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CHAPTER 3
Planning for and Recruiting
Human Resources

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved. 5-1
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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 Continued

• The changes may include downsizing, training

existing employees in new skills, or hiring new
employees.
• The process consists of three stages:
1.forecasting,
2.goal setting and strategic planning, and
3.program implementation and evaluation.

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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 Supply
• Transitional matrix: a It answers two questions:
chart that lists job 1. “Where did people in
categories held in one each job category go?”
period and shows the 2. “Where did people now
proportion of employees in each job category
in each of those job come from?
categories in a future
period.

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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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 Downsizing

• Downsizing is the planned elimination of large

numbers of personnel with the goal of
enhancing the organization’s competitiveness.
• According to surveys, they do this by meeting
four objectives:
1. Reducing costs —Labor is a large part of a
company’s total costs, so downsizing is an
attractive place to start cutting costs.

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 Continued

• Replacing labor with technology —Closing

outdated factories, automating, or introducing
other technological changes reduces the need
for labor.
• Mergers and acquisitions —When
organizations combine, they often need less
bureaucratic overhead
• Moving to more economical locations —Some
organizations move from one area to another
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Implementing and Evaluating the HR Plan

• When implementing the HR strategy, the

organization must hold some individual accountable
for achieving the goals.
• That person must also have the authority and
resources needed to accomplish those goals.
• Regular progress reports should be issued.
• The evaluation of results should not only look at the
actual numbers, but should also identify which parts
of the planning process contributed to success or
failure.
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Applying HR Planning to Affirmative Action

• Workforce Utilization • The organization must

Review: a comparison of
employees in protected
groups with the
proportion that each
group represents in the
relevant labor market. • If the analyses forecast
• The steps in a workforce
utilization review are
identical to the steps in
the HR planning process.
assess current utilization
patterns, then forecast
how they are likely to
change in the near future.
underutilization of certain
groups, then goals and a
plan will be established.

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 Recruiting Human Resources
• In human resource management, recruiting
consists of any practice or activity carried on by
the organization with the primary purpose of
identifying and attracting potential employees.
• The goals of recruiting (encouraging qualified
people to apply for jobs) and selection
(deciding which candidates would be the best
fit) are different enough that they are most
effective when performed separately

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• In general, however, all companies have to a

make decisions in three areas of recruiting:

personnel policies, recruitment sources, and
the characteristics and behavior of the
recruiter.
• Personnel policies influence the characteristics
of the positions to be filled.
• Recruitment sources influence the kinds of job
applicants an organization reaches.
• And the nature and behavior of the recruiter
affect the characteristics of both the vacancies
and the applicants.
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 Personnel Policies
• An organization’s personnel policies are its
decisions about how it will carry out human
resource management, including how it will fill
job vacancies.
• Several personnel policies are especially
relevant to recruitment:
1.Internal versus external recruiting
2.Lead-the-market pay strategies
3.Employment-at-will policies
4.Image advertising
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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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Recruitment Sources: External Sources

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 Recruiter Traits and Behaviors
• The recruiter affects the nature of both the
job vacancy and the applicants generated.
• In general, applicants respond positively to
recruiters whom they perceive as warm and
informative.
• Because the recruiter’s job is to attract
candidates, recruiters may feel pressure to
exaggerate the positive qualities of the
vacancy and to downplay its negative
qualities.
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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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