Developing a Hiring System

Planning the Hiring Process

Stages in Recruiting

• Establishing Objectives– What kind of talent(s) needed?– How many?– When?

• Recruitment Strategy

• Recruitment Activities

• Evaluation

Tactical & Strategic Planning

• Tactical: Responding to a hiring event– How do you avoid getting into panic/crisis

hiring every time someone quits?

• Strategic: Planning the long-term development of your work force– How do you ensure your work force is ready

for the future?

Strategic Planning: Key Questions

• What HR needs will arise as a result of changes in firm’s mission/strategy?

• Are projected staffing levels and skill mix sufficient?

• Where will you be caught short in skills?

• Where will you have excess capacity, and how should it be handled?

Steps in Strategic HR Planning

• Forecast HR demand

• Forecast HR supply

• Reconcile demand and supply and respond

Step 1: Forecasting HR Demand• Qualitative approach• Quantitative approach: Time Series Analysis

• Quantitative: Relate to business factors

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2000 2001 2002 2003 2004 2005

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Forecasting Demand Example:Historical Data on Staffing

Year Job A Job B Job C Job D2000 66 29 12 152001 77 34 13 162002 91 53 19 182003 90 65 25 172004 99 77 29 202005 ??? ??? ??? ???

Forecasting Demand Example:Historical Data on Business Activity

Year Loan Vol No. Borrowers Insurance Income2000 1.0B 22000 1.5M2001 1.2B 21900 1.9M2002 1.3B 21800 2.0M2003 1.4B 22000 2.4M2004 1.55B 22500 2.8M

2005 1.68 23000 3.2M

Is There a Relationship betweenBusiness Activity & Staffing Levels

• Use multiple regression to estimate– Y = a + b1X1 + b2X2 + b3X3 …...

• Job A = a + b1Loan Volume + b2Number of Borrowers + b3Insurance Income

– Repeat for Jobs B, C & D

• Job A = 6.0 + .061 (Loan Volume)

Using the Regression Results to Predict 2005 Staffing Levels

• Job A = 6.0 + .000061 (Loan Volume)

• For 2005, the forecasted loan volume is 1.675B

• Job A = 6.0 + .000061 (1.675B)

• Job A = 102

Step 1: Forecasting HR Demand

• Qualitative approach

• Quantitative approach– Relate to business factors– Time-series analysis

Step 2: Forecasting HR Supply

• Internal– Turnover (replacement) analysis– Markov analysis

• External– Market surveys

Simple Replacement Analysis

Current N Retention Rate Projected SupplyTech. I 30 0.60Tech 2 20 0.65Tech 3 15 0.70Tech. Sup 6 0.90

Step 2: Forecasting HR Supply

• Internal– Turnover (replacement) analysis– Markov analysis

• External– Market surveys

Markov Transition Probability Matrix

Current Tech 1 Tech 2 Tech 3 Sup QuitTech. I 30 0.60 0.20 0.05 0.00 0.15Tech 2 20 0.05 0.65 0.20 0.00 0.10Tech 3 15 0.00 0.05 0.70 0.15 0.10Tech. Sup 6 0.00 0.00 0.00 0.90 0.10

Projected N

Step 2: Forecasting HR Supply

• Internal– Turnover (replacement) analysis– Markov analysis

• External– Market surveys

Step 3: Reconcile and Respond

• Change recruiting practices

• Alter retention rates or patterns– Change compensation, job design, training

• Change promotion or transfer patterns

• Reduction in force?

• Modify business strategy?

Tactical Planning StrategiesHow do you avoid crisis hiring?

• PATH: Planned Alternative To Hiring

• Three key questions:– What won’t get done with this person gone?– Which of these duties are the most critical?– How can they be accomplished until an effective hire is made?

PATH Options

• Replacement Plans

• Succession Plans

• Job Design

• Temporary Staffing

Continuous Hiring

Hiring outstanding applicants when you find them, whether or not you need them

Effective when:• • •

Continuous Hiring: What do you do with “surplus” workers?

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