- Relevant Laws and Executive Orders
- Relevant Case Law
- Legal Concepts/Definitions Relevant to Workplace Planning and Employment
- Recruiting Candidates
- The Selection Process
- Background Checks
- Employment: Extending the Offer
- Termination: The End of the Employment Life Cycle...or Is It?
- Exit Interviews
- Severance Packages
- Affirmative Action Plans
- Compensation and Benefits
- Documentation Strategies for HR Professionals
- Chapter Summary
- Key Terms
- Apply Your Knowledge
“Recruiting and selection” are often thought of as a single process. In fact, however, they are two separate components of the staffing process and need to be approached and carried out separately. Recruiting is the process of attracting and creating a pool of qualified candidates. Selection is the process of identifying the candidate(s) to whom the position will be offered.
Before an employer goes out in search of new employees, it needs to consider how potential candidates in the labor market will perceive the organization. Organizations create a “brand” as an employer in much the same way they create a brand for the product or service that they market to their customers. So, just as an organization markets its products or services deliberately and intentionally, it must deliberately and intentionally decide on a marketing strategy that will be used to promote the employer’s brand within the labor market.
Relevant Labor Market
In looking at drawing from an external pool of candidates, it is important to first define the relevant labor market. This refers to the size and scope of the geographic area within which an organization would seek to attract qualified candidates for a particular position(s).
Even within the same organization, the relevant labor market for different positions can vary widely depending upon the skills, knowledge, abilities, and behavioral characteristics required to perform each position successfully. Other factors that impact how an organization defines the relevant labor market might be the degree of competition that exists among employers for particular skills or knowledge and the degree to which certain skills or knowledge requirements are industry specific.
The first step that must be taken to begin the process of creating a pool of qualified candidates is to identify and develop selection criteria for the position. Selection criteria can be likened to a “shopping list” of what you’re looking for in the individuals who will populate your candidate pool (and, ultimately, the candidate(s) who will join the organization). This could—and often will—include KSAs, job specifications, and specific requirements stemming from the job competencies.
Internal and External Recruiting
After you’ve determined (in collaboration with your internal client—most likely the hiring manager, in this case) the selection criteria for a particular position, the next step is to decide whether to seek to create a candidate pool internally, externally, or through a combination of both approaches.
Recruiting Internal Candidates
Many—in fact, most—organizations embrace the idea of promoting current employees from within the organization. This begins by creating a pool of qualified candidates from among current employees. Three primary mechanisms for seeking internal candidates for positions within the organization are job posting, job bidding, and succession planning.
Job posting systems announce position openings to current employees within the organization. Candidates who believe that they meet the minimum requirements of the position (as posted) are invited to apply for positions—sometimes even before external candidates are sought.
Although the job posting process isn’t triggered until a job opens, job bidding systems invite employees to express interest in positions at any time, even if a position is not currently available. Candidates who are determined to meet the qualifications for a position in which they have expressed interest will automatically be put into consideration when that position becomes available.
In addition to job posting and job bidding, many organizations take further proactive steps toward succession planning: the detailed, ongoing process through which an organization identifies individuals who might be able to fill higher-level positions that could become available in the future.
Succession plans are “living, breathing” tools that impact individual and group professional development planning and that —through predictive efforts and proactive planning —strive to ensure that the overarching mission and goals of the organization will not be derailed by the inevitable departure of individuals from the organization.
You can find more information about succession planning in Chapter 3, “Human Resource Development.”
Internal Candidates: Advantages and Disadvantages
Recruiting internal candidates can benefit employees as well as employers. Through internal recruitment, employees can grow and develop without leaving the organization. Employers can select from a pool of internal candidates about whom they have more job-related knowledge than they would normally have about an external candidate. Both employees and employers can build on the investments they have already made in each other and may even experience an enhanced sense of loyalty and dedication to each other.
Recruiting internal candidates, however, also presents certain risks, such as these:
- Relying too heavily on performance appraisals that, for a variety of reasons, may not be reflective of actual past performance (see Chapter 3).
- Relying too heavily on performance appraisals that, even when accurate, may reflect KSAs that are not wholly relevant to the position for which the candidate is applying.
Particular risk exists when a position is posted for which a strong internal candidate has already been identified. If it is fully expected (in other words, predetermined) that a particular individual will be selected for an open position, the integrity of the job posting or bidding system could be seriously—and perhaps irreparably—compromised.
The organizational policies surrounding internal recruiting systems must be thought through carefully and administered consistently. For instance
- Is an employee who posts or bids for a position required to notify her current supervisor? Is the supervisor required to grant “permission” for the employee to post for another position?
- If an employee is selected for a position, how long must that employee wait before being “allowed” to start his new job? Must a replacement for the employee’s former position be found before the employee can move on to his new position?
- Must an employee be performing satisfactorily in her current position to be considered for another position within the organization? Would certain areas of unsatisfactory performance be acceptable, such as those that are unrelated to the new position?
- Must an employee work for a specified period of time in one position before posting for a different position within the organization?
- Are employees who currently hold exempt-level positions subject to different requirements than employees who hold non-exempt–level positions?
Any of these considerations, depending on how they are handled, can either strengthen or diminish the ultimate effectiveness of the job posting or bidding system.
Recruiting External Candidates
There are various options available for recruiting external candidates. A few of these options include
- Internet job listing websites
- Newspaper advertisements
- Radio advertisements
- “.jobs” websites
- College and university career development/placement offices
- Job fairs
- Open houses
- Alumni networks (alumni of colleges/universities, as well as alumni of companies)
- Former employees
- Professional organizations
- Referrals from current employees or industry network colleagues
- State unemployment offices
- Organizational websites
- Prior applicants
- Social media
Perhaps the newest and least traditional of these methods is the use of social media. Let’s explore this in more detail.
Using Social Media to Find Candidates
There are many social media platforms, the most popular of which (as of this printing) are considered LinkedIn, Facebook, and Twitter. Of these three platforms, LinkedIn is the most professionally oriented, and Facebook is the most personally oriented —although that is shifting quickly, as Facebook is quickly becoming a way for candidates and employers to “find” each other.
“Finding” each other is one of the great potential benefits of social media. Although active candidates —those who are actively seeking a new position —will look for new opportunities, passive job seekers —by definition —will not. Social media (particularly LinkedIn, at the moment) provide a way for employers to find individuals who might not currently be seeking a new job but who might be well suited for a job opening and who might be willing to consider new opportunities.
In this overlap between these two types of candidates are semi-active candidates: those who occasionally look for a new position (perhaps when feelings of dissatisfaction or lack of appreciation relative to their current positions mount) but who do not make a full-time, concerted effort to do so. These individuals can also be reached through social media and might be more receptive to considering new employment than passive candidates would be.
Using Social Media to Learn About Candidates
Of potential greater concern —and greater debate —is the use of social media (especially Facebook) as a way to gather information about current candidates. There are legal, as well as ethical, questions surrounding this practice —and the “jury is still out” (literally, as well as figuratively).
Here are some things to keep in mind as you consider using Facebook to gather information about candidates:
- To what degree is the information you are gathering reflective of the individual?
- To what degree is the information you are gathering related to the qualifications of the position?
- To what degree can you be confident that the candidate created/posted the content on his page?
- To what degree is the information you are gathering likely to expose you to information that is covered by EEO laws?
- To what degree might gathering such information unlevel the playing field for candidates?
- What would your measure of comfort be if you were required to discuss this practice with counsel? Or what if you were on the witness stand and were called to testify?
HR professionals —and all who are involved in the hiring process —are advised to speak with counsel before incorporating social media into the candidate evaluation process.
There are several different types of employment agencies of which HR professions must have knowledge.
Each state has a service through which unemployed individuals who are currently looking for work are often required to register, thus providing a potentially rich pool of candidates to employers. These public agencies will also provide preliminary screening and candidate referral services to employers.
Many organizations utilize temporary employment agencies to secure services that are needed on a short-term basis. This allows organizations the flexibility to meet temporary, short-term, or unexpected needs. Some organizations also use a “temp to hire” model to try out the employee before extending an offer of regular employment. This also gives the employee the opportunity to try out the organization before deciding whether to make a commitment to a particular organization or position.
This process used to be referred to as “temp to perm.” It is no longer advisable to use this language, however, because there is no such thing as permanent employment. Employers —and HR professionals, in particular —should be careful not to say anything or use any verbiage that could potentially imply otherwise or that could unintentionally create an implied contract.
Private Employment Agencies (Also Known as Private Search Firms)
Employers may also enlist the services of private employment agencies to assist them in finding regular employees. There are two primary options:
- Contingency employment agencies/search firms: The employer pays a fee to the firm only when a candidate is hired through its efforts. This type of agency would be selected more often for entry-level professional or supervisory recruiting efforts.
- Retained employment agencies/search firms: The employer pays a fee to the firm whether or not a candidate is hired. This type of agency would be selected more often for executive-level recruiting efforts.
Employee Referral: A Hybrid Approach
Many organizations embrace employee referral systems—a recruiting technique whereby current employees are used as a source for recruiting external candidates into the applicant pool.
This approach offers distinct advantages—and potential disadvantages, as well. Some potential advantages include
- Candidates who are referred by current employees may have a better understanding of the culture and values of the organization and thus have more realistic expectations about the job and about the organization.
- Current employees are more likely to refer individuals who they believe (rightly or wrongly) have a high likelihood of succeeding. This happens because current employees often believe that the performance of the person whom they refer will have an impact on how they are perceived by the organization.
- Employee referral programs—even those that offer rich rewards—are significantly more cost-effective than most other forms of recruiting.
Employee referral programs also have the potential for significant disadvantages:
- If the current organization is not particularly diverse (with respect to gender, age, race, education background, or a host of other factors), employee referral programs might perpetuate that lack of diversity.
- If an affirmative action plan is in place, and if there are areas of underutilization, an employee referral program is not likely to demonstrate “good faith efforts” to recruit candidates who are women or minorities.
- In organizations where there are prior patterns of hiring discrimination, employee referral programs are likely to reinforce those patterns.
In many cases, organizations will not rely exclusively on employee referral programs for creating pools of candidates. Instead, employee referral programs are one of several techniques used to create a pool of qualified and, ideally, diverse candidates.
Nontraditional Staffing Alternatives
HR professionals also need to be familiar with other, more flexible, less traditional staffing arrangements. These arrangements do not necessarily fall within “internal” or “external” sources because these options could be offered to existing employees within the organization, could be used as a way to attract external candidates, or could even result in the outsourcing of functions that were formerly performed within the organization.
Examples of nontraditional staffing alternatives could include the use of temporary help, temp-to-hire arrangements, outsourcing to third-party vendors (any entity or person outside the organization to whom work can be outsourced), off-shoring (a specific type of outsourcing that uses vendors located overseas), or contracting with consultants. Current or newly hired employees can also participate in flexible staffing programs through part-time employment, telecommuting, job sharing arrangements, or seasonal employment.
More and more organizations are deciding to have certain services performed by individuals or entities that are external to the organization rather than by employees. Welcome to the ever-expanding world of third-party contracts.
Third-party relationships are no longer a phenomenon; rather, they are progressively becoming a standard—and even expected—way of conducting business. Some services that are outsourced represent new initiatives or projects. At other times, work that is currently being performed by employees is outsourced to individuals or entities outside the organization.
Different organizations may choose to outsource different functions. Many functions (and some people would argue that almost any function) within an organization can be outsourced.
Many HR departments outsource significant functions as well. Some of the HR functions that are often partially—or fully—outsourced include the following:
- 401(k) or 403(b) programs
- Stock option administration
- Learning and development
- Safety and security
Request for Proposal
The Request for Proposal (RFP) is a written document that invites third-party contractors to propose written solutions that address the organization’s needs—ideally, within a price that the customer is willing to pay. Developing a solid and carefully constructed RFP is critical; a poorly designed or overly vague RFP may yield proposed solutions that do not address the organization’s actual problems. Worse yet, those solutions may appear to be workable and appropriate—until they have been implemented.
Preemployment testing is another way of ascertaining the degree to which a candidate possesses and can demonstrate the knowledge, skills, and abilities/behavioral characteristics required to successfully perform the position. Any tests that are used must be job related and valid. (See the section “Uniform Guidelines on Employee Selection Procedures” earlier in this chapter.)
Some of the most commonly used types of preemployment exams are discussed in this section.
Agility tests are preemployment tests that are used to ascertain whether the candidate can perform the physical requirements of the position for which she is applying.
Aptitude tests are preemployment tests that are used to ascertain whether the candidate possesses the skills or knowledge required to perform the position for which he is applying.
Assessment centers are facilities that assess evaluate candidate’s absolute and relative qualifications for open positions within an organization, or with respect to overall potential/talent.
Cognitive Ability Tests
Cognitive ability tests are preemployment tests that are used to assess the candidate’s intelligence or current skill level with respect to a job-related function. Cognitive tests could be administered to assess skills such as problem-solving, mathematical skill, or numerical ability.
Integrity, or Honesty, Tests
These tests are preemployment tests that are used to ascertain the degree to which a candidate would be likely to engage in behavior that is dishonest or that reflects a potential lack of integrity.
These tests are preemployment medical tests, or exams, that can be conducted only if the exam is job related and consistent with business necessity, and even then only after an offer (or a conditional offer) of employment has been extended to the candidate. It is important to note that an offer of employment cannot be rescinded simply because a medical test reveals that a candidate has a disability. Instead, in this situation, the employer would then determine the feasibility of extending a reasonable accommodation that does not cause undue hardship.
Personality tests are preemployment tests that are used to gather information about a candidate’s personality traits, motivation, discipline, and other characteristics.
Preemployment Drug Testing
Preemployment drug testing is urine (or, less often, blood or hair sample) that is subjected to testing to identify the presence of illegal drugs. When used in a preemployment context, drug tests are not considered to be medical tests. Most employers, however, do not conduct drug testing until a conditional offer of employment has been extended to, and accepted by, the candidate.
Prepromotion Drug Testing
Prepromotion drug testing is conducted to decrease the likelihood of promoting someone who is currently using/abusing illegal drugs.
Measuring Recruiting Costs and Effectiveness
There are numerous ways to calculate the costs associated with recruiting as well as the overall effectiveness of the recruiting process. Some of those measures focus on the actual recruiting process (for instance, cost per hire or time to file), while others take a more forward-looking approach (for instance, voluntary or involuntary turnover percentage for new hires within the first 3, 6, or 12 months).
The most critical points to keep in mind about measuring recruiting costs and interviewing effectiveness are these:
- Do it.
- Do it consistently.
Historically, HR professionals can —and often have — become their own worst enemies by settling for subjective and qualitative answers to the question, “How am I doing?” The good news, however, is that this offers us yet another opportunity to learn to be more strategic. So, in conjunction with your clients and with HR leadership, determine which measures will be most relevant and valuable. Ask questions such as these:
- Which recruiting sources yield the most applicants?
- Which recruiting sources yield the best qualified applicants?
- On that note, how do you define a “good applicant”? Is it one who meets the minimum qualifications of the position? One to whom an offer of employment is extended? One who accepts an offer of employment? Or one who is still with the organization 3, 6, or 12 months after being hired?
- Which recruiting sources are the least expensive on a cost-per-hire basis?
- How much time, effort, and attention does each recruiting source require from HR, or from the manager, during the recruiting process?
To calculate many of these measures, you’ll need to calculate yield ratios. A yield ratio calculates the percentage of applicants from a particular recruiting source who advance to a particular stage in the recruiting process. For instance, one pertinent yield ratio might refer to the number of résumés from minimally (at least) qualified candidates as a percentage of the number of total résumés received (from particular recruiting sources). It might also be helpful to compare this yield ratio for different recruiting sources.
Cost per Hire
HR professionals must be well versed in calculating accurate cost per hire metrics. The formula for calculating cost per hire follows:
Generally, this calculation will be made over a one-year period.
One of the most crucial considerations for calculating cost per hire accurately is ensuring that all costs —internal as well as external, and direct as well as indirect —are included in the numerator of this calculation. Otherwise, the cost per hire will be inaccurate (and understated). Review, and perhaps even use, cost-per-hire calculators that are available online through reputable sources.
HR professionals must also be well-versed in calculating turnover. Turnover measures the percentage of the workforce that has left the organization during a specified period of time.
Most often expressed on an annual basis, turnover is calculated as follows:
This information can be used in a number of ways—one of which is to help predict future turnover rates, which can affect staffing needs. Turnover can be voluntary (for instance, an employee accepts employment at another organization) or involuntary (for instance, an employee is laid off). Turnover can be broken down in any number of ways:
- Total for the entire organization
- Total for one—or more—particular departments
- FLSA (exempt or nonexempt) status
- Length of service
Please also ensure that you review information about adverse impact, discussed earlier in this chapter.