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                                                  HRIS for Small to Mid-size Companies

Employment Staffing (Jobs)

Effective Hiring Strategies

A successful employment staffing program involves hiring the right people with minimal lead time. For the best results, get everyone in your organization involved in hiring. Make it a high priority for all. The most popular methods to recruit employees are listed below:

  • Internal Job Postings often yield the best candidates to fill the open position. Filling positions with internal candidates encourages career growth, professional development and cross training of employees. It's a big morale boost if your employees perceive that they have growth potential within the company. They will be less likely to leave the company. Post job openings on a share folder, a server, or the old fashioned way, a bulletin board (the kind that hangs on the wall). A few positions you won't want to post...those in which you have a specific candidate in mind, typically Senior Management positions. Avoid doing this too often or your employees will loose confidence in the fairness and effectiveness of the internal transfer system and they will perceive favoritism, a big demotivator.
  • Employee Referrals are the best source of external candidates. There's a strong motivation for employees to refer good candidates lest they feel responsible for referring someone who turns out to be a poor performer. Also, employees tend to know others in the same field, either through professional associations, or by having worked with them at previous companies. To encourage referrals, a large majority of companies pay bonuses to employees who refer candidates who are eventually hired. Referral bonuses typically range from $100 to $1500, with the higher bonuses being paid for employees hired into positions that are difficult to fill. With a $3500 to $4500 average cost per hire, this is a bargain. Employee referral programs work best when employees are enthusiastic about their work and their employer.
  • Newspaper advertisements is, at best, a moderately effective means of recruiting. Your newspaper ad may not be read by your target audience. Furthermore, many non-qualified candidates often respond. In addition, newspaper advertising can be expensive.
  • College Campuses are another very popular recruitment source. New college hires are generally enthusiastic and eager to learn. They are typically more accepting of idiosyncrasies in organizations than experienced hires. Colleges, universities, and technical schools are generally eager to schedule businesses to come on campus for interviews. (See also the section on Recruiting College Students.)
  • Contract Recruiters can be used instead of in-house recruiting staff.  Because contract recruiters are not employees of the company, they can be brought on-board or released quickly. This can be an advantage to the company because recruiting is a very cyclical function. Contract recruiters usually command a higher pay rate than in-house recruiters, even considering that they do not receive benefits.
  • Employment Agencies (Headhunters) have been used by almost all organizations, at least occasionally. Employment agencies are typically used to recruit candidates for top management positions and other positions that are difficult to fill. Employment agencies offer some unique advantages. They can typically conduct a confidential search, and deliver candidates quickly (depending upon the size of their candidate pool). Their disadvantages include cost (20% to 30% of the hired candidates annual salary), and a high turnover of placements (hiring the candidate in your organization does not remove them from  the headhunter's candidate pool).
  • Job Fairs can be very effective. A job fair is an event sponsored by a "job fair" company who charges a fee to participating employers.The "job fair" company will typically advertise in local media to attract qualified applicants. Hiring managers can meet multiple candidates and conduct on-the-spot interviews. Because the applicants may be interviewing with multiple employers, it is imperative to respond quickly with invitations for in-plant interviews of qualified candidates. If a job fair results in just one hire it is usually cost effective.
  • The Internet is the most popular source of employment advertising. Employers can post their openings to free sites or to job boards that charge a fee.
  • Minority and Handicap Sources are used by many organizations (more prevalent in larger organizations, less in smaller organizations), often to fulfill an Affirmative Action Plan obligation. Examples of Minority or Handicap sources include Project Hired, Goodwill Institute for Career Development, and Mexican American Community Services, etc.
  • State Employment Agencies provide an abundant source of applicants for predominantly lower skilled positions. About two-thirds of organizations use state employment agencies.
  • Rehires are another excellent source of candidates. Often employees leave only to find that the grass wasn't greener at their new company. Call them after a month or a few months and you might be surprised about their willingness to return. At a minimum, it will keep the door open to a possible future return.
  • Part-time employees are utilized by almost all companies. Many candidates are only willing to work part-time. Therefore this can be a valuable source of employees if the business situation allows for part-time employment.
  • Other Sources:
  • Employee referral contests (significant prizes to those who successfully refer the most candidates over a period of time)
  • Billboards
  • Open houses
  • Radio
  • Television
  • Controlling Employee Turnover

    Employee terminations (turnover) are a significant cost to organizations. Productivity is lost during the 45 to 60 days it takes to refill the position,plus the time it takes to train the new employee in their new job. The higher the turnover, the more pressure placed on recruiting. Several strategies for controlling employee turnover are shown below.

    Providing career advancement opportunities is critical for retention, especially for those employees who are career oriented and are in the early or middle stages of their careers. Ensure that job openings are posted and that there are no barriers to transferring to new positions (such as inter-organizational rivalries, or unwillingness to release an employee from a particular project). Career Development discussions should be held at least annually as part of the Performance Management process or whenever the employee requests it. An employee has to take the initiative and own their career development plan, but the organization should encourage its development. A mentoring program can help. A career ladder chart, even a simple one, can also help facilitate the career development discussion. Recognize and acknowledge the skills and abilities that the employee has gained since joining the organization which may make them eligible for the next advancement. Avoid the tendency to view the employee as only having those skills and abilities that they had when they were hired. If the employer's business situation is perceived to be unstable (relatively speaking - no company is perfectly stable), employees may seek other employment opportunities that appear to offer more stability.

    Communicating the business condition of the company to the employees is valuable for several reasons. It can help provide a link between the employees' job and the success of the company. It gives employees a sense of stability of the organization because the employees can see that someone is in charge and worrying about the big picture. Don't be afraid to communicate bad news, because no matter how bad it is, it is still going to be better than the  rumor mill. It's best to communicate the state of the business on a regular basis such as quarterly or semiannually. A personal presentation from the head of the organization is best, but written communication can work too. In addition to the regularly scheduled employee communications, major business events, both good and bad, should be communicated to employees as they occur.

    Listening to employee ideas and complaints is another important aspect of communication. Employees who do not feel listened to will be demotivated. A system of regularly scheduled one-on-one meetings between the employee and manager can help fill the need to be listened to. So can the Performance Management process. Listening to employees gives them a message that they are valued and provides them with a sense of control over their work situation.

    Providing recognition to employees is a third aspect of communication. Types of recognition can range from a simple "thank you fora job well done," to a plaque, to Financial Incentives.

    Pay is overstated as a retention tool. The areas mentioned above are more important for retention than pay. This subject is discussed in detail in a separate section on compensation.

    A recent survey by HR focus magazine (June 2000) listed the following Benefits and Perks that Work for Retention:

    Retention Event Pct of Cos Using
    More office social events 46%
    More flextime options permitted 44%
    More input sought from workers on policies and procedures 41%
    Performance bonuses added or increased 39%
    Casual dress days added or expanded 34%
    Higher raises given 28%
    Vacation/leave-time added 23%
    Telecommuting allowed/increased 21%
    Employee entertainment/service discounts 20%
    Job-sharing allowed/increased 14%
    In-office services (e.g. dry cleaning pick-up, etc.) 13%
    Comp time offered/increased 12%
    More diversity initiatives added 12%
    Sabbaticals offered/lengthened 3%
    Employees allowed to bring pets to the office 2%

    Involuntary Terminations

    Layoffs typically occur when the business base is not big enough to support the current number of employees. Layoffs are costly in terms of employee morale (voluntary turnover usually increases sharply after a layoff because employees' sense of security is undermined or they may be angry at the organization for having a layoff, or choosing the wrong people to be laid off, etc.). Layoffs are also costly in terms of actual costs (companies typically provide severance pay and benefits after termination for a period of time equal to one week for each year of service). There's also an increased risk of wrongful termination lawsuits, but this can be mitigated by rigorous and objective layoff selection process and severance packages.

    Staffing planning is one way to reduce the need for layoffs, though no staffing plan is perfect. Another way is to employ temporary or contract employees. Using temporary employees is a practical solution in a volatile business environment.  The availability and quality of temporary employees can be high. Some temporary employment agencies, in an effort to attract the best candidates, offer benefits.

    Performance related terminations inevitably arise because some employees cannot fulfill the requirements of their job. The reasons can include a bad hire (skills of the new employee didn't match the requirements of the job), personal problems (personal problems can pull the employee's attention away from the job), personality conflict with others in the work group, or substance abuse. These situations can be treacherous. Employees sometimes react irrationally and lawsuits are a risk. A progressive discipline policy is a must. The policy must provide a process in which the employee is notified in writing of the performance problem(s) and it must allow a period of time for the employee to correct their performance problem (except for extreme behavioral problems, such as theft or violence). Focus on the performance issues and avoid getting sucked into the employee's personal life. If you suspect the employee is having personal problems and your company sponsors an EAP, you may wish to utilize this resource. Contact the EAP first and ask them for advise on how to approach the employee with an invitation to utilize the EAP. Don't try to diagnose the employee. If, for example, you merely suggest that you think the employee has a substance abuse problem, the employee becomes protected under the American's with Disability Act (ADA). Instead go the EAP route (again, call the EAP first). In about half of the cases, the employee's performance will improve to an acceptable level once they are put on notice. Many will recognize that their skills and the requirements of the job don't match, and choose to leave voluntarily. Be supportive of that decision. If the employee remains, and after a reasonable amount of time, their performance does not improve, as politely as possible, inform them that it didn't work out and send them on their way. Document every step of the process as a defense against possible lawsuits.

    The Virtual HR Department - Detailed HR Process Instructions

    "The Virtual HR Department" provides detailed step-by-step instructions on how those with HR responsibilities can perform virtually every major task in Human Resources. Here are procedures related to the topics on this page: