CHAPTER 5:

PERSONNEL PLANNING AND

RECRUITING

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LEARNING OUTCOMES
1. List the steps in the recruitment and selection process.
2. Explain the main techniques used in employment
planning and forecasting.
3. Explain and give examples for the need for effective
recruiting.
4. Name and describe the main internal sources of
candidates.
5. List and discuss the main outside sources of
candidates.
6. Explain how to recruit a more diverse workforce.

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LO1: The Recruitment and Selection
Process
1. Decide what positions to fill through personnel planning
and forecasting.
2. Build a candidate pool by recruiting internal or external
candidates.
3. Have candidates complete application forms and
undergo initial screening interviews.
4. Use selection tools to identify viable candidates.
5. Decide who to make an offer to, by having the
supervisor and others interview the candidates.

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Workforce/Personnel Planning

• Employment or Personnel Planning

 The process of deciding what positions the firm will have to fill, and
how to fill them.
 Its aim is to identify and to eliminate the gaps between the
employer’s projected workforce needs and the current employees
who might be suitable for filling those needs.
 Workforce planning embraces all future positions, from
maintenance clerk to CEO.
 Succession Planning
– The process of deciding how to fill the company’s most important
executive jobs. (top level management)
– Succession planning is very important to ensure continuity of
leadership.

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 Steps in Recruitment and Selection Process

 The recruitment and selection process is a series of hurdles aimed at selecting

the best candidate for the job.
 The recruitment and selection activities of a firms HR should support and
facilitate its overall corporate strategies (SHRM).
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Linking Employer’s Strategy to HR Plans

Workforce planning should be an integral part of the firm’s strategic planning process.

i.e GSK BD
i.e SCB foreign rotation of IG’s
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Workforce/Personnel Forecasting

• What to Forecast for Personnel Planning?

1. Overall personnel needs
2. The supply of inside candidates
3. The supply of outside candidates

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 LO 2: Forecasting future Personnel Needs
 Future personnel requirement depends on various factors such as future level of
business activity, labor turnover rate, change in labor productivity, change in
business strategies etc.

 The main way to forecast personnel needs is therefore to forecast future sales
level and identify the number of workers needed to support that sales level.

 This information is then adjusted for turnover level, internal filling of vacancy and
other factors such as productivity changes to arrive at the labor forecast.

Forecasting Tools

Trend analysis Ratio analysis Scatter plotting

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Personnel Forecasting tools
• Trend analysis
 It involves studying variations in the firms employment level over the
past few years and use it to project future employee requirement.
 It can provide an initial estimate of future staffing needs, but employment
levels rarely depend just on the passage of time as assumed by this
technique.
 Other factors (like changes in productivity and retirements) also affect
staffing needs.
• Ratio analysis
 Provides forecasts based on the historical ratio between
 (1) some causal factor (like sales volume) and
 (2) the number of employees required (such as number of
salespeople).

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Forecasting Personnel Needs
• Scatter plot
 Shows graphically how two variables—such as sales and your firm’s
staffing levels—are related.
 If they are correlated, and then if you can forecast the business activity
(like sales), you should also be able to estimate your personnel needs.

Hospital Size Number of

(Number Registered
of Beds) Nurses
200 240
300 260
400 470
500 500
600 620
700 660
Determining the Relationship Between Hospital Size
800 820
and Number of Nurses
900 860 5–10
Determining the Relationship Between Hospital Size and Number of Nurses

Note: After fitting the line,

you can project how
many employees are
needed, given your
projected volume.

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Drawbacks to Traditional Forecasting
Techniques
• They focus on projections based on historical
relationships.
• They do not consider the impact of strategic initiatives on
future staffing levels.
• They “bake in” the idea that staff increases are
inevitable. Thus, they reward managers for adding
employees, irrespective of company needs and best
interest.
• They validate the usual ways of doing things even in the
face of changes.

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Using Computers to Forecast Personnel Requirements
as an alternative to traditional forecasting tools

• Computerized Forecasts
 Help managers translate estimates of projected productivity and sales
levels into forecastable personnel requirements.
 Computerized forecasts enable managers to build more variables (age,
tenure, turnover rate, time to train) into their personnel projections.
 Forecasting staffing levels for direct labor, indirect staff, and exempt
staff.
 Making three sales projection scenarios—minimum, maximum, and
probable.
Even if computerized forecast is used, still managerial judgment should
play a big role.

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 Forecasting the Supply of Inside Candidates
 Knowing your future staffing needs satisfies only half the staffing equation.
 Next, you have to estimate the likely supply of both inside and outside
candidates.
 Most firms start with the inside candidates.

 The focus is on determining which current employees (inside

employees) are qualified or trainable for the projected openings.
 This can be done by maintaining and using qualification
inventories.

Qualification
Inventories

Manual systems and Computerized skills

replacement charts inventories
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Forecasting the Supply of Inside
Candidates
• Qualification Inventories
 Manual records list the followings
 employees’ education,
 career and development interests,
 languages,
 special skills and experience level
This information is to be used in selecting inside candidates for
promotion.
 Personnel replacement charts
 Company records showing present performance and
promotability of inside candidates for the most important
positions.
 Thus, this tool is more often used during succession planning.

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Management Replacement Chart Showing Development Needs of Potential Future Divisional
Vice Presidents

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 Forecasting the Supply of Inside
• Computerized skills inventories
Candidates
For large companies with thousands of employees it might not be possible
or efficient to maintain manual qualification inventories. Such firms
could use HR software to maintain computerized skills inventories.
 Computerized skills inventory include items like
 work experience codes,
 the employee’s level of familiarity with the employer’s product lines or
services,
 the person’s industry experience, and formal education.
 Foreign language skills, relocation limitations

 The employee, the supervisor, and human resource manager enter information
about the employee’s background, experience, and skills via the system.
 A Manager can use key words to describe a position’s specifications (for instance,
in terms of education and skills) when a position is to be filled.
 The computerized system then produces a list of qualified candidates.

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Forecasting Outside Candidate Supply
• If there won’t be enough inside candidates to fill the
anticipated openings (or firm wants to go outside for another
reason), it will turn to outside candidates.
• Factors affecting Supply of Outside Candidates
 General economic conditions
 Expected unemployment rate

• Sources of Information regarding these factors

 Periodic forecasts in business/industry publications
 Online economic projections
 Bureau of Labor Statistics (BLS)
 Other agencies and private sources.

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Predictive Workforce Monitoring
• Most firms conduct personnel planning once a year making it
an annual exercise. However, this is not always sufficient.
• Workforce base is subject to frequent changes due to
retirements, growth plans, turnover.
• Consequently, nowadays firms should view workforce
planning as a continuous activity.
• The firm should pay continuous attention to how its current
workforce base is changing and what this means for filling
future vacancies.

• Such, continuous workforce planning is known as

predictive workforce monitoring.

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Succession planning
• The ongoing process of systematically identifying,
assessing, and developing organizational leadership to
enhance performance.

• In simpler words, it is the process of pre-planning how to

fill top executive/managerial positions should they
become vacant.

• Succession planning is very important since failure to fill

top positions quickly will hamper business continuity.
• On the other hand, hastily filling top positions with
inappropriate people could lead to poor business
performance and results.
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Succession planning Steps
1. The HR director and top management of the firm will identify
what the company’s key future positions needs will be based
on the firms strategies and plans.
 This involves preparing qualifications inventory of current employees
and assessing their suitability for the key positions.

2. Creating candidates for these jobs. “Creating” means

identifying inside (or bringing in outside) candidates and
providing them with the developmental experiences they
require to be viable candidates.
 This is done by providing them with necessary training and cross
functional experience, departmental rotation and project leadership
roles.
3. Select the most viable candidate who has demonstrated
greatest improvement during the “development” stage and who
seems to be ready to fill the top position.

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 LO3: The Need for Effective Recruiting
 Employee recruiting means finding and/or attracting applicants for the
employer’s open positions.

 It involves trying to build a large pool of candidates so that the firm can employ the
best candidates by applying various selection tools.

Effective Recruitment is of paramount importance as it ensures:

• Enhanced productivity at firm.
• Greater efficiency.
• Lower labor turnover and thereby associated costs.

The importance of a large pool of candidates via effective recruitment can be explained
using the concept of recruitment yield pyramid.

Recruitment yield pyramid shows

the historical arithmetic relationship
between recruitment leads and
invitees, invitees and interviews,
interviews and offers made and offers
made and offers accepted.
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 LO3: The Need for Effective Recruiting
However, effective recruitment is not so easy due to the various recruiting
challenges faced by the HR people.

 Selecting right Recruitment sources such as referrals, online ads, and

so on for the job in question is important.

 For assessing the best source most employers look at how many
applicants the source generates along with other metrics how many
of its applicants were hired, how well its applicants performed on the
job, how many failed and had to be replaced, and applicants’
performance in terms of training, absence, and turnover.

 Similarly, the employer’s brand or reputation affects recruiting success.

Most obviously, it is futile to recruit if the employer’s reputation is that it’s
an awful place to work.

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 LO4: Internal Sources of Candidates
Recruiting typically brings to mind classified ads, LinkedIn, and employment agencies, but
internal sources or “hiring from within” are often the best sources of candidates

Advantages Disadvantages

• HR has better knowledge • Failed applicants become

of candidates’ strengths discontented
and weaknesses • Time wasted interviewing
• More accurate view of inside candidates who will
candidate’s skills not be considered
• Candidates have a stronger • Inbreeding may fail to bring
commitment to the new perspectives/skills.
company
• Increases employee
morale
• Less training and
orientation required 5–24
 Finding Internal Candidates
• Job posting
 Publicizing the open job to employees (usually by literally posting it on
company intranets or bulletin boards) and listing its attributes, like
qualifications, supervisor, working schedule, and pay rate.
 Qualifications skills inventories could also be used to identify potential
internal candidates for a vacancy.
• Rehiring Employees
 Both Positive and Negative consequences.
 The firm will likely have a good idea of the strengths and weaknesses of a
former employee.
 However, former employees might bring in resentment/negative attitude.
 Rehiring former employees instead of promoting existing employees might
also lead to discontent among existing employees and will set a poor
precedence.

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LO5: Outside Sources of Candidates
Employers can’t always get all the employees they need from their current staff, and
sometimes they just don’t want to

Locating Outside Candidates

1 Informal Recruiting and Hidden Job Market 6 On Demand Recruiting Services (ODRS)

2 Recruiting via the Internet 7 Offshoring/Outsourcing

3 Advertising 8 Executive Recruiters

4 Employment Agencies 9 Referrals and Walk-ins

5 Recruitment Process Outsourcers 10 College Recruiting

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Informal Recruiting and Hidden Job Market
• Many job openings aren’t publicized at all.
• Jobs are created and become available when employers
serendipitously encounter the right candidates.

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 Recruiting via the Internet
• Most employers post ads on their own Web sites, as well as on
online job boards
• Virtual (fully online) job fairs are also used.
• Advantages
 Cost-effective way to publicize job openings.
 More applicants attracted over a longer period.
 Immediate applicant responses.
 Enables prescreening potential hires through Applicant Tracking System
(ATS: attract, gather, screen, compile and manage applicants)
• Disadvantages
 Exclusion of older and minority workers
 Unqualified applicants overload the system

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 Ineffective and Effective Web Ads

 The ineffective Web ad has needless abbreviations and doesn’t say much about why
the job seeker should want that job.
 Effective Web ad provides good reasons to work for this company. It starts with an
attention-grabbing heading and uses the extra space to provide more specific job
information.

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 Advertising for Outside Candidates
While Web-based recruiting is replacing traditional help wanted ads,
print ads are still popular.
• The Media Choice
 Selection of the best medium depends on the type of positions for which
the firm is recruiting.
 Newspapers: usually appropriate for local blue collar workers, low
level staff and specific labor markets.
 Trade and professional journals: appropriate for hiring specialized
employees with specific skill sets. (Giving ad for pilot on an aviation
magazine)
• Constructing (Writing) Effective Ads
 Create attention, interest, desire.
 Create a positive impression (image) of the firm.

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Help Wanted Ad that Draws Attention

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 Employment Agencies

Types of Employment
Agencies

Public Nonprofit Private

agencies agencies agencies

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 Employment Agencies
• Public and Nonprofit Agencies
 Every state has a public, state-run employment service agency.
 The U.S. Department of Labor supports these agencies, through
grants and through other assistance such as a nationwide
computerized job bank.
 Most (nonprofit) professional and technical societies have units
that help members find jobs.

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 Employment Agencies
• Private Agencies (Fee Paid)
 Your firm doesn’t have its own human resources department and feels it can’t do a
good job recruiting and screening.
 You must fill a job quickly.
 You want to reach currently employed individuals, who might feel more comfortable
dealing with agencies than with competing companies.
 You want to reduce the time you’re devoting to recruiting.

To avoid potential problems of getting poor employees:

 Give the agency an accurate and complete job description.
 Make sure tests, application blanks, and interviews are part of the agency’s selection
process.
 Periodically review equal employment data on candidates accepted or rejected by your
firm, and by the agency.
 Screen the agency and Check references.

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Recruitment Process Outsourcing
 Recruitment process outsourcers (RPOs) are special vendors that handle
all or most of an employer’s recruiting needs.

 They usually sign short-term contracts with the employer, and receive a
monthly fee that varies with the amount of actual recruiting the employer
needs done.

 This makes it easier for an employer to ramp up or ramp down its

recruiting expenses, as compared with paying the relatively fixed costs of
an in-house recruitment office.

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On-Demand Recruiting Services
 On-demand recruiting services (ODRS) are recruiters who are paid by the
hour or project, instead of a percentage fee, to support a specific project.

 A traditional recruiting firm might charge 20% to 30% of each hire’s

salary.

 The ODRS firm charges by time, rather than per hire.

 It handles recruiting and prescreening, and leaves the client with a short
list of qualified candidates.

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 Offshoring and Outsourcing Jobs

• Rather than bringing people in to do the firm’s jobs, outsourcing and

offshoring send the jobs out.

• Outsourcing means having outside vendors supply services (such as

benefits management, market research, or manufacturing) that the firm’s
own employees previously did in-house.

• Offshoring is a narrower term. It means having outside

vendors/employees abroad supply services that the firm’s own
employees previously did in-house.

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 Offshoring and Outsourcing Jobs

Political and military

instability

Resentment and
Cultural
anxiety of domestic
misunderstandings
employees/unions

Outsourcing/
Offshoring
Customers’ security
Costs of foreign Issues and privacy
workers
concerns

Foreign contracts,
Special training of
liability, and legal
foreign employees
concerns

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Executive Recruitment
• Executive recruiters (also known as headhunters) are
special employment agencies retained by employers to seek
out top-management talent for their clients.

• The employer always pays the fees.

• The recruiter’s fee might actually turn out to be small when

you compare it to the executive time saved.

• The big issue is ensuring that the recruiter really

understands your needs and then delivers properly vetted
candidates.
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 Employee Referrals and Walk-ins
• Employee Referrals
 Employer posts announcements of openings and requests for referrals on
its Web site, bulletin boards, and/or wallboards.
 It often offers prizes or cash awards for referrals that lead to hiring.
– Many employers use tools like Jobvite Refer to make it easier for their employees to
publicize the firm’s open positions via their own social media sites
 It tends to generate “more applicants, more hires, and a higher yield ratio
(hires/applicants).”

 Referral programs are more cost-effective

 Current employees tend to provide accurate information about their
referrals because they’re putting their own reputations on the line.
 Can backfire if workforce is already homogeneous and/or
nonminority.

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 Employee Referrals and Walk-ins
• Walk-ins
 Seek employment (hourly workers) through a personal direct approach
to the employer.

 Sometimes, posting a “Help Wanted” sign outside the door may be the
most cost-effective way of attracting good local applicants.

 Employers also typically receive unsolicited applications from professional

and white-collar applicants.

 Courteous treatment of any applicant for both the employer’s community

reputation and the applicant’s self-esteem is a good business practice.

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 College Recruiting
College recruiting—sending an employer’s representatives to college campuses to prescreen
applicants and create an applicant pool from the graduating class
• On-campus recruiting goals
 To determine if the candidate is
worthy of further consideration.
 communication skills, education,
experience, and technical and
interpersonal skills.
 To attract good candidates by
making the employer attractive.
 sincere and informal attitude, respect
for the applicant, and prompt follow-
up emails/letters.
• On-site visits (inviting good
candidates to the office or plant)
 Invitation letters
 Assigned hosts
 Information packages.
 Planned interviews.
 Timely employment offer.
• Internships
 Students can hone business skills, learn
about potential employers, and discover
career likes (and dislikes).
 Employers can use the interns to make
useful contributions while evaluating
them as possible full-time employees.
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LO6: Recruiting A More Diverse Workforce

Single parents

The disabled Older workers

Minorities and
Welfare-to-work
women

The solution is same for all of the above groups. HR needs to identify the
main impediments hindering the prospects of these groups in joining the
organization and needs to formulate strategies and action plans to eradicate
those impediments. 5–43
Developing and Using Application Forms

Uses of Application Form

Information

Applicant’s Applicant’s Applicant’s Applicant’s

education and prior progress employment likelihood of
experience and growth stability success

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Thank You 

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