are promoted up through a hierarchy of increasingly responsible and lucrative positions. In recent years, however, internal labor markets have weakened, such that high-level jobs have not been restricted to internal candidates, and, as noted earlier, new employees have been hired from the outside at virtually all levels (Bidwell, 2017; Cappelli & Keller, 2017). This has had the predictable effect of weakening employee loyalty and trust in management, and it puts employers at a disadvantage when labor markets tighten. Table 11.1 presents some of the advantages and disadvantages of internal versus external recruitment.
Staffing Requirements and Cost Analyses

Experienced professional and technical recruiters can be expected to produce about 50 new hires per year, but that number varies by company size. It could be 85 hires per year for a large company, and as few as 20–30 for a small one (Glenn, 2009). Let’s assume four full-time recruiters will be required to meet ABC’s staffing requirements for 100 engineers in the next six months.

So far, we have been able to estimate ABC’s recruiting time and staffing requirements on the basis of its previous recruiting experience. Several other parameters must be considered before the planning process is complete. The most important of these, as might logically be expected, is cost. Before making cost estimates, however, let’s assume that an organization has no prior recruiting experience (or that the necessary data were not recorded). The development of working hypotheses about yield ratios is considerably more complex under these conditions, though far from impossible.

It is important to analyze the external labor market by source, along with analyses of demand for similar types of people by competitors. It is also important to evaluate the entire organizational environment in order to do a “company advantage study.” Numerous items must be appraised, including geographic factors (climate, recreation), location of the firm, cost of living, availability of housing, proximity to shopping centers, quality of local public and parochial schools, and so forth.

Capitalizing on special factors that are likely to attract candidates, such as organizational image, reputation, and future opportunities, is important as well (Collins, 2007; Collins & Han, 2004; Feffer, 2016; Weber, 2016). Image is a strong predictor (ρ = .48) of organizational attraction (Allen, Mahto, & Otondo, 2007; Lievens & Slaughter, 2016). Such information will prove useful when developing a future recruiting strategy and when gathering baseline data for estimates of recruiting yield.

Here are three reasons why a positive organizational image or reputation might influence prospective candidates to apply (Lievens & Slaughter, 2016; Rynes & Cable, 2003): (1) People seek to associate themselves with organizations that enhance their self-esteem. Job seekers might pursue high-reputation companies to bask in such organizations’ reflected glory or to avoid negative outcomes associated with working for an employer with a poor image. (2) A positive reputation may signal that an organization is likely to provide other desirable attributes, such as high pay and strong opportunities for career growth and development. (3) A positive reputation may make applicants more receptive to whatever information an organization provides.

Yield ratios and time-lapse data are valuable for estimating recruiting staff and time requirements. Recruitment planning is not complete, however, until the costs of alternative recruitment strategies have been estimated. Expenditures by source must be analyzed carefully in advance in order to avoid any subsequent “surprises.” In short, analysis of costs is one of the most important considerations in determining where, when, and how to approach the recruiting marketplace.

The International Organization for Standardization (2017) has issued a cost-per-hire (CPH) international standard. The CPH metric is designed to measure the costs associated with the sourcing, recruiting, and staffing activities borne by an employer to fill an open position in the organization. CPH is a ratio of the total dollars expended (in both external and internal costs) to the total number of hires in a specified time period (see Equation 11.1).

CPH = ∑ (External Costs) + ∑ (Internal Costs)/Total Number of Hires in a Time Period (11.1)

External costs include all sources of spending outside the organization on recruiting efforts during the time period in question. Examples of external costs include third-party agency fees, advertising costs, job-fair costs, and travel costs for recruiting.

Internal costs include all sources of internal resources and costs used for staffing efforts during the time period in question. Examples of internal costs include the fully loaded salary and benefits of the recruiting team and fixed costs, such as physical infrastructure (e.g., talent-acquisition system costs).

Total number of hires refers to the total added during the time period in question. Regardless of the hires’ staffing type (e.g., regular full time, regular part time, temporary) and total number, we assume that the fully loaded costs to staff the included positions have been calculated in external costs and internal costs.
Source Analysis

Analysis of recruiting sources facilitates effective planning. Three types of analyses are typical: cost per hire, time lapse from candidate identification to hire, and source yield. In terms of cost per hire, the most expensive sources generally are private employment agencies and executive search firms, since their fees may constitute as much as 35% of an individual’s first-year salary (Stewart, 2015). The next most expensive sources are field trips, for both advertising expenses and recruiters’ travel and living expenses are incurred. Less expensive are advertising responses, Internet responses, write-ins, and internal transfers and promotions. Employee referrals, direct applications (mail or Web based), and walk-ins are the cheapest sources of candidates.

Time-lapse studies of recruiting sources are especially useful for planning purposes, since the time from initial contact to report onboard varies across sources. In the case of college recruiting, for example, a steady flow of new employees is impossible, since reporting dates typically coincide closely with graduation, regardless of when the initial contact was made.

For those sources capable of producing a steady flow, however, employee referrals and direct applications usually show the shortest delay from initial contact to report (Maurer, 2016a). By contrast, when an organization has an efficient recruiting infrastructure in place, it may be difficult to beat the Internet. Today’s cloud-based applicant tracking systems, such as IBM Kenexa BrassRing, Greenhouse, or SmartRecruiters, have intuitive interfaces and tools that allow recruiters to cast a wider net for candidates. They also include robust analytics with “dashboards” that illustrate key recruitment metrics (Maurer, 2017a; Zielinski, 2015). Fully 75% of hiring and talent acquisition managers use applicant tracking or recruiting software to improve the hiring process (Kandefer, 2017).

From an applicant’s perspective, it takes an average of about 15 applications to different employers to get a job through an online job site, versus 10 for those who apply directly to a company, and six for those who are referred by current employees (Maurer, 2016a). Competition for top candidates is intense; the organization whose recruiting section functions smoothly and is capable of responding swiftly has the greatest likelihood of landing high-potential people.

The third index of source performance is source yield (i.e., the ratio of the number of candidates generated from a particular source to hires from that source). Although no ranking of source yields would have validity across all types of organizations and all labor markets, Breaugh, Greising, Taggart, and Chen (2003) examined the relationship between five recruitment methods (i.e., employee referrals, direct applicants, college placement offices, job fairs, and newspaper ads) and prehire outcomes for applicants for information-technology jobs. They found no difference for level of …