HR Service Delivery (2).docx

1 2 Senior Professional in Human Resources – International (SPHRi) Workbook Module Three: HR Service Delivery 2021 Edition (2nd) Copyright © 2021 by International Human Resource Certification Institute All rights reserved. No part of this book shall be reproduced, stored in a retrieval system, or transmitted by any means – electronic, mechanical, photocopying, recording, or otherwise – without written permission from the International Human Resource Certification Institute (IHRCI). No patent liability is assumed with respect to the use of the information contained herein. Although every precaution has been taken in the preparation of this book, the publisher and author assume no responsibility for errors or omissions. Neither is any liability assumed for damages resulting from the use of the information contained herein. International Human Resource Certification Institute (IHRCI) Flat/Rm, B, 5/F, Gaylord Commercial Building, 114-118, Lockhart Road. Hong Kong www.ihrci.org 3 Introduction As a purchaser of the SPHRi certification workbook serials, you have access to the www.ihrci.org learning system. The system contains Glossary that provides a search box and a description of the key terms in HR. Also, the system consists of over 800 practice exam questions and answers with explanations in our database including pre-test, review-test, and post-test: Pre-test: It contains the same percentage of questions from each content area. Participants can take a pre-test of that module to access their conceptual understanding of that specific area of the SPHRi Body of Knowledge. When the pre-test is completed, an overall correct percentage is provided along with the number and percentage of questions answered correctly. The answers with explanations to individual questions are also provided. Our system allows users to save the results of the pre-test so that they can improve upon that later. Review-test: Every review test contains questions s with explanations which help to understand the concepts of that particular knowledge area for each section of the study workbook. Once you successfully finish reviewing for one section text in the workbook; you naturally get access to the next section. Every new section helps construct on the earlier concepts learnt in the previous knowledge areas. Please do step-wise study for all the knowledge areas. Post-test: Once you complete with all the knowledge areas, have a post-test through the full length simulated practice tests under the same testing conditions as the actual exams. With 130 questions covered during the 2.5 hours test. These tests are designed to help you get the feel of the final SPHRi Exam, with similar format and question types. Practice till you are near to 80% correct answers in the post-test. This helped you in understanding areas where you have improved since the last test as well as list down topics for which you needed more revision. Access to the learning system is valid for twelve (12) months from the date of purchase to cover two test windows. Each practice for the pre-test, review-test, and post-test may be taken as many times as you would like within the 12 months. Access to these practice exams is for your individual use; your account is not to be shared with others. Your use of the online practice exams signifies your acknowledgment of an agreement to these terms. This workbook is not a textbook. These materials include workbooks and practice exams are intended for use as an aid to preparation for the SPHRi Certification Exam conducted by the HR Certification Institute. By using all of the preparation materials, you will be well-versed in the four key functional areas that make up the HR Certification Institute SPHRi body of knowledge. Studying these materials does not guarantee, however, that you will pass the exam. These workbooks are not to be considered legal or professional advice. 4 Table of Content Introduction................................................................................................................................ 3 Table of Content......................................................................................................................... 4 Part One: HR Planning & Staffing............................................................................................... 8 Workforce Planning........................................................................................................ 8 Business Objectives............................................................................................. 9 Workforce Supply Analysis................................................................................ 10 Workforce Demand Analysis............................................................................. 11 Workforce Gap.................................................................................................. 11 Staffing Plan....................................................................................................... 12 HR Forecasting.............................................................................................................. 16 Steps One and Two: Classifying Employees and Positions................................ 17 Step Three: Equating Staffing and Output........................................................ 18 Step Four: Forecasting Demands....................................................................... 19 Step Five: Forecasting Labor Supply.................................................................. 23 Step Seven: Forecasting HR Needs.................................................................... 27 Contingent Staffing....................................................................................................... 28 The benefits of hiring contingent workers........................................................ 28 Drawbacks of hiring a contingent worker......................................................... 29 Best practices of contingent staffing................................................................. 30 Strategic recruitment plan............................................................................................ 31 Define your goals............................................................................................... 31 Forecast future hiring needs............................................................................. 31 Get clear about the type of candidates you want to attract............................. 32 Revisit your employee value proposition (EVP)................................................ 32 Develop your sourcing strategy......................................................................... 33 Refine your selection process............................................................................ 37 Design an onboarding process that sets candidates up for success................. 38 Identify tools that can help............................................................................... 39 Create a budget to support your recruitment plan........................................... 40 Employer Branding....................................................................................................... 40 The benefits of employer branding................................................................... 41 Build a successful employer branding (EB)....................................................... 41 The Role of Employees in Building a Strong Employer Branding Strategy........ 44 5.5. How to Drive Employer Brand Ambassadorship in Your Organization.............. 44 Employee Selection and Assessment........................................................................... 44 Assessment methods........................................................................................ 45 Criteria for Selecting and Evaluating Assessment Methods.............................. 47 Additional consideration................................................................................... 48 5 Reduction in Force (RIF)............................................................................................... 51 Short-range cost adjustments........................................................................... 52 Medium-range cost adjustments...................................................................... 54 Long-range cost adjustments............................................................................ 55 Discharge, Layoff, and Resignation.................................................................... 56 Part Two: Total Rewards & Wellbeing...................................................................................... 58 Total Rewards............................................................................................................... 58 Compensation................................................................................................... 59 Benefits.............................................................................................................. 60 Work-Life Effectiveness (Well-Being)................................................................. 62 Performance & Recognition.............................................................................. 63 Development & Career Opportunities.............................................................. 63 External Influences............................................................................................ 64 Internal Influences............................................................................................. 65 Employee Experiences....................................................................................... 66 Organizational Performance.............................................................................. 68 Total Rewards Implementation.................................................................................... 68 Assessment........................................................................................................ 69 Design................................................................................................................ 70 Execution........................................................................................................... 70 Evaluation.......................................................................................................... 70 Total Rewards Optimization.......................................................................................... 70 Benchmark total rewards.................................................................................. 70 Optimize total rewards...................................................................................... 71 Customize rewards portfolios............................................................................ 72 Total Rewards Governance................................................................................ 73 Compensation Philosophy and Strategy....................................................................... 74 4. 1. Match the market............................................................................................. 75 Lead the market................................................................................................ 76 Lag the market................................................................................................... 76 Use a combination of options........................................................................... 77 Executive Compensation.............................................................................................. 77 Base Salary......................................................................................................... 77 Short-term Incentives........................................................................................ 77 Long-term Incentives......................................................................................... 77 Executive Benefits............................................................................................. 78 Perquisites......................................................................................................... 78 Golden Parachutes............................................................................................ 78 6 Employee Health, Safety and Security......................................................................... 78 Roles and Responsibilities................................................................................. 79 Issues in Employee Health & Safety.................................................................. 79 Accident investigation....................................................................................... 80 Employee Wellness Program............................................................................. 81 Employee Assistant Program (EAP)................................................................... 82 Employee Return to Work............................................................................................ 82 Gather details and assess the situation............................................................ 82 Consult with health and medical specialists..................................................... 83 Consult with union representatives (when necessary)..................................... 84 Review the accommodation options................................................................. 84 Implement accommodation measures............................................................. 84 Part Three: HR Technology & Outsourcing............................................................................... 86 Technology and HR Service Delivery............................................................................ 86 HR Activities....................................................................................................... 86 A Primer on HRIS............................................................................................... 86 Why HRIS?......................................................................................................... 87 E-HRM vs. HRIS.................................................................................................. 87 HR Service Delivery........................................................................................... 88 Implement Human Resource Information System (HRIS)............................................ 89 Determine Needs.............................................................................................. 89 Plan the objectives............................................................................................ 90 Build the Project Team...................................................................................... 91 Evaluate HRIS Options....................................................................................... 93 Select the vendor.............................................................................................. 95 Execute Implement Action................................................................................ 97 Post-Live Training............................................................................................... 97 2.7. Testing Post-Live Performance.......................................................................... 98 HR Outsourcing............................................................................................................. 98 Outsourcing....................................................................................................... 99 Offshoring.......................................................................................................... 99 HR outsourcing services.................................................................................. 100 Cosourcing and Insoucing................................................................................ 101 Benefits, Pitfalls, and Risk................................................................................ 101 Part Four: International Assignment...................................................................................... 104 Global Workforces...................................................................................................... 104 Parent-country nationals (PCNs)..................................................................... 104 Host-country nationals (HCNs) or local nationals........................................... 104 8 Part One: HR Planning & Staffing 1. Workforce Planning Workforce planning (also called human resource planning, HRP) has traditionally been used by organizations to ensure that the right person is in the right job at the right time. Under past conditions of relative environmental certainty and stability, human resource planning focused on the short term and was dictated largely by line management concerns. Increasing environmental instability, demographic shifts, changes in technology, and heightened international competition are changing the need for and the nature of human resource planning in leading organizations. Planning is increasingly the product of the interaction between line management and planners. In addition, organizations are realizing that in order to adequately address human resource concerns, they must develop long-term as well as short term solutions. As human resource planners involve themselves in more programs to serve the needs of the business, and even influence the direction of the business, they face new and increased responsibilities and challenges. A scholar defined HRP as the process by which management determines how the organization should move from its current manpower position to its desired position. Through planning, management strives to have the right number and the right kinds of people, at the right places, at the right time, doing things which result in both the organization and the individual receiving maximum long-run benefits. In addition, workforce planning focuses on analyzing an organization’s HR needs as the organization’s conditions change, and then supplying strategies to help respond proactively to those changes over time. HRP helps ensure that the right numbers of the right kinds of people are available at the right times and in the right places to translate organizational plans into reality. This process becomes strategic when some attempt is made to anticipate long-term HR “supplies and demands” relative to changing conditions facing the organization, and then to use HR department programs in an effort to meet these identified HR needs. When the right skills are in place and they are matched with the right positions, long-term objectives are met more easily, and your company is guaranteed to see more successful results. Here are some reasons why implementing strategic workforce planning is important for your company. Developing a workforce action plan is a key component of your business planning. 10 the process went hand-in-hand with a short-term orientation. Now, major changes in business, economic, and social environments are creating uncertainties that are forcing organizations to integrate business planning with human resource planning and to adopt a longer term perspective. For example, according to a HR executive, Human resources is part of the strategic (business) planning process. It's part of policy development, line extension planning and the merger and acquisition processes. Little is done-in the company that doesn't involve us in the planning, policy or finalization stages of any deal. Another executive of human resources describes an integrated linkage between business and human resource plans as one by which human resource and line managers work jointly to develop business plans and determine human resource needs, analyze the work force profile in terms of future business strategies, review emerging human resource issues, and develop programs to address the issues and support the business plans. According to him, such joint efforts occur when human resource planners convince corporate business planners that "human resources represent a major competitive advantage" that can increase profits when managed carefully. It describes some of the activities that industrial/organizational (I/O) psychologists are engaged in as they seek to improve the competitiveness of organizations through effective human resource planning. 1.2. Workforce Supply Analysis Supply forecasts can be derived from both internal and external sources of information, but internal sources are generally most crucial and most available. By assessing the extent to which the current workforce possesses skills and abilities that can be transferred to aid their performance in jobs predicted to exist in the future, HR professionals can help organizations assess how much of a discrepancy exists between their current skills profile and the profile required to meet their strategic plan. Moreover, computer technology has increased the feasibility of keeping information provided from such inventories up-to-date. 1.2.1. Manual Systems and Replacement Charts Simple manual devices can be used to keep inventories and development records to compile qualifications information on each employee. Personnel replacement charts show the present performance and promotability for each position’s potential replacement. Position replacement cards can also be created for each position to show possible replacements as well as their present performance, promotion potential, and training. 1.2.2. Computerized Information Systems They are used to track the qualifications of hundreds or thousands of employees. The system can provide managers with a listing of candidates with specified qualifications after scanning the database. 1.2.3. The Matter of Privacy Employers must balance an individual’s right to privacy while making HR information legitimately available to those in the firm who need it. 11 1.2.4. Forecasting the Supply of outside Candidates This may involve considering general economic conditions and the expected rate of unemployment. 1.3. Workforce Demand Analysis In order to forecast the numbers and qualities of people who will be needed to perform the jobs, strategic planners, attempt to predict organizational outputs, such as expected production, volume, and sales levels. The outputs that an organization intends to produce or deliver, in combination with the technology that the organization intends to use to generate the outputs, dictate the human resource needs of the organization. Predicting outputs requires considering factors such as future demands from the marketplace for the products and services that the organization provides, the percentage of the market that the organization is likely to be able to serve, the availability and nature of new technologies that may affect the amounts and types of products or services that can be offered, and the different countries in which the organization expects to operate. 1.3.1. Trend or flow Analysis It means studying a firm’s employment levels over a period of years to predict future needs. Using this simple flow analysis allows the HR manager to visualize the change in the department and predict future staffing needs. Projecting turnover is another essential technique to use in estimating HR requirements. 1.3.2. Ratio Analysis It means making forecasts based on the ratio between (1) some causal factor, like sales volume, and (2) number of employees required, like number of salespeople. 1.3.3. The Scatter Plot It shows graphically how two variables (such as a measure of business activity and a firm’s staffing levels) are related. 1.3.4. Using Computers to Forecast Personnel Requirements The use of software programs can enable employers to quickly translate projected productivity and sales levels into forecasts of personnel needs, while estimating how personnel requirements will be affected by various productivity and sales levels. 1.4. Workforce Gap After projecting future human resource supplies and demands, workforce gap is identified and action plans are developed to meet' the objectives, through the joint efforts of the human resource planner and relevant managers throughout the organization. Differences in the types of objectives established` for the short and intermediate term reflect differences in the types of changes that are feasible with two or three additional years of time. Thus, whereas short-term objectives include attracting, accessing, and assigning employees to jobs, intermediate-term objectives are more likely to include readjusting employees' skills, attitudes, and behaviors to fit 13 1.5.1. Staffing Quantity A organization as a whole, as well as for each of its units, forecasts workforce quantity requirements-the needed headcount- and then compared these to forecasted workforce availabilities-the likely employee headcount-to determine its likely staffing level position. Making sure headcount requirements match availabilities, the projection is that the organization will be fully staffed, do not be understaffed or overstaffed. Headcounts are the budget amount of full-time equivalent (FTE) for a given position. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that the worker is only half-time. The headcount does not include independent contractors or temporary workers on an agency’s payroll. 1.5.2. Staffing Quality Staffing quality includes person/job match and person/organization match. The person/job match seeks to align characteristics of individuals and jobs in ways that will result in desired HR outcomes. Often an organization seeks to determine not only how well the person fits or matches the job but also the organization. Likewise, applicants often assess how they think they might fit into the organization, in addition to how well they match the specific job’s requirements and rewards. 1.5.3. Staffing Strategy Staffing strategy is the planning process of identifying and addressing the staffing implications of business plans and strategies, or better still, as the process of identifying and addressing the staffing implications of change. Others call the process “strategic workforce planning,” by any name, this effort typically includes: Defining the number (staffing levels) and types (capabilities) of employees who will be needed at a particular point in the future to implement plans effectively(often including how that staff should be organized and deployed); Identifying the staffing resources that are currently available; Projecting the “supply” of talent that will be available at that point in the future for which requirements have been defined (e.g., factoring in the effects of turnover, retirements, planned movement, etc.); Identifying differences between anticipated demand and forecasted supply; and Developing and implementing staffing plans/actions needed to close talent gaps and eliminate surpluses. Increasingly, long-term human resource planning (for beyond three years) is becoming critical to the effective functioning of organizations. The rapidly changing and highly competitive worldwide marketplace is causing firms to turn to their human resources for survival and competitiveness. Because there is a greater understanding that an organization's work force cannot be turned around on a dime, long-term human resource planning is gaining currency. It is an activity that demands integration of the skills and knowledge of the human resource planner and all the other executives responsible for strategic planning. 14 Staffing the upper echelons of organizations presents a number of unique challenges, particularly when a company practices a promotion-from-within policy. Because the planning horizon is so long, greater uncertainty exists when predicting both future demand and future supply. The uncertainty in predicting supply is compounded by the small numbers of people and jobs involved, which changes the prediction task from one of estimating the percentage of a pool of employees who are likely to be with the company x years into the future to one of estimating the probability that a few particular individuals will still be with the company x years into the future. Providing developmental experiences to a greater number of employees helps reduce the uncertainty of forecasted supply, but orchestrating developmental experiences for large numbers of employees can be very difficult logistically because development is best accomplished by rotating employees through many key jobs throughout their careers. Predicting who will be available and with what capabilities is only half of the problem, of course. Equally challenging is predicting the needs of the organization. Because the purpose of human resource planning is to ensure that the right people are in the right place at the right time, it must be linked with the plans of the total organization. Traditionally, there has been a weak one way linkage between business planning and human resource planning. Business plans, where they exist, have defined human resource needs, thereby making human resource planning a reactive exercise. Many organizations now recognize that they can benefit from a two-way linkage between business and human resource planning. With a two-way linkage, business plans are considered somewhat malleable in that they are influenced by human resource considerations, such as the cost and availability of labor. Such organizations realize that profitability requires that business objectives be linked to people-planning activities. If the right people are unavailable, performance goals cannot be met. A two way linkage is evident when astute managers no longer assume that every plan is doable. 1.5.4. Equating Workforce Demand to Supply Demand Equals Supply Should labor demand equal labour supply—a situation that could occur in very small firms operating in a stable environment but is not likely to happen in large organizations facing dynamic conditions—no action need be taken. The company can simply continue doing what it is doing; nothing else is required, at least in the short run. Demand Is Less Than Supply As more and large organizations down-size, restructure, right-size, and streamline to cut costs, increase efficiency, improve productivity, and remain competitive, the potential for the demand for employees to be less than the available supply is a distinct possibility. Several methods are available for equating demand and supply, such as restricted hiring, reduced working hours, job sharing, early retirement, retraining, and layoffs. Demand Is Greater Than Supply 15 Faced with a shortage of personnel, an organization must intensify its efforts to obtain the necessary supply of people to meet the needs of the firm. Several actions may be taken, such as creative recruiting (seeking different sourcing), compensation incentive (premium pay, four-day workweeks, flexible working hours, telecommuting, parttime, employment, and child care centers), training programs (special training programs to prepare previously unemployable individuals for positions with a firm), and different selection standards (lowering of employment standards and coupled with training programs). In line with HR planning, staffing plans help employers analyze and respond to staffing gaps. Many factors drive the loss of staff, including changing labor markets, wage inflation due to competition for key skills, lack of employee engagement, and retirement. The model below outlines how employers can evaluate and respond to such losses. There are Demand-side and Supply-side staffing strategies. Consider a combination of strategies when addressing staffing gaps. 1.5.5. Demand-side Strategies Demand-side strategies reduce the number of positions that need to be filled. They include: Retention: Reduce turnover through retention incentives and employee engagement strategies. Reorganization: Reduce the number of management positions by expanding supervisory span of control. Work Process Redesign: Reduce staffing needs by streamlining workflows and methods. Employee Performance Management: Reduce staffing needs by improving individual productivity. 1.5.6. Supply-side Strategies Supply-side strategies help fill the remaining staffing gap once demand-side strategies have reduced the number of positions that must be filled. They include: Recruitment: Expand applicant pools through enhanced marketing (e.g., broadening the target recruitment area, increasing advertising venues, and improved branding strategy). Modified Qualifications: Expand applicant pools by considering a broader range of experience and education. Workforce Development: Grow future applicant pools by supporting schools and apprenticeship programs. Training and Development: Keep current staff up-to-date in their knowledge and skills through on-the-job and other training and development programs. Succession Planning: Grow new internal applicant pools through training and development programs. 16 2. HR Forecasting More often than not, human resource (HR) planners pay more attention to HR forecasting than to environmental scanning. Historically, literature on HR planning has emphasized forecasting and nearly ignored scanning. The difference between them is one of focus: Strategists and HR planners prefer to emphasize the influence of future trends on the content of jobs, the people doing those jobs, and the HR department’s efforts over the number of jobs and the people doing them. Environmental scanning focuses on qualitative (content) changes over time; forecasting focuses on quantitative (numbers) over time. Some evidence does exist to suggest that HR planners are moving away from historical estimates of future HR needs and are beginning to think in terms of just-in-time approaches. The HR forecaster is responsible for estimating numbers of people and jobs needed by an organization to achieve its objectives and realize its plans over time in the most efficient and effective manner possible. In the simplest sense, HR needs are computed by subtracting HR supplies or numbers of people available from expected HR demands or numbers of people required to produce at a desired level. To carry out the forecasting process, HR planners: Classify employees into distinct and unambiguous categories, which include age, race, sex, length of tenure, and present position. Classify positions into categories, which include (for example) educational preparation, experience required, or placement of the job in the organizational structure. Equate historical relationships between output and staffing levels. For instance, how many people are needed to produce a specific number of goods? Offer a specific level of service? Forecast demand by analyzing current HR requirements and projecting future HR requirements. Forecast supply by analyzing current HR inventories and comparing expected internal and external availability of human resource supplies. Forecasting can be looked at from more than just the perspective of the forecaster’s role. In one classic and still-relevant treatment, a scholar indicates that it consists of six steps. The first step is to assess the internal and external environment, either as part of strategic business planning efforts or as special stand-alone studies commissioned solely for human resources planning. The second step is to inventory available talent through examination of current employee appraisal information and succession plans. The third step is to forecast future labor supply based on attrition or turnover patterns, mobility or movement between job classes, skills utilization, and future assumptions. 17 On the other side of the demand-supply equation, the fourth step consists of analyzing present HR requirements. Forecasters examine the number of present positions, the nature of the organization’s structure, and the desired mix or pattern of occupations. The present is then projected into the future. Special attention is devoted to expected demand (what will probably be) and desired demand (what should be in the future). The final step is a comparison of supply and demand. This process indicates shortfalls where action will be necessary to bring together the number of people available and the number needed in the future. Action is taken through such HR practice areas as recruitment and training. HR planners (1) assess labor demand by projecting requirements implied by organizational plans; (2) assess internal labor supply by examining turnover patterns and inventories of existing skills and people; (3) assess external labor supply expected in the future; (4) compare supply and demand; and (5) reconcile labor shortfalls in such categories as the number of people/positions, experience, abilities, and race/sex of employees. External environmental issues as well as internal forecasting can be included in a model of human resources planning (HRP), which is thus based on making comparisons between short- and long-range labor supplies and demands. Demand is stimulated by external environmental, organizational, and workforce conditions. Supply is a function of internal and external availability. These models are primarily quantitative, equating supply and demand to numbers of people or positions by category. People are viewed not so much as individuals with unique talents, strengths, and weaknesses but rather as members of classifiable groups, clustered for ease in quantifying attributes, patterns, and characteristics. This reflects the traditional quantitative bias of HR forecasting. 2.1. Steps One and Two: Classifying Employees and Positions The first two steps in the forecasting model we propose involves classifying employees and positions into distinct categories. Depending on the purpose for which forecasting is conducted; it can be handled in several ways. People are categorized by age, if the purpose of forecasting is to project expected numbers of retirements; by race and sex, if the purpose is to compare goals and results for diversity, equal employment opportunity, or affirmative action; by tenure or seniority, if the purpose is to predict turnover rates/promotion; by educational level, if the purpose is to narrow the pool of qualified candidates for transfers and promotions; and by experience, if the purpose is to assess bench strength or identify people with adequate preparation for transfers or promotions. On the other hand, positions are categorized by level, if the purpose is to relate positions to decision-making authority; by educational and training requirements, if the purpose is to identify work or experience prerequisites, based on task differences that distinguish one position from others; by employee type, if the purpose is to classify positions according to designations provided by the U.S. Equal Employment 18 Opportunity Commission and state government counterparts of that commission; by location, if the purpose is to identify positions by geography; and by activity or function, if the purpose is to identify positions by their location in organizational departments, divisions, and work groups. Organization charts and budget documents are excellent starting points for establishing position categories. They show relationships between units and authorized staffing levels. They provide a snapshot of what is—present conditions. They can also serve as guides for dealing with what will probably be, or serve as projections into the future, taking into account assumptions and what should be in the future, or desired numbers of people/positions. Likewise, individualized career profiles provide a starting point for categorizing individuals, summarizing in a single place all the information pertinent to individual performance, education, career aspirations, and prior experience. Decisions about what categories to use—and how many—depend solely on the purpose or aim of the HR forecast. 2.2. Step Three: Equating Staffing and Output The key to forecasting is to determine some relationship between people and positions and organizational outputs. HR planners need to identify or devise a predictor or measure of revenues or outputs that relates numbers and types of people to goods or services produced. Predictors can be historic or past oriented, based on projections into the future of relationships identified in the past; they can be judgmental or futureoriented, based on the expected influence on staffing of changes in such areas as technology, sales, and productivity. In any case, predictors must be proportionate; that is, changes in expected or required production levels must affect staffing levels and vice versa. Unfortunately, it is not a simple matter to identify a predictor from past staffing/output relationships or to devise one based on judgments about the future. Research provides few clues about what predictors are being used, when they are appropriate or inappropriate, and when alternatives should be chosen. Intuitive predictors are probably most common. Managers simply estimate how many and what kind of people they will need to achieve functional plans related to production, finance, and marketing, and to achieve output objectives established for their organizational units. Little attempt is made to pinpoint a precise mathematical variable or variables to serve as a predictor; rather, each manager simply relies on intuition. HR planners survey managers at each level and, in this way, arrive at forecasts of HR needs. Of course, more sophisticated predictors can be identified from (1) historical data (from past staffing levels and output patterns, HR planners identify a productivity index; it is used, in turn, to estimate future staffing requirements resulting from expected or desired output levels); (2) the total budget of the organization (a ratio of workers to budget dollars is devised; as the budget increases, numbers of workers increase in proportion to it); (3) numbers of units processed (if the numbers of units expected to be processed increases, staffing is correspondingly increased); (4) changes in productivity (to the extent that outputs per worker are affected by identifiable trends, 19 they can be used as predictors); and (5) staffing cycles (when staffing requirements vary by season or when the work itself is temporarily stepped up or slows down, it can be identified from past trends and then projected into the future). Not one of these predictors sheds light on what skills should be possessed in what jobs. This important qualitative issue has been traditionally ignored by HR forecasters, though growing interest does exist in knowledge management and intellectual capital that examines these issues. 2.3. Step Four: Forecasting Demands Forecasting demand is the process of estimating how many people will be needed in the future in various job categories, geographical locations, and organizational units. The process is based on applying the predictor identified or devised in the previous step. More art than science, demand forecasting—as it is sometimes called—is the driving force in HR planning. Estimates of supply are matched to it. A scholar indicates that professional HR departments have, for the most part, devised well-established methods for addressing this issue, but that those methods are also the greatest source of dissatisfaction. What Are Some Reasons for Demand Forecasting? There are several good reasons to conduct demand forecasting. It can help to: (1) quantify the positions necessary for producing a given number of goods or offering a given amount of services in demand; (2) identify departments or work groups that can benefit from productivity improvement efforts; (3) determine what staff mix is desirable in the future (that is, numbers of people/positions of one class or occupational group relative to others); (4) assess appropriate staffing levels in different parts of the organization so as to hold down unnecessary costs; (5) prevent shortages of people where and when they are most needed; and (6)monitor compliance with equal employment opportunity goals. Demand forecasting thus helps control costs associated with human resources by ensuring that recruitment, management of HR, and promotions/transfers match organizational needs. Causes of HR Demand Demand for human resources stems from such causes as changes in the external environment (as economic, technological, social, demographic, and other external factors exert influence on work performed by the organization, labor demand is affected); organizational plans and objectives (How do strategists want the organization to perform? At what level of output do they plan to produce goods or offer services? Answers to those questions affect demand, especially when staffing is linked to output levels by means of a predictor); and productivity levels (How much is each worker producing? Labor demand remains constant or even decreases when each worker increases output). Each source of demand can be separately considered in the forecasting process. Forecasting Methods Few topics among HR planners have commanded as much attention as methods of 21 The moving average, as the name implies, literally averages data about HR demand from recent periods and simply projects them into the future. The actual number of people required over the past three, six, or twelve months is divided by the number of months in the forecast to compute a simple mean. That mean will vary slightly, depending on how much demand has fluctuated during the time included in the forecast. Suppose we wish to forecast HR demand at month 10, using information on actual demand for 7 previous months and forecasted demand for 2 more. Assuming that a 3month moving average is used as the basis of the forecast and that 85 people were needed in month 7, 102 were forecasted for month 8, and 110 were forecasted for month 9, then 99 people will be forecast for month 10. Yet if a five-month moving average is used, 106 people might be forecasted. The chief advantage of the moving average method is its simplicity. Unfortunately, it also has serious disadvantages: (1) Months are weighed equally, when in fact they can differ greatly in significance, (2) seasonal or cyclical patterns are ignored, and (3) heavy reliance is placed on past rather than future data. Exponential smoothing is a somewhat more sophisticated quantitative/descriptive method. The basic idea is simple enough. The forecast for the current period is added to an error term, computed by multiplying forecast error during the present period by a constant between one and zero. Forecast error is present demand less present forecast. Choice of a constant is judgmental, depending on the forecaster’s awareness of management needs and the unique nature of the forecasting situation. In reality, exponential smoothing is a general term applied to a whole range of methods. It is more advantageous than moving averages because forecasters can vary weights associated with different time periods. It is disadvantageous for planning in that, like moving averages, its basis is the past rather than the future. Trend projections are somewhat simpler. Forecasters plot past demand for HR on a graph. Numbers of people hired or requested are placed on one axis; time is placed on the other. Forecasters simply eyeball the data and plot a straight line from past to future. While not a method characterized by great accuracy, trend projections are easily explained to strategists and easily prepared by HR planners. Regression models, similar to trend projections, are more mathematically precise. A line is fitted on a graph much like that in trend projection, except a mathematical regression formula is used to relate staffing and output variables. Multiple regression is similar except that more variables are included. Flow models are very frequently associated with HR forecasting. The simplest one is called a Markov model. Forecasters: Determine the time that will be encompassed. This choice is, of course, based on the planning horizon desired, usually coinciding with the time horizon of strategic business plans. Shorter lengths of time are generally more accurate than longer ones. Establish categories to which employees can be assigned. These categories, called 22 states, must not overlap, but must take into account every possible category to which an individual can be assigned. The number of states must not be too large or too small. Count annual “flows” or movements between states for several prior time periods. These states are defined as absorbing (gains or losses to the organization) or nonabsorbing (changes in position levels or employment status). Losses include death or disability, absence, resignations, and retirement; gains include hiring, rehiring, transfer, and movement by position level. Estimate the probability of transitions from one state to another based on past trends. Demand is a function of replacing those who make a transition. There are alternatives to the simple Markov model. One, called the semi-Markov, takes into account not just state but also tenure of individuals in each state. After all, likelihood of movement increases with tenure. Another method is called the vacancy model, which predicates probabilities of movement and numbers of vacancies. While the semi-Markov does the best job of estimating movement among those whose situations and tenures are similar, the vacancy model produces the best results for an organization. Markov analysis is advantageous in that it makes sense to decision-makers. They can easily understand its underlying assumptions and are thus more likely to rely on the results. The disadvantages: past-oriented data might not be accurate in periods of dynamically wrenching change and accuracy in forecast about individuals is sacrificed to achieve accuracy across groups. Unlike quantitative/descriptive demand forecasting methods, quantitative/normative ones optimize numbers of people and positions. Their purpose is thus to assess what should be in the future, not what will probably be. Specific methods include linear programming, goal programming, and assignment models. Linear programming is the general title applicable to a whole range of techniques. It is appropriate to use when (1) managers seek a single, well-defined objective; (2) alternatives for action exist; (3) achievement of the objective is constrained by scarce resources; (4) objectives and constraints are expressed as mathematical functions (“linear inequalities”); and (5) a linear relationship exists between the objective and constraints on achieving it. This method helps determine HR demand equated with desired output. In other words, it assesses the required staffing level that matches required output levels. Goal programming is a related method, pairing linear programming and Markov modeling. When constraints such as budget and promotion policies influence staffing and when the forecasting problem encompasses several time periods, the method is appropriate. It pinpoints attainable and optimal goals by comparing discrepancies between targets and forecasted results. It has been used in business firms and government organizations. Assignment models match individuals to job vacancies. Their focus on individuals rather than groups distinguishes them from such other methods as linear and goal 23 programming, Markov analysis, and regression or trend projections. Individuals are matched to positions on the basis of career aspirations or tenure in existing jobs, for example. The aim is to achieve great precision in examining use of talent and pinpointing shortages and surpluses. The chief advantage of methods like linear programming, goal programming, and assignment models is that they establish norms or yardsticks for HR forecasts. They facilitate control of human resources, helping hold down costs. Unfortunately, they require sophisticated mathematics. The techniques are sometimes greeted with skepticism by managers who have trouble understanding the mathematics behind them. Qualitative/descriptive forecasting methods constitute a third category of approaches to assessing HR demand. Like their quantitative/descriptive counterpart, they focus on what is expected in the future, not necessarily what is desired. Unlike their quantitative counterpart, however, they do not rely on mathematics. Specific methods include simple judgments by managers, the critical incident approach, the Delphi technique, the nominal group technique, and cross-impact analysis. Scholars indicated that they factors inside and outside an organization will influence jobs, people, and the HR department in the future, and predict how those factors will influence jobs, people, and the HR department. Without repeating lengthy descriptions of these methods, we shall simply note that they can be applied to HR forecasting as well as to environmental scanning. Each method is potentially useful for forecasting HR labor demand; each is directed at assessing what will probably be. Qualitative/normative methods are directed at forecasting what should be in the future. They forecast according to the manager’s desires in line with strategic business plans, not mere expectations. Numbers of people and positions are assessed without mathematics. Methods used in qualitative/descriptive forecasting are also used in qualitative/normative forecasting, though intent is different: to determine what ought to be, not just what will probably be. Hence, qualitative/normative forecasting can make use of the critical incident process, the Delphi technique, nominal group technique, cross-impact analysis, questionnaires, and interviews. The state of the forecasting art is quite advanced. In short, the methods available—as we have seen—can be rather sophisticated, some relying on advanced mathematics that is easier to use with the appropriate software. While there are many mathematical methods available to conduct HRP, they are less often used in practice than they are touted in writings about HRP. Several reasons may account for this: (1) managers are sometimes skeptical of quantitative forecasts; (2) problems that confront organizations do change, rendering reliance on specific forecasting approaches inappropriate; and (3) not all HR planners possess appropriate skills to apply all forecasting methods. 2.4. Step Five: Forecasting Labor Supply The fifth step in HR forecasting is analysis of the supply of workers—the numbers and the types of people expected to be available to meet demand. This worker supply can come from two places: from the inside of the organization (people can be promoted, demoted, transferred, or trained and developed to help meet future HR demand) and from the outside of the organization (people can be recruited from colleges, 24 competitors, specialized training programs, and other sources to help meet future HR demand). What Are Some Reasons for Supply Forecasting? Fewer organizations estimate HR supplies than demand. One reason is that decisionmakers tend to take for granted the existing workforce in the organization. In addition, some managers assume that employees are just “warm bodies” who can be easily moved or replaced at will. Old beliefs die hard, even at a time when (at this writing) most employers say that attracting and retaining talent is a key competitive challenge and a key constraint on organizational growth. HR planners still encounter managers who make this assumption, even when it is apparent that not just anybody can perform adequately in highly specialized positions requiring years of preparation. Supply forecasting helps: Quantify numbers of people and positions expected to be available in the future to help the organization realize its plans and meet its objectives. Identify how much productivity improvement is possible in areas of the organization that are thought to be able to benefit from such initiatives. Clarify likely staff mixes that will exist in the future. Assess existing staffing levels in different parts of the organization. Prevent shortages of people where and when they are most needed. Monitor expected future compliance with equal employment opportunity goals. Causes of Supply Shifts Changes in HR supplies stem from: External factors. For instance, internal supplies are influenced by economic conditions (as the economy heats up, turnover often increases; as the economy cools down, turnover decreases); technological conditions (automation can change the distribution of demand; it can mean reduction in supply like layoffs and creation of entirely new job categories); and governmental/legal conditions (changes in laws, regulations, and court rulings mean that some groups or employee categories are accorded specialized protection from layoff and are given specialized attention in hiring, training, and promotion). Internal factors. Supplies in the organization are affected by job climate/morale (voluntary turnover increases when climate is poor, work group morale is low, and individuals experience job dissatisfaction) and structure (some organizational structures require more people than others). Workforce factors. External HR supplies are affected by availability of talent from competitors; high schools, colleges, and universities; and different age groups. Smaller numbers of people in specific age categories mean that some HR supplies are less plentiful. 25 There are, of course, other reasons why worker supplies change. For example, as average individual job tenure or length of service increases, more people will be unavailable for the future. With longer job tenure, the probability of movement is greater. Turnover can also affect HR supply. Supply Forecasting Methods There are essentially two kinds of supply forecasting methods: The quantitative, in which mathematical methods are used. The qualitative, in which nonmathematical and largely judgmental methods are used. Quantitative methods have most frequently been advocated by academic researchers. They trace historical movements between job categories and allow for loss resulting from turnover and retirement. On the other hand, qualitative supply forecasting methods include staffing charts, replacement charts, succession charts, and kill inventories. They help clarify what future HR supplies will probably be available. They are not, like quantitative methods, based on mathematical calculations. A staffing chart is prepared before or after an annual budget. Its time frame tends to be short-term—a year in most cases. This chart depicts numbers of people in each job category authorized for the year and numbers presently occupying those positions. Differences between those numbers reveal anticipated openings at some point, typically at the start of the budget period. The chart is a static representation that does not indicate whether openings will be filled from without. It is useful for identifying what head count should exist by the end of a budget period. Of course, it does little to establish targets for productivity improvement, because numbers of people/positions are not equated to output. A replacement chart is a graphic depiction of who inside the organization is ready to assume a higher position. In simplistic terms, preparation of a chart is about the least that can be done to plan for the sudden loss of key executives. Replacement charts can also help plan for impending retirement of key executives or other employees. Unfortunately, they provide very limited information. As a result, managers in some organizations prefer more detailed replacement summaries that more completely describe replacement candidates, including information about their relative ages, educational backgrounds, and experiences. Succession charts are more detailed and they are not limited to executives like replacement charts. Indeed, succession planning tends to be more long term in focus and more developmental in thrust. Chief components of a succession planning program include: Candidate data, including performance appraisal information, career interests, and individual biographical information Position requirements, including expected organization structure, position 26 descriptions, and career paths between positions, indicating what education and experience are needed to progress from one level to another. An organized process for reviewing candidate data relative to position requirements over time Individual development plans such as training and education plans, developmental assignments, and testing methods Succession plans, including candidate summaries, indicating relative strengths/weaknesses for promotion, and position/succession summaries indicating what internal candidates are at what levels of preparedness for higher or alternative positions and how to overcome expected surpluses and shortfalls of supply for various positions. The culmination of a succession program is either a chart or series of succession summaries for most positions in the organization, except, perhaps, those like entrylevel positions that are customarily filled through external recruitment. Companies vary in how they handle the succession-planning process. Skill inventories are more comprehensive than replacement and succession charts. They provide very detailed information about everyone in the organization. Common data elements include employee name, work location, present position title, previous position titles, date of birth, date of hire, educational preparation, training completed, fluency in foreign language, career objectives, medical history, publications, professional licenses, hobbies, salary history, and potentially much more. The challenge is to decide what to include and what to exclude. Forecasting External Labor Supply It is much more difficult to forecast the supply of labor available outside than inside the organization. Several reasons account for this. First, no centralized, national projections of labor supplies exist. The U.S. Bureau of Labor Statistics provides some information of this type, though it is often too broad to be useful to individual employers. Second, few firms are large enough to justify the expense of devoting substantial effort to forecasting external supplies available nationally, regionally, and locally from colleges, universities, competitors, and other sources. Third, organizations differ in their unique requirements. It will not be enough to forecast general numbers, such as availability of accounting graduates in the United States. It might be more useful to narrow this forecast by focusing on those graduates possessing several characteristics desired by the firm. Of course, cross-matching of characteristics will mean that real supplies available dwindle quickly. There might be many accounting graduates in the United States each year, but there are substantially fewer who (for example) are minorities and who possess specialized experience in one industry. Fourth, and finally, labor availability differs by location. The distribution of the U.S. population is not even. There are, for example, more young workers in western than in northern states. Very little information exists on how organizations estimate external labor supply. Perhaps few do. Some HR planners have proposed economic models to estimate labor supply. The prototypes of this approach were geared to determining, for purposes of 27 equal employment opportunity, how many people in various sex and race categories could be attracted to employment with one firm. A more sophisticated approach is based on using scenarios of different economic and technological conditions. There is just no simple way to go about forecasting external labor supply. 2.5. Step Seven: Forecasting HR Needs The final step in HRP forecasting is a relatively simple one, as long as supply and demand are expressed in terms compatible enough to allow for comparison. In other words, if demand focuses on numbers of people in job categories, then supply forecasts must be expressed in similar terms. One way to forecast needs is to graph expected demand and expected internal supply. The gap between them will have to be closed through: Recruitment and hiring. This action will be affected by availability of external labor supply. Training. This action will involve preparing people in some job categories to move into other categories in which HR demand is expected to increase. Promotions and transfers. These actions typically follow training and involve actually moving people from one category to another. Job redesign. The organization’s allocation of work duties can be changed so as to alter need for more people. Job redesign usually implies enrichment—that is, loading a lower-level job category with responsibilities associated with a higher category. Another possibility is job enlargement, in which more of the same kind of tasks/duties are added to a job. Turnover reduction. One way to increase available internal labor supply is to reduce the number of competent, experienced people who leave the organization. This strategy involves examining quality of work life issues such as job satisfaction, and employee intentions about leaving. It can also involve identifying existing or expected problems stemming from organizational policies on compensation/benefits, labor relations, and other issues. Increased productivity. One way to change labor demand is to change the ratio between demand and staffing. Overall, HR forecasting tends to focus more on quantitative than on qualitative issues. It has been the subject of much attention in HR planning literature, but there is still no foolproof method to handle it. The basis of most forecasting methods? Historic and past-oriented relationships between staffing levels and bottom-line measures of outputs and revenues. Even when some attempt is made to incorporate expectations about how the future will differ from the past, HR planners tend to preserve their heavy emphasis on past-oriented information. For this reason, environmental scanning is more valuable than quantitative forecasting for job incumbents, HRP practitioners, and managers in strategic planning for HR. 29 business needs them to stay ahead of the competition, or at least to not fall behind. Hiring a contingent worker can be a great way to kill two proverbial birds with one stone; you will have access to the right skills immediately and the temporary employee can transfer (part) of their skills to your current employees. That way, by the time the continent worker leaves, you have had the opportunity to build the capability you previously lacked. Another, more typical example of when employing contingent workers provides you with the flexibility you need is during seasonal peaks in business activity. 3.1.2. Additional talent pool Both the contingent worker and the organization they temporarily work for can look at this period as a test phase. Do they see a fit? Would they like to turn their temporary contract into a more permanent one? For organizations, contingent employees can be a valuable additional talent pool, one they’ve already had (a great) experience with. They know how those people work, what their strengths are, and whether or not they fit in the company culture. 3.1.3. Fewer costs Of course, there is a financial reality too. Hiring a contingent worker is financially interesting for companies. They usually pay fewer taxes for contingent employees and no employee benefits. 3.1.4. No need to train/highly specialized Contingent workers are often highly specialized in what they do. Organizations may need these specialists every now and then for certain projects, but not on a permanent basis. Rather than spending (a lot of) money on training people in-house, companies can hire a contingent worker to help them out. Another benefit of working with a contingent expert is that they tend to have a lot of experience. This means that they don’t need a lot of training to get started. They know how to get the job done and are able to do so autonomously. 3.2. Drawbacks of hiring a contingent worker Working with contingent employees comes with its own set of challenges, or points of attention. Drawbacks include: 3.2.1. Lack of commitment Compared to ‘classic’ employees, contingent workers are often not as committed to the organization they work for. This is, among other things, due to the temporary nature of their relationship with their employer and the fact that it can be difficult for them to integrate into the company. 3.2.2. High turnover Naturally, contingent workers remain with the company for a fixed period of time only, which leads to more turnover. This constant coming-and-going of people can also make other employees less inclined to fully welcome their contingent colleagues into 30 their team. 3.2.3. Security risk The hiring process for a contingent worker – if there is any – is often not as thorough as the process for a classic employee. Certain screening processes, for instance, may be skipped. This can present a security risk since contingent workers often have the same access to company information and resources as core employees. 3.3. Best practices of contingent staffing 3.3.1. Get your processes in order Just like you want to have the processes related to every stage of the employee life cycle in order, you also want to have the processes related to the contingent worker life cycle to be spick and span. This includes: Recruitment and selection. We briefly mentioned the recruitment process regarding potential security risks. But your hiring process is also important for your contingent worker experience. While the way you hire contingent employees can be different from the way you hire core employees, you still need to have a structured process in place. Onboarding and new employee orientation. To make a contingent worker feel welcome and part of the team and to help them get to know their way around the organization quicker, it’s important to give them an onboarding. This also includes new employee orientation. Project management. Someone, most likely the contingent worker’s manager, should check in with them regularly to see how the project is evolving. Milestones should be praised and celebrated with the team. Offboarding. When the project is done and the temporary contract has expired, it’s time to offboard your contingent worker. Here too, you need to have a process in place and again, this can be based on your regular process. In any case, thank the temporary employee for their time and effort and make sure to have a (short) list of exit interview questions ready for them. If both of you were satisfied working together, you can add the contingent worker to one of your talent pools. 3.3.2. Pay people on time Yes, this is a process as well but since it’s also something that (too) often goes wrong when it comes to contingent workers, we mention it separately. Few things are more frustrating than having to ask for your money, especially when you’ve already done the work. Not paying your contingent employees on time doesn’t help with making them feel ‘part of the team’ either, nor does it boost their commitment to the company. In other words, ensure timely payments. 3.3.3. Culture, technology, and physical space Since your contingent workers are your employees too, albeit for a fixed period of time, these three environments need to be on point. A quick reminder of what this 32 4.2.1. Get your org chart up to date You’ll need an up to date copy of your org chart to get started. And if you don’t already have one, get started on a draft right now. 4.2.2. Identify likely promotions Within your current structure, who’s likely to move around? Are there upcoming promotions you should be aware of? What gaps will this create? 4.2.3. Identify likely attrition and turnover Think about retirement, resignation, redundancy, health issues, and performance. Are there people who are likely to be moving on in the next year? For larger organizations where you don’t have this information on an individual basis, use historic trends as a baseline for planning. Just remember that depending on your industry this may vary considerably year on year. Again, re-draft your org chart to highlight these gaps and add these to the headcount planning sheet in your hiring plan template. 4.2.4. Plan for growth and skill gaps Now that you’ve got an outline of the vacancies that’ll be created by movement within your existing workforce, we need to consider growth. Are there teams where additional resources are needed? A big project coming up? Talk to your hiring managers and understand what roles they’re likely to be creating over the next 12 months. Again, these roles to your org chart, and include them in your recruitment plan. How are your teams looking? Are there additional skills that need to be added to a team to help them flourish? Larger organizations sometimes complete a formal skills gap analysis at this point. For smaller organizations, it may be a case of having a less formal chat with your team leaders. Keep a note of these gaps in your recruitment plan. When you’re approving requisitions, designing job descriptions, and advertising roles, consider how you’ll attract the right people to start filling some of these gaps. 4.3. Get clear about the type of candidates you want to attract What values do your most successful team members share? What kind of person tends to work well in your company historically? What kind of person doesn’t? If you had to identify common themes between your ‘star recruits’, what would they be? Are there differences in these answers in different departments and locations? Now that we’ve got you thinking about this, open up your Ideal Candidate Profile Template and create a profile for each type of candidate you’re trying to attract. 4.4. Revisit your employee value proposition (EVP) In a competitive market for the best candidates, the organizations that will win are the ones that are clear about why someone would choose to work for them over a competitor. This is known as an employee value proposition. When you’re on the inside of a company, it’s easy to see all the good (and bad) things about working there. You know what the team’s like, what the expectations are, and 33 what kind of person works well within your organization. You can also see when a new hire is going to fit right in – or, equally, be gone in their first month. But, when you’re an applicant things like the look and feel of an office, team diversity, and the culture are not obvious. That is, unless the employer makes a real effort to communicate this upfront. And the employers that do, make the most successful hires. No one wants to accept a job, only to find that it is entirely different to how they thought it’d be. It’s disappointing. A letdown. And it leads to high staff turnover. It really is a waste of time for everyone. It’s your responsibility as a recruiter to make sure you’re attracting the right people to your business by being very clear about what it’s really like at your organization. When candidates understand what your business is really like you’ll attract the right applicants, and your new hires won’t have a huge shock on their first day. It also means that they’ll be way less likely to leave. So, it’s time to revisit (or create) your EVP. Does it really reflect who you are and what you offer? Is it going to help you attract, hire, and retain the right candidates? 4.5. Develop your sourcing strategy Once you’ve put some work into your employee value proposition, it’s time to develop a plan for attracting the right candidates and review how well you’re communicating your employer brand in the market. Don’t be the fool that assumed they’re already doing a great job. Everyone can always do better. 4.5.1. Choosing the right recruitment marketing channels With a huge range of recruitment marketing channels available, how do you decide which are going to work best for you? As with many things in marketing, “it depends”. If you’re looking to attract a large volume of applicants fast and in an uncompetitive market, then job boards could be a good starting point. If your focus is on quality, then employer brand campaigns on social media followed up with highly targeted digital ads promoting specific vacancies might be the order of the day. The most popular channels including: Programmatic recruitment advertising Programmatic recruitment advertising is the automated buying of online advertising to help organizations attract the best applicants. Traditionally, recruitment advertising took a “spray and pray” approach. Today, programmatic recruitment advertising enables talent acquisition teams to target their advertising to be seen by exactly the right potential candidates – the ones they’d actually want to hire. It’s cost-effective and delivers consistent results. Digital recruitment ads can be delivered across social media platforms and millions of websites where your ideal candidates are spending their time online. Cost-wise, you can typically expect to pay around 2%-3% of salary to make a hire from programmatic recruitment advertising. Job board advertising Job boards remain popular because of their relatively low cost. On the other hand, when not using relevant niche job boards, recruiters often complain that they attract a huge volume of completely irrelevant applicants that they then have to sift through 34 and manage. Job boards definitely have their place. They’re a much more cost-effective way to reach the active candidate market than using recruitment agencies. The key is in choosing job boards where your ideal candidates are looking for roles – and that often means going niche. By spending some time researching the most relevant job boards for your vacancies, you’ll spend less time reviewing irrelevant applications and attract more of the best candidates. Recruitment agencies There are few in-house recruiters that we speak to who love their agencies. They’re expensive, their goals aren’t always aligned with yours, and the quality of candidates varies dramatically. On the other hand, over-stretched in-house recruitment teams are often worried that they won’t be able to attract enough quality candidates direct and assume that reducing reliance on recruitment agencies will result in more admin. There’s a place for external recruiters when hiring for roles that require very specialist skills, or for senior positions where niche headhunters have access to the right network of potential candidates. The average cost of hiring through an external recruiter is 15%30% of the candidate’s annual salary. Print advertising If print’s still working for you then who are we to bash it. Of course, it’s more difficult to measure than digital but there are inevitably industries where it can work. But, just as with any other channel, ensure you’re placing your ads where your ideal candidates are actually hanging out. The cost of print ads obviously varies dramatically and it can be more difficult to prove a return on investment on print than on digital advertising. Employee referrals Employee referrals are one of the biggest untapped resources for attracting good-fit candidates. Employee referrals are the most reliable, available, and underutilized source of candidates for recruiters. HR teams can leverage their connections with current employees and get them to suggest worthy candidates. Your employees can help you reach the most relevant candidates in a fraction of the time and at a fraction of the cost of other candidate-sourcing channels. Job fairs/campus recruiting Although not a necessary part of a recruitment strategy, attending job fairs can be a great way of getting your employer brand in front of the newest brains entering the workforce. Before you invest in heading to job fairs, you should get clear on who you’re looking to recruit and select the job fairs or careers days that suit that goal – or decide if this form of recruiting is actually not relevant for your organization. For example, if you’re looking to recruit for entry-level positions predominantly, then you might concentrate on getting more of an educational careers day. If you’re seeking tech graduates, then an industry-specific jobs fair would be a better fit, so that your brand is in the race for the best new talent. Although job fairs are a great way to get your employer brand in front of many talented 35 people, it’s important that you select the relevant events – and that you ensure you’ve got the collateral to support your efforts. As you’ll see at job fairs, often the businesses who are remembered are those with the most merch! Don’t pin all of your hopes on getting lots of applicants immediately from these events, but it’s a nice way of getting your brand out there. Engaging with existing talent pools Whether you’re going to be building a talent pipeline for the first time or you already have a strong talent pool, you need to think about how you’ll keep these candidates engaged. Typically, this will include: Keeping in touch through regular social media content, emails, and programmatic advertising. Manually maintaining relationships with your top talent pipeline candidates whether that’s by email, social media, or in person. Inviting talent pipeline candidates to apply for relevant vacancies as they come up (usually by email). 4.5.2. Optimizing your marketing assets Just like in product sales and marketing where buyers are doing their research before speaking to sales teams, candidates are doing their own research before applying or speaking to a recruiter. Have you optimized all of your recruitment marketing assets to clearly position your employee value proposition and help attract the right kinds of candidates? Careers site(s) Your careers site is often your first point of contact with any potential applicant. Over 60% of traffic to careers sites is now from mobile devices so it’s absolutely imperative that it’s designed mobile-first. The majority of your applicants will be perusing on the go. As well as that, it should be totally on-brand, with lots of information about your company, what it’s like to work for you, and what your team values. Candidates should be able to apply with a single page application form. No logins. Don’t make it difficult for your applicants, or you’ll lose the best ones. Check out these examples of excellent careers pages, or this guide on improving your own careers site. This is an area where lots of organizations fall down when it comes to unconscious bias in recruitment. Consider how the images and language you choose affect who will apply. If this is an area of interest, we’d recommend watching this on-demand webinar on diversity recruiting. Job descriptions If you were trying to attract more customers you wouldn’t just give them a list of things they’d have to do to use your product or service. You’d explain the benefits of your offering, explain the purchase process, the support process, and give examples of how 38 4.6.3. Automating interview scheduling The back and forth of emails when trying to schedule interviews is a painful experience for candidates and hiring teams. Most applicant tracking systems (ATS) include an interview scheduling tool that enables candidates to schedule their own interviews based on your hiring team’s availability. 4.6.4. Improving candidate communications Communication is key! The worst thing that could happen, is that you’ve spent all this time cultivating a strong EVP, attracting great applicants, and then during the recruitment process you lose them because they didn’t know what to expect, and nobody kept them up to date. Make sure you’re including information about the process upfront – on your careers site, on the application confirmation page. And keep in touch with candidates at each stage of the process. Include detailed information about what to expect from the interview on the interview confirmation email. Who will they be meeting? What’s the dress code? What do they need to prepare? What should they do when they arrive? 4.6.5. Taking the admin out of background checks Background checks are an essential part of most selection processes but they can also be one of the most labor-intensive parts, requiring candidates and recruiters to complete a huge amount of paperwork. There’s an ever-increasing number of software tools that can help automate elements of your background check process. 4.7. Design an onboarding process that sets candidates up for success One of the key metrics that every recruiter should be considering, of course, is retention. If your onboarding plan isn’t up to scratch, it’s highly likely that you’re going to lose the awesome talent you’ve put so much effort into attracting. After all, 30% of new employees leave their new job within the first six months. Let’s make sure your new starter isn’t one of them. Here are a few ideas to get you started: Use an onboarding tool to minimize paperwork and keep everything in one place. Send a welcome pack with stationery and branded items in the post before their first day. Get their equipment to them, fully configured, ahead of day one. Send a virtual greeting from the team – it doesn’t have to be super professional, just make it an authentic ‘we’re looking forward to meeting you!’ Bonus points if it’s a video. Ensure their line manager checks in with them regularly between offer acceptance and start date. Get creative! Film a short ‘this is your new office’ video on a smartphone, or send a snap of their new desk – whatever you can do to make it personal. 39 Give new hires a login to training systems or an online portal before they arrive on day one. Make sure you set expectations. If this training is optional, make that clear. But give candidates the opportunity to geek-up before they start if they want to. Give them the chance to introduce themselves – a bio post on the company intranet? Make sure they’ve got the handbook and contract all well ahead of starting so that they can prep any questions they might have. Give them a schedule of what their first week might look like. Make it clear what they’re expected to wear, bring, etc. Your schedule doesn’t have to be exact, but it’ll calm a lot of new-job nerves, and help them to settle faster. 4.8. Identify tools that can help Processes that were previously tedious and time-consuming can be automated, data can be stored in a central location rather than masses of spreadsheets, and modern careers websites can be kept up to date automatically. The right tools no longer cost the earth. It’s time to let modern HR tech help you out. 4.8.1. Programmatic recruitment marketing platforms The days of “spray and pray” recruitment strategies are over, and you no longer need a full-time marketing team to run your recruitment marketing campaigns. Programmatic recruitment marketing platforms enable in-house recruiters to run highly targeted recruitment ads across social media and the websites where their ideal future hires spend their time, all at the click of a button. There’s standalone recruitment marketing software, and other tools that are built into modern applicant tracking systems (ATS). When your ATS and programmatic recruitment marketing platform are deeply integrated, the targeting of your adverts will be automatically adjusted to attract more of the types of candidates you’re most likely to interview or hire. Over time, your costs go down whilst the quality of your applicants improves – all without requiring your team to have any experience in digital marketing. 4.8.2 Applicant tracking software An applicant tracking system is as important for recruitment teams as a Customer Relationship Management (CRM) system is for sales. The right ATS should save you an unimaginable amount of time previously spent on repetitive admin whilst also helping you attract better applicants and improve your candidate experience. Some applicant tracking systems include marketing automation tools and onboarding features. But even the most basic will offer some combination of: A branded careers website and online application process Interview scheduling automation 40 Candidate communication management The ability to build talent pools Team collaboration tools A recruitment analytics dashboard Employee onboarding software Employee onboarding software empowers your team to deliver personalized onboarding experiences for every candidate, whilst spending less time on admin. No more onboarding paperwork. No more back and forth requesting signatures. Everything’s managed in one central portal. Employee engagement software Whether it’s for performance management, or reward and recognition, employee engagement tools help streamline everyday “people process”. Employee engagement tools enable HR teams to collect data on employee satisfaction, map out OKRs, plan one to ones, and recognize great work. Employees and managers can provide feedback, set objectives, and provide updates in a structured way. 4.9. Create a budget to support your recruitment plan A well-planned recruitment budget will help you demonstrate the return on investment of your direct hiring strategy to senior stakeholders and position your inhouse recruitment team in a positive way. And when you can demonstrate that your inhouse recruitment team is saving the organization money when compared to relying on external recruiters, it becomes easier to secure additional budget for the resources you need to do an even better job. A comprehensive recruitment budget will include: The cost of sourcing (e.g. job boards, programmatic advertising, recruitment agencies) The cost of selection (e.g. background check and assessment tools) The cost of onboarding (e.g. onboarding software, background checks) The cost of general employer branding activity and the overheads associated with your in-house recruitment team (e.g. salaries). Some organizations will also include things like an allowance for IT / office equipment and other costs associated with the employment of your recruitment team 5. Employer Branding Employer brand is a term used to describe an organization’s reputation as an employer, while employer branding is a set of activities and campaigns employers use to promote their employer brands. In other words, employer branding is everything an organization does to communicate and promote their organization’s employee value proposition (EVP). 43 Boost employee engagement with employer branding initiatives Increase the number of job referrals Improve candidate experience and Net Promoter Scores (NPS, i.e. How likely are you to recommend this company as a place to work to others?) Improve the offer acceptance rate Reduce application drop-off rate Increase Glassdoor ratings 5.2.4. Define your candidate personas In order to make employer branding campaigns more personalized and efficient, it is important to define and understand your candidate personas. Candidate persona is the visual representation of your perfect job candidates. 5.2.5. Optimize your employer branding channels There are multiple different channels organizations use to promote their employer brand and get in front of their candidate personas. 5.2.6. Engage your employees The most effective employer branding initiatives are the ones that showcase your existing employees. Engaging employees in your EB campaigns is crucial because employees have a big power to increase trust in the workplace. If you can encourage employees to share their own stories and become your employer brand ambassadors, your external communications will be much more credible and attractive to job seekers. 5.2.7. Engage the C-Suite Leadership’s buy-in and engagement with employer branding initiatives is very important. It is crucial that they support those initiatives and act as role models to both employees and job candidates. According to Glassdoor, 75% of U.S. respondents believe that companies whose C-Suite executives and leadership team use social media to communicate about their core mission, positive workplace culture, brand values, and purpose are more trustworthy. 5.2.8. Ensure positive candidate experience Employer branding doesn’t stop once a candidate applies. Candidate experience in the selection process is also an important piece of employer branding. According to Talent Adore, 78% of job candidates say the overall candidate experience they get is an indicator of how a company values its people. And those with a poor experience never apply to that organization’s job openings anymore. Moreover, many of them stop buying that organization’s products and services and even tell their friends to do the same. 5.2.9. Measure the success and optimize based on insights 44 Measuring the impact of your EB initiatives is important for improving them in the future and getting the highest possible ROIs. To measure the success of your employer branding campaigns and initiatives, you should refer back to the defined goals and do the before and after analysis. 5.3. The Role of Employees in Building a Strong Employer Branding Strategy HR, recruitment, and talent management departments are usually the ones responsible for developing employer branding strategies. Often, they also work in collaboration with marketing and communications teams to ensure consistent communication among employees and customers. However, it is important that organizations understand that their employees are the most important employer brand ambassadors. According to Edelman Trust Barometer, employee voice is 3x more credible than the CEO’s when it comes to talking about working conditions in that company. Moreover, employees rank highest as the most trusted and influential source of company news and information — outranking the company CEO, activist consumers, and the media spokesperson. As social media is a big driver for employer branding success, your employees’ engagement on social media is crucial for attracting new talent to your organization. 5.5. How to Drive Employer Brand Ambassadorship in Your Organization According to previously mentioned research by LinkedIn, 68% of talent acquisition leaders agree that social professional networks are one of the most effective tools for spreading awareness about employer brand. This is why many employers are trying to engage their employees to be their employer brand ambassadors on social media. 98% of employees use at least one social media site for personal use, of which 50% are already posting about their company. To add, Weber Shandwick discovered that 21% of employees within organizations are estimated to be brand advocates and another 33% have the potential to be ones. 6. Employee Selection and Assessment Yet, when it comes to actually assessing which job candidates are likely to perform most effectively and make the most significant contributions, a large number of organizations employ rudimentary and haphazard approaches to selecting their workforces. This represents a serious disconnect for organizations that purport to have a strategic focus on increasing their competitive advantage through effective talent management. Here we describe the various assessment methods that can be used by organizations. The figure below shows which assessment methods are predominantly task-based and which are predominantly KSA-based. The methods mentioned below can be used for internal or external selection. Internal selection refers to situations where an organization is hiring or promoting from within, whereas external selection refers to situations where an organization is hiring from the outside. While some assessment methods are used more commonly for external selection (e.g., cognitive ability tests, personality tests, integrity tests). 45 6.1. Assessment methods 6.1.1. Cognitive Ability Tests These assessments measure a variety of mental abilities, such as verbal and mathematical ability, reasoning ability and reading comprehension. Cognitive ability tests have been shown to be extremely useful predictors of job performance and thus are used frequently in making selection decisions for many different types of jobs. Cognitive ability tests typically consist of multiple-choice items that are administered via a paper-and-pencil instrument or computer. 6.1.2. Job Knowledge Tests These assessments measure critical knowledge areas that are needed to perform a job effectively. Typically, the knowledge areas measured represent technical knowledge. Job knowledge tests are used in situations where candidates must already possess a body of knowledge prior to job entry. Job knowledge tests are not appropriate to use in situations where candidates will be trained after selection on the knowledge areas they need to have. 6.1.3. Personality Tests Personality tests that assess traits relevant to job performance have been shown to be effective predictors of subsequent job performance. The personality factors that are assessed most frequently in work situations include conscientiousness, extraversion, agreeableness, openness to experience and emotional stability. 6.1.4. Biographical Data Biographical data (biodata) inventories, which ask job candidates questions covering their background, personal characteristics or interests, have been shown to be effective predictors of job performance. The idea is that the best predictor of future performance is past performance. 6.1.5. Integrity Tests Integrity tests measure attitudes and experiences that are related to an individual’s honesty, trustworthiness and dependability. 6.1.6. Structured Interviews The interview is the most common selection device used in organizations. Structured interviews consist of a specific set of questions that are designed to assess critical KSAs that are required for a job. Structured interview questions can be developed to assess almost any KSA, but they are used most frequently to assess softer skills such as interpersonal skills, communication skills, leadership, planning, organizing and adaptability, among others. An important characteristic of an effective structured interview is that it provides standardized rating criteria to help interviewers judge the quality and effectiveness of the responses provided by the interviewee. During a structured interview, the predetermined questions you ask are all correlated to important job competencies derived from a detailed job description. The questions 46 can be either behavioral or situational. They’re rated with a specific scoring system with a range of acceptable answers. When there is more than one interviewer, the team should reach a consensus on the order of questions and the interpretation of answers. Situational interview questions present the candidate with a hypothetical situation and ask them how they would handle it. “What would you do if…” Behavioral interview questions ask the candidate to recall a past experience and describe how they did handle in. “Tell me about a time in a past job when…” The disadvantages of structured interviews reflect the benefits of the unstructured intervie

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