Recruiting and Labor Markets

Recruitment is defined as a process that provides the organization with

a pool of qualified job candidates from which to choose. Before companies

recruit, they must implement proper staffing plans and forecasting to

determine how many people they will need.

The basis of the forecast will be the annual budget of the organization

and the short- to long-term plans of the organization. Recruiting is not always

necessary. It is not necessary when the number of available candidates is the

same as the number of people needed to be hired.

FACTORS THAT INFLUENCE RECRUITMENT

Recruitment is affected by several factors. These factors play a big part

on whether the recruitment process will be successful or not.

Size of the organization

A large organization is bound to have a higher demand for new employees. It

is bound to look for more people, since the structure will require more

manpower. On the other end of the spectrum, a small enterprise, like a new

company just starting its operations, will require only a lean staff.
Current employment conditions in the economy

Try comparing employment opportunities in a country with a developed

economy with that of an underdeveloped one. An organization operating in

an underdeveloped economy may have difficulty finding the candidates with

the talents and skills it requires.

Salary structure of the organization

Say one company is known to provide higher salaries and wages to its

employees. Once it advertises its open position, candidates are likely to line

up submitting their resumes. However, a company known to be quite stingy

with its wages will have more difficulty recruiting top talents.

Working conditions within the organization

Maintaining employees’ job satisfaction is one way for organizations to keep

its employees, and attract new ones. Prospective candidates will first look for

work in companies or organizations that are known to provide good working

conditions and looks out for the health and well-being of their employees.

Growth rate of the organization

There are organizations that grow at a fast rate, which means that they will

require new employees from time to time. However, there are also

organizations that do not grow as much, or even at all. The only time that
these organizations with low growth rates are likely to recruit new employees

would be when the old ones retire or resign.

THE RECRUITMENT PROCESS

Organizations, depending on their structure and specific needs, may

have special procedures that they integrate into their recruitment process.

For purposes of discussion, however, we will take a look at the general

approach of a recruitment process, one that is used by most organizations or

companies across various industries.

Step 1: Conduct of a job analysis

Basically, this step will allow the human resources manager, hiring manager,

and other members of management on what the new employee will be

required to do in the position that is currently open for filling up. This has to

be done in a systematic manner, which is what the job analysis is for.

a. Build a job description.

Before anything else, the organization must first know exactly what it needs.

Or who it needs. It could be that the organization deemed a need for a job

that is not included in the current roster of jobs. Hence, the need to create a

new one.

Job analysis involves identification of the activities of the job, and the

attributes that are needed for it. These are the main parts that will make up
 the job description. This part has to be done right, since the job description

will also be used in the job advertisement when it is time to source out

talents.

The job description generally includes the following:

 Title and other general information about the position

 Purpose of the position in the unit, department, and organization as

whole

 Essential functions of the job or position

 Minimum requirements or basic qualifications

b. Review the job description.

Once the job description has been created, it is a good idea to review it for

accuracy, and to assess whether it is current or not. Also, in cases where job

descriptions are already in place, there is a need to revisit them and check

their accuracy and applicability with respect to the status quo. There are

three positive outcomes from conducting a review of the job description:

 To ensure continuous improvement of the organizational

structure. This can be an efficient way of conducting organizational audit,

to determine which jobs are redundant and thus no longer needed, and

which ones are needed.

 To evaluate competencies for each position. Jobs evolve. In as

much as circumstances and work conditions change, so will the requirements

for the job. It is possible that a job may require a new competency from the

worker that it did not need before. By evaluating the competencies, the

impact of the job within the organizational structure is ensured.

 To evaluate the wages or compensation for each

position. Without management knowing it, the worker or employee

performing a specific job may be undercompensated, leading to

dissatisfaction. By reviewing the job description, management can assess

whether the job is getting paid an amount that is commensurate to the skills

and competencies required.

c. Set minimum qualifications for the employee who will do the job.

These are the basic requirements that applicants are required to have in

order to be considered for the position. These are required for the employee

to be able to accomplish the essential functions of the job. Therefore, they

should be relevant and directly relate to the identified duties and

responsibilities of the position.

d. Define a salary range.

The job must belong to a salary range that is deemed commensurate to the

duties and responsibilities that come with the position. Aside from complying

with legislation (such as laws on minimum wages and other compensation

 required by law), the organization should also base this on prevailing

industry rates.

Step 2: Sourcing of talent

This is the stage where the organization will let it be known to everyone that

there is an open position, and that they are looking for someone to fill it up.

Before advertising, however, the organization must first know where to look

for potential candidates. They should search out the sources where the

persons that can potentially fill the job are going to be available for

recruitment. That way, they will know where to direct their advertising

efforts.

 Networking. Word-of-mouth is the best form of advertising, and when

it takes the form of networking, it becomes more effective. In recruitment,

this is often done through representatives of the company attending college

and career fairs, letting them know about the opening in their organization.

This is a tactic employed by large software and tech companies that want to

hire fresh, young and brilliant minds into their organization.

 Posting. Recruitment often involves the application of candidates both

from within and outside the company. Thus, in order to attract the best

possible talents, it is recommended that the posting of the open positions be

made internally and externally. Internal posting usually takes the form of the

vacancy announcement being displayed in bulletin boards and other areas

 within the business premises where the employees and visitors to the

company are likely to see it. Posting externally may be in the form of flyers

being distributed, or vacancy notices being displayed in other areas outside

of the business premises.

 Print and media advertising. One classic example of this would be

the Classifieds section of the local daily or weekly newspaper. Companies

looking for people to fill up open positions make the announcement in the

newspapers, providing the qualifications and the contact details where

prospective applicants may submit their application documents. When trying

to attract the attention of suitable candidates, the organization makes use of

various tools and techniques. If it wants to get the best candidates, then it

should not be haphazard about things.

 Developing and using proper techniques. The company may

include various offerings in order to attract the best candidates.

 Using the reputation of the company. Perhaps the best publicity

that the company can use to attract candidates is its own reputation in the

market.

Step 3: Screening of applicants

This is most probably the part of the recruitment process that requires the

most amount of work. This is where the applicants’ skills and personalities
 are going to be tested and evaluated, to ascertain whether they are a good

fit for the job and its description.

 Preliminary screening. It is often the case, especially in large

organizations, where one open position will receive hundreds to thousands of

applications from candidates. In an ideal world, it would be good for the

hiring managers to be able to interview each and every single one of them.

 Initial interview. The candidates who were able to pass the

preliminary screening will now undergo the initial interview. In most cases,

the initial interview is done through phone. There are those who also conduct

interviews through videos using their internet connection. Often a basic

interview, this may involve the candidates being asked questions to evaluate

or assess their basic skills and various personal characteristics that are

relevant to the open position.

 Conduct of various tests for recruitment. The hiring managers

may conduct tests on the skills of the candidates and how they use these

skills and talents. Other tests that are often employed are behavioral tests

and personality assessment tests.

 Final interview. Usually depending on the number of candidates for

the job, and the preference of the hiring managers and senior management,

a series of interviews may be conducted, gradually narrowing down the list of

candidates. This may go on until the company has finally come up with a

shortlist of candidates that will undergo a final interview. Often, the final
 interview requires a face-to-face meeting between the candidate and the

hiring managers, as well as other members of the organization. Top

management may even be involved during the final interview, depending on

the job or position that will be filled up.

 Selection. In this stage, the hiring managers, human resources

representatives, and other members of the organization who participated in

the process meet together to finally make a selection among the candidates

who underwent the final interview. During the discussion, the matters

considered are:

o Qualifications of the candidates who were able to reach the last stage of

the screening process

o Results of the assessments and interviews that the final pool of candidates

were subjected to

There will be no problem if they have a unanimous decision on the candidate

that the job will be offered to. In case of varying opinions, the majority will

prevail.

Step 4: Finalization of the job offer

The last step of the previous phase involves the selection of the best

candidate out of the pool of applicants. It is now time for the organization to

offer the job to the selected applicant.

 Making the offer: To make things more formal, a representative of

the company or of the human resources department will contact the

candidate and inform him that he has been selected for the job. In this

stage, complete details of the compensation package will also be made

known to the applicant.

 Acceptance of the offer by the applicant: The applicant should

also communicate his acceptance of the offer for it to be final. Take note

that, if the selected applicant does not accept the job offer and declines it,

the recruitment process will have to start all over again.

Step 5: Introduction and induction of the new employee

The moment that the applicant accepted the job offer, he has officially gone

from being an applicant to an employee of the organization. The induction

process will now begin.

Usually, the beginning of the induction process is marked by the signing of

the employment contract, along with a welcome package given to the new

employee. The date for the first day that the employee will have to report for

work and start working in the company will be determined and

communicated to the newly hired employee.

Recruitment techniques
Internal recruitment can be a massive time-saver because there isn’t a

protracted interview and onboarding process. The downside is that

keeping everything close to home can stymie new ideas, innovation and

diversity.

External recruitment brings in new ideas, a fresh approach and renewed

energy. But it is a costly and time-consuming process. Candidates have to be

sourced, interviewed, assessed and verified before making a hiring decision.

12 best recruitment methods

1. Direct advertising

Placing job adverts on your careers site, job boards, social media and

industry publications is an excellent way to find lots of applicants. It also

gives exposure to your employer branding and boosts your company’s

reputation. The downside is that external advertising can be very expensive.

2. Talent pool databases

You should always search your talent pool databases for applicants and

candidates that were not hired but were suitable enough to save. Most hiring

decisions involve deciding between at least two or three candidates.

3. Employee referrals

Most companies have some kind of employee referral program in place.

Employee referrals is a combination of internal and external recruitment.

Existing staff are encouraged to refer people they know for vacancies.
4. Boomerang employees

Rehiring past employees is gaining popularity. Known as boomerang

employees, these are people who worked well at a company but then left on

good terms for a myriad of reasons.

5. Promotions and transfers

Promotions and transfers aren’t quite the same thing, but the concept is

the same. Internal employees are identified to fill open roles. A promotion

means that the person moves up the ladder and is given more

responsibilities and also a pay increase. A transfer usually doesn’t involve

greater responsibilities or more money and is a horizontal move.

Staff can be transferred to the same role in another branch or region, or they

can take on a similar position in a different department or division.

6. Employment exchanges

Although not available in all countries, employment exchanges are

mandatory in others. An employment exchange is a government-run

initiative that keeps record of unemployed job seekers. Employers submit

new vacancies to the exchange and are given the details of suitable

candidates. Using an exchange is cost-effective but mostly suited to more

junior, factory, agricultural and artisan roles.

7. Recruitment agencies

You can outsource your hiring process to a recruitment agency. Agencies

manage full cycle recruiting on your behalf. Although the cost of using an

agency is high, it frees up your time to focus on more pressing matters.

Recruitment agencies are a great option for hard-to-fill positions and for

companies that don’t have the internal HR resources to focus on hiring.

8. Professional organizations

When you need to fill a highly skilled position, professional organizations can

be an excellent source of candidates. Many professions require that on

qualification, people register with the appropriate professional association.

9. Internships and apprenticeships

Offering internships and apprenticeships is an excellent way to get to know

the strengths of individuals and can be considered to be a working interview.

During the contact period, line and hiring managers can evaluate the

potential to identify interns and apprentices who can be upskilled and

developed to fill future roles.

10. Recruitment events

For big organizations, or companies planning expansion, recruitment

events are perfect for attracting the type of people you need. Events can

range from hosting open days to being at job fairs, holding

a hackathon and graduate recruitment drives on campus. Events can be

costly.

To ensure that you get the best ROI, you must know precisely what type of

candidate you want to attract and what your employer value proposition is.

Job shadowing is another great way to get to identify potential candidates.

It’s also an excellent means of promoting your employer brand and letting

people know that your company supports developing talent.

11. Word of mouth

Big brands and multinationals can easily use word of mouth methods of

recruitment because unsolicited job seekers approach them daily. Their

employer brand is established, and they’re recognized as an employer of

choice. All they need to do is put the word out that they’re hiring and they

will get a good response.

12. Bulletin boards

There are still jobs that can be advertised on bulletin boards. Factory and

agricultural jobs are typical examples. Unemployed people often wait at

factory gates for day or contact jobs to be announced.

In agriculture, seasonal workers gather at local markets or co-ops to see job

lists put up by local farms.

Labor Market

Labor markets refers to the supply and demand for labor in which

employees provide the supply and employers the demand. It is a major

component of any economy or in this case company. Labor markets are very

important in recruiting.

Components of the Labor Market

The labor market comprises four components, namely, the labor force

population, applicant population, applicant pool, and the individuals selected.

1. Labor force population

The labor force population or labor force participation refers to the number of

individuals who are available to work in a labor market. It considers all

workers who are offering their skills and services for employment regardless

of the industry they are in.

2. Applicant population

The second component is the applicant population which refers to the people

who are applying for a particular job that suits their expertise and skills.

Recruiters take a look first at the labor market and then look next for

individuals who meet the skills and qualifications that are set for a particular

job. For example, the people who are looking for IT, graphics design, and
similar jobs belong to the same applicant population which is targeted by

recruiters who are looking for this type of professional.

3. Applicant pool

The third component is the applicant pool, which is the actual number of

people who initially signified their interest to apply for a particular job by

sending in their resume. It may very well be considered the first part of the

selection process where the recruitment department of a specific

organization receives applications and screens them to determine who

advances to the next round of screening.

4. Individuals selected

The fourth component is the individuals selected, which simply means the

individual or individuals who’ve made it through the screening process and

have been hired for the job. Of course, this is judged based on a number of

factors, and the person is screened against a carefully determined set of

qualifications.

Labor Market Analysis

Labor market analysis is an integral part of an organization’s

recruitment process because it not only helps it find the most qualified

workers for the jobs that it offers but also ensures that it provides a

competitive compensation package to its workers. This is important in order

for an organization to be able to keep its competent workers and, thus,

continue its productivity.

Generally speaking, labor market analysis involves the following processes:

 Identifying the various labor markets for a given type of

position. It involves looking at the appropriate labor market based on

a specific position.

 Checking the market for salaries for a common position. The

process involves checking similar positions in the labor market in order

to determine if an organization’s salary rates are at about the same

level.

 Determining market trends. This step answers questions as to how

other organizations are compensating their workers, including their pay

practices.

 Adjusting salary packages or structure of positions. After

checking the salary rates of other organizations and finding out if there

is any need for adjustments, the department then makes

recommendations for such adjustments and restructuring of positions

in the company.

 Making consultations with management. This process involves

sitting down with management to determine their workforce needs.

Different labor markets and recruiting

 • Industry and occupational labor markets: careers: nurses, home health

care, post secondary teachers, truckers and welders

• Educational and technical labor markets: military, medical,

informational technology (IT)

• Geographic labor markets: local, area or regional, national, or

international

• Global labor markets: overseas jobs and laws

References:

https://open.lib.umn.edu/humanresourcemanagement/chapter/4-1-the-

recruitment-process/#:~:text=Recruitment%20is%20defined%20as

%20a,many%20people%20they%20will%20need.

https://www.businessbootcamp101.org/post/recruiting-and-labor-

https://nscpolteksby.ac.id/ebook/files/Ebook/Business

%20Administration/Human%20Resource%20Management%2013th

%20Edition%20(2010)/Chapter%206%20-%20Recruiting%20and%20Labor

%20Markets.pdf

https://corporatefinanceinstitute.com/resources/knowledge/economics/labor-

market/

https://www.cleverism.com/what-is-recruitment/
https://blog.recruitee.com/recruitment-methods/