Introduction Situation Boeing cut 10,000 jobs in 2009 but almost none of those positions were senior employee

positions. Boeing learned from its experience in the 1990s, when it offered voluntary buyout plans as part of its workforce reduction. It was hurt when, after the recession ended and the company tried to expand, it was hurt by labor shortages in its jobs that required the most experience In fact, older workers have experienced less job loss during the recent recession. Discussion Question 1. Explain the various considerations presented by aging U.S. workforce for the human resource planning function. First, aging of the labor force affects HRM because as the workforce ages, HRM has to focus more on retirement plans and costs of healthcare benefits. HRM will have to deal with the change in generations and values. As workers get older, HRM may have to give them fewer hours and fewer responsibilities. HRM will have to find new ways to recruit new and young employees. HR professionals will spend much of their time on concerns related to retirement planning, retraining older workers, and motivating workers whose careers have reached a plateau. Organizations will struggle with ways to control the rising costs of health care and other benefits. Additionally, older workers tend to occupy the best paid jobs, which blocks the hiring or advancement of younger workers Organizations will have to find ways to attract, retain, and prepare the youth labor force. As more and more of the workforce reaches retirement age, some companies have set up mentoring programs between older and younger workers so that knowledge is not lost but passed on. Figure 2.1: Age Distribution of U.S Labor Force, 2008 and 2018

The Bureau of Labor Statistics (BLS) has projected that from 2008 to 2018, the total U.S. civilian labor force will grow from 154 million to 167 million workers. Figure 2.1 highlights the changes to the labor force Some of the expected change involves the distribution of workers by age. From 2008 to 2018, the fastest-growing age group is expected to be workers 55 and older. The 25- to 44-year-old group will increase its numbers slightly, so its share of the total workforce will fall. And young workers between the ages of 16 and 24 will actually be fewer in number. More older workers are asking to work part-time or for only a few months at a time as a way to transition to full retirement. Although recruiting and retaining older workers may present some challenges related to the costs of health care and benefits, companies also are benefiting from these employees talent and experience. Aging workers bring experience and stability to a company Example:

Borders Group has adapted hiring and retention practices to capitalize on older workers. Half of books purchased in US are made by customer over the age of 45, so the company believes older workers can relate well to these customers. To attract and retain older workers, Borders add medical and dental benefits for part-time workers and prepare a program which workers can work half the year at Borders store in one part of the country and half the year at another location, which accommodates those who want to spend winter in warm climates. Since Borders launched the program, employee turnover decreased, and the turnover rate among workers over age 50 is one-tenth the turnover of the employees under 30. Some strategies Employing Temporary Workers Advantages:

Operational flexibility

The use of temporary workers frees the firm from many administrative tasks and financial burdens(health insurance, pension, worker's compensation, life insurance, etc) associated with being the employer of record. Small companies that cannot afford their own testing programs often get employees who have been tested by a temporary agency. Many temporary agencies train employees before sending them to employers, which reduces training costs and eases the transition for both the temporary worker and the company.

 Because the temporary worker has little experience in the host firm, she brings an objective perspective to the organizations problems and procedures that is sometimes valuable. Also, since the temporary worker may have a great deal of experience in other firms, she can sometimes identify solutions to the host organizations problems that were confronted at a different firm Disadvantages: The potential conflicts between permanent and temporary employees

Smaller companies may use temporary agencies to do their employment screening for them. After 90 days, if the employee works out, he or she is often offered a permanent position. Training may be done by the agency as well. The potential conflicts between permanent and temporary employees need to be managed. There are several key issues:

The organization needs to have bottomed out first in terms of any downsizing

before it starts bringing in temporaries.

If the organization is concerned about the reactions of full-time workers to the

temporaries, it may want to go out of its way to hire nonthreatening temporaries. For example, although most temporary workers want their temporary assignments to turn into full-time work (75% of those surveyed expressed this hope), not all do. Some prefer the freedom of temporary arrangements. These workers are the ideal temporaries for a firm with fearful full-time workers. In many cases, temporary staffing firms have access to this type of employee, and this explains the massive growth rate for firms in that industry. For example, Manpower Inc., one of the larger temporary employment agencies, has seen an increase in stock price of more than 35% between 2005 and 2007. The organization, however, must be careful not to create the perception that temporary workers are second-class organizational citizens. in attempting to convince full-time employees that they are valued and not about to be replaced by temporary workers,
Finally, HR staff can also prevent feelings of a two-tiered society by ensuring that the temporary agency provides benefits to the temporaries that are at least minimally comparable with those enjoyed by the full-time workers with whom they interact. This not only reduces the benefit gap between the full-time and part-time workers but also helps attract the best part-time workers in the first place. Outsourcing: This occurs when a firm is interested in a broad set of services performed by an outside organization

Usually companies outsource to take advantage of specialized skills, cost efficiencies and labor flexibility. Example A bank may give a large IT company in that country the responsibility for managing its network and IT infrastructure. The IT company would then procure people to do that as part of the contract. Offshoring: a special case of outsourcing where the jobs that move actually leave one country and go to another. Benefits of offshoring are usually lower costs, better availability of skilled people, and getting work done faster through a global talent pool. Example British Airways: In 1996, British Airways opened an offshore processing center in Mumbai, India, to handle some of its operations work. Customer relations (handling complaint letters rather than phone calls) and passenger revenue accounting (an airline finance function) were the first two major business tasks moved to India. The ROI from offshoring included savings of nearly $23 million per year per 1,000 jobs it relocates to India, reduced delays in answering complaint letters (from more than two weeks to less than three days), shorter training periods, and higher work quality. The new offshore passenger revenue accounting center became so efficient that it began to service other airlines, producing additional revenue streams for BA. Steps to take that help ensure the success of outsourcing strategies include: When choosing an outsourcing vendor, it is usually the bigger and older, the better. Small overseas upstarts often promise more than they can deliver and take risks that one is not likely to see in larger, more established contractors. Jobs that are proprietary or require tight security should not be outsourced. One software developer that hired an Indian firm to debug its programs later found that the firm copied the software and sold it under its own brand name. In general, the work that is outsourced needs to be modular in the sense that the work is self-contained and does not require the outsourcing firm to provide any information that is best kept secret for competitive reasons. It is a good idea to start small and monitor the work very closely, especially in the beginning. Typically, if problems are going to develop, they manifest themselves quickly to those who are paying close attention Altering pay and hours:
-

Companies facing a shortage of labor may be reluctant to hire new full-time or part-time employees. Under some conditions, these firms may have the option of trying to garner more hours out of the existing labor force. Despite having to pay workers time-and-a-half for overtime production, employers see this as preferable to hiring and training new employeesespecially if they are afraid that current

demand for products or services may not extend to the future. Also, for a short time at least, many workers enjoy the added compensation. However, over extended periods, employees experience stress and frustration from being overworked in this manner. - In the face of a labor surplus, organizations can sometimes avoid layoffs if they can get their employees to take pay cuts. For example, Hewlett-Packard cut salaries between 3% and 20% and reduced their contributions to 401 (k) plans in the face of the last recession, and many other firms engaged in the same sort of practices. Alternatively, one can avoid layoffs and hold the pay rate constant but reduce the number of hours of all the workers Example:

Pella Windows shifted from a five day work week to a four day work week during the recent recession but it kept every worker on the payroll. Even though the employees preferred to work a full week, most agreed that this was the humane way to reduce the surplus of labor relative to laying off 20% of the workforce altogether. Additionally, Pella thought the recession would be short, and that by not laying off workers, the company would be able to ramp up quickly when the forecasted spike in demand occurs.

2. The Human Resource Recruitment ProcessHuman resource recruitment is any

organizational activity that is designed to affect the number of people who apply for vacancies, the type of people who apply for them, and/or the likelihood that those applying for vacancies will accept positions if offered. The goal of recruitment is to ensure that when a vacancy occurs, the organization has a number of reasonably qualified applicants to choose from. In general, all companies have to make decisions in three areas of recruiting: (1) personnel policies, which affect the kinds of jobs the company has to offer; (2) recruitment sources used to solicit applicants, which affect the kinds of people who apply; and (3) the characteristics and behaviors of the recruiter. These, in turn, influence both the nature of the vacancies and the nature of the people applying for jobs in a way that shapes job choice decisions. A. Personnel policies, in relationship to recruitment, affect the nature of the vacancies for which people are required and impact the ability of the organization to recruit and its level of requiring success. 1. Internal versus External Recruiting: Job SecurityA decision must be made on

whether to recruit from within or outside the organization. Companies that recruit from within often use a job posting program in which vacancies are publicized on bulletin boards, in company newsletters, or in memos. Employees can apply and typically receive first consideration before the organization searches externally. Such policies make it clear that there are opportunities to advance and increase the level of skills within the organization. Example: A good example of the power of tapping internal sources of recruits is provided by Edwards Lifesciences, a medical device maker that has grown an average of 7% a year for the last 10 years. Edwards Lifesciences workforce planning model begins with the identification of the 75 most critical jobs in the company and then identifies two or three individuals that would serve as potential excellent replacements or successors for the person currently occupying that job. Identifying these internal candidates early allows the firm to invest in them slowly, but surely, providing them with extra training both in technical areas and general leadership skills. This gives the company a deep bench from which to draw talent, and indeed more than 70% of its most critical jobs are staffed from this bench.65 The potential for extra training and the hope of upward advancement

is a highly motivating element of the culture and helps keep attrition and turnover to some of the lowest rates in the industry. 2. Extrinsic and Intrinsic RewardsLead-the-market pay strategy is a policy of paying higher than current market wages. This creates a distinct advantage in recruiting since higher pay can make up for a job's less attractive features. However, employees in todays labor pool are attracted to other incentives besides money. There is also pressure on human resources to deliver the best employees, so higher productivity, quality, and so on, are achieved. Because pay is an important job characteristic for almost all applicants, companies that take a lead-the-market approach to paythat is, a policy of paying higher thancurrent-market wageshave a distinct advantage in recruiting. Pay can also make up for a jobs less desirable featuresfor example, paying higher wages to employees who have to work midnight shifts. We merely note here that lead policies make any given vacancy more attractive to applicants. There are limits to what can be done in terms of using pay to attract people to certain jobs, however. For example, the U.S. Army, because of the ongoing wars in Iraq and Afghanistan, struggled and failed to meet its recruiting goals for new soldiers, despite offering a $20,000 signing bonus and a $400 a month raise in base pay for infantry positions. As General Michael Rochelle, head of Army recruiting, notes, We cant get started down a slippery slope where we are depending on money to lure people in. The reality is that while we have to remain at least competitive, were never going to be able to pay as much as the private sector. To offset this disadvantage in extrinsic financial rewards, the Army has to rely on more intrinsic rewards related to patriotism and personal growth opportunities that people associate with military service. For example, Rochelle suggests that the idea that being a soldier strengthens you for today and for tomorrow, for whatever you go on to do in life, that clearly resonates with them, and thus this serves as an alternative means of appealing to recruits 3. Image advertising promotes an organization as a good place to work in general and may be particularly important for organizations in highly competitive labor markets that perceive themselves as having a bad image. B. Recruitment SourcesSince recruitment sources are unlimited, an organization

must decide how to reach the best sources of potential employees. 1. Internal versus External Sources

We discussed internal versus external sources of recruits earlier in this chapter and focused on the positive effects that internal recruiting can have on recruits perceptions of job security. We will now discuss this issue again, but with a focus on how using internal sources affects the kinds of people who are recruited.

Relying on internal sources is useful since employees are well known to the firm, are knowledgeable about the organization and jobs and generally cheaper and faster to fill vacancies internally However, there may not be enough internal recruits There are several good reasons why organizations might decide to recruit externally. First, for entry-level positions and perhaps even for some specialized upper-level positions, there may not be any internal recruits from which to draw Second, bringing in outsiders may expose the organization to new ideas or new ways of doing business. Using only internal recruitment can result in a workforce whose members all think alike and who therefore may be poorly suited to innovation. For example, for most of its 100-year history, retailer JCPenney followed a practice of strictly promoting from within. This led to a very strong culture that in many ways was still closely related to the one first established by JCPenney himself in the late 1800s. The companys image was very conservative, and the behavior and attire of the employees was very formal. This culture made it difficult to attract and retain younger workers, however, and the accounting department estimated that turnover was costing the company $400 million a year. To stem the tide, JCPenney brought in an outsider, Mike Ullman, as the new CEO in 2006, and his first steps in redirecting the company were to loosen up the culture and hire more outsiders into key management positions. This was central to the CEOs new competitive strategy, in the sense that, in Ullmans own words, In retailing today, you have to realize there is too much property and too much merchandisewhat there isnt enough of is talent. If I had a choice to honor the past and lose, or move forward and win, I pick winning Finally, recruiting from outside sources is a good way to strengthen ones own company and weaken ones competitors at the same time. This strategy seems to be particularly effective during bad economic times, where counter cyclical hiring policies create once-in-a-lifetime opportunities for acquiring talent.76 For example, during the most recent recession, many firms that were top performers and hence able to weather the storm better than their lower-performing competitorsviewed this as an excellent opportunity to poach the highest-performing individuals within struggling companies. Thus, for many organizations, times of crisis and turbulence are actually the best time for them to shine by leveraging their current talent and success to bring in more talent and achieve even greater success over the long term. 2. Direct Applicants and Referrals

a. Direct applicants are people who apply for a vacancy without prompting from an organization. Direct applicants tend to be one of the best sources, since they are also low cost. b. Referrals are people who are prompted to apply for a vacancy by someone within the organization. First, many direct applicants are to some extent already sold on the organization. Most of them have done some homework and concluded that there is enough fit between themselves and the vacancy to warrant their submitting an application. This process is called se lf selection. A form of aided self-selection occurs with referrals. Many job seekers look to friends, relatives, and acquaintances to help tind employment, and evoking these social networks can greatly aid the job search process for both the job seeker and the organization. Current employees (who are knowledgeable of both the vacancy and the person they are referring) do their homework and conclude that there is a fit between the person and the vacancy; they then sell the person on the job. These kinds of word-of-mouth endorsements from credible sources seem to have a particularly strong effect early in the recruitment process when people are still unfocused in their search process 3. Advertisements in newspapers and periodicals typically are less effective than direct applicants or referrals and is more expensive. Jobs should be described very specifically in advertisement. Local newspapers, although commonly used do not target skill levels very well. Journals, periodicals, and/or cable television may be useful in reaching the appropriate audience. 4. Electronic Recruiting The growth of the information highway as opened up new vistas for organizations trying to recruit talent. Ways to get into e-recruiting include: a. Use an organizations own web page to solicit applications.

b. Use large, well known job sites such as Monster.com, HotJobs.com, or CareerBuilder.com. 5. Public and Private Employment Agencies The Social Security Act of 1935 requires that everyone receiving unemployment compensation be registered with a local state employment office. These state employment offices work with the U.S. Employment Service (USES) to try to ensure that unemployed individuals eventually get off state aid and back on employer payrolls. To accomplish this, agencies collect information from the unemployed about their skills and experiences. Employers can register their job vacancies with their local state employment office, and the agency will attempt to find someone suitable using its computerized inventory of

local unemployed individuals. The agency makes referrals to the organization at no charge, and these individuals can be interviewed or tested by the employer for potential vacancies. Because of certain legislative mandates, state unemployment offices often have specialized desks for minorities, handicapped individuals, and Vietnam-era veterans. Thus, this is an excellent source for employers who feel they are currently underutilizing any of these subgroups. Public employment agencies serve primarily the blue-collar labor market; private employment agencies perform much the same service for the white-collar labor market. Unlike public agencies, however, private employment agencies charge the organization for the referrals. Another difference between private and public employment agencies is that one doesnt have to be unemployed to use a private employment agency. One special type of private employment agency is the so-called executive search firm (ESF). These agencies are often referred to as headhunters because, unlike the other sources we have examined, they operate almost exclusively with people who are currently employed. Dealing with executive search firms is sometimes a sensitive process because executives may not want to advertise their availability for fear of their current employers reaction. Due to the sensitive nature of this process, the most successful ESFs tend to develop trusting, long-term relationships with high-skilled employees, and serving as the buffer between the employer and the recruit becomes the core of their business model.89 Along with newspapers and classified advertisements, ESFs may have suffered the most damage in recent years due to the combination of reduced employment levels because of the recent recession on the one hand and increased use of low cost electronic search vehicles on the other. Many have questioned whether the ESFs have a viable business model, given the recent changes in the economy and in technology. 6. Colleges and Universities Most colleges and universities have placement services that seek to help their graduates obtain employment. Indeed, on-campus interviewing is the most important source of recruits for entry-level professional and managerial vacancies. Organizations tend to focus especially on colleges that have strong reputations in areas for which they have critical needs (chemical engineering, public accounting, or the like). Many employers have found that to effectively compete for the best students, they need to do more than just sign prospective graduates up for interview slots. One of the best ways to establish a stronger presence on a campus is with a college internship program. These kinds of programs allow an organization to get early access to potential applicants and to assess their capacities directly. These programs also allow applicants to gain firsthand experience with the employer, so that both parties can make well-informed choices about fit with relatively low costs and commitment. Another way of increasing ones presence on campus is to participate in university job fairs. In general, a job fair is a place where many employers gather for a short time to meet large numbers of potential job applicants. Although job fairs can be held anywhere (such as at a hotel or convention center), campuses are ideal locations because of the many well-educated, yet unemployed, individuals who live there. Job fairs are a rather

inexpensive means of generating an on-campus presence and can even provide one-onone dialogue with potential recruitsdialogue that could not be achieved through less interactive media like newspaper ads. C. RECRUITERS The last part of the model presented in Figure 5.4 that we will discuss is the recruiter. We consider the recruiter this late in the chapter to reinforce our earlier observation that the recruiter often gets involved late in the process. In many cases, by the time a recruiter meets some applicants, they have already made up their minds about what they desire in a job, what the current job has to offer, and their likelihood of receiving a job offer. Moreover, many applicants approach the recruiter with some degree of skepticism. Knowing that it is the recruiters job to sell them on a vacancy, some applicants may discount what the recruiter says relative to what they have heard from other sources (like friends, magazine articles, and professors). For these and other reasons, recruiters characteristics and behaviors seem to have less impact on applicants job choices than we might expect. Recruiters Functional Area. Most organizations must choose whether their recruiters are specialists in human resources or experts at particular jobs (supervisors or job incumbents). Some studies indicate that applicants find a job less attractive and the recruiter less credible when he is a personnel specialist.93 This does not completely discount personnel specialists role in recruiting, but it does indicate that such specialists need to take extra steps to ensure that applicants perceive them as knowledgeable and credible. Recruiters Traits. Two traits stand out when applicants reactions to recruiters are examined. The first, which could be called warmth, reflects the degree to which the recruiter seems to care about the applicant and is enthusiastic about her potential to contribute to the company. The second characteristic could be called informativeness. In general, applicants respond more positively to recruiters who are perceived as warm and informative. These characteristics seem more important than such demographic characteristics as age, sex, or race, which have complex and inconsistent effects on applicant responses. Recruiters Realism. Perhaps the most well-researched aspect of recruiting deals with the level of realism that the recruiter incorporates into his message. Because the recruiters job is to attract candidates, there is some pressure to exaggerate the positive features of the vacancy while downplaying the negative features. Applicants are highly sensitive to negative information. On the other hand, if the recruiter goes too far in a positive direction, the candidate can be misled and lured into taking the job under false pretenses. This can lead to a serious case of unmet expectations and a high turnover rate. In fact, unrealistic descriptions of a job may even lead new job incumbents to believe that the employer is deceitful.95 Many studies have looked at the capacity of realistic job previews to circumvent this problem and help minimize early job turnover. On the whole, the research indicates that realistic job previews do lower expectations and can help reduce future turnover in the workforce.96 Certainly, the idea that one can go overboard in selling

a vacancy to a recruit has merit. However, the belief that informing people about the negative characteristics of the job will totally inoculate them to such characteristics seems unwarranted, based on the research conducted to date.97 Thus we return to the conclusion that an organizations decisions about personnel policies that directly affect the jobs attributes (pay, security, advancement opportunities, and so on) will probably be more important than recruiter traits and behaviors in affecting job choice. Still, helping applicants better understand their own needs and qualifications and then linking this to the true nature of current openings may be best in the long run for all concerned, even if it does not result in an immediate hire.98 Enhancing Recruiter Impact. Although research suggests that recruiters do not have much influence on job choice, this does not mean recruiters cannot have an impact. Organizations can take steps to increase the impact that recruiters have on those they recruit. First, recruiters can provide timely feedback. Applicants react very negatively to delays in feedback, often making unwarranted attributions for the delays (such as, the organization is uninterested in my application).99 Second, recruiting can be done in teams rather than by individuals. As we have seen, applicants tend to view line personnel (job incumbents and supervisors) as more credible than personnel specialists, so these kinds of recruiters should be part of any team. On the other hand, personnel specialists have knowledge that is not shared by line personnel (who may perceive recruiting as a small part of their real jobs), so they should be included as well.