Title: The decision to recruit online: A descriptive study Abstract: Online Recruitment is a new tool, at the disposal of the

HR departments, which has known a phenomenal success in very short time. This paper presents the findings of some descriptive research, involving UK IT companies. The research tries to identify the effect that the perceived attributes of the practice have on the decision of companies to recruit through the Internet. The attributes tested are cost effectiveness; recruitment cycle time; response rate; quality of response; impact on the image of the company; targeting of specific niches; targeting of the passive job-seeker; worldwide coverage; necessary resources, time and effort to implement; attractiveness of the mean to the job seekers (especially IT professionals and young graduates); risk of overload of answers; and impact of the size and reputation of the company. The paper provides an insight on how the companies perceive and value online recruitment. Keywords: Online Recruitment, advantages, disadvantages, UK, IT companies

Author: Eleanna Galanaki, BSc in Economics from the Athens University of Economics and Business, MA in HRM from the University of Newcastle upon Tyne, Graduate member of the CIPD, currently studying for a PhD at the Athens University of Economics and Business. Research interests: Recruitment, Outsourcing, Measuring of HR effectiveness. Contact Details: Eleanna Galanaki, Professor Nancy Papalexandris Office, Athens University of Economics and Business, 12 Derigny Street, Athens 104 34, Greece, email address: eleanag@aueb.gr Acknowledgements: I would like to thank Professor Nancy Papalexandris for her valuable assistance and helpful comments during the editing of this article

Introduction Though one of the latter steps in the recruitment process, the choice of its recruitment tool, remains fundamental for any company. The choice of the recruitment method requires that the organisation goes through an elaborate procedure considering the cost of reaching the target group, the time scales involved, the fit with the organisational culture and the opportunity presented to enhance the organisations public relations. One of the newest recruitment tools at the disposal of employers is online recruitment. Online Recruitment Defined The terms Online recruitment (O.R.), e-cruiting, cybercruiting, or Internet recruiting, imply the formal sourcing of job information online. It is a fairly new practice. The first references to O.R. appear in articles of the mid-80s (Gentner, 1984, Casper, 1985), while systematic reference to the O.R. in the HR journals begins almost a decade later, in the mid-nineties, when IT companies and Universities begin to amply use the Internet. Since then, the Online Recruitment industry has been developing and it is estimated that in Europe it will have soared in value from just over 50 million in 1999 to 3.8 billion by 2005. (Taylor, 2001) Due to the novelty of the term, different authors have different concepts of what O.R. consists of. In this paper we take a view on O.R. that has been promoted by the Chartered Institute of Personnel and Development (CIPD, 1999). This states that the most common ways to use the Internet as a means to recruit are: To add recruitment pages to the existing organisation site. It is a very common practice at the moment and its major advantage, namely the minimal cost associated with developing a page on the corporate site, puts it forward as the smartest way to recruit on the Internet. (Scheyer & McCarter, 1998)

To use web sites specialised in recruiting employees, like online recruiters, job portals, online job boards or job agencies. Those sites ultimately act as mediums that connect the companies with potential applicants. The dedicated recruitment websites can take the form of Job listing websites, which are very similar to printed classified advertisements; work-wanted sites, which emphasize the prospective employees side; and finally online recruiters who make use of other websites as a resource for finding clients and customers (Rudich, 2000, Taylor, 2001). To use a media site. In this case, electronic ads appear similarly and simultaneously with traditional printed ads in the original paper (newspaper or magazine). Classifieds on the newspapers websites are sometimes offered free to anyone paying for a print advertisement. The scope of O. R. also involves providing the possibility to conduct remote interviews and assessments, such as psychometric or aptitude tests online, and using Banner Ads and Smart Agents to search the web. Interactive tools, which link the corporate databases with the website, like search engines, interactive application forms, e-mail auto-respondents and electronic mailing lists, are also at an early practice stage (Dysart, 1999, Taylor, 2001).

Factors affecting the decision to recruit through the Internet In most relevant literature there are some commonly identified benefits and downsides for the companies using O.R. The commonly cited advantages and drawbacks of O.R. in the literature are presented in table 1, as follows: Take in Table 1

Research Methodology The main aim of the research undertaken was to identify the factors, perceived advantages and disadvantages, that affect the decision of companies to use O.R. The study was bound to be exploratory, since there was not much information about the situation at hand. The basic assumption that drove the sample selection was that the IT companies should present a distinct behaviour pattern in relation to O.R. This emanated from the particular relation attributed between IT jobs and online recruitment in the literature (Finn, 2000), the greater easiness in technically implementing the O.R. development project and the intense shortage of labour supply for IT professionals at the time,(Lamb 2000b, Rana, 1999 and Kucznski, 1999), which stressed the IT companies to intensify the use of all recruitment tools. Furthermore, IT companies were generally expected to use O.R. as a mean to enhance their image of being innovative and adopting new practices and ideas. It was anticipated, therefore, that the IT companies should be more into online recruitment and probably have gained considerable experience, which the rest of the companies lacked. A survey was carried out, in the form of a postal questionnaire, which was further followed by interviews with some of the respondents. The sample consisted of all the 99 IT companies whose shares are traded in the London Stock Exchange Market. Postal questionnaires and electronic forms to complete were addressed either to the recruitment manager or, alternatively, to the person whose name figured on the recruitment announcement on the Web, while the interviews were mostly held with the HR manager who was most familiar with the online recruitment practice.

Research Findings In total, 34 of the 99 originally contacted companies replied. seven companies that do not use online recruitment abstained from completing the questionnaire, but they replied by post or e-mail in order to disclose information on their current situation concerning online recruitment. In relation with the factors affecting the decision to adopt O.R., the results were unclear, although a general pattern has emerged. Figures 1 and 2 present the findings from the questionnaires about the factors that influence the companies decision making. Take in Figure 1 From a brief view of figure 1, it appears that the cost effectiveness and the high response rate come first, followed by the access to the passive job seeker and the marketing purpose of O.R., which, however, seem to be of the most problematic notions in the O.R. literature. On the other hand, the factors quality of response and worldwide coverage are the least important for the respondents. Take in Figure 2 As shown in figure 2, the major negative factor considered is the risk of overload of applicants, along with the fact that the Internet still is not the first place people who look for a job will look at. The least considered negative factor was the lack of the resources and the extra effort involved when putting to practice the O.R. project. The findings concerning the impact of each positive and negative attribute of Online Recruitment that were tested are summarised in table 2. Take in Table 2

Discussion

Implied assumption 1: IT industry: A distinct market sector, in what concerns recruitment? A comparison of the outcomes of a previous recruitment survey run by CIPD for the year 2000 (CIPD, 2000, Merrick, 2000) and the findings of the current research is . presented in table 3. Take in Table 3 It is obvious that the findings of the current research are different from the findings of the CIPD for the total of the UK economy. This suggests that the IT companies have a more established experience in the practice of O.R., and therefore that they might also have a clearer perception of the attributes of O.R. Online Recruitment = Low cost A general inference from the analysis is that the O.R. decision is mostly a matter of cost. Low cost is the major factor of O.R. attractiveness, since it eases the companies decision making, by minimising the risk involved in the difficult step of changing established recruitment practices. Importance of the size and reputation of the company A further deduction from the issues discussed here is that the decision to adopt O.R. is still a privilege of the largest and best-known companies. This could be partly a matter of the relatively smaller risk that large companies have to face, by spreading the financial burden. Therefore, O.R. is still more popular and better developed in large and well-known companies, despite its undeniable potential to be successfully implemented by small companies, due to its low budget and user simplicity. (Raymond, 2001, Scheyer and McCarter, 1999) It has to be noted that figure 2 only

presents the answers of companies that have actually adopted some e-cruiting practice. Given the additional information provided in letters and e-mails from the companies not using O.R., I conclude that were their position taken into account, the effect of the size of the company on O.R. should be rated as most important factor. According to one of the interviewees, it was a major reason for their company not to use any O.R. agency, while two other interviewees stated that they envisage adopting some software for automated primary selection for online applications. table 4 assembles the findings from the questionnaire with the informal data, gathered through letters or e-mails: Take in Table 4 Relation of Satisfaction with particular attributes of online recruitment Both a Pearson Correlation and a Spearman rank correlation coefficient tests were run and both tests indicated the existence of positive correlation between the extent of use of online recruitment and the satisfaction from it, as shown in table 5. Take in Table 5 However, the existence of such a positive relation cannot be easily interpreted, and there are two distinct explanations. Either the high satisfaction that some companies have experienced from their use of e-cruiting induced them to invest and intensify the use of this tool, or the enhanced utilisation of it results in higher satisfaction. At this point it is risky to sustain either position, as there is no hint on the direction of the influence. Is it all about recruitment, or marketing and fear of staying behind? One of the most puzzling attributes of O.R. is its effect on the corporate image. As the marketing purpose of O.R. has been greatly stressed in the literature, it was anticipated that perhaps the corporate image, rather than recruitment itself, is the

major focus of O.R. efforts. The findings of the questionnaire supported the assumption that the positive effect on the corporate image affected the decision to use O.R. 85% of the respondents do take into account the marketing purpose of the tool when they decide to use it. It is important though, that for 57.7%, this is a secondary consideration for the HR department. Therefore, although most companies take into consideration the marketing purpose of O.R., this appears to be mostly a secondary factor in their decision to adopt O.R., with the exception of certain companies, for which the development of O.R. is taken up by the marketing or IT department, with the HR department left outside the decision process. In two of the companies interviewed, the marketing department had taken all the steps to the development of the process, which, in both cases, resulted in the HR department neither having active involvement in the O.R. process, nor forming any specific ideas on the effectiveness of the medium. Quality of response For the majority of the companies, better quality through the Internet was questionable. Surprisingly, however, in two interviews the interviewees sustained that the Internet does provide better quality of applicants. In one interview, in particular, it was upheld that the Internet agencies provide the company with fewer but substantially better applicants, than traditional recruitment agencies do. International reach The ability of O.R. to successfully reach the best applicants from all over the world has been mostly promoted in the American literature, which could be related to a somewhat greater internationalisation of the American firms. A MacKinsey report revealed that European IT players are relatively slow to internationalise their business

activities (Hoch et. al., 2000). Probably this explains why the international grip of O.R. was not of particular interest to the respondents of the survey. Recruitment cycle time The research did not agree with the eminent assumption about the savings in time achieved through O.R. One manager characteristically stated that the savings in time are probably exaggerated, since the company has not experienced such effect since they adopted the practice of e-cruiting. The passive Job Seeker The other doubtful issue about O.R. concerns its potential of reaching the passive job seeker. Although widely supported in the literature, it is debatable whether most companies actually succeed in their efforts to that direction. The common practice of keeping databases of online speculative job applications from the corporate web site cannot be overseen as a way to target the passive job seeker and 86% of the respondents accentuated the importance of the passive job seeker to the decision to use O.R. However, from the interviews, only one company has actually implemented a method to attract people who are not actively searching for a job and keeps a record of them to use when future vacancies arise. No company of those contacted practices active search on the Web for resumes matching the post to fill. This is a finding that presents considerable difficulty to explain. Probably most of the companies feel that O.R. has the potential to recruit the passive job seeker and that was a major factor in their decision to adopt this method. Nevertheless, they mostly rely on fate to access the passive job seeker, rather than actively search for such people online. The target niche For the sector in study a major part of the human capital comes from the group of young IT graduates, so the minimal concern on the fact that the Internet is considered

best for the recruitment of ITs and young graduates was somewhat expected. As most interviews revealed, particular interest is shown for the recruitment of recent graduates, while the majority of the staff are employed in IT positions (more than 60% of their total staff; in one case 95%). For those companies, this attribute of O.R. was not seen as restriction, but rather as an advantage. There was a general agreement that the Internet still is not the first place that one will look for a job. However, the interviews revealed that for some positions it is better to look on the Internet, even if that is not yet a mass job search tool. As a company put it most characteristically, the young IT graduate most probably will first search on the Internet, and secondly on the University Careers Service.

Conclusions Most of the considerations on O.R. that surfaced during the research are not new in the recruitment literature. In fact, cost, time, coverage, reach of applicants, quality of response and impact on the corporate image are traditional considerations in the decision on the recruitment method. The suitability of the media for certain specialities and the balance between overload of answers and lack of answers to choose from, as well as the effect that the reputation of the company has on the effectiveness of any recruitment effort have also been traditionally widely discussed in the literature (Sisson, 1994: 194). In fact, several factors that have been promoted as downsides of O.R. are mostly symptoms of poor recruitment practice. An example is the consideration over the risk of overload of answers. Although the Internet reaches people from wider geographical and social contexts than advertisement on a single regional or national paper, it also provides for the possibility to better inform the applicant on the job description. The extended word limit of all O.R. job postings

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allows the company to communicate accurate and detailed information about the job to prospective employees, allowing them to self-screen and reducing the number of unfitting applicants. This effect falls into the realism hypothesis, according to which, the realism of the job description that is provided to the candidate increases the effectiveness of the recruiting source (Griffeth et. al., 1997). It seems, then, that the effectiveness of the medium depends mostly on the implementation rather than on the recruitment source itself and many of the characteristics that have been attributed to the O.R. are highly dependent on the calibre of the whole recruitment process. Concerning the future of O.R., the most popular position holds that its use will continue to rise as it has up to now, following the expected rise of the use of Internet, in general. In addition to that, the recruitment-related software has become more readily available and cost-effective, a tendency that most probably will prevail in the future, while the HR-departments are seen as gaining high-speed access to the Internet at no cost, as part of the overall online adjustment of most corporations. (Hansen, 1998, Taylor 2001) On the other hand, it could be that the up to now raise of O.R. has been exaggerated, due to the high labour demand for technical and professional positions around the world, that made such recruitment practice seem successful (Rudich, 2000). Given the findings of this research, concerning the general satisfaction and positive attitude of the companies towards O.R., it would be expected that, even if O.R. does not become the major recruitment tool, or proves to own part of its success to the tight labour market conditions, it definitely is here to stay. On the other hand, advanced tools, like resume scanning, online self-screening, video-conferencing and online psychometric tests, which are already used by companies like Cisco (Personnel Journal 1996, Useem, 1999), will be more broadly used in the future. Moreover, the

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provision of Internet directories that direct candidates to any site that has posts matching their criteria has already started and is expected to force the recruitment websites to adapt and offer more developed services than those of pure middlemen, in order to survive. (People Management, 2000)

Implications The implications surfacing from this current research are as follows: Implications for recruiting companies: The recruiting companies that use Online recruitment should see to fully benefit from this practice, by applying all the traditional best practice guidelines concerning the evaluation of the recruitment needs, the provision of full necessary information on the job, (from job description to job specification e. t. c.) and the specification of the recruitment target niche. The O.R. provides them in this respect with enhanced capabilities, like extended word limit and use of specialised agents, keywords and web sites to target the right people. The main deduction from this study was that the O.R., no matter how revolutionary, is just a channel and that the success of its implementation depends on the thorough planning and on the use of the established HR practices concerning the recruitment. Legal Implications: It is imperative to legally regulate the ownership of the labour information gathered on the Internet (Thaler-Carter, 1998, Piturro, 2000). The major ethical issue around O.R. concerns the confidentiality and trust during resume handling by online recruiters. The existing law in the UK stipulates only that a candidates information must only be disclosed in the course of looking for employment opportunities, but not if the candidate has made any requests to remain confidential. (Anstead, 2000) The

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common practice of companies to share the resumes sent to them with other firms, is seen as unfair to the candidate who has only applied for a particular position. Potential problems include a company forwarding a resume to a candidates current employer, as the result of a resale. Concerns have also been raised over the common practice of recruitment sites to post fictitious vacancies in order to attract CVs, which are then circulated to companies, often against the candidates will. More disturbingly, some head-hunters unlock corporate websites and roam the site for staff directories, CVs, photos and organisational charts, which they later on sell either to recruitment agencies, or directly to companies that may be interested. Finally, O.R. raises concerns on the provision of equal opportunities to all applicants. E-cruiting should perhaps be used in conjunction with other more traditional tools, in order to eliminate the possibility of accusations that certain sites are not equally at the disposition of different social groups, and therefore constitute a source of indirect discrimination. Another, related issue is the risk of the documents proving that the proper procedures have been followed getting lost without a trace. A suggestion is always to fall back on traditional methods to confirm everything. (Whitehead and Rana, 1999) Such a practice, however, would definitely reduce the effectiveness of O.R. on time and cost savings. Research Implications It is recommended that any future research, to examine the effectiveness of O.R., should establish the connection between the satisfaction (perceived effectiveness), with the size of the company, the number of O.R. practices and the extent of use, as well as the integration of it in the overall recruitment effort. Although not tested through quantitative analysis in the current research, those relations were suggested from a comparative analysis of the whole quantitative and qualitative findings.

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