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Chapter 13 Staffing System Evaluation
and Technology
Outline
Staffing Technology at Osram Sylvania
Staffing Outcomes
Evaluating Staffing Systems
Key Performance Indicators
Staffing Metrics
Six Sigma Initiatives
The Balanced Scorecard Approach
Staffing Evaluation Ethics
Technology and Staffing Evaluation
Résumé Screening Software
Applicant Tracking Systems
Company Web sites
Digital Staffing Dashboards
Develop Your Skills: Creating a Digital Staffing Dashboard
Staffing Technology at Osram Sylvania
Summary
Learning Objectives
After studying this chapter, you should be able to:
• Describe the effects staffing activities have on applicants, new hires, and
organizations.
• Explain the different types of staffing metrics and how each is used best.
• Describe a balanced staffing scorecard.
• Explain how digital staffing dashboards can help managers monitor and
improve the staffing process.
• Describe how staffing technology can improve the efficiency and
effectiveness of the staffing function.
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Staffing Technology at Osram Sylvania1
The North American business of Osram AG of Germany, Osram
Sylvania, is headquartered in Danvers, Massachusetts. Employing over
11,000 people, Osram Sylvania has provided lighting solutions for
homes, businesses, and vehicles for over 100 years. As a
manufacturing organization, the effectiveness of the company’s
processes determines its success.
The company recognizes that its recruiting process is costing it
unnecessary time and money as it fills 80 or more open positions a
month. Osram Sylvania’s recruiters gather e-mail résumés from the
company Web site and various job boards, then cut, paste, and forward
them to hiring managers. Each recruiter spends 6 to 10 hours per week
just cutting, pasting, and forwarding the e-mail résumés. The company
also lacks a standard recruiting process across its 26 North America
locations.
As a government contractor, Osram Sylvania is subject to the Office of
Federal Contract and Compliance Program’s (OFCCP) Internet
Applicant Guidelines that it is finding difficult to meet without some form
of technology. The company wants to streamline its recruiting
processes, provide a common structure for all 26 locations, and
incorporate external staffing vendors to effectively source and hire
quality employees.
Imagine that Osram Sylvania asks you for advice on how it can better
incorporate technology to create a more effective staffing system. After
reading this chapter, you should have some good ideas that you can
share with the company.
Executing a business strategy is often harder than creating one. One study
found that of the 90 percent of 1,800 large companies that had detailed
strategic plans, only about one in eight achieved their strategic goals.2 Why
so few? Not tracking performance is one reason.3 Another reason goals go
unmet is because it’s unclear who within the firm is accountable for their
execution.4 The same is true for the staffing function. A key goal of strategic
staffing is to get the right people with the right competencies into the right jobs
at the right time. But doing so requires that the effort be continually monitored,
tracked, and evaluated.
Few companies make investment decisions about recruitment and staffing
based on hard data, rather than anecdotal evidence. Yet some companies do
successfully use data to create a competitive staffing advantage. HR
technology company SAP is using data analytic tools to better support
company goals, including analyzing recruiting metrics and learning and
development program outcomes to get new hire up to speed even faster.5
Corning Inc. gets monthly reports from its recruiting vendor showing the
number of applicants versus hires from each recruiting source, including all
major and niche job boards. This helps Corning to decide what percentage of
its budget to spend on each sourcing channel. Corning believes that it would
spend 50 percent more on its recruiting function if it didn’t analyze this
information regularly because it would throw money at the wrong sources.6
Technology makes it possible to monitor the recruitment process in real time,
making it possible to identify bottlenecks or a possible bias and correct it
quickly. Qualified candidates can be identified as soon as they submit an
application, allowing the extension of an immediate interview offer. This both
speeds up the hiring process and improves the applicant experience. It can
also be possible to have an applicant tracking system hide personal details
when recruiters are assessing applicants, reducing the potential for bias.
Applicant tracking systems can also identify and flag differential job offer rates
across interviewers. For example, if one interviewer is advancing 50 percent
of the candidates interviewed and another is advancing only 10 percent, the
reasons can be examined and training provided as needed.7
Staffing Evaluation
the analysis of a staffing system to assess its performance
and effectiveness
To maximize the effectiveness of a staffing system and the investment made
in it, evaluating the process is critical. A staffing evaluation
enables a
firm’s human resource department to justify what it has done and to identify
how its activities contribute to the organization’s bottom line. Part of making
sure that the human resource department is effective is showing a firm’s top
managers the hard numbers related to the company’s staffing. Measuring and
evaluating the staffing function can also provide a firm with feedback about
how well its various policies are being implemented. For example, many firms
claim to have a “promotion from within” policy, but don’t actually promote
many employees. Unfortunately, these firms continue to claim success
because they lack systematic information about actual internal promotion
rates. Additionally, as we discussed in Chapter 8
measured are more likely to be
, things that are
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attended to and addressed.8 The feedback provided by the evaluation effort is
necessary to refine and further develop a firm’s staffing policies and practices,
as well as to learn how well they are achieving their intended results.
Technology is an important tool in the staffing process. Technology can
enhance the usability and efficiency of sourcing, recruiting, and assessment
tools. It can also create a positive candidate experience that enhances the
company’s employer brand and helps candidates better understand the
company, its jobs, and its career opportunities. The Internet can also be used
to conduct interviews or administer assessments, saving time, improving
standardization, and facilitating assessment validation, analysis, and
improvement. The data sets created by online or electronically administered
tests also facilitate the development of optimal scoring algorithms and the
identification of any adverse impact.
We have discussed aspects of staffing evaluation at various points in the
book. The purpose of this chapter is not to review themthe aspects of staffing
evaluation but to discuss the broader issues related to evaluating a staffing
system. We first describe different types of staffing outcomes, and then
discuss the techniques and tools used to evaluate them as well as the staffing
system as a whole. We then describe the role technology plays in terms of
the staffing and evaluating process. After reading this chapter, you should
understand why evaluation is critical to strategic staffing, how to evaluate
staffing systems, and how to leverage technology to improve the
effectiveness of staffing systems.
Staffing Outcomes
How far-reaching are the effects of staffing activities? Staffing activities
extend far beyond simply hiring and promoting people. An organization’s
staffing activities affect a firm’s applicants, new hires, customers, and the
organization as a whole. Before they ever become employees, the strategic
staffing process influences people’s willingness to apply and stay in the
candidate pool, their expectations about the job and organization as an
employer, perceptions of fairness, and willingness to recommend the
employer to others and accept its job offers. The influence of strategic staffing
on a candidate does not end once a candidate is hired. For example, if the
firm recruits and screens for the wrong candidate characteristics, it will hurt its
chances that a new hire who accepts the company’s offer will succeed in the
organization. It will also mean that the talents and efforts the organization
needs will be missing. The negative spillover effects related to poor staffing
practices can hurt the organization’s future recruiting success and image as
an employer as well. As a result, it may take longer for the firm to fill jobs,
create higher turnover and lower new hire quality, reduce the firm’s supply of
internal leadership talent, and lower the return on the company’s staffing
investment.
By contrast, hiring the right people allows the organization to leverage the
contributions of its employees right away rather than having to invest the time
and resources necessary to change how they behave and think. Performing
staffing activities strategically reduces the time to fill open positions by
increasing the number of employees qualified for promotion. It also increases
the return on the investment a company has made in its staffing system.
Figure 13-1
shows how effectively designed staffing systems can create a
positive cycle of employee outcomes that enhance an organization’s
effectiveness. Similarly, poorly designed systems can create a negative cycle
that can derail an organization’s expansion efforts, impede its strategic
implementation, and limit its long-term profitability. Granted, other factors
including training, the supervisor’s management skills and style, and
compensation can also influence some of the new hire outcomes listed in
Figure 13-1
. However, staffing practices can strongly influence these
outcomes, and the ways in which they do so are relevant to strategic staffing.
Both good and bad staffing practices have financial consequences for
organizations. A firm often incurs large direct costs
if critical positions are
unfilled for longer than necessary, for example. Direct costs are those
charges incurred as an immediate result of some staffing activity. For
example, poor hiring increases a firm’s direct costs in the areas of training,
supervision, turnover, and lower productivity. Direct costs are relatively easy
to measure and track over time.
Direct Costs
costs incurred as a direct result of a staffing activity
Indirect costs
are those not directly attributable to staffing activities, such
as lost business opportunities, missed deadlines, lost market share, cost
overruns, reduced organizational flexibility, and declines in the morale of a
firm’s workforce. The indirect costs of poor hiring can be even more significant
than the direct costs but more difficult to measure. Conducting a staffing
evaluation can help a firm calculate both the direct and indirect costs of its
staffing system and identify ways to improve the company’s return on its
staffing investment.
Indirect Costs
costs not directly attributable to staffing activities (e.g., lost
business opportunities and lower morale)
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Evaluating Staffing Systems
As we have explained, evaluating a staffing system allows a firm to
objectively assess how well its different staffing initiatives are working and to
subsequently improve them. As you learned in Chapter 8 ,
regularlyRegularly measuring key pieces of information and correlating
different staffing measurements can be extremely valuable. Tracking data and
making comparisons over time is one way to do this. For example, tracking
turnover rates for the organization as a whole and for its individual
departments and jobs can help a company identify trends in its staffing; so will
tracking the firm’s headcount in combination with other factors, such as its
revenue or production volumes. This will allow the firm to identify how closely
one factor leads or lags another and understand how the firm’s staffing
activities affect the rest of the organization’s operations. Establishing
meaningful trends and relationships enables a firm to make more accurate
projections and action plans as well. Next, we discuss key performance
indicators, staffing metrics, the role Six Sigma can play in terms of improving
the staffing process, and how the staffing evaluation process is implemented.
Figure 13-1 Strategic Staffing Outcomes
Key Performance Indicators
Staffing evaluation begins with an understanding of the requirements of the
company’s business strategy, talent philosophy, human resource strategy,
and staffing strategy. These factors determine what the firm’s most important
staffing outcomes are. Once we identify these outcomes, we identify key
performance indicators (KPIs)
that are measurable factors critical to the
firm’s success and long- and short-term goals.9 KPIs are the outcomes
against which the effectiveness of the staffing system is evaluated.
Key Performance Indicators (kpis)
measurable factors critical to the firm’s success and longand short-term goals
To design effective KPIs, it is essential to understand what is important to the
business and what key business measures exist.10 Many factors can be
useful to measure and track. However, the KPIs that will result in an
organization’s success are those best able to enhance a firm’s strategy
execution. These KPIs can include things such as financial measures of
revenue growth, customer satisfaction, innovation, and a firm’s globalization
efforts.11 For example, an evaluation that demonstrates that a new staffing
system increased a firm’s revenue because the company’s new hires were of
higher quality and generated revenue more quickly shows how staffing can
contribute to the bottom line. In this example, the KPI is employee revenue
generation, and the related staffing evaluation metrics are new hire quality
and time to productivity. It is also important to focus on company culture
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and the stakeholder values that will lead to organizational success in
choosing KPIs. If a stated business objective is to develop a diverse
workforce, it is important to identify and track underrepresented candidates
and employees and where they were recruited so that those sources can be
leveraged.
In terms of evaluating staffing systems, it is important to understand lagging
and leading indicators. A lagging indicator
is a factor that becomes
known only after a staffing decision has been made. A lagging indicator might
be a measure of a recruiting source’s effectiveness, the time to fill a position,
or the fit, performance, or promotability of a firm’s new hires. Lagging
indicators measure various aspects of the success or failure of a staffing
system but do not help a company improve its staffing efforts midstream. That
is, the indicators do not identify exactly what went wrong or right, or indicate
how to improve. In general, lagging indicators are not useful for managing
staffing on a day-to-day basis but can identify areas of a staffing system that
should be further analyzed and perhaps improved after the fact.12
Lagging Indicator
a factor that becomes known only after a staffing decision
has been made
By contrast, a leading indicator
precedes or predicts a staffing outcome.
For example, lower applicant quality and fewer applications per position often
precede negative staffing outcomes such as longer time to fill, new hires who
take longer to contribute to the firm, and higher turnover. Leading indicators
are useful for monitoring the progress of a staffing effort. In other words, they
can provide the firm with timely information it can use to adjust and improve
the company’s staffing outcomes midstream. For example, if the number of
applications a company is receiving and their quality are below target levels,
this can indicate that the firm should engage in additional sourcing and
recruiting activities before the staffing effort progresses too much further, and
the risk of a poor candidate being hired increases.
Leading Indicator
a factor that precedes or predicts a staffing outcome
Some indicators can be both leading and lagging indicators. This, of course,
can complicate a staffing evaluation effort. For example, the number of
applicants is often used as a leading time-to-fill indicator. However, the
number of applicants that apply for a position can also be a lagging indicator
of a company’s employer image. Table 13-1
describes several indicators
and some of the outcomes they can lead or lag.
Table 13-1 Leading and Lagging Staffing Indicators
When an organization lacks the luxury of a dedicated staff to develop, track,
and analyze the firm’s staffing metrics, it must make careful choices about
which metrics and indicators best serve its needs. In one small company of
400 employees that sells and leases health care equipment to hospitals, a
human resources director and an assistant track the metrics that best reflect
the company’s culture and strategic goals to ensure that employee costs track
favorably against the firm’s revenues and profits. Four of the metrics tracked
and benchmarked against prior years are lagging indicators: employee cost
divided by sales revenue, employee cost divided by net income before taxes,
turnover, and ratings of human resources’ performance. Absenteeism and
time to fill are leading indicators.13
Linking people measures to KPIs in a reliable way can require large amounts
of data for large companies, such as American Express. American Express
keeps a close eye on 15 to 20 different metrics associated with its key
positions, including how long it takes to fill the positions, how many offers the
company makes before a position is filled, and retention rates. Successfully
launching such an evaluation depends heavily on the firm being able to use
technology to gather
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the data. To gather the information and metrics sought, a firm’s human
resource department must work closely with the company’s information
technology and finance departments. Evaluating a large amount of data also
requires both trial and error and patience on the part of those conducting the
evaluations.
Staffing Metrics
Because people pay attention to what gets measured, carefully selecting key
metrics to track can help focus employees on key behaviors and outcomes.
But too much information makes it difficult to focus attention on the metrics
and outcomes that are the most important. To evaluate its staffing success,
telecommunication company Avaya sets goals for how many experienced
employees it intends to acquire from its competitors. The company also
measures the performance of individuals who move internally from one
business to another compared with the average performance of employees in
that division. One company representative says, “Most companies will say
their recruitment is successful if they retain the people that they hire. We look
beyond that and set very specific goals for ourselves.”14
Southwest Airlines measures key metrics including cost per hire, new hire
quality, compensation, time to productivity, and retention and promotion rates
of high-potential employees and uses these measurements to continually
improve its staffing and talent management process. If Southwest notices that
an operational group is logging above average overtime, for example, it works
with that group to reduce overtime by decreasing turnover or increasing
staffing.15
Staffing metrics can be thought of as long term or short term, and can be
efficiency or effectiveness oriented. Next, we discuss these different types of
metrics and how they are best used.
Long-Term and Short-Term Metrics
Metrics can be tracked over many different time periods. Short-term metrics
help a firm evaluate the success of its staffing system in terms of the
recruiting and new hire outcomes achieved. These metrics include:
• The percentage of hires for each job or job family coming from each
recruiting source and recruiter
• The number of high-quality new hires coming from each recruiting source
and recruiter
• The number of diverse hires coming from each recruiting source and
recruiter
• The average time to start (by position, source, and recruiter)
• The average time to contribution (by position, source, and recruiter)
Long-term metrics help a firm evaluate the success of its staffing system in
terms of the outcomes that occur some time after employees are hired. These
metrics include:
• Employee job success by recruiting source and by recruiter
• Employee tenure by recruiting source and by recruiter
• Promotion rates by recruiting source and by recruiter
Short-term metrics are useful as leading indicators of a company’s ability to
have the right people in the right jobs at the right time to execute its business
strategy and to meet its immediate staffing goals. Long-term metrics are
useful as lagging indicators. They are best used for evaluating the
effectiveness of the firm’s long-term staffing system—for example, the longterm, on-the-job success of employees and their turnover and promotion
rates.
Staffing Efficiency Metrics
Staffing efficiency
refers to the amount of resources used in the staffing
process. Efficiency metrics are analyzed to make process improvements
designed to minimize the amount of resources needed to staff a
firm—specifically, the firm’s hiring costs and replacement costs. A firm’s hiring
costs include sourcing, recruiting, screening, referral bonuses, travel
expenses, advertisements, the cost of assessing and doing background
checks on candidates, and the meals and transportation associated with their
recruiting processes. Replacement costs include hiring costs as well as the
productivity losses that occur while positions remain unfilled. Staffing
efficiency metrics include the cost per hire, the time to fill positions, and the
number of requisitions handled per full time equivalent (FTE) staffing member.
Many firms also calculate onboarding costs, such as training and time-tocontribution costs, which can also be used as indicators to measure a firm’s
staffing efficiency.
Staffing Efficiency
the amount of resources used in the staffing process
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The critical factor to remember when tracking staffing efficiency metrics is that
it is necessary to be efficient but also meet the needs of a firm’s customers.
On the one hand, time-to-fill rates that are below a certain benchmark might
reflect that the firm is staffing itself efficiently. On the other hand, the same
rates might indicate that hiring managers are not spending enough time
interviewing enough candidates to ensure that they are hiring the best ones.
One way to compute staffing efficiency is as a percentage of the amount of
new hires’ compensation. The staffing efficiency ratio can be calculated by
dividing a firm’s total staffing costs by the total compensation of its new hires
recruited, and then multiplying the result by 100. For example, a staffing
efficiency of 12 percent means it costs $0.12 cents to bring in $1.00 of
compensation, or $12,000 to hire someone who makes $100,000 a year.16
An organization that hires 400 employees annually, each with a
compensation of $40,000 annually, would save about $320,000 in staffing
costs every year by improving its staffing efficiency by just 2 percent (400 ×
$40,000 = $16 million total compensation recruited; 2 percent of $16 million =
$320,000). By relying more on technology to source, recruit, and screen their
employees, many firms could easily achieve such a 2 percent savings.17
Staffing Effectiveness Metrics
Strategic staffing is not simply hiring a large number of people or hiring them
quickly or cheaply. Strategic staffing is hiring people who become successful
in the job, are a good fit with the company, and stay with the organization.
Although efficiency and cost are often the initial focus of a firm’s staffing
evaluation efforts, many companies subsequently shift their focus toward
measuring their staffing effectiveness .18 Staffing effectiveness relates to
how well the staffing process meets the needs of a firm’s stakeholder needs
and contributes to the organization’s strategy execution and performance.
Staffing effectiveness metrics help answer questions such as “Is the number
and caliber of finalists being sent to hiring managers meeting their needs?”
and “Is the hiring experience and speed acceptable to candidates?” Staffing
efficiency is often easier to measure and evaluate than staffing effectiveness.
For example, it is relatively easy to measure how many jobs each recruiter is
filling (staffing efficiency), but what is often more important is whether the jobs
are being filled with the right people (staffing effectiveness).
Staffing Effectiveness
how well the staffing process meets the needs of a firm’s
stakeholders and contributes to the organization’s strategy
execution and performance
There are many possible measures of staffing effectiveness. Perhaps the
most obvious measure of staffing effectiveness is new hire job success. Job
success refers to job performance as well as the new hire’s fit with his or her
work group, unit, and organization, and the degree to which his or her values
are consistent with the company’s culture and values. Tracking this metric by
recruiting source, recruiter, and hiring manager can help improve a
company’s future staffing efforts. The quality of hire reflects whether the
company hired the people it set out to as defined by hiring managers’
predetermined job performance requirements. New hire job success starts
with the quality of the people hired. The quality of hire can be assessed using
new hires’ performance ratings after an appropriate time on the job, hiring
manager satisfaction surveys, objective employee productivity measures, and
even safety, absenteeism, and turnover rates. New hire quality matters when
it comes to an organization’s performance. The War for Talent study,
published in 2001 by McKinsey & Co., revealed that high performers in
operations roles increased the productivity of their firms by 40 percent; high
performers in managerial roles increased their firms’ profits by 49 percent;
and high-performing salespeople created 67 percent more revenue for their
firms than average or low-performing employees.
Overall retention or turnover rates might seem like good metrics, but
remember that retaining poor performers can actually impose a cost on the
firm. Tracking the voluntary turnover rate of top performers as well as
measuring the turnover rate of bottom performers, as we discussed in the last
chapter, can provide more meaningful information. Tracking monthly turnover
by hiring manager, department, or business unit and by race, gender, or age
group need not take a lot of time and can reveal patterns that might suggest
poor staffing or poor management. Measuring the turnover of employees
based on the sources from which they were hired can help identify the return
on investment (ROI) from each source. Jeff Cottle, senior vice president of
human resources and organizational strategy at SCT, a global informationtechnology company, tracks turnover by employee type to assess controllable
voluntary turnover and understand what’s causing it. Says Cottle, “Our
perspective on the use of metrics…is based on our belief that human-capital
metrics have a direct correlation to financial metrics.”19
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Evaluating the value of top performers can also be a useful metric. When a
competitor was pursuing one of its top technical employees, Texas
Instruments (TI) wanted to find out what the employee was worth. TI added
up all the ideas that the employee had generated for the company, and what
those ideas were worth in terms of patents. TI decided that the employee was
probably fairly valued at about $25 million and decided it was worth its trouble
to get him to stay. TI gave him a nice amount of stock, structured in a way
that provided him an incentive to stay another decade. The company even
arranged for a week of private golf lessons for his wife and him at a famous
golf resort.20
Measuring what a top employee is worth, and comparing that to what an
average employee is worth, can be a useful indicator. McDonald’s knows that
a top manager is worth 35 percent more in profits than an average
manager.21 Calculating the value of a company’s top performers can help
managers justify what it is worth to invest more in recruiting, hiring, and
retaining them. TI doesn’t track, and isn’t concerned about, what it spends to
hire key technology workers. The company understands that these
employees will produce far more for the company than what they’re paid, and
believes that hiring costs are too small a percentage of an employee’s value
to worry about.22
Many other metrics are possible. To identify which divisions in the company
are creating new talent, Cisco Systems uses a metric that tracks why a
person moved within the company rather than simply how many people
moved. High performers tend to want to take on new challenges so tracking
their movement inside the company is a way to make sure managers serve as
talent “launching pads,” rather than talent hoarders. Once identified, those
managers who “launch” talent are rewarded accordingly.23
Some of the key staffing metrics utilized by Valero Energy include:24
• Brand-related metrics. Valero measures the value of its employment
brand by calculating the cost savings related to the positions it fills via its
corporate Web page, community referrals, and nonemployment-related TV
ads. The recruiting department estimates that the Valero brand saved the
company $4,309,005 in recruiting costs.
• Staffing efficiency metrics. Valero utilizes the staffing efficiency measure
developed by Staffing.org, an independent and nonproprietary nonprofit
corporation that develops standard human resource performance metrics.
Valero calculates its staffing efficiency by dividing the firm’s total recruiting
costs by the total compensation for all the positions it fills annually (the
sum of the base starting salaries for each external hire during their first
year). Staffing efficiencies in the range of 5 to 9 percent are considered
excellent, and those above 16 percent indicate inefficiency.25 However,
these ranges can vary by industry, organizational size, and region.
• Sourcing channel metrics. Some of the measures Valero applies to each
sourcing channel are:
◾ The staffing cost of the source
◾ The percentage of the firm’s budget the source represents
◾ The percentage of applicants recruited via the source
◾ The percentage of positions filled via the source
◾ The source’s speed
◾ The source’s efficiency
◾ The turnover at 12 months of new hires recruited from the source
◾ The dependability of the source
◾ The average salary of the position filled via the source
• Internal recruiters are also monitored on the preceding metrics.
Return on Investment
As we have stressed throughout this book, staffing costs are an investment.
When using metrics and evaluating staffing activities, it can be easy to focus
on staffing efficiency and lose sight of staffing effectiveness. If a firm is only
concerned with hiring enough people quickly and cheaply, as is often the
case during periods of rapid expansion and labor shortages, the firm is not
likely to pay much attention to employee-quality requirements. At one point,
the human resources department of the telecommunication company GTE
(now a part of Verizon) was under pressure to focus largely on efficiency and
cost reduction. To hire people faster, recruiters started sourcing from
temporary agencies and job banks rather
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than graduating college students and experienced professionals. This change
improved GTE’s staffing efficiency. One region of the company reduced its
time to fill a position to 50 percent below GTE’s company average, and the
cost per hire was very low. Unfortunately, the turnover rate in the region rose
to twice the company’s average and customer service levels in the region fell.
Instead of hiring experienced professionals and new graduates, sourcing
through temporary agencies and job banks was less selective.26 For GTE,
the previous higher staffing costs and longer times to fill had been good
investments.
A cautionary note is in order here: If the only goal an organization pursues is
hiring the highest-quality people, its staffing program might not produce
enough hires or might produce them at an unacceptable cost. Indeed, a
common hiring mantra of organizations is to hire the best talent available.
However, as we have explained, not all business strategies require the best
talent for all jobs. Architectural Support Services, a computer-aided design
company providing technical support for architects, is a case in point: When
the company was relatively young, it hired the best and brightest
professionals available. However, poor morale and high turnover caused by
infighting among the high-powered staff compromised its operations. The
organization realized that it did not need to fill all of its positions with the most
talented graduates from elite four-year institutions, and started recruiting from
community colleges instead. The company was rewarded with a much more
loyal and committed workforce, and its results improved.27 The lesson here is
that a balance must be struck between staffing efficiency and staffing
effectiveness.
A firm can calculate the ROI for its individual staffing activities, such as the
ROI of different recruiting sources or assessment methods, or for the staffing
system as a whole. Although many companies have no idea which candidate
sources produce the best employees, others have turned the evaluation of
their hiring sources into a science. This helps the companies determine the
degree to which their recruiting investments are paying off, which allows the
firms to cut out poor-performing sources, and to negotiate better contracts
with outside recruiters based on the results they produce.
With that said, measuring a firm’s overall staffing ROI is not always easy.
Nonetheless, if the associated measurements are made carefully, the
effectiveness and ROI of staffing initiatives can be demonstrated.28
Six Sigma Initiatives
Developed in the 1980s at Motorola, and now practiced by many large
corporations, including GE and Dow Chemical, Six Sigma
is a data-driven
quality initiative that uses statistics to measure and improve business
processes and their outcomes to near perfection.29 The central principle of
Six Sigma is to measure defects, identify and remove the sources of error,
and to reduce defects to near zero. Six Sigma was developed in a
manufacturing environment, but the principles and process can be used to
improve any process, including staffing.
Six Sigma
a data-driven quality initiative that uses statistics to
measure and improve business processes and their
outcomes to near perfection
Six Sigma can be used to improve a variety of staffing outcomes, such as:
• Lowering turnover among high performers
• Improving the quality of applicants
• Improving the fit of new hires with a firm’s corporate culture
• Reducing the time to fill positions
• Increasing the return on the company’s staffing investment
GE Medical Systems used Six Sigma processes to develop its recruitment
Web site.30 Microsoft aligned its recruiting efforts with the rest of its
company’s implementation of Six Sigma, and even created a senior “manager
of quality improvement” position to help improve the processes the company
uses to hire its technical employees.31
Six Sigma methodology begins with a process map that defines and
graphically maps out the process to be improved. The process map, which
encompasses the entire process, helps firms identify the important metrics
that need to be analyzed. After identifying the source of any defects in the
system, an improvement program is created to remove the cause of the
defects. To improve the quality of a staffing process, each step of the process
must maximize the probability that the selected candidate meets the hiring
manager’s expectations by maximizing the chances that unqualified
candidates are screened out at each step, and enhancing the interest
qualified candidates have in the job and the organization as an employer.
Figure 13-2
illustrates a staffing process map.
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Dow Chemical uses Six Sigma for its staffing processes on a global basis to
improve its processes and yield higher productivity. Dow Chemical’s Human
Resources Information Technology Global Director Jon Walker states,
Figure 13-2 A Staffing Process Map
Best practices and proven methodologies are key to improving the staffing
process enterprise-wide. Since we’ve been able to engineer new
processes and staffing management technology, we have achieved an
increase in Sigma by at least 50 percent.…An increase in Sigma will
typically result in bottom-line efficiency and cost reduction of five percent or
more. As it relates to staffing management, we attribute our productivity
gains to finding quality candidates faster, faster time to contribution and a
reduction in cycle-time by forty percent.32
When local unemployment was a low 2 percent, one Colorado manufacturer
was paying a substantial amount of overtime to its experienced workers
because it was having trouble recruiting for positions in its 24/7 operation.
The company applied Six Sigma quality tools to the staffing process and
found that because hiring was taking six weeks—candidates had to apply one
week, test the next, interview the next, undergo a blood test, then receive an
offer—many quality
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candidates found jobs elsewhere. By mapping the process and removing
barriers, the manufacturer shortened its hiring time to one week, improving
hiring rates and reducing the overtime and higher salaries the firm had
previously had to pay while the positions were unfilled.33
Six Sigma and other quality methodologies focus on not just measuring
activities but also understanding the variables that affect those metrics and
then systematically attempting to control those variables. The DMAIC (define,
measure, analyze, improve, and control) process of Six Sigma can be applied
to existing internal processes, and the DMADV (define, measure, analyze,
design, and verify) method can be effectively used in creating new processes.
In more detail, these processes are:34
DMAIC (Define, Measure, Analyze, Improve, and Control)
• Define the problem. Reduce unwanted turnover among high performers.
• Measure. Identify key measurements underlying turnover, such as the
turnover rate among high versus low performers.
• Analyze. Understand the key factors and trends that create turnover, such
as low employee engagement, the dissatisfaction of employees with their
supervision or pay, and high outside demand for the employees’ skills.
• Improve. Identify and execute a plan to address those factors.
• Control. Implement controls to lower turnover on an ongoing basis.
DMADV (Define, Measure, Analyze, Design, and Verify)
• Define project goals and customer deliverables, such as improved new
hire quality.
• Measure. Determine hiring managers’ needs, such as their need to hire
good employees quickly.
• Analyze the process of sourcing, recruiting, screening, and making job
offers.
• Design the staffing process to screen out undesirable candidates and
maximize the quality of new hires.
• Verify the performance of the process and its ability to meet the needs of
hiring managers.
Although some areas of sourcing, recruiting, and selection are more art than
science, if an area can be measured, Six Sigma can be applied to it. For
example, by increasing its spending on validated selection tools, a firm can
weed out more undesirable candidates and reduce the interviewing and travel
expenses related to further screening them. Not only can the tools reduce the
firm’s recruiting expenses, they can improve the quality of candidates hired
and increase employee retention.
The Balanced Scorecard Approach
Good performance is about more than bottom-line financial results. The
balanced scorecard
is a tool used to monitor, assess, and manage the
performance of employees as well as align their interests with a firm’s key
business objectives by assigning them both financial and nonfinancial
goals.35 In other words, the balanced scorecard approach “balances” a firm’s
strategic, operational, financial, and customer-related goals. The approach
also helps managers monitor and assess the performance of their employees
so as to quickly take corrective action when needed. After all, financial results
are historical measures. Thus, focusing solely on them when evaluating a
firm’s staffing process is limiting because they reveal only how the company
has done in the past—not how it will do in the future. Monitoring nonfinancial
measures, including how applicants and employees react to the firm’s staffing
process and how satisfied hiring managers are with it, for example, can warn
a firm about problems that might lie ahead. For example, a dip in employee
satisfaction ratings might prompt a manager to say, “because low employee
satisfaction leads to higher turnover and weakens our image as an employer,
we should address declining employee satisfaction now.”
Balanced Scorecard
a tool used to monitor, assess, and manage the
performance of employees as well as align their interests
with a firm’s key business objectives by assigning them
both financial and nonfinancial goals
Balanced scorecards help organizations in the following ways:36
• Compare and track the performance trends of different business units,
departments, and employees within the organization
• Benchmark the organization against other organizations
• Identify the company’s best performers and its best practices
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Corporate scorecards are first developed to define the goals and agenda for
the entire organization. Each business unit then looks to the corporate
scorecard for guidance in creating their own balanced scorecards that support
the broader goals and strategies of the organization. Once business unit
scorecards are created, each support unit—including a firm’s human resource
management and staffing department—can create its own scorecard to clarify
its goals and track its progress toward meeting them.
A balanced staffing scorecard
contains objectives, targets, and
initiatives for each activity that adds value to the staffing process. Using
software, such as Oracle’s Balanced Scorecard package, managers can
more easily compare the staffing performance of different units, and
benchmark it against the firm’s budgets, historical data, and peer firms within
the industry. From their computers, managers can then click on any indicator
to conduct more detailed analyses of the data. If there are problems with the
staffing process, the system allows employees to collaborate online to
analyze the causes and to take corrective action. It also helps managers see
how their decisions impact the company’s strategy.
Balanced Staffing Scorecard
contains objectives, targets, and initiatives for each activity
that adds value to the staffing process
A company’s goals and strategies should guide the development of the firm’s
staffing scorecard. Most of the measures should focus on staffing
effectiveness—that is, creating value for the firm. A smaller number of
measures should focus on staffing efficiency and cost control. The choice of
scorecard criteria should be based not only on the company’s strategy and
goals, but also the challenges the company anticipates, such as a tightening
labor market or changing workforce demographics. The criteria of the
scorecard can also be chosen to address any current problems the firm is
experiencing—for example, if the firm is having difficulty staffing its key
leadership positions.
Assume that every unfilled sales representative position costs a hypothetical
retailer $8,000 per day in lost revenue. The company has about 2,000 sales
representatives, and averages 120 openings at any given time. The company
wants to minimize the time sales representative positions are vacant. In
addition, the time hiring managers spend on the sales floor with their
representatives adds 20 percent to the revenues the representatives
generate. Thus, the retailer wants its managers to balance their sales floor
time with the time they spend recruiting and interviewing candidates. To
ensure that it is being sufficiently selective, the company would like its hiring
managers to interview four to seven candidates per hire. The firm also wants
to ensure that it is hiring a diverse sales force and controlling turnover to
reduce replacement expenses and lost sales.
Figure 13-3 Monthly Balanced Staffing Scorecard for Sales
Representatives
Accordingly, the company might create the monthly staffing scorecard as
shown in Figure 13-3 . Note that the columns to the right show the
performance metric being tracked for each zone and the goal for each metric
is shown in italics in the first row of each column. The data cell for each
region is coded green when a metric is consistent with its target, yellow when
the metric is becoming problematic, and red when it is out of its target range.
The company tracks the time hiring managers spend and number of
interviews they conduct per sales representative hire to make sure that
enough, but not too much, time is being spent recruiting. The company, of
course, also tracks the amount of time it takes to fill a position. If a high
percentage of sales
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positions are vacant, this signals that urgent action is needed. Turnover rates
are tracked to identify where retention efforts might be appropriate. New hires’
average first year performance as well as the diversity of candidates hired to
ensure that the firm is complying with EEO laws and that the company’s
commitment to diversity is being supported is also tracked. Any problematic
demographic areas are listed in the corresponding cell. Tracking the average
store staffing level in a zone can help to indicate whether staffing issues are
creating problems keeping stores staffed appropriately with sales
representatives. Customer service scores are in the last column and suggest
that stores with the greatest staffing challenges also have the lowest
customer service scores. Ideally, any cell in the scorecard could be clicked on
to retrieve more detailed information within each zone to better diagnose any
issues that need attention.
It often doesn’t require a massive effort to improve a firm’s staffing metrics.
One way to begin is by identifying a problem area and determining how to
start measuring and improving it. If the turnover of new hires is a problem, for
example, start tracking it by manager and uncover the reasons why people
are leaving. Track the information back to the firm’s staffing activities, identify
areas for improvement, and then make changes and track their results. If new
hires are leaving after a year because they don’t see a clear career path for
themselves in the company, add realistic job preview and career information
to the recruitment and socialization process, and incorporate career planning
into employees’ annual performance discussions. Subsequently track the
turnover rates of new hires and see if they improve. If not, reassess what is
causing the turnover problem and try again. The metrics used shouldn’t be
too complex or numerous to understand or explain to others.
Because Nokia wants each of its new hires to fit in with its culture and be able
to continually learn and adapt to the company’s changing business needs,
human resources and hiring managers partner to carefully assess the match
between what Nokia needs and can offer new hires and what each candidate
needs, wants, and can contribute to the company. Tracking the attrition of
new hires at the 12-month mark helps indicate where problem areas might lie,
and signals Nokia’s human resources personnel to devise corrective
measures to address the underlying issues. Nokia further evaluates its
staffing effort by conducting focus groups or using other methods designed to
identify the reasons why attrition is too high. The reasons could be the hiring
process, the hiring manager’s skills, HR issues, and the overselling of jobs or
the organization. Nokia is careful not to micromanage with staffing metrics. To
reinforce its culture, additional metrics are collected only when performance
and attrition metrics indicate that a problem is occurring. Nokia is also careful
to tailor any staffing metrics it utilizes to different employee populations and
problems.37
It is often a good idea to implement a staffing evaluation program
incrementally rather than taking on the entire staffing system at once.
Evaluate one component of the system at a time by calculating its impact on
relevant KPIs, such as a division’s productivity, employee tenure,
performance, labor costs, and employee promotions. For example, a
company pursuing a cost-leadership strategy based on an operational
excellence competitive advantage might be very concerned about its labor
costs. This, of course, would be a good component to track. The direct and
indirect cost savings of better recruiting, hiring, and onboarding, as well as the
costs of open jobs, such as those associated with severance and
unemployment pay, overtime, and the cost of hiring temporary employees,
can also be factored in. You can also involve other units of the company, like
its finance and operations departments, to acquire the information and data
you need. This process helps build the case that staffing activities influence
important organizational outcomes and can secure the buy-in needed to
make staffing improvements and increase the scope of the evaluation
program.
It is important to match a firm’s staffing metrics to the different people
responsible for them in the hiring process. For example, Nokia tracks the
performance of its newly hired executives to the recruiter or search agency
that referred them. At lower levels in Nokia, the performance of new hires is
tracked to both employees’ hiring managers and their recruiters.38
Staffing Evaluation Ethics
Ethical issues must be attended to in staffing evaluation. The data used to
conduct a staffing evaluation must be high quality. Thus, it is important that
everyone responsible for collecting the data ensure that it is accurate. It is
also important to keep personal information about
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applicants and employees private. Any personal information about an
employee, including the person’s performance and salary information, should
be kept confidential and secure. In addition, if applicants or employees are
told that the information collected about them will be used in a particular way,
the data must be used only in that way. It is also important to realize that
some performance comparisons between different recruiters can be unfair.
Some recruiting is more difficult because there are fewer diverse, qualified
individuals or fewer qualified individuals in general. Recruiting for certain job
families can also be more difficult if there is a labor shortage related to those
jobs. Nursing and truck-driving jobs are good examples. These positions can
be very difficult to fill. One expert recommends that to be fair, recruiter
comparisons should be limited to year-to-year comparisons within the same
job family and within the same geographic region.39
Technology and Staffing Evaluation
One expert says, “When the war for talent is fought over the Internet,
corporations will be won and lost over staffing technology.”40 To be sure, the
Internet has changed staffing practices in dramatic ways. For example,
recruiting employees online costs only about 5 percent of what it costs to
recruit them through “help wanted” ads and other traditional means. Online
recruiting, application submission, and résumé screening have reduced the
average 43-day hiring cycle by more than two weeks.41 Technology, such as
the Internet, has helped companies reach larger numbers of qualified
applicants worldwide.
Using technology doesn’t merely mean using the Internet to source and
recruit applicants, though. Databases and analytical software have made it
substantially easier for companies to gather and organize volumes of
information about applicants and employees throughout their careers, for
example.42 Technology can also facilitate the administration of employee
surveys that can help evaluate the effectiveness of the staffing system.
Bernard Hodes’s QTrac software assesses the ROI of a firm’s employment
branding and staffing efforts. An online survey is administered to new hires
after 30 days on the job and again at 90 days, 180 days, and 365 days. The
survey for each period asks different questions that are most relevant to a
new hire at that time to identify any weakness in the recruiting, onboarding,
training, and new hire experience and enhance effective recruiting and
retention. The home improvement retailer Lowe’s uses the monthly reports its
QTrac software generates to improve the company’s recruiting techniques
and the experience of its job candidates. After only two months of QTrac
reporting, information was learned that Lowe’s translated into tangible plans
for improving the process.43
Thus, technology helps companies evaluate their staffing functions in terms of
their effectiveness and efficiency and better manage their internal labor talent.
Next, we discuss some of the most commonly used staffing technologies and
tools: résumé screening software, applicant tracking systems, and human
resource information systems and how they are used. We then discuss a
company’s Web site as a critical staffing technology, followed by digital
dashboards.
Résumé Screening Software
Résumé screening software screens résumés for certain words or phrases so
that recruiters do not have to look at every résumé. This software saves
recruiters a lot of time and makes Internet recruiting much more manageable
for companies that receive thousands of responses to their job postings.
However, relying too heavily on software can result in a firm overlooking
highly qualified candidates who do not match specific criteria. As one expert
says, “In some cases, the best candidate might not have a specific skill but
can learn it.”44 If a company does not invest enough time and resources finetuning a system to uncover the best candidates, recruiters might pull up too
many résumés matching the desired keywords but too few that are
outstanding.45
It is important to be careful when selecting résumé screening
software—depending on how the software works, it may disproportionately
exclude groups of people from various protected categories. For example, a
lawsuit filed against one company alleged that the firm’s screening software
disproportionately screened out African Americans. Rather than deleting
résumés, the software identified those that had the words or phrases the
company was looking for. It was argued that the words used by the screening
software were not the same words that members of the African American
community would use to convey that information despite being very well
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qualified for that job. The case was settled relatively quickly, and there is very
little information on what the words were.46 Nonetheless, the case highlights
the importance of being an informed consumer and fully understanding how a
software package works.
Applicant Tracking Systems
An applicant tracking system (ATS)
is software that allows a database
with applicant information and job information to be maintained so that
matches between the two are easier to make. First-generation applicant
tracking systems only collected résumés and offered basic search
capabilities. Today’s systems, whether they’re used in-house or in tandem
with job boards, allow human resources and line managers to oversee the
entire recruitment and staffing process—everything from mining résumés to
doing basic screening and conducting background checks and facilitating the
onboarding of new hires. Some ATSs are able to generate detailed profiles of
candidates that include their education, background, skills, behavioral
attributes, work history, and salary requirements. PNC Financial Services
Group’s applicant tracking system filters out applicants lacking at least two
years of cash-handling experience and e-mails rejected applicants within a
day suggesting that they search its careers site for jobs for which they are
better qualified.47
Applicant Tracking System
software that allows a database with applicant information
and job information to be maintained so that matches
between the two are easier to make
Large organizations spend an estimated 7 percent of their external
recruitment budgets on applicant tracking systems.48 ATSs not only reduce
costs but also help to speed up the hiring process and improve the company’s
ability to find people who fit the firm’s success profile.49 Salesforce.com’s
Vana HCM cloud-based recruiting tools not only allow organizations to
configure job postings, automatically process résumé attachments, and post
openings to thousands of job boards, but the tracking reports help to identify
which positions were hard to fill in the past to help allocate the right resources
and time for future recruiting efforts.
ATSs can also provide managers with interview and selection guidelines and
even help prescreen applicants by administering online prescreening tests or
questionnaires to them. For example, Continental Airline’s flight attendant
candidates answer 41 questions online before being allowed to complete a
formal application.50 Because ATSs store candidate-related data inside a
database, searching, filtering, and routing applications is faster and more
effective. This frees up recruiters’ time to source and communicate with
candidates, and can reduce inefficiencies, costs, and the time it takes to fill
positions. Reporting tools that help facilitate a firm’s EEOC compliance are
often included, as are tools for managing communications with applicants.
ATSs are made by large software firms such as PeopleSoft, SAP, and Oracle,
and firms such as HR Diagnostics, RecruitPro, and Hirebridge. Their cost
ranges from a few hundred dollars to millions of dollars, depending on their
complexity. Training end users to properly use the systems is critical for
success, as is selecting the best reporting metrics to incorporate, and
carefully testing the usability of the system’s functions. The more integrated
the various functions are, the more usable the system will be.
Attracting and retaining diverse, high-quality talent is central to ConAgra
Food’s strategy for continued growth. To make its staffing process more
strategic, ConAgra realized that one of the most powerful ways to enrich and
diversify its talent pool was to leverage the Internet in a way that would allow
the company to find external candidates. The company’s ATS now
automatically stores all applications and résumés submitted to the company
via the Internet, and ConAgra’s HR managers review only those that are
prescreened by the system. This eliminates hours of research by recruiters.
More than 50 percent of ConAgra Foods’ recruiting and staffing activities are
now done through the Internet and its internal résumé database, and the
company has seen an increased flow of quality talent. Including a metrics
system also allowed the company to implement actionable recruiting goals to
measure the quality and diversity of its candidates.51
According to experts, at a minimum an applicant tracking system should be
able to:52
• Scan résumés
• Generate mailing labels and letters that can be sent to accepted and
rejected applicants
• Generate EEO reports
• Schedule and track interviews
• Store the firm’s job descriptions
• Generate staffing statistics by activity, recruiter, and recruiting sources
• Generate a job requisition analysis
•
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Generate a staffing cost analysis
• Create applicant profiles
• Generate mailing labels
• Allow managers’ notes regarding different candidates and the staffing
process to be stored online
Figure 13-4
shows a screenshot from HR Diagnostics’s applicant tracking
system. The system shows the number of candidates at each stage in the
hiring process, and the menu at the left gives managers easy access to
reports, testing outcomes, and other information about candidates and the
hiring process.
Figure 13-4 An Example of an Applicant Tracking System (ATS)
From http://www.hr-diagnostics.com., Reprinted with permission from HR Diagnostics.
Human Resources Information Systems
A human resources information system (HRIS)
is a system of software
and supporting computer hardware specifically designed to store and process
all HR information and keep track of all employees and information about
them. Also known as human resources management systems (HRMS), these
systems support most modern HR departments. An HRIS combines separate
HR systems into a centralized database that performs the majority of HR
transactions,53 including reporting capabilities. Some systems are able to
track applicants before they become employees. The better HRIS systems
help to manage all employee information, report and analyze employee
information, manage applications and résumés, and facilitate employee
onboarding.
Human Resources Information System (Hris)
a system of software and supporting computer hardware
specifically designed to store and process all HR
information and keep track of all employees and
information about them
Human resources information systems usually include each employee’s:54
• Department
• Job title
• Job grade
• Salary
• Salary history
•
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Position history
• Supervisor
• Training completed
• Special qualifications
• Ethnicity
• Date of birth
• Disabilities
• Veteran status
• Visa status
• Benefits selected
Because of local and cultural differences in what data gets entered into the
HRIS system and how things are labeled, it can be challenging to create
global reports. Because of this difficulty, HRIS technology solutions are
sometimes implemented differently in different geographic regions.55
Company Web Sites
You have probably noticed that many companies feature on their Web sites
special careers sections dedicated to the firm’s employment opportunities. In
fact, corporate Web sites have become the primary way most students
research companies and evaluate career opportunities. In addition to
providing information about current job openings, the careers site can also
contain information about a firm’s corporate culture and mission. Many
companies are able to accept applications and administer prescreening tests
online. Thoughtfully developed careers sites can also result in more effective
interviews because applicants’ basic questions will already have been
answered by the Web site content, and poor fits are more likely to have selfselected out after learning more about the organization and job opportunity
online.
It is critical that the path to careers sites be easy to find, and that they be kept
usable. When one insurance company buried a jobs link at the bottom of its
homepage, requiring users to scroll past unrelated information, job-related
inquiries submitted to the firm dropped by 80 percent. Other companies are
working on creative ways to grab a candidate’s attention as they build their
recruiting pages.56 Goldman Sachs’s interactive careers Web site at
www.goldmansachs.com/careers/index.html is a good example.
Organizations can use as much space as they feel they need to communicate
their unique employer brand and showcase their employment opportunities.
Search functions can help visitors identify the job opportunities they wish to
pursue and their desired work locations, and self-assessment inventories can
help applicants decide which opportunities are best for them. Drop-down
menus and résumé builders can allow visitors to submit their background
information in a standardized manner, facilitating the screening and record
keeping of this information.
If done professionally and in an easy-to-navigate manner, Web sites can help
establish and maintain an organization’s image as a good employer. Although
a high-quality Web site can be expensive to build, it should be thought of as
an investment that will be amortized over the large numbers of people likely to
see and use it. The investment is also likely to reduce hiring times and other
staffing-related costs.
Despite the benefits of staffing technology, there can be some dysfunctional
or unintended consequences related to it as well.57 Computerized recruiting
and staffing systems can depersonalize the hiring process and make it less
flexible, negatively impacting applicant attraction and retention rates. If some
subgroups lack access to computerized systems or the skills needed to utilize
them, online recruiting can result in adverse impact. Privacy concerns
sometimes make applicants less willing to use e-recruiting systems.58 Some
research has shown that e-recruiting doesn’t always attract the most qualified
job applicants and, in fact, has a tendency to attract individuals who switch
jobs frequently.59
The following are some experts’ guidelines for e-staffing:60
• The Internet should not be the only recruiting source a company uses.
• E-recruiting should be used when large numbers of candidates are
needed, when fairly high education levels are required, and to target
applicants in specific labor markets, such as high-technology employees,
students seeking part-time work, or new graduates seeking full-time work.
• E-recruiting systems should provide applicants with accurate information
about a company’s unique characteristics and give a realistic preview of
the company.
•
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Company Web sites should promote values that most new employees will
find attractive.
• E-staffing systems should be aligned with the company’s strategic goals
and enable firms to attract applicants who can help them meet their
strategic objectives.
• Feedback should be regularly collected from job applicants about the
types of implicit and explicit messages a company’s Web site conveys
about the firm and its culture.
• To attract diverse applicants, e-staffing systems should be culturally
sensitive and possibly include special features (e.g., be presented in
multiple languages and an option for large font to accommodate the needs
of individuals with vision disabilities).
• To protect applicants’ privacy, e-staffing systems should be governed by
privacy protection policies that (a) restrict data access, (b) restrict data
disclosure, and (c) ensure that only job-relevant data are collected for
decision-making purposes. For privacy reasons, all medical information
must be kept separate from the employee’s other information, in a place
where managers cannot see it.
Digital Staffing Dashboards
Just as the dashboard of a car gives the driver indications of the car’s
performance and warns when there is danger, digital staffing
dashboards
are interactive computer displays that indicate how a staffing
function is meeting its goals, using whatever metrics the user chooses. The
metrics are often those from the balanced staffing scorecard but can include
other metrics as well. Digital dashboards reflect the idea that a picture is
worth a thousand words: The dashboards display large amounts of data in a
clear and user-friendly format, usually with charts and graphs, and are
interactive, allowing the user to break high-level data down into more detailed
reports. Like automobile dashboards, digital dashboards usually present
important information in a way that grabs the manager’s attention. For
example, if a staffing initiative is over budget, a graph related to it might
display a red blinking light. SAS’s Strategic Performance Management
package is such a system.61
Digital Staffing Dashboards
interactive computer displays that indicate how a staffing
function is meeting its goals
Digital staffing dashboards can include a variety of information including the
names of top recruiters and their performance, the number of positions a firm
has open, the number of candidates at each stage in the selection process,
employee skill sets, turnover rates, diversity statistics, staffing expenses, and
many other metrics. Well-crafted staffing dashboards help companies monitor
and manage their workforces and chart their progress toward meeting
strategic and tactical staffing objectives. Capital One Financial Group uses
dashboards to identify its top performers. Erickson Retirement Communities
of Baltimore uses dashboards to identify which retirement complexes are
having trouble retaining staff members and which complexes have seen
employee satisfaction ratings dip.62 Chicago’s Northwestern Memorial
Hospital uses dashboards to track its turnover, open positions, number of
hires, the reasons why applicants are rejected or decline an offer, and other
metrics.63 Digital dashboards can also keep employees aware of how well
they are performing. Thus, if an employee receives a poor performance
review at the end of the year, the person is less likely to be surprised and
upset by it.64 Digital dashboard technology is also scalable, allowing even
small- and medium-sized companies to use the technology, and contains
safeguards to protect sensitive employee data.
ABN AMRO Bank, one of the largest banks in Europe, implemented a digital
staffing dashboard to better understand the effects its human resource
policies were having on its recruitment and retention efforts and to provide
better visibility of the firm’s workforce trends and events. In addition to
providing a global overview of the company’s HR operations (such as the
firm’s headcount and average employee compensation) by respective
quarters and years, the dashboard-based application also gives end users the
option of examining KPIs in greater detail, for instance, to evaluate employee
compensation by age groups.65
Figure 13-5
illustrates a recruiting effectiveness dashboard developed by
Recruiting Roundtable Research for Alpha Company (a hypothetical
company). The dashboard allows Alpha Company to track its hiring quality,
candidate conversion rates, new hires’ perceptions of the firm’s recruiting
effectiveness, and candidate conversion factors, or the reasons new hires
gave for accepting job offers with Alpha Company.
Because what gets measured gets managed, digital dashboards help keep
managers focused on the key factors that drive company success. Creating
an effective dashboard takes some planning.
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Utilizing it can take time, require managers to adapt how they manage, and
even alter a firm’s corporate culture. This chapter’s Develop Your Skills
feature provides some tips for creating a good dashboard.
Figure 13-5 Recruiting Effectiveness Dashboard
Source: Recruiting Executive Dashbaord, Recruiting Rountable Research © 2007 Corporate Executive Board. All rights
reserved. Reprinted with permission.
Develop Your Skills Creating a Digital Staffing Dashboard
Creating digital staffing dashboards requires time, expertise, and an
understanding of what drives a firm’s staffing success.66 Here are some
tips for creating a digital staffing dashboard:
1. Identify the factors that determine a firm’s staffing and business
success. The factors might include the following:67
◾ The firm’s talent depth in its key positions
◾ The job success of the firm’s new hires (including their
performance, fit with the organization, and promotion rates)
◾ The recruiting sources of top performers (e.g., the colleges top
performers attended)
◾ The retention and absenteeism rates of hires from different
sources and different supervisors
◾ The cost per hire
◾ The average time to fill a position
◾ The time to productivity (the time it takes a new hire to
achieve a minimum level of output)
◾ The top five nonmonetary reasons that people accepted the
firm’s job offers
◾ Vacancy percentages in key positions
◾ The time it takes HR personnel to refer résumés to hiring
managers
◾ The time it takes to interview candidates after they have
applied with the firm
◾ The time between a candidate’s interview and the offer made
to him or her
◾ The percentage of bad hires
◾ The percentage of diverse hires
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◾ Applicants’ and managers’ satisfaction levels with the hiring
process
◾ The five primary reasons top performers leave the firm
◾ The turnover rate of top performers
2. Set specific goals. Each metric should be associated with a target
level or range that reflects a business priority (e.g., hiring and
retaining more top performers or promoting from within) or
financial return (e.g., reducing turnover and saving money).68
3. Prioritize the information. Dashboards are ineffective if they
contain too much information. Identify which metrics are critical,
and put them on the main dashboard page. Creating drill-down
pages with more detailed information and additional metrics can
help limit the amount of information presented on any single
dashboard.
4. Identify how best to present the data. Bar charts, tables, pie
charts, graphs, and even speedometer-style displays are all
possible. Managers and employees can be asked to test different
formats to identify what works best.
5. Assess users’ comprehension of the data. Ensure that users are
not misinterpreting the data and that they can quickly and clearly
understand the information being communicated.
6. Consider including dynamic capabilities. Dynamic capabilities on
the dashboard will allow managers to plan for different scenarios
and growth projections.69
7. Create data entry accountability. If the data used by the system
are not entered accurately or on time, the dashboard will not be
accurate.70 Assess and reward managers for maintaining the
database.
Staffing Technology at Osram Sylvania71
Osram Sylvania adopted staffing technologies that automatically crossposts position requisitions to both internal and external careers sites, as
well as to their five top-producing job boards. Embedded URL tracking
and a staffing dashboard that monitors results help save time and
increase résumé flow.
To manage the increased number of candidates, the company uses
custom candidate prescreening questions that are embedded in the
application process for each job. Now when hiring managers log into the
system, their candidates are presented in ranked order based on their
answers to the prescreening questions. Managers also use mail merge
templates to communicate with candidates and set up interviews. And
everything is tracked and visible to both recruiters and hiring managers.
Employee referrals that come in both through the external Web site as
well as the intranet are also tracked.
Osram Sylvania’s staffing dashboard and built-in reporting now keep
track of key statistics like time to hire and EEO compliance. Diversity is
monitored at every stage of the hiring process, so managers can
proactively spot if and at what hiring stage certain protected groups are
dropping off. Regular diversity reports that used to take several hours
are now completed with four mouse clicks, saving substantial time.
The company claims a weekly savings of $4,000 from the automation of
its résumé processing. Automated job board posting and source tracking
have also increased candidate quality, quantity, and time to hire. The
company is in compliance of OFCCP rules on Internet candidate
searches, and hiring managers are more involved in the recruiting
process. Osram Sylvania feels that its new staffing system has also
enabled it to hire more effectively.
Summary
Surprisingly few organizations currently evaluate the effectiveness of their
recruiting and hiring efforts, making this a high-potential area in which human
resources can contribute to the organization’s bottom line. One of the biggest
challenges in staffing is often the reluctance of hiring managers to rely on the
type of strategic staffing system presented in this book, despite its proven
effectiveness. Managers often feel that they are good judges of people, and
prefer to “trust their gut” and use their instincts in determining where to recruit
and who to hire. Understanding and applying the strategic staffing process
presented in this book provides a company a strategic staffing advantage
over firms that prefer to use an unscientific method based on instinct. Staffing
professionals with these skills are also more valuable than those who lack
them.
A variety of staffing sources, methods, and skills is usually required if a
staffing program is to be effective in meeting all of its goals. Available staffing
methods must be analyzed and chosen because they are appropriate to
staffing the current vacancy. As the importance of quality and quantity goals
change relative to each other, the staffing function must be prepared to
change its evaluation strategy as well. In order to measure, we must have
clear goals and objectives that are based on the business strategy and the
firm’s objectives.
Utilizing statistical and software tools for analyzing and predicting staffing
outcomes is an important part of maximizing a staffing system’s quality and its
return on investment. For a staffing system to consistently produce new hires
who fit an organization’s unique definition of success, quality data as well as
training in the tools and processes needed to analyze and interpret this
information are necessary to make data-based decisions and create a culture
that supports the continual evaluation and improvement of the staffing
system.
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Today, the increasing demand for HR technology parallels increasing interest
in evaluating staffing systems and improving staffing ROI. Technology
systems are becoming a critical tool in enhancing the value staffing creates
for an organization, and in enhancing the efficiency and effectiveness of the
staffing function. While initially used primarily by large organizations, more
small and midsize companies now use software products to both effectively
measure human capital investment and track a wide range of HR metrics.72
As you learned in Chapter 1
and as we have stressed throughout this
book, employees are the key to every organization’s performance and
survival. Strategic staffing involves the movement of people into, through, and
out of the organization in future-oriented and goal-directed ways that support
the organization’s business strategy and enhance organizational
effectiveness. Planning, measurement, and continuous evaluation and
improvement are important to the success of any staffing system. Staffing
must be tied to business strategy and reinforce the company’s competitive
advantage. It must also be aligned with the other functional areas of human
resource management, including training, compensation, and performance
management. By partnering with hiring managers and positively influencing
the flow of talent into, through, and out of an organization, staffing
professionals play an important strategic role in organizations.
Takeaway Points
1. A firm’s staffing activities can affect the willingness of applicants to stay
in the hiring process and accept job offers as well as their willingness
to recommend the employer to others. Staffing can also affect new
hires’ job expectations, motivation and job engagement, performance,
and retention, and influence the organization’s performance, strategy
execution, and leadership capabilities.
2. Staffing metrics can be short-term or long-term and efficiency or
effectiveness oriented. Short-term metrics can be used as leading
indicators to gauge a company’s ability to have the right people in the
right jobs at the right time. Long-term metrics are best for evaluating
the effectiveness of the staffing system because they drive the
financial impact of staffing on the organization. Staffing efficiency
metrics assess the resources used in the staffing process, and staffing
effectiveness metrics measure how well the staffing process meets the
needs of a firm’s stakeholders and contributes to the company’s
strategy execution and performance.
3. A balanced staffing scorecard is a tool for managing employees’
performance and for aligning their incentives with the firm’s key
business objectives. The scorecard balances a firm’s strategic,
operational, financial, and customer goals and helps managers monitor
and assess the performance of employees so as to quickly take
corrective action when needed.
4. Digital staffing dashboards are interactive computer displays of
indicators of how the staffing function is meeting its goals, using
whatever metrics the user chooses. By continually monitoring selected
staffing metrics and alerting managers when goals are not being met,
dashboards help managers monitor and improve the staffing process.
5. Staffing technology can improve the efficiency and effectiveness of the
staffing function by creating a database of applicant and employee
information and automating many of the steps of the staffing process.
This can save firms time and money. Because technology allows data
to be stored and reports to be generated automatically, it can also
facilitate the staffing evaluation process.
Discussion Questions
1. What might prevent organizations from evaluating their staffing
systems, and what can be done to remove these barriers?
2. In your opinion, what three metrics might a university use to evaluate
the effectiveness of its efforts to fill instructor positions?
3. If your manager was reluctant to invest in an applicant tracking system,
how would you persuade him or her to make the investment?
4. As an applicant, how would you feel knowing that technology were
used to make an initial decision to screen you out of the hiring
process?
5. What information do you want to see when you visit the careers
section of a potential employer’s Web site?
Exercises
1. Strategy Exercise: Metrics are only information—it is up to you to
interpret and use them. Interpret the following metrics and identify what
they might mean by addressing the questions that follow them.
a. Compare the following two recruiting sources:
1. Which program do you conclude is better?
2. If the hires from source X are retained for two years, and
the hires from source Y are retained for five years, would
your conclusion change?
3. What additional information would you need to make a
recommendation about the source that’s preferable?
b. The turnover rates of different employee subgroups of a firm are
as follows:
1.
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In what ways is turnover a problem for this company?
2. How could the company address the situation?
2. Develop Your Skills Exercise: In this chapter’s Develop Your Skills
feature, we gave you some tips for creating a digital staffing
dashboard. Using this information, create a dashboard for Osram
Sylvania (featured in this chapter’s opening vignette) reflecting the
following metrics. Use color coding to indicate whether or not a metric
is within the parameters the company desires.
Metrics:
◾ Top five staffing vendors
◾ Job applicant quantity
◾ New hires’ time-to-contribution rates by recruiting source
◾ Diversity by recruiting source
◾ Osram Sylvania’s staffing efficiency ratio
3. Opening Vignette Exercise: This chapter’s opening vignette illustrated
how Osram Sylvania used technology to improve its staffing system.
Reread the vignette, and answer the following questions:
a. In what ways did technology improve the company’s staffing
function?
b. Do you think it is appropriate for Osram Sylvania to rank-order
applicants based on their answers to the online prescreening
questions? Why or why not?
c. If you were a hiring manager at Osram Sylvania, what metrics
would you most want to have available about your hires?
Case Study
Staffing Evaluation at Hallmark
Hallmark, founded in 1910, is the largest U.S. manufacturer of greeting cards
and the owner of Binney & Smith, the maker of Crayola Crayons.73 The
company pursues a differentiation and innovation strategy and uses creativity
and emotion to help people connect to its products, including its stationery,
party goods, photo albums, home decor, collectibles, a cable television
channel, and books.74 Privately owned Hallmark has annual revenues of over
$4 billion and employs 3,200 individuals at its corporate headquarters in
Kansas City, Missouri, and another 12,000 around the world.75
To hire quality people more consistently, Hallmark needed a tool to help it
focus its staffing efforts on what is most relevant to the company—that is, on
business-relevant criteria that would allow it to more consistently hire quality
employees to best execute its strategy.76 However, Hallmark didn’t want the
tool to be too complex. To launch the effort, Hallmark created a staffing index
to evaluate the quality of the firm’s past hires so as to source and screen
candidates more effectively.
Upon hiring a new employee, the person’s line manager makes an immediate
assessment of the employee’s intrinsic abilities and desirability. To avoid
using complex formulas that require a specialized background to understand,
the ratings are simple and focused on measuring the quality and timeliness of
Hallmark’s hiring system.77 The possible new hire ratings are as follows:78
1 = Average
2 = Above Average
3 = Good
4 = Very Good
5 = Walk-on-Water Good
After six months, the hiring manager uses the same five-point scale to
evaluate whether its initial expectations have been realized. The data are
used to compare new hires who consistently get top ratings with those who
don’t to identify any distinguishing factors that can be used to make the hiring
process more effective.79
According to one expert, Hallmark is on the right track by keeping its system
simple and not getting too wrapped up in the numbers and by focusing on the
end result of making good hires. Hallmark views the staffing index only as a
means to an end and knows that ultimate staffing success will be gauged not
by these metrics, but by the organization’s performance.80
Questions
1. Critically evaluate Hallmark’s staffing index. What are its pros and
cons?
2. What additional criteria do you think Hallmark should track, and how
should it be measured?
3. Why might an employee rated “walk-on-water good” at the time of hire
not live up to expectations? What can a company do to help new
employees realize their potential?
Semester-Long Active Learning Project
Propose an evaluation system to assess the effectiveness of your recruitment
and selection suggestions. How will you know if your new recruitment and
selection system is working? Identify potential barriers to the effective
implementation of your recruitment and selection system and propose
strategies for coping with them.
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Case Study Assignment: Strategic Staffing at Chern’s
See the appendix at the back of the book for this chapter’scase study and
work on the Case Study Assignment.
Endnotes
1.
Osram Sylvania, “We Make Light Better for Better Living,” 2013, http://
www.sylvania.com/en-us/about/Pages/company-profile.aspx; Alexander,
I. and Anderson, S. J., “Osram Sylvania Shines New Light on Recruiting With
Automation,” Talent Management Magazine, April 2008: 54–64; Cytiva, Inc.,
“Osram Sylvania Shines a Light on Their Recruiting Efforts with ‘Robustly
Configurable’ SonciRecruit,” 2008,
http://www.sonicrecruit.com/press_room/sylvania_case.pdf; “Osram,” 2010,
http://www.osram.com/osram_com/Consumer/index.html.
2.
Kaplan, R., and Norton, D., “The Office of Strategy Management,”
Harvard Business Review (October 2005): 72–80.
3.
Mankin, M., and Steele, R., “Turning Great Strategy into Great
Performance,” Harvard Business Review (July–August 2005): 65–72.
4.
Dessler, G., and Phillips, J., Managing Now, New York: Houghton-
Mifflin, 2007.
5.
Rafter, M. V., “Companies Making HR ‘Big Data’ Work,” Workforce
Management, April 2013, 21.
6.
Zimmerman, E., “Keeping Tabs on Productivity of Recruiting Tools,”
Workforce Management Online, March 2005, www.workforce.com/section/
06/feature/23/98/25/index.html.
7.
Hips, C., “Promoting Diversity through Recruitment,” Personnel Today,
August 16, 2012. http://www.personneltoday.com/articles/16/08/2012/
58740/promoting-diversity-through-recruitment.htm.
8.
Pfeffer, J., “Producing Sustainable Competitive Advantage Through the
Effective Management of People,” Academy of Management Executive, 9
(1995): 55–69.
9.
See Lockwood, N., “Maximizing Human Capital: Demonstrating HR
Value with Key Performance Indicators,” Society for Human Resource
Management, September 2006,
www.shrm.org/research/quarterly/2006/0906RQuart_essay.as.
10.
Ulrich, D., and Brockbank, W., The HR Value Proposition, Boston, MA:
Harvard Business School Press, 2005.
11.
Lockwood, “Maximizing Human Capital.”
12.
Denton, D. K., “Measuring Relevant Things,” Performance
Improvement, 45, 3 (March 2006): 33–38.
13.
Lockwood, “Maximizing Human Capital.”
14.
Marquez, J., “When Brand Alone Isn’t Enough,” Workforce
Management, March 13, 2006: 39–41.
15.
Margolis, D., “Southwest Airlines: Clear Skies Ahead,” Talent
Management Magazine, August 2012: 38–41.
16.
Group, D., and Joseph, J., 2005–2006 Recruiting Metrics and
Performance Benchmark Report, Willow Grove, PA: Staffing.org and
Washington, DC: BNA Inc., August 2005.
17.
See Group and Joseph, 2005–2006 Recruiting Metrics and
Performance Benchmark Report.
18.
Sullivan, J., “Best Recruiting Practices from the World’s Most
Business-Like Recruiting Function, Part 4,” Electronic Recruiting Exchange,
October 10, 2005, www.ere.net/articles/db/D89CC5
F6881B4A24A9A344D6E5FF0D37.as.
19.
Barkley, M., “The First Three Things That HR Should Measure,”
Workforce Online, February 2003,
www.workforce.com/archive/article/23/40/07.
20.
Raphael, T., “Cost Per Hire—Don’t Even Bother,” Workforce, June
2002: 112.
21.
Ibid.
22.
Ibid.
23.
Schneider, C., “The New Human-Capital Metrics,” CFO Magazine,
February 15, 2006, www.cfo.com/article.cfm/5491043/1/c_2984284?
f=archives.
24.
Sullivan, “Best Recruiting Practices from the World’s Most Business-
Like Recruiting Function, Part 4.”
25.
Quartana, L., “How to Assess the Effectiveness of Recruiting,” Net-
Temps.com, www.net-temps.com/careerdev/crossroads/print.htm?
id=150.
26.
Becker, B. E., Huselid, M. A., and Ulrich, D., The HR Scorecard:
Linking People, Strategy, and Performance, Boston, MA: Harvard Business
School Press, 2001, 48.
27.
Cappelli, P., “A Market-Driven Approach to Retaining Talent,” In
Harvard Business Review, Harvard Business Review on Finding and Keeping
the Best People, Boston, MA: Harvard Business School Publishing, 2001, 27
–50.
28.
Singh, R., “The Emperor’s New Metrics, Part 2,” Electronic Recruiting
Exchange, September 8, 2005,
www.ere.net/articles/db/001D8B71AF754FA18E 074813EB6ADD8A.asp.
29.
See Harry, M., and Schroeder, R., Six Sigma, New York: Random
House, 2000.
30.
See http://savelives.gecareers.com.
31.
Weston, S., “Six Sigma in Recruiting, Part 2,” Electronic Recruiting
Exchange, April 29, 2003,
www.ere.net/articles/db/3669F629B43644DC825FE6D1250890C4.as.
32.
Snell, A., “Applying Six Sigma Principles to Corporate Staffing
Departments,” Taleo.com, www.taleo.com/research/articles/strategic/
applying-six-sigma-principles-corporate-staffing-32.html.
33.
Heuring, L., “Six Sigma in Sight,” HR Magazine, March 2004,
www.shrm.org/hrmagazine/articles/0304/0304Heuring.asp.
34.
Weston, “Six Sigma in Recruiting, Part 2.”
35.
Kaplan, R. S., and Norton, D. P., The Balanced Scorecard: Translating
Strategy into Action, Boston, MA: Harvard Business School Press, 1996; see
also Becker, Huselid, and Ulrich, The HR Scorecard.
36.
Monina, J., and Morre, K., “Backroom to Boardroom: Bridging People
Gaps with Saratoga,” PriceWaterhouse Coopers, July 2006,
www.pwc.com/Extweb/pwcpublications.nsf/docid/B5E93EADE6D40A7E8025723C00316
$file/PwC_Saratoga.pdf.
37.
Based on an interview with Jose Conejos, Nokia’s vice president of
global HRD and resourcing, and Jadwiga Zareba, head of resourcing for
Nokia Worldwide, June 7, 2007.
38.
Ibid.
39.
Sullivan, J., “The Recruiter’s Scorecard: Assessing the Effectiveness
of Individual Recruiters,” Electronic Recruiting Exchange, October 27, 2003,
www.ere.net/articles/db/61A88F9BB9CB463FAA8312AB2D518837.
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40.
Sullivan, J., “Best Recruiting Practices from the World’s Most
Business-Like Recruiting Function, Part 5,” Electronic Recruiting Exchange,
October 17, 2005, www.ere.net/articles/db/4EDDC98223964CD
5B5BA718AB0CF0F59.asp.
41.
Cappelli, P., “Making the Most of Online Recruiting,” Harvard Business
Review (March 2001): 139–146.
42.
Schneider, “The New Human-Capital Metrics.”
43.
Hansen, F., “Lowe’s Builds Its Employment Brand,” Workforce
Management Online, January 2007, www.workforce.com/section/06/
feature/24/62/85/index.html.
44.
Greengard, S., “Smarter Screening Takes Technology and HR Savvy,”
Workforce, June 2002: 57–60.
45.
Ibid.
46.
Flynn, G., “E-Recruiting Ushers in Legal Dangers: Legal Insight,”
Workforce, April 2002, www.findarticles.com/p/articles/mi_m0FXS/
is_4_81/ai_85698986.
47.
Weber, L., “Your Résumé vs. Oblivion,” The Wall Street Journal,
January 24, 2012, http://online.wsj.com/article/
SB10001424052970204624204577178941034941330.html.
48.
Ibid.
49.
Greengard, “Smarter Screening Takes Technology and HR Savvy.”
50.
Hansen, F., “Continental’s Recruiting Reach,” Workforce Management
Online, December 2005, www.workforce.com/archive/article/24/23/41.php.
51.
“BrassRing Revealed Recruitment Trends at Summit,” May 22, 2006,
Wpsmag.com.
52.
Applicant Tracking, Hr-guide.com, www.hr-guide.com/data/
201.htm.
53.
“Human Resource Information Systems,” Lycos.com,
www.lycos.com/info/human-resource-information-systems.html.
54.
Reh, F. J., “Human Resources Information System,” About.com,
http://manageme...
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