UMUC Business Recruiting Methods Discussion

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fzehffryy12

Business Finance

University of Maryland University College

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Part A: Recruiting Methods

Discuss the different types of social media sites that HR professionals can use as recruitment tools. What are some of the advantages and disadvantages of using these sites? Make a case for which social media site you believe to be most effective to recruit quality candidates. Be sure to include an expert's ideas (with proper citations) to support your argument.

Part B: Evaluation of Recruiting and Selection Processes

Review some of the examples of metrics included in this week’s reading. How can HRMs use metrics to measure the success of the recruiting and selection processes? List 3 metrics that you view as most relevant. Explain your opinions. Be sure to include an expert's ideas (with proper citations) to support your argument.

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Slide 1: Welcome to lesson 4 on recruiting. This lesson focuses on how to find qualified candidates for jobs in organizations. Slide 2: This lesson will cover three topics:  Topic 1: The Recruitment Process  Topic 2: The Law and Recruitment  Topic 3: Recruitment Strategies Slide 3: Topic 1: The Recruitment Process The recruitment process is an important part of human resource management, and it requires strategic planning. Recruitment is defined as a process that provides the organization with a pool of qualified job candidates from which to choose. Before companies recruit, they must implement proper staffing plans and forecasting to determine how many people they will need. Slide 4: Forecasting is based on both internal and external factors. Internal factors include the following: • • • • • Budget constraints Expected or trend of employee separations Production levels Sales increases or decreases Global expansion plans Slide 5: External factors might include the following: • • • • • • Changes in technology Changes in laws Unemployment rates Shifts in population Shifts in urban, suburban, and rural areas Competition Once the forecasting data are gathered and analyzed, the HR professional can see where gaps exist and then begin to recruit individuals with the right skills, education, and backgrounds. Slide 6: Although it might seem easy, recruitment of the right talent, at the right place and at the right time, takes skill and practice, but more importantly, it takes strategic planning. When a job opening occurs, the HRM professional should be ready to fill that position. Here are the aspects of developing a recruitment strategy: 1. 2. 3. 4. Refer to a staffing plan. Confirm the job analysis is correct through questionnaires. Write the job description and job specifications. Have a bidding system to recruit and review internal candidate qualifications for possible promotions. 5. Determine the best recruitment strategies for the position. 6. Implement a recruiting strategy. The first step should be acknowledgment of a job opening. At this time, the manager and the HRM look at the job description for the job opening (assuming it isn’t a new job). Assuming the job analysis and job description are ready, an organization may decide to look at internal candidates’ qualifications first. Internal candidates are people who are already working for the company. If an internal candidate meets the qualifications, this person might be encouraged to apply for the job, and the job opening may not be published. Many organizations have formal job posting procedures and bidding systems in place for internal candidates. However, the advantage of publishing open positions to everyone in and outside the company is to ensure the organization is diverse. The best recruiting strategies for the type of position are then determined. For example, for a high-level executive position, it may be decided to hire an outside head-hunting firm. For an entry-level position, advertising on social networking websites might be the best strategy. Most organizations will use a variety of methods to obtain the best results. Another consideration is how the recruiting process will be managed under constraining circumstances, such as a short deadline or a low number of applications. In addition, establishing a protocol for how applications and résumés will be processed will save time later. Once these tasks are accomplished, the hope is that you will have a diverse group of people to interview. Slide 7: The job analysis is a formal system developed to determine what tasks people actually perform in their jobs. The purpose of a job analysis is to ensure creation of the right fit between the job and the employee and to determine how employee performance will be assessed. A major part of the job analysis includes research, which means reviewing job responsibilities of current employees, researching job descriptions for similar jobs with competitors, and analyzing any new responsibilities that need to be accomplished by the person with the position. Figure 4.1 shows the process of writing a job analysis. Please note, that a job analysis is different from a job design. Job design refers to how a job can be modified or changed to be more effective—for example, changing tasks as new technology becomes available. The information gathered from the job analysis is used to develop both the job description and the job specifications. A job description is a list of tasks, duties, and responsibilities of a job. Job specifications, on the other hand, discuss the skills and abilities the person must have to perform the job. The two are tied together, as job descriptions are usually written to include job specifications. A job analysis must be performed first, and then based on that data, we can successfully write the job description and job specifications. Think of the analysis as everything an employee is required and expected to do. Slide 8: Two types of job analyses can be performed: a task-based analysis and a competency or skills-based analysis. A task-based analysis focuses on the duties of the job, as opposed to a competency-based analysis, which focuses on the specific knowledge and abilities an employee must have to perform the job. Slide 9: An example of a task-based analysis might include the following: • • • • • Write performance evaluations for employees. Prepare reports. Answer incoming phone calls. Assist customers with product questions. Cold-call three customers a day. With task job analysis, the specific tasks are listed, and it is clear. Slide 10: With a competency-based analysis, it is less clear and more subjective. However, a competency-based analysis might be more appropriate for specific, highlevel positions. For example, a competency-based analysis might include the following: • • • • Able to utilize data analysis tools Able to work within teams Adaptable Innovative You can clearly see the difference between the two. The focus of task-based analyses is the job duties required, while the focus of competency-based analyses is on how a person can apply their skills to perform the job. One is not better than the other but is simply used for different purposes and different types of jobs. For example, a task-based analysis might be used for a receptionist, while a competencybased analysis might be used for a vice president of a sales position. Consider the legal implications, however, of which job analysis is used. Because a competencybased job analysis is more subjective, it might be more difficult to tell whether someone has met the criteria. Slide 11: Once you have decided if a competency-based or task-based analysis is more appropriate for a job, you can prepare to write the job analysis. Feedback from managers should be taken into consideration to make this task useful in all levels of the organization. Organization is a key component to preparing for your job analysis. For example, will you perform an analysis on all jobs in the organization or just focus on one department? Once you have determined how you will conduct the analysis, a tool to conduct the analysis should be chosen. Most organizations use questionnaires to determine the duties of each job title. Some organizations will use interviews to perform this task, depending on time constraints and the size of the organization. The job analysis questionnaire usually includes the following types of questions, depending on the type of industry: • • • • Employee information such as job title, how long in position, education level, how many years of experience in the industry Key tasks and responsibilities Decision making and problem solving: this section asks employees to list situations in which problems needed to be solved and the types of decisions made, or solutions provided. Level of contact with colleagues, managers, outside vendors, and customers Slide 12: In addition: • • • • Physical demands of the job, such as the amount of heavy lifting or ability to see, hear, or walk. Personal abilities required to do the job—that is, personal characteristics needed to perform well in this position. Specific skills required to do the job—for example, the ability to run a particular computer program. Certifications to perform the job Slide 13: Once all employees have completed the questionnaire, you can organize the data, which is helpful in creating job descriptions. If there is more than one person completing a questionnaire for one job title, the data should be combined to create one job analysis for one job title. Once the job analysis has been completed, it is time to write the job description and specifications, using the data you collected. Job descriptions should always include the following components: 1. Job functions (the tasks the employee performs) 2. Knowledge, skills, and abilities (what an employee is expected to know and be able to do, as well as personal attributes) 3. Education and experience required 4. Physical requirements of the job (ability to lift, see, or hear, for example) Slide 14: Tips to writing a good job description. Be sure to include the pertinent information, such as: o o o o o o Title Department Reporting relationships Duties and responsibilities Terms of employment qualifications needed Think of the job description as a snapshot of the job. Slide 15: In addition: • • • • • Communicate clearly and concisely. Make sure the job description is interesting to the right candidate applying for the job. Avoid acronyms. Don’t try to fit all job aspects into the job description. Proofread the job description. Slide 16: Let’s move on to topic 2. Once the job description has been written, obtaining approval from the hiring manager is the next step. Then, the HR professional can begin to recruit for the position. One of the most important parts of HRM is to know and apply the law in all activities the HR department handles. Specifically with hiring processes, the law is very clear on a fair hiring process that is inclusive to all individuals applying for a job. The laws discussed are applied specifically to the recruiting of new employees. Slide 17: The Immigration Reform and Control Act requires employers to attest to their employees’ immigration status. It also makes it illegal to hire or recruit illegal immigrants. The purpose of this law is to preserve jobs for those who have legal documentation to work in the United States. The implications for human resources lie in the recruitment process, because before entering employees into the selection process it is important to know they are eligible to work in the United States. This is why many application forms ask, “Are you legally able to work in the United States?” Dealing with the IRCA is a balancing act, however, because organizations cannot discriminate against legal aliens seeking work in the United States. The IRCA relates not only to workers you hire but also to subcontractors. In a subcontractor situation (which is when an organization hires an outside firm), your organization can still be held liable if it is determined your organization exercises control over how and when the subcontractors perform their jobs. HR professionals must verify both the identity and employment eligibility of all employees, even if they are temporary employees. The I-9 form (Employment Eligibility Verification form) is the reporting form that determines the identity and legal work status of an employee. If an audit is performed on your company, you would be required to show I-9 forms for all your workers. If an employer hires temporary workers, it is important to manage data on when work visas are to expire, to ensure compliance. The Patriot Act enhances the federal government’s ability to conduct domestic and international investigations and surveillance activities. As a result, employers must maintain employee privacy rights while also creating a system that allows for release of information requested by the government. Slide 18: EEOC set of laws. We discussed Equal Employment Opportunity (EEO) laws in lesson 3 last week. Under EEO laws related to the recruitment process, employers cannot discriminate based on age (which is forty years or older), disability, genetic information, national origin, sex, pregnancy, race, or religion. In a job announcement, organizations usually have an EEO statement. In addition to including the EEO policy in the job announcement, HR is required to post notices of EEO policies in visible parts of the work environment. Slide 19: Although EEOC laws in hiring are clear about discrimination, an exception may occur, called the bona fide occupational qualification (BFOQ). BFOQ is a quality or attribute that is reasonably necessary to the normal operation of the business and that can be used when considering applicants. To obtain a BFOQ exception, a company must prove that a particular person could not perform the job duties because of sex, age, religion, disability, or national origin. However, many arguments for BFOQ would not be considered valid. For example, race has never been a BFOQ, nor has customers’ having a preference for a particular gender. Generally speaking, when going through the recruitment process and writing job descriptions, assuming a BFOQ would apply might be a mistake. Seeking legal counsel before writing a job description would be prudent. Other aspects to consider in the development of the job description are disparate impact and disparate treatment. These are the two ways to classify employment discrimination cases. Disparate impact occurs when an organization discriminates through the use of a process affecting a protected group as a whole, rather than consciously intending to discriminate. Disparate treatment is when one person is intentionally treated differently than another, but it does not necessarily impact the larger protected group as a whole, as in disparate impact. The challenge in these cases is to determine if someone was treated differently. Slide 20: Let’s now move on to topic 3: recruitment strategies. Now that we have discussed development of the job analysis, job description, and job specifications, and you are aware of the laws relating to recruitment, it is time to start recruiting. It is important to mention, though, that a recruitment plan should be in place. This plan can be informal, but you should outline where you plan to recruit and your expected timelines. Also of consideration is to ensure you are recruiting from a variety of sources to ensure diversity. Slide 21: Some organizations choose to have specific individuals working for them who focus solely on the recruiting function of HR. Recruiters use similar sources to recruit individuals, such as professional organizations, websites, and other methods discussed in this chapter. Recruiters are excellent at networking and usually attend many events where possible candidates will be present. Recruiters keep a constant pipeline of possible candidates in case a position should arise that would be a good match. There are three main types of recruiters: 1. Executive search firms: These companies are focused on high-level positions, such as management and CEO roles. They do much of the upfront work, sending candidates who meet the qualifications. 2. Temporary recruitment or staffing firms: Suppose your assistant is going on medical leave and you need to hire somebody to replace her, but you don’t want a long-term hire. You can utilize the services of a temporary recruitment firm to send you qualified candidates who are willing to work shorter contracts. Usually, the firm pays the salary of the employee and the company pays the recruitment firm, so you don’t have to add this person to your payroll. 3. Corporate recruiter. A corporate recruiter is an employee within a company who focuses entirely on recruiting for his or her company. Corporate recruiters are employed by the company for which they are recruiting. This type of recruiter may be focused on a specific area, such as technical recruiting. While the HR professional, when using recruiters, may not be responsible for the details of managing the search process, he or she is still responsible for managing the process and the recruiters. The job analysis, job description, and job specifications still need to be developed and candidates will still need to be interviewed. Slide 22: Other recruiting methods. Colleges and universities can be excellent sources of new candidates, usually at entry-level positions. For this type of program to work, it requires the establishment of relationships with campus communities, such as campus career services departments. It can also require time to attend campus events, such as job fairs. Professional associations are usually nonprofit organizations whose goal is to further a particular profession. Almost every profession has its own professional organization. For example, in the field of human resources, the Society for Human Resource Management (SHRM) allows companies to post jobs relating to HR. If you have ever had to look for a job, you know there are numerous websites to help you do that. From the HR perspective, there are many options to place advertisements, most of which are inexpensive. The downside to this method is the immense number of résumés you may receive from these websites, all of which may or may not be qualified. Many organizations, to combat this, implement software that searches for keywords in résumés, which can help address this problem. The goal of using social media as a recruiting tool is to create a buzz about your organization, share stories of successful employees, and tout an interesting culture. Even smaller companies can utilize this technology by posting job openings as their status updates. This technique is relatively inexpensive, but there are some things to consider. For example, tweeting about a job opening might spark interest in some candidates, but the trick is to show your personality as an employer early on. Most recruiting plans include asking current employees, “Who do you know?” The quality of referred applicants is usually high, since most people would not recommend someone they thought incapable of doing the job. E-mailing a job opening to current employees and offering incentives to refer a friend can be a quick way of recruiting individuals. Due to the success of most formalized referral programs, it is suggested that a program be part of the overall HRM strategic plan and recruitment strategy. However, be wary of using referrals as the only method for recruitment, as this can lead to lack of diversity in a workplace. Many organizations hold events annually to allow people to network and learn about new technologies. Attending these events may allow you to meet people who could possibly fill a position or future position. Special interest groups (SIGs) may require membership of individuals and focus on specific topics for members. Often SIGs will have areas for job posting, or a variety of discussion boards where jobs can be posted. Recruiting using this method can be a great way to target a specific group of people who are trained in a specific area or who have a certain specialty. Part of recruitment planning includes budgeting the cost of finding applicants. It is important to look at how effective our recruiting methods are to determine the best place to recruit for a particular position. A yield ratio is the percentage of applicants from one source who make it to the next stage in the selection process (which means they get an interview). Slide 14: So that wraps up lesson four. If you have any questions, you can post them to your professor’s CyberOffice in the HRMN 300 online classroom. Human resource management. Chapter 4. Retrieved from http://www.saylor.org/site/textbooks/Human%20Resource%20Management.pdf SHRM HR Metrics HR Metrics (based on Functional Areas) Table of Contents Metrics Introduction ................................................................................................................................. 1 Strategic Management.............................................................................................................................. 2 Return Analyses ............................................................................................................................................................ 2 HR Management ........................................................................................................................................................... 3 Financial Management ................................................................................................................................................. 4 Workforce Planning and Staffing .............................................................................................................. 6 Staffing .......................................................................................................................................................................... 6 Talent Management................................................................................................................................ 10 Development .............................................................................................................................................................. 10 Training ....................................................................................................................................................................... 10 Performance Management ......................................................................................................................................... 11 Succession Planning .................................................................................................................................................... 12 Total Rewards ......................................................................................................................................... 12 Pay .............................................................................................................................................................................. 12 Benefits ....................................................................................................................................................................... 13 Employee Relations................................................................................................................................. 14 Organizational Effectiveness ....................................................................................................................................... 14 EEO Compliance .......................................................................................................................................................... 15 Risk Management ................................................................................................................................... 15 Safety and Health ........................................................................................................................................................ 15 Liability ........................................................................................................................................................................ 15 Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 1 SHRM HR Metrics Metrics Introduction Included in this Job Aid are suggested metrics for each of the HR functional areas. Several important points should be noted about the use of metrics in HR and Human Capital management. First, metrics are only truly useful when they provide a basis for analysis. They should not be used separate of analysis for any purpose other than compliance reporting, and even then it is encouraged that a thorough analysis of the data accompanies the reporting to insure a fuller understanding. Applying basic statistical techniques, doing dimensional segmentation, and/or trending one metric to another, or to a target or benchmark is sufficient to turn metrics into analytics and information into insight. It is the insight that produces value, not the metric itself. Reporting is insufficient, and it could be argued a complete waste of time. Analysis is necessary and critical. Second, the primary purpose of analytics is to support and improve decision making. Any metric that does not lead to action is not worth the time and effort to calculate and report it. Typically today HR departments overproduce data and information yet provide little to no insight that achieves this primary purpose. Less is more when it comes to metrics and analytics. Third, identify the appropriate audience for each metric. Many metrics are useful to those responsible to manage an HR process because they provide insights into process improvement opportunities. But these metrics may not be useful or important to line management. Other metrics successfully illuminate risks to organization success and therefore provide valuable insight to your executive team. Don’t waste anyone’s time with metrics or analytics that are not relevant to their responsibilities and decisions. Fourth, with most metrics there is no one defined desirable outcome. Organizations must set desired outcomes, or targets, for metrics that align with organization strategy, goals, and objectives. The target must be such that it reasonable leads to organization success. Finally, identifying the handful of analytics that connect Human Capital management to organization strategy and key goals and objectives is the most important step you can take in making metrics meaningful to your organization. SHRM’s course on Critical Evaluation: Building HR Metrics to Guide Decisions shows you how to do this. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 1 SHRM HR Metrics Strategic Management Return Analyses BreakBreak-even Point The point in time when costs invested in developing or improving an HR program is equal to or greater than the returns. In other words, the break-even point is reached when returns to-date are equal to investments. Formula Development cost/Annual return Example A new on-line training program has a development cost of $100,000. It is expected to generate a return of $50,000 in reduced delivery costs each year. Break-even point = $100,000 / $50,000 = 2 years CostCost-Benefit Ratio How the Benefits of a program or activity relate to the Costs associated with developing and executing that program or activity. When you are calculating Costs for any HR program be clear as to what you have included. In our example here we have included the salary + benefit costs for a new program lead and the use of a consultant to help develop the new program and make the systems changes to our HRIS necessary to capture Successor and High Potential identification. We have not included the cost of the time of managers and HRBPs to participate in the program. Example The new succession management program will produce a savings of $500,000 in reduced search firm fees over the targeted time frame (2 years) and will cost $250,000 to develop and manage over that same period. Cost-benefit ratio = $500,000:$250,000 = 2:1 Total Cost-Benefit ratio is 2 to 1. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 2 SHRM HR Metrics ROI (Return on Investment) The return on a company’s monetary investment in a new program or activity or change to a current program or activity. The measurement of ROI can be calculated in several ways. If your organization has a standard formula, it’s best to use that formula. If not, this formula can work for most situations. Formula ((Anticipated Benefits – Total Development Cost of Program)/ Total Development Cost of Program) x 100 Anticipated Benefits can be ascertained by looking at potential reductions in the costs of administering and delivering the program (e.g., reduced vendor fees, lower headcount needed to administer), increases in productivity or reductions in costs enabled by the methodology or other aspect of the program (e.g., less time away from work and reduced travel expenses by putting a program on-line), and improved outcomes (e.g., reducing turnover and employee relations issues, and increasing employee productivity with a better leadership program). Quantify these benefits as much as possible. Costs and Benefits must be calculated for a set period of time that represents a reasonable life time for the program. A complete ROI analysis should also highlight those benefits that cannot be financially quantified but still represent desired outcomes. HR Management HR Expense to Revenue Ratio This information is useful for fiscal budgeting. To have this for each fiscal year creates a standard for projected budgeting costs for each year on HR expenses. HR Expenses should include outsourcing expenses. Percentage of exceptions processed for payroll, benefits, promotions, and other HR This metric is helpful to understand the amount of special effort required to process benefits, promotions, and other HR transactions that are out of the standard protocol. HRHR-toto-Employee/Worker Ratio The HR-to-Employee ratio and HR-to-Worker ratios provide a way to compare HR staffing levels across and within organizations. It represents the number of HR staff per 100 employees/workers supported by HR in the organization. Percentage of HR Staff in Supervisory Roles This is useful in determining span of control within HR. Formula Total HR Expenses ÷ Revenue Formula Total number of exceptions processed by HR ÷ all HR transactions Formula (HR FTEs ÷ total number of FTEs in the organization) x 100 (HR FTEs / total number of workers supported by HR) x 100 Formula Number of HR staff in supervisory positions ÷ total number of HR staff Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 3 SHRM HR Metrics Percentage of HR Staff in Professional and/or Technical Roles This is very useful, especially for issues such as budgeting in regards to FLSA. Generally positions are exempt, only allowing straight time for overtime if allocated. If overtime is warranted, this would need to be assessed for the year's budget. Positions in this category may be called recruiter, benefits administrator, HR generalist, etc. Percentage of HR Staff in Administrative Support Roles Often, but not always, positions in this category are nonexempt. They may be called coordinator, assistant, etc. HR Expenses Human resource expenses represent HR’s total costs for a given fiscal year. HR Expense to Operating Expense Ratio This ratio depicts the amount of HR expenses as a percentage of total operating expenses, which is an indication of the proportion of dollars an organization invests in its HR function. HR Expense per FTE/FTW HR expense by FTE/ FTW ratio represents the amount of human resource dollars spent per FTE or FTW in the organization. Formula Number of HR staff in professional technical positions ÷ the total number of HR staff Formula Number of HR staff in administrative support positions ÷ by the total HR staff Formula No further computations are required beyond what is listed for the completion of this metric. Formula Total HR expenses ÷ total operating expenses Formula HR expenses/ Total number of FTEs or FTWs FTWs include employees and non-employee workers (temps, contractors, interims) supported by HR. Financial Management Revenue per Total Human Capital (HC) $pend The total amount of revenue received during an organization’s fiscal year divided by the total spend on Human Capital. This ratio conceptually links the costs associated with the firm’s human capital to its productivity. If the revenue-perTHCS ratio increases, it indicates that there is greater efficiency and productivity because more output is being produced per $ spent on human capital. If the ratio decreases, it indicates there is less efficiency and productivity. Formula Revenue ÷ Total HC $pend Total Human Capital Spend should include wages, benefits; independent contractors, temps and other non-employee workers; and, HR program costs (nonstaff) including outsourcing. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 4 SHRM HR Metrics Total Human Capital (HC) $pend to Total Operating Spend Ratio Comparing total HC spend to the organization’s total spend on all operating expenses, including human capital, shows the organization’s relative prioritization regarding operational expense priorities and needs. Changes in this ratio can also show the relative changes in efficiency and productivity between operating expense areas, like IT, real estate, and human capital. It is also useful for budgeting purposes. Revenue Per FTE The Total Revenue divided by the number of FTEs. This ratio conceptually measures the efficiency and productive use of human capital because it links the time and effort associated with the firm’s human capital to its revenue output. If the revenue-per-FTE ratio increases, it might indicate that more output is being produced per FTE. However, if it increases due primarily to major declines in FTEs from involuntary staff reductions or increased outsourcing, this may be misleading. The metric can temporarily look like increased efficiency or productivity. If revenue is not sustained over time with the lower staff levels then productivity and/or efficiency have not actually improved. Earnings before investments and taxes (EBIT) per FTE EBIT per FTE is a better measure of the efficiency and productive use of human capital because it incorporates the operating costs involved in productivity improvements, like investments in IT. Increasing revenue, lowering expenses, reducing employees, and increasing worker productivity have a positive impact on this metric. This metric can be improved further if you use Total FTE’s vs Employee FTEs since Total FTEs incorporates the productivity contributions of the contingent element of your workforce. Earnings before investments and Taxes per Human Capital Expense EBIT per FTE is the best of the three measures of human capital efficiency and productivity because it incorporates all human capital expenditures, including compensation, benefits, talent development, outsourcing and contingents. Increasing revenue, lowering expenses, and increasing organization productivity have a positive impact on this metric. Productivity Describes the relationship between real output and the amount of labor time involved in its production. Formula Total HC Spend/ Total Operating Spend Formula Revenue ÷ number of FTEs Formula EBIT ÷ number of FTEs Formula EBIT ÷ total human capital expense Formula Revenue/ Labor hour Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 5 SHRM HR Metrics Workforce Planning and Staffing Staffing Contingent Representation Rate Degree of contingent staff within your total workforce. Establishing targets for this metric monitoring it will tell you if you are complying with the contingent vs employee organization balance you have determined Is optimal for the accomplishment of organization goals and objectives, including human capital and operating expense targets. TimeTime -toto-Start Average number of days it took to fill a position. This metric typically includes positions filled by both external and internal hires. Starting with the day the position became available – which can be the date of resignation of the prior incumbent or the day the position received budget approval or simply when the hiring manager communicated that he/she was ready to fill the position - rather than when a requisition is received by HR, and ending with start date vs date filled, show a more organization vs HR focus; and, help show whether activities outside HR are helping or hindering efficient hiring. Sub-metrics within this metric which can be measured to help improve process elements include Time to Approval, Time to 1st Interview, Time to Offer, and Time to Fill. You should measure Time to Start for both External Hires and Internal Hires. Formula (Contingent headcount FTEs/ Total Workforce FTEs) x 100 Formula (Total days elapsed from the date each filled position was available to the date each new person started in the position) / Number of positions filled You need agreement on whether you are counting calendar days or working days, and whether you minus days that recruiting is suspended. TimeTime -toto-Productivity Average number of days to satisfactory productivity. This metric typically includes positions filled by both external and internal hires. Formula (Total days elapsed from the date each filled position was You need agreement on whether you are counting calendar days or available to the date working days, and whether you minus days that recruiting is suspended. each new person achieved satisfactory Organizations are finding unique and simple ways to identify the date of productivity) / Number minimal acceptable productivity from using manager self-service reporting to of positions filled very brief surveys (often just one question) that are set to automatically check in with hiring managers weekly until they receive a positive response. This metric is crucial since it reflects the organization’s need for productivity vs just having a person in the job. Outcomes with this metric can reflect on the quality of your recruitment, selection, onboarding, and management of new employees. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 6 SHRM HR Metrics Turnover Rate Rate at which employees are leaving the organization in a given time period. It is suggested that Turnover be categorized as Employer Intended vs Employer Unintended, and the latter category be further divided into Voluntary and All Others. The objective of measuring turnover is to determine where and when the organization has risk of losing talent that it doesn’t want to lose, and to determine how to mitigate that risk. Therefore identifying Employer Intended separations segments out of that risk analysis terminations for poor performance or cause, layoffs or job eliminations, acceptance of early retirement offers, etc. which are irrelevant to identifying and mitigating the risk. Identifying Voluntary (resignation and retirement) separately from other Employer Unintended, like death, incarceration, job abandonment, refusal to accept new assignment, etc. also helps to focus our risk analysis. The Voluntary category is the most relevant to the Turnover risk analysis. Formula (Number of separations during the time period ÷ average actual number of employees during the time period) x 100 Time periods – typically year, quarter, month, pay period Turnover of New Hires and Failure to Start Rate are also good metrics for Staffing professionals to be measuring. Other Turnover subgroups are important to other areas of analysis and decision making. For example, Turnover of Poor Performers can provide insight into the effectiveness of your Performance Management. Turnover rates are also useful inputs into Workforce Planning. The reporting of overall turnover is no longer considered best practice. This metric is unlikely to inform and improve decision making. Focus on key employee populations: Top Performers, New Hires, Poor Performers, Successors, High Potentials, Key Positions, High Risk Employees. These are the groups worth acting on if Turnover becomes unacceptable. Cost of Turnover and Cost per Turnover The average direct monetary costs associated with a position that was vacant due to turnover and is refilled. Costs include separation pay, payables to temps and contractors, overtime pay to other employees to cover, and staffing costs for replacement hiring. It should be noted that this metric does not reflect significant non-direct costs like loss of revenue, damage to customer relationships, and temporary or long-term productivity and performance differentials. Formula Total of the costs of separation + vacancy + replacement Turnover costs/ # of positions filled due to separation Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 7 SHRM HR Metrics Turnover Impact and Impact per Employer Unintended Separation Total and Average Experience Lost due to Employer Unintended turnover. Cost Per Hire Average cost incurred with an external hire. Total costs should include the sum of all direct costs (e.g., advertising, hiring events, agencies, search firms, employee referral programs, onboarding and travel for applicants and interviewers) incurred in attracting and hiring employees. Some organizations also include relocation costs, interviewer pay, and staffing department operating expenses. If the HR interviewers have other responsibilities like internal hiring or generalist duties then pay would need to be pro-rated for the time involved in external recruiting. If you include management interviewers you would also need to pro-rate pay since they have many other duties. Vacancy Costs and Cost per Vacancy Total and average direct costs resulting from vacant positions. It should be noted that this metric does not reflect significant non-direct costs like loss of revenue, damage to customer relationships, and temporary or long-term productivity and performance differentials. Vacancy/Occupancy Vacancy/Occupancy Rate Measures the percentage of approved positions that is unfilled or filled at a given time. Positions may be vacant due to turnover or because they are new and have never been filled. Formula Total years of experience of all Employer Unintended separations Turnover Impact/ Number of Employer Unintended separations Formula Formula Total costs related to all external hires/ Number of external hires Formula (Total of the costs of temporary workers + independent contractors + temporary outsourcing + overtime) - wages and benefits not paid to vacant positions Vacancy Costs/ # of vacant positions Formula (Total number of vacant or occupied positions ÷ total number of approved positions) x 100 These measures are particularly important for key positions, e.g., strategic jobs, time consuming and expensive to fill jobs, critical project staff. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 8 SHRM HR Metrics Retention Degree to which an organization is retaining key employees. As an example, this can tell you what the retention rate of University Relations hires is at 1, 3, and 5 years of service and whether the rate is different for different Universities or for those that interned with your organization vs those that did not. Yield or Selection Rate Measures efficiency of each stage in the staffing process. The dilemma with Selection or Yield rates is determining what is a good vs a bad outcome. Using our example, is a rate higher than 50% better since it might indicate that you attracted more qualified resumes or is a rate lower than 50% better since it might indicate that your assessment is better and you’ve really narrowed down to the best possibilities therefore saving time and effort during the remainder of the process. While this measure could be helpful in finding a way to improve process efficiency, It should be noted that efficiency is less important than effectiveness. Offer Rate Percentage of applicants interviewed that receive offers. Offer Decline Rate Percentage offers extended that are declined. It is suggested that data be tracked and measured as to the reasons for offer declines so that action may be taken to mitigate this outcome. This metric provides insight into the frequency with which you are not hiring the top candidate or are starting a search over. It may also be helpful in identifying areas where your total compensation may not be market comparable, your organization not as well regarded as competition, your selling of the job and organization not effective, or your matching of applicant to job not accurate. It is important to capture and understand the specific reasons for the decline – not just “accepted other offer”. Promotion Rate Average rate at which employees are promoted. Organizations must first define ‘promotion’. In many companies a promotion requires a change in position as well as pay grade. This serves to eliminate job re-evaluations that change an employee’s grade due to changes in market conditions not changes in duties and responsibilities. Formula # of employees in the selected group employed at the designated time/ # of employees in that selected group originally Formula Percentage of persons moving to next stage/ number of persons at prior stage. Example 100 resumes received, 50 found acceptable = 50% yield Formula (Total number of candidates offered ÷ number of candidates interviewed) x 100 Formula (Number of offer declines ÷ number of offers extended) x 100 Formula (Number of promotions ÷ number of eligible employees) x 100 Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 9 SHRM HR Metrics Retirement Risk Talent loss risk related to retirement. It’s best to focus your analysis of retirement risk on individual or groups of key employees where the quality of the loss is relevant. However don’t forget that looking at it by job and organization structure can also reveal risks based on sheer quantity. Formula (# of employees eligible to retire/ # of employees) X 100 Trending Retirement Risk with Retirement Rate (actual retirements/# of employees eligible to retire) can tell you how risk and reality relate. Understanding what % of your eligibles is actually retiring is extremely relevant to assessing your risk. Talent Management Development Readiness Reflects how ready the organization is from a human capital perspective to execute on strategy and achieve key goals and objectives. Readiness is a function of Occupancy (the rate of the approved positions being filled) and Competency (to what degree do incumbents have the competencies to achieve performance objectives). Formula (Occupancy Rate (see Staffing) x Competency Rate (see Training)) X 100 It is recommended that you only calculate Readiness for those positions that are critical to the execution of strategy and the accomplishment of key goals and objectives. Competency Rate Formula Degree to which employees in key positions have the competencies (# of incumbents with necessary to achieve their performance objectives. competency ratings of Acceptable or better/ # of incumbents who have received competency assessments) x 100 Training Training Participation Rate Percentage of employees who participated in company paid training. Formula (Number of employees who participated in at least one company paid training activity/ Number of employees eligible for training) x 100 Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 10 SHRM HR Metrics Training Spend Rates Relative importance of spend on training vs other operating and human capital activities. Formula (Training spend/ Total Human Capital Spend) x 100 The importance is derived by comparing these metrics to your unique targets since various circumstances drive what is optimal for any one organization. Average Average Training Spend The monetary investment in training at an individual level. (Training spend/ Total Operating Spend) x 100 The expenses should include all direct training costs: e.g., materials, trainer, associated travel, logistics. Average Training Hours The time investment in training at an individual level. Required Training Completion Rate Shows compliance with training requirements. It is also useful for budget and resource planning. Formula Training spend ÷ Number of workers participating in training Formula Total training hours ÷ total number of workers participating in training Formula (Total number of workers who have completed a specific required training ÷ total number of workers who are required to take that training) x 100 Performance Management Performance Review Completion Rate Percentage of completed reviews Average Performance Rating The mean performance rating across a selected group of employees receiving performance assessments. Performance Rating Distribution The employee representation across each of the available Performance Ratings. Formula (Number of completed performance reviews/ Number of completed performance reviews due) x 100 Formula (Total of all Performance Ratings/ Number of employees who received a Performance Rating) x 100 Formula (Number of employees who received each rating/ Number of employees who received a Performance Rating) x 100 This distribution can provide insight into the degree of use of the full scale, suggest possible rating inflation, illustrate where there are issues with under performance, and reveal any variance with organization distribution targets. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 11 SHRM HR Metrics Succession Planning Succession Breadth Extent to which you have Ready Now Successors or your succession positions. Succession Depth Extent to which you have unique Ready Now Successors Succession Fill Rate Degree to which your Succession Management program is providing viable candidates for successor positions. Successor and High High Potential Retention Degree to which you are retaining those employees who are successors, and those who have been assessed as having the potential to be successors. Formula (Number of Successor positions with a minimum of one Ready Now Successors/Number of Succession positions) x 100 Formula (Number of Successor positions with a minimum of one unique Ready Now successor/ Number of Successor positions) x 100 Formula (Number of succession positions filled with a Successor/ Number of succession positions filled) x 100 Formula (Number of Successor or High Potential employees at the targeted time period/Number of Successor or High Potential employees originally) x 100 Total Rewards Pay Annual Base Salary Increase Percentage increase in base salaries from one time period to another, e.g., year over year, or quarter over quarter (different quarters within same year or same quarter within different years) Target Bonus for NonNon-Executives The average percentage of base pay that is targeted to be paid out in cash bonuses to nonexecutive staff during a given year Target Bonus for Executives The average percentage of base pay that is targeted to be paid out in cash bonuses to nonexecutive staff during a given year Compa Ratio and Average Compa Ratio The compensation ratio is defined as the relationship of current salaries to the midpoints of the salary rates. This metric can be used at the individual, segment, or organization level to show if an employee or group of employees is being paid appropriately on basis of their skills, experience and performance. Formula (Targeted base salary spend after Increase/ Current base salary spend) x 100 Formula Total bonus pay spend at target for nonexecutive staff/Total base pay spend for nonexecutive staff Formula Total bonus pay spend at target for executive staff/Total base pay spend for executive staff Formula Pay rate ÷ pay range midpoint (for individual) Total of all Compa-ratios of employees in the segment or organization/ Number of employees in the segment or organization Both must be in same format: annual, pay period, or hourly Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 12 SHRM HR Metrics Total Compensation Spend Rate The relationship of costs associated with Total Compensation spend, including salaries, overtime, benefits, incentives and bonuses, to an organization’s Total Operating Costs. TCS rate provides management with insight into the largest category of human capital costs. Also looking at (and perhaps benchmarking) fixed and variable compensation as a percentage of total compensation is helpful in budgeting, workforce planning, and devising compensation strategies. Compensation Ratios Direct: The direct compensation ratio is defined as the relationship of direct pay to the midpoints of the salary ranges. Indirect: The indirect compensation ratio is defined as the relationship of indirect pay to the midpoints of the salary ranges. Formula ((Direct compensation + Indirect compensation)/ Total operating spend) x 100 Formula Direct: Direct compensation (base pay + differential pay + short & long term incentive pay + cash awards) ÷ pay range midpoint. Indirect: Indirect: Indirect compensation (legally required benefits + disability + medical, dental, life, vision insurance + pay for time not worked + unpaid leave + flexible benefits + non-cash awards) ÷ pay range midpoint Benefits Benefit Participation Rate The percentage of employees that participated in a particular optional benefit Plan or Program. Benefits Spend Share Percentage of Total Compensation Spend that is spent on Benefits. Annual Change in Benefits Spend The rate increase/decrease in an organization’s benefits spend vs. a comparator, e.g., prior time period, target or projection. Health Care Spend Rate Average cost of providing health care to enrolled employees. Formula (Number of employees participating in Plan or Program/Number of employees eligible for Plan or Program) x 100 Formula Total Benefits Spend/ Total Compensation Spend Formula (Current benefits spend – Comparator Spend/Comparator Spend) x 100 Formula Total health care expenses ÷ number of employees enrolled in a health care plan. Total health care expenses include both employee and company paid premiums, stoploss insurance and administrative fees. This metric can be calculated for other benefits as well. Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 13 SHRM HR Metrics Organization Share of Health Care Premiums The percentage of health care premiums paid by the organization. Best to measure this against targets and appropriate benchmarks. Formula Employee-only coverage premiums paid by organization ÷ total premiums Employee and dependent coverage premiums paid by organization ÷ total premiums Employee Relations Organizational Effectiveness Employee Engagement Degree to which employees are engaged with and committed to the strategy and objectives of the organization, and demonstrate their commitment to organization success through the contribution of their skills, knowledge, abilities and performance. Employee Relations Incidents (Total and Average) Metric reflects the prevalence of employee relations incidents. Each organization must define what constitutes an incident. It is suggested that organizations use workforce headcount vs employee headcount since many employee relations laws and policies, e.g., sexual harassment, apply to non-employees in the workplace as well as to employees. Span of Control (Average and Median) Number of direct reports per people manager. This is a reflection of organization structure and of culture in some organizations. Formula There is no one way to measure Engagement. Many companies use surveys. However surveys have challenges – self reporting can be flawed, participation is typically not 100% and is skewed to favor engaged vs non-engaged employees, output is dated since surveys are often done only annually, and they reflect attitudes or opinions not necessarily behavior. Each organization must drive a metric that reflects employee behavioral alignment with their unique strategy and objectives. Formula Number of Incidents Number of incidents/Workforce headcount Formula Number of employees/ Number of employees with people management responsibilities Number of direct reports that represents the halfway point where 50% of people managers have more and 50% have less Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 14 SHRM HR Metrics EEO Compliance EEO Compliance This data provides information about the composition of the organization's work force, applicants and candidates, and degree to which the organization is in compliance with EE regulations. Formula EEO -1 reporting Internal pay equity Average Compa-ratio by gender, race and ethnicity. Formula No further computations are required beyond what is listed for the completion of this metric. Risk Management Safety and Health Workers Compensation Spend Rate Average cost of worker’s compensation costs. Allows companies to monitor and benchmark workers compensation costs. Workers Compensation claims filed (Total and Average) Provides an indirect measure of workplace safety, and an indication of company risk of incurring high workers compensation costs. Accidents (Total and Averages) Provides a direct measure of workplace safety, and an indication of company risk of incurring high workers compensation costs. Formula Total worker’s compensation spend/ Number of covered employees Formula Total of all claims filed Total of all claims filed/ Number of employees Total of all claims filed/ Number of labor hours Formula Number of accidents Number of accidents/Number of employees Number of accidents/Number of labor hours Liability Internal and External Complaints (Total and Average) Metrics are used to provide insight into health of the organization and help to devise long and short-term solutions in order to improve performance and productivity issues, and mitigate liability risk. Formula Number of complaints Number of complaints/Number of employees Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 15 SHRM HR Metrics Employment Practices Claims Initiated (Total and Average) Metric is used to evaluate EPL risk and exposure. Increases in annual EPL claims are an indicator for an organization to reevaluate their employment practices, implement loss-control tools and consider risk-transfer alternatives Employment Liability Spend (Total and Averages) Metrics are used to monitor, manage, budget for and mitigate employment claim related costs. Formula Number of claims initiated Number of claims initiated/Number of employees Formula Total Spend for: Employment practices liability (EPL) insurance + Cost of defending claims + Resolution payout fees + Risk-reduction services from an EPL provider (Total Employment Liability Spend/Number of employees (Total Employment Liability Spend/Number of claims Advanced Analytics: Using Data to Drive HR Excellence ©2016 Society for Human Resource Management Page 16
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Business Discussion
Part A: Recruiting Methods
Most company departments are now exploiting the suitability of innovation, while global
rivalry keeps on demanding creativeness in respect to how employers procure human resources.
Social media has instigated an excitement that even companies want to get involved and use as
corporate tools (Villeda, McCamey, Essien & Amadi, 2019). Some of the key web-based media
sites that HR experts can employ as recruitment tools incorporate LinkedIn; deemed as the
globe’s biggest professional web and most visited web-based media platform for enlisting,
LinkedIn is an essential selection tool. With a massive network of esteemed connections, an
organization can undoubtedly keep a high-profile relation with active and passive applicants
(Villeda, McCamey, Essien & Amadi, 2019). Secondly, twitter; Twitter is a huge microblogging
website characterized by allowing 140 character posts (tweets). Organizations might post job
opportunities on their handles or use third-party organizations, li...


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