Existing recruitment and selection process ITcom in India
Imagine that you have been asked by an organisation to review an area of HR practice and suggest ways in which it could be improved so as to contribute to HRM strategy and organisational goals. Draw on research literature and contemporary organisational practice to address this issue, and ensure that your answer also pays attention to issues of the methodology employed in the studies you quote. You can choose any area of HR practice that we cover during the second half of the course (that is, recruitment, selection, talent management, performance management, employee involvement and participation). You will also need to provide a short description of the organisation on which you are basing your recommendations so that answers can be evaluated within the context of their application.
The objective of this essay is to undertake an examination of the existing recruitment and selection process forming an organizational framework. The current author will review an Indian based Multinational Company ITcom (Organization’s name changed) with respect to globalisation and international market, emphasising on finding the effectiveness on cost/time and quality parameters to identify areas of improvement and suggest ways to improvise on its recruitment and selection procedures drawing on the literature and analysing the research methodology of studies used.
Increased global competition coupled with enhanced customer/client expectations makes the growth or even the survival of any firm difficult (Back S, 2005). Organizations need to perform and respond to a rapidly changing global environment and thus require attracting and retaining a dedicated, high quality workforce by means of recruitment and selection. From the psychometric perspective (UK Chartered Institute of Personnel and Development), jobs are defined in terms of their tasks or descriptions which are specific. Recruitment is a process of attracting individuals who might meet specifications of task or description. Selection is the process of measuring differences between these candidates to find the person who is best fit.
The importance of hiring should not be underestimated because a poor recruitment decision can cost an employer an amount equal to 30 per cent of the employee’s first year earnings (Hacker 1997). These costs can include: lower productivity; potential loss of clients; training costs; advertising costs; recruitment expenses and redundancy packages (Smith and Graves 2002). According to the CIPD, 20 percent of employees leave within the first six months. This is sometimes called the “induction crisis”. It was found that numbers varied dramatically by industry, clothing industry figure was 26.5 percent, with 45 percent leaving during first three months, only a third remaining beyond a year (Tarpin et al, 2003). Overall turnover rates in the UK/Ireland fell from 25 percent per year (2000) to about 18 percent per year (2007). However, more people left voluntarily than through dismissal, redundancy, or ending of contracts. Thus it is imperative for an organization to have a strategized HR policy in place for recruitment for selecting and retaining the workforce.
Although it’s recognised as crucial to many organisations, recruitment is often done in an ad hoc and reactive manner. Eight in ten employers rank attracting and recruiting key staff to the organisation in their top three resourcing objectives, but only 50% of organisations in the UK have formal resourcing strategies in place. Many employers acknowledge that they experience tremendous recruitment difficulties (86% according to CIPD). Hence given the costs of filling a vacancy, it’s important for firms to recruit well and select the most appropriate employees.
About the company:
ITcom Business, a division of ITcom Limited, is amongst the largest global IT services, Business Process Outsourcing and Product Engineering companies. In addition to the IT business, ITcom also has leadership position in niche market segments of consumer products and lighting solutions. The company has been listed since 1945 and started its technology business in 1980. Today, ITcom generates USD 6 billion (India GAAP figure 2009-10) of annual revenues. Its equity shares are listed in India on the Mumbai Stock Exchange and the National Stock Exchange; as well as on the New York Stock Exchange in the United States.
ITcom makes an ideal partner for organizations looking at transformational IT solutions because of its core capabilities, great human resources, commitment to quality and the global infrastructure to deliver a wide range of technology and business consulting solutions and services. ITcom enables business results by being a ‘transformation catalyst’. It offers integrated portfolio of services to its clients in the areas of Consulting, System Integration and Outsourcing for key-industry verticals.
It has a wide geographical diversity of operations with over 50 development centers and 10 near shore centres spread across India, Japan, China, France, Austria, Sweden, Germany, UK and USA.
In recent years, ITcom has faced a number of workforce challenges, such as an increasingly diverse workforce, increased cut throat competition in market giving rise to attrition rate and uncertainty of workforce requirement. As one of the strategies to address these challenges, a need rises to review and streamline recruitment and selection business processes to support ITcom as a leading organization and to increase the ability to make high quality hires and meet workforce needs.
Literature Review in Context with ITcom:
The Recruitment Process:
Organizational review and Job Analysis:
“Perhaps the most one can say with any certainty is that many UK companies continue to express a commitment to the idea of HR strategy and planning. How this translates into practice, however, is less clear” – (Liff, 2000 p.125)
When the ‘pattern of planned human resource deployments and activities [is] intended to enable an organization to achieve its goals'(Wright and McMahan 1992: 298), HRM can be said to be strategic. More specifically, for recruitment to become strategic, HR practitioners must answers to the following questions (Breaugh 1992; Breaugh and Starke 2000): Whom to recruit?, Where to recruit?, What recruitment sources to use (e.g. the web, newspapers, job fairs, on campus, etc.)?, When to recruit? And (5) what message to communicate?
HR planning is regarded as essential for at least four sets of reasons (Marchington, 2005):
Clear links between business and HR Plans:
It draws the link or degree of fit between HR planning and strategic plans, so that the ability of HR function can be measured to deliver precisely what the business requires. It can also be viewed as a relationship between corporate and HR plans, where HR plans will contribute to the development of the corporate. In either ways HR planning can be viewed as major facilitator of competitive advantage.
Better control over staffing costs and numbers employed:
Making projections about anticipated staffing needs is imperative, irrespective of whether a growth or decline in numbers is predicted. This makes it easier to match supply and demand and therefore make decisions about recruiting from the external labour market, relocating staff, or preparing for reductions in numbers employed in order to achieve greater control over staffing costs (Taylor, 2005. P.101)
More informed judgements about the skills and attitude mix in the organization:
It is very critical to get the right mix of skills in the employed workforce to attain the confidence of customer and for productivity and profit generation. In case of ITcom, some of its customers are domain based, for example one of its clients is Boeing, which has specifications of employing only citizens in the USA geography and highly skilled professionals in Product Life Cycle Management (PLM). In this scenario what is expected is either ITcom should search and acquire people skilled in this field or get professionals who can be trained on these platforms to give quality results.
Maintain a profile of existing staff:
By maintaining a profile in terms of age, gender, race and disability etc helps any organization to claim for providing equal opportunities. Without accurate and up-to-date figures on existing staff numbers and their breakdown by grade and position, it is impossible for employers to make decisions about how equality management can be achieved (Liff 2000, p103).
In 2008, ITcom was asked by the DOJ (Department of Justice) of US legislations to prove that it offers equal employment opportunity for all. ITcom was using online software (known as SYNERGY) for database generation. This software had a peculiar questionnaire (like age, sex, nationality etc) to understand the background of the candidate applying for jobs. Later these questions were omitted as it was believed that interviewers might get biased at the initial stage of application and may not proceed ahead with the prospective employee’s candidature. Hence all the details of employee were transferred and saved in the SAP software for internal use and data storage, it helped the company to keep track of its existing employees along with amendments in Synergy software which helped in refraining its managers and recruiters to avoid any discriminatory practice by human error at the stage of recruitment and selection.
The primary step in the recruitment process after HR planning, involves a systematic review of the organizational requirements which lead to a thorough analysis of the requirements of jobs called job analysis.
The above process of HR planning and job analysis which translates demand for labour, leads to forecasting the internal and external supply. Based on these decisions can be made about the balance between external recruitment, internal staff development or workforce reductions.
Table I is an example of a typical seven days of business taken from a hotel operation. The figures have been reduced to two functions: for example, rooms and food and beverage or restaurant and bars, and for simplicity it is assumed that functional flexibility covers two skills, i.e. staff from function A would be able to work in function B and vice versa. In operational terms the seven days depicted here would be a point in a rolling forecast that would change daily. The demand patterns described here are typical of departments within a hotel operation but could also represent patterns in restaurant operations, retailing and many tourism attractions.
ITcom has been able to work well in this area of HR planning and setting up a stringent policy to which all the employees/recruiters are bound to be compliant. The Executive Vice President of Human Resource Management personally regulates the HR policies which are formed by the leaders and Senior Managers of the company. A dedicated team continuously works on mapping the market trends and predicts the upcoming problems and opportunities to work pro-actively on demands to incur with supply of labour.
Job description, person specification and competencies:
Once the job analysis has been collected, the next step is to develop a job description. They are particularly prevalent in public sector and large organizations. A job description usually includes: Job title, location, responsible to (job title of supervisor) and for (job titles of members who will report directly under the job holder), main purpose of the job, responsibilities or duties, working conditions (contains contractual agreements, fringes and benefits etc) other matters such as if travelling is required etc and performance standards along with any other duties that might be assigned by the organisation. (Marchington, 2005)
Traditionally, it is divided into two main topics: ‘work-oriented analysis’ (focussing on the job itself) and ‘worker-oriented analysis’ (focussing on the worker) (Searle, 2003). Rodger’s seven-point plan (Physical make-up, attainments, general intelligence, special aptitudes, interest, disposition and circumstances) and Fraser’s five-point plan (Impact on others, acquired knowledge and qualifications, innate abilities, motivation and adjustment) rely heavily on personal judgment to specify human qualities associated with successful performance (Newell and Shackleton 2000, p115). The significance of these job descriptions is that they focus on the behavioural aspects of the candidates. Therefore it is not required to make inferences about personal qualities that might underpin behaviour (Newell and Shackleton, 2001, p26).
Job descriptions and specifications of person often exist alongside the competency-based approaches (Taylor 2002c), not least because they set a framework within which subsequent HR practices, for example performance management, training and development, pay and grading can be placed (Whiddett and Hollingforde 1999). According to IRS (IRS Employment Review 782 2003, p45) the most commonly used competencies are team orientation, communication, people management, customer focus, results orientation and problem solving. Surprisingly, ethical behaviour, responsibility, enthusiasm and listening are rarely used.
Competency can be differentiated in four types (Roberts 1997, p71-72) a) namely: natural which is made up by the ‘big five’ dimensions of personality; extraversion/introversion, emotional stability, agreeableness, conscientiousness and openness to experience b) acquired: where knowledge and skills acquired through work or other avenues. c) Adapting: this competency area revolves around the ability to adapt natural talents and acquired skills to new situation. And lastly, performing: which comprises observable behaviours and output.
Choosing a cost effective method for recruitment is essential and depends on factors specific to organisation. Recruitment is typically regarded as poor relation to selection, typically afforded limited space in most of the publications and gives very little evidence of the theoretical underpinnings (Breaugh and Starke 2000). “Recruitment provides the candidates for the selector to judge. Selection techniques cannot overcome failures in recruitment; they merely make them evident” – (Watson, 1994, p203). It is very important that the organisation decide whether or not to recruit, which sources to be used and what cost. Legal issues are also to be borne particularly while using media and publishing the adverts (Taylor 2002c).
Internal and External Searches:
ITcom uses various tools for recruitment internally and externally.
Internal Sources: It moves its potential employees from one department to another which fills the vacancies and proves to be a career development for the employees. The knowledge transfer from one position to another embarks the capabilities in the staff and enhances their skills and abilities. These practices are more prevalent during rationalisation than in boon or recession (Marchington, 2005). Staffs are also transferred from temporary posts to open ended contracts or from agency work onto the direct payroll. This provides employers with a form of quasi-internal labour market where they can observe people at work before committing to a more secure employment offer (Rubery et al 2002, 2004). There is indication from wider research on agencies that they are progressively taking up strategies to expand markets in which potential recruits, as well as employers, are receptive to temporary opportunities and for whom the profit of agency working outweigh the costs. *
There is also an internal marketing team in recruitment department in ITcom which focuses on publishing the job vacancies in the company and gain the references from the existing employees. The CIPD survey showed that word-of-mouth recruitment remains widely used though it is sometimes hard to differentiate from speculative applications. A major advantage of referral programs is the quality of candidates, as most employees are unlikely to recommend friend who will not fit the culture of the organization and who is not suited for the role. The Coventry Building Society filled nearly a quarter of all its posts through this method (IRS Employment Review 804 2004). In ITcom there are various award schemes for recruiters to encourage employees to refer their friends and families.
Although it is cheap and readily available, organizations such as Acas, the EOC and the CRE are worried such ‘ring-fencing’ may strengthen the existing imbalances (gender, race and disability), upsetting the attempts to encourage greater workforce diversity. (Marchington, 2005)
One of the major and critical hiring in ITcom is for the Sales division, where the Industry experts like evangelists, practice managers, sales director etc are required to lead the business. ITcom has a dedicated team of leadership hiring professionals who evaluate the candidature for these positions. The current author suggests that the company should try to engage with head-hunters for sourcing and recruiting for such high-level and critical roles. Head-hunters may have extensive contacts which can be beneficial. This method is expensive, and is used much in private sector than in public or voluntary bodies (Marchington, 2005)
Apart from the middle and senior level positions, for the fresh recruits the most effective way can be campus placements and the CIPD survey found that it was on a par with the company’s own website in popularity.
Sources of external applicant and Methods of attracting applicants:
Largest number of lists comes under external sources which constitute the open sources. Advertisements in national and local papers are amongst the most widely used methods, and for the specialist posts trade press can be more effective (CIPD 2004b). Radio and TV adverts are rarely used. ITcom in 2009 advertised its employee referral programmes which were based on theme of friendship, aired the adverts on a local radio channel (94.3 Radio One FM in Bangalore), to let the message be conveyed to mass. This had helped the company to gain many applicants through existing employees.
E-Recruitment is another one tool which has gained its significance in recent years. According to IRS 90% of firms use some form of e-recruitment. Like job boards (monster.com, dice.com, careerbuilder.com. jobsahead.com etc) for advertising the vacancies. Social networking sites (linkedin.com, myspace.com, facebook.com etc) are also gaining popularity amongst the job seekers and recruiters for filling the positions. Main advantages of e-recruitment are reduced costs, improved corporate image, reduced administration, etc.
The Selection Process:
Consulting various sources such as Cook (1998), Taylor (2002c), Cooper et al (2003) and Searle (2003) it is conferred that no single technique, no matter how well it is designed and administered, can be capable of being perfect selection decision. Employers are advised not to rely on one method (Marchington, 2005). According to a CIPD survey of more than 1000 employers, it is concluded that the most common and widely used techniques were traditional interviews, competency-based interviews and tests for specific skills.
Robertson and Smith (2001) also indicated that most techniques have very low levels of accuracy in terms of producing effective selection decisions. Of techniques used on their own, work sampling offers the highest likelihood of success, closely followed by intelligence tests and structured interviewing (Schmidt and Hunter, 1998)
Various authors (Newell and Shackleton 200; Taylor 2002c; Cooper et al 2003 and Searle 2003) discuss the criteria for assessing the value of selection methods:
Practicality: According to Cooper et al (2003, p94), it is the most important criteria of all. The method suggested has to be economical in terms of cost and benefits, the time required to administer it and should be within the capabilities of those who are supposed to run it. Most critical is the cost issue. For example, it makes very less sense to run a sophisticated and complex personality test if only one candidate has applied for the post.
Sensitivity: A lot of care must be taken to avoid any kind of discrimination based on race, gender, age or disability.
Reliability: comprises of different elements but refers essentially to consistency of method used to select individuals (Newell and Shackleton 2000, p119). It should not be too much influenced by chance factors (Cooper et al 2003, p 50-52). For example: inter-rater reliability is crucial if many interviewers take interview, where one rejects and other selects. In ITcom, at many occasions this problem exists, as for certain job roles, several levels of interviews are conducted. It must be taken in consideration to measure the accuracy of each interviewer before concluding a rejection or selection of the candidate.
Validity: This defines the correctness of the inferences that can be drawn from the selection methods. (Newell and Shackleton, 2000, p121) define this as the relationship between the predictors (the result from the selection methods used) and the criteria (performance of the job).
Key Themes and Recommendations:
The assessment of market scenario of ITcom suggests that while there are quite a few areas for upgrading and improvement, there are also many areas that are working well, including: ITcom appears to have more flexibility in identifying the suitable appointment method, establishing the merit criteria to be considered in determining the most suitable candidate with its strong value based strict compliance policies. The range of options (internal and external sourcing) available to recruit staff provides flexibility and supports timely and effective hiring decisions. The Jobs Websites (monster.com, dice.com, careerbuilder.com, linkedin.com etc) appears to be an effective method of attracting successful candidates, and feedback about the job postings, application and interview process and the quality of hires seems positive. Staffing Operating Principles related to “fairness”, “integrity” and “selection of the most suitable person” was seen as both useful and being achieved. The staffing process was perceived to be transparent and able to withstand scrutiny. Executive Search recruitment and screening processes were generally considered to work well and support hiring high quality executive management and senior leaders, in a timely fashion.
Opportunities for improvement:
Themes emerged including the need to formalize processes that will progress into a more strategic approach to recruitment:
Focus must be increased on long-term forecasting of workforce needs in new development centres (e.g. newly opened development centre in Atlanta, GA in USA and Germany), which will help to directly connect workforce planning to the staffing function and developing strategies to address gaps. In this context of globalization, many multinational organizations search for suitable employees from across the globe and apply similar selection criteria with limited attention to effectiveness and less knowledge of different cultural backgrounds (Searle, 2003). Searle also believes that this is an area where practice is far ahead of research and comment. “One way firms are trying to manage their operation within this new global context more effectively is by using sophisticated selection assessment practices. If the underlying basis for their assessment is flawed, then these more high-powered tests and assessments will inevitably be a further waste of resources.”
Increase focus on recruitment planning and implement a project management approach to the hiring process.
Increase focus on branding and candidate sourcing for active and passive candidates, including more targeted sources of media. Research has indicated that the media exposure of a firm is a sign of its reputation (Newell and Shackleton, 2001). Technology in form of media and internet helps reducing the cost and time of travel for both applicants and companies. ITcom with most of its offices across the globe uses the telephone and video conferencing for conducting interviews.
Expand methods for facilitating the identification of potential internal candidates for executive positions, including if possible, information from succession management and workforce planning initiatives.
Enhance utilization of summer employment, work experience, co-op and internship initiatives as a strategy to attract and develop students and recent graduates in conjunction with workforce forecasting needs.
Improve efficiency and effectiveness through increased collaboration and use of technology.
Increase all stakeholders’ knowledge of staffing process including the recruitment strategies available.
The Recruitment and selection within the wide organizational context highlights the relationship between organizational strategy and human resource policy and procedures. Key changes in methods and practices are identified responsible for increased attention and use of selection systems. Application of techniques enhances the confidence of HR processes. The growth in process oriented research highlights an alternative view of selection and recruitment and is at odds with the psychometric approach. As there is increased sophistication in the selection methods, it is often forgotten that without a proper set recruitment method, there would be less number of applicants for selection; this can have reverse impact on the performance of employment contract. Conversely, usage of well chosen methods can be helpful in choosing the staff which can be fit to meet targets of the organization. Recruitment is one area of HRM where assistance might be sought from the external providers, as being aware of the limits and using the right techniques are equally important. It is very important that recruitment and selection processes be well organised, delivered and evaluated for the organisational growth.
The research work or sample used in the essay are pure and applied (from the perspective of application in various situations) and descriptive, co relational, explanatory or exploratory (from the perspective of objectives of the literature view). Most of the information is gathered by the literature from texts and journals and was related to real life experience of the current author from ITcom. Data collection of most of the articles and references cited in the essay are from the companies which is generally the primary data, secondary data is the one used from literature. Wherever required while collecting the data, the interviews were commenced, questionnaires were formed, and observations were made for example the IRS employment reviews and CIPD conducted surveys (which are quoted in the essay) in such styles or formats.
Each of the articles and examples portrayed in the essay were based on literature review which brought in the clarity and focus to research problem and improved the methodology by enhancing the knowledge base. The literature pertinent dealt with two types of information, one universal and second specific (local trends).
In some of the journals, a number of sources were used to compile databases, for example data was collected from local employment agencies, yellow pages along with interviews and surveys were conducted. These give a broad platform to compare and relate the data by empirical methodology of data accumulation.