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Using the two articles above as supportive research, discuss two  contemporary human capital topics that have impacted your workplace or  that you foresee impacting a business. You may use this week’s required  or recommended articles or locate your own. Additionally, address, as  current or future leaders, how understanding these topics can assist you  in recruiting and retaining employees.

Your initial response should be a minimum of 220 words. Support your response with at least one scholarly resource in addition  to the text.

Diversity & INNOVATION

Parsi, Novid HRMagazine ; Alexandria  Vol. 62, Iss. 1,  (Feb 2017): 38-45.

1.

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McKinsey found that companies in the top quartile of executive-board diversity had returns on equity that were 53 percent higher than those in the bottom quartile. […]organizations with more female executives are more profitable, according to a 2016 analysis of more than 20,000 firms in 91 countries. Which is exactly what a company like Johnson & Johnson needs. “Because we are an innovation company, we need a global workforce that not only represents our customers and patients but also constantly brings in new insights,” says Peter Fasolo, chief human resources officer.

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Headnote

Meet five leaders who have invented new approaches to D&I.

It won’t be long before U.S. minorities are not in the minority anymore. Due to projected growth among Asian, Hispanic and multi-racial groups, traditionally underrepresented populations will hit majority status by 2044, according to the Census Bureau.

Smart companies reflect that reality in the collective makeup of their employees. Their leaders understand that yesterday’s workforce can’t lead them into tomorrow. “We see diversity and inclusion as a business imperative,” says Wanda Hope, chief diversity officer at Johnson & Johnson in New York City. >

That sentiment is shared by leaders at AT&T, where 42 percent of employees are people of color. “It makes good business sense to have an employee base that looks like our customer base,” says Cynthia Marshall, senior vice president of human resources and chief diversity officer at the Dallas-based company. “To truly serve the populations we want to serve, we need diverse groups of employees, suppliers and vendors.” AT&T attracts a diverse pipeline of applicants by partnering with universities to help prepare minority students for work; it also supports underrepresented employees through mentorships and employee resource groups.

The business case for attracting a wider range of employees will only get stronger as the country grows more diverse. “If you’re not good at attracting and retaining women and people of color, you’re competing for an increasingly smaller portion of talent,” says Joe Gerstandt, a diversity consultant based in Omaha, Neb. “And that’s a fundamentally flawed strategy.”

Performance Driver

But diversity is not just about mirroring the country’s demographics. It’s also about innovation and performance. Companies that exhibit gender and ethnic diversity are, respectively, 15 percent and 35 percent more likely to outperform those that don’t, according to global management consulting firm McKinsey & Co. And research indicates that organizations with more racial and gender diversity bring in more sales revenue, more customers and higher profits.

Diversity also matters at the top: McKinsey found that companies in the top quartile of executive-board diversity had returns on equity that were 53 percent higher than those in the bottom quartile. Moreover, organizations with more female executives are more profitable, according to a 2016 analysis of more than 20,000 firms in 91 countries.

“Attracting, retaining and developing diverse professionals stirs innovation and drives growth,” says Mike Dillon, chief diversity and inclusion officer for PwC in San Francisco. That statement is backed by decades of sociological and economic research, and there are myriad reasons it holds true. In part it’s because people with different backgrounds and perspectives bring different information to the table. Members of diverse teams can’t take for granted that their teammates think the same way they do. That leads them to question their own assumptions and anticipate alternate viewpoints. The result? More-creative ideas and solutions.

Which is exactly what a company like Johnson & Johnson needs. “Because we are an innovation company, we need a global workforce that not only represents our customers and patients but also constantly brings in new insights,” says Peter Fasolo, chief human resources officer. At Johnson & Johnson, the hiring and promotion of diverse employees is factored into the determination of managers’ annual bonuses.

Broadening Diversity

Communicating with members of diverse teams takes extra effort, but that effort leads to better collaboration and more favorable outcomes overall, says David Rock, director of the NeuroLeadership Institute in New York City. “They challenge their own and others’ thinking.”

Perhaps that explains why the concept of organizational diversity itself has become increasingly diversified-to include personality type, thinking style and other factors that influence how people see the world. Finding the right mix of individuals to work on teams, and creating the conditions in which they can excel, are key business goals for today’s leaders, given that collaboration has become a paradigm of the 21st century workplace. Yet building strong teams and attracting more-diverse workers are just two pieces of the puzzle.

“The far bigger issue is how people interact with each other once they’re on the job,” says Howard J. Ross, founder and chief learning officer at the diversity consultancy Cook Ross in Silver Spring, Md. He cites an oft-quoted maxim: “Diversity is being invited to the party; inclusion is being asked to dance.”

“Diversity is about the ingredients, the mix of people and perspectives,” Gerstandt says. “Inclusion is about the container-the place that allows employees to feel they belong, to feel both accepted and different. You need a group of people who think differently-in a container that’s safe to share those differences.”

Getting There

Make no mistake: Achieving a truly diverse and inclusive workplace is a lot of work. Among the hardest things to combat are the biases people embrace on an unconscious level-deep prejudices or stereotypes imparted by upbringing, culture and mass media that influence our perceptions about others.

Making employees aware of unconscious bias, which research has shown everyone has, is not sufficient; HR and business leaders must develop practices to mitigate it. “Education is only the beginning of the conversation,” Ross says. “It’s like joining the gym-you still have to exercise.”

Fortunately, there are many new ways that companies can get that workout. Tech tools and companies are sprouting up all over the place to help leaders hire, manage and retain a vital and diverse workforce. And an emerging crop of innovators, including those highlighted here, are thinking about diversity and inclusion in new and exciting ways that seem to represent a win-win for employees and company leaders. “It’s beyond the right thing to do,” Marshall says. 03

Sidebar

‘Attracting, retaining and developing diverse professionals stirs innovation and drives growth.’

Mike Dillon

Chief diversity and inclusion officer for PwC

Capturing Team Spirit

Abeer Dubey,

Director, People Analytics, Google

Collaboration is key to success in today’s work environment, and yet most managers and HR professionals focus all their attention on the performance of individuals. Dubey led an effort to change that at Google. “We don’t experience work as individuals; we experience it in teams,” he says. In 2012, he helped launch Project Aristotle to pinpoint what distinguishes the teams that do well from the ones that struggle. His team analyzed more than 180 teams of tech and sales employees and conducted over 200 interviews.

Stronger Together

Dubey and his fellow Googlers, as they call themselves, learned that the individuals who make up a team matter far less than the ways they interact with, and view, their collaborators and the overall project. People do their best work when they feel they have strong goals, can rely on each other and believe their work makes a difference. “On a strong team at Google, the how matters more than the who,” Dubey says.

Safety First

Findings from Project Aristotle also emphasized the concept of psychological safety, or the sense that people can take risks and be vulnerable with each other. “Psychological safety allows teams to harness the power of diversity,” Dubey says. “That’s because employees who have different points of view feel safe bringing their ideas to the table.”

Taking Action

As a result of Project Aristotle, Googlers now assess all teams’ psychological safety and have discussions about it. The company’s teams have been improving their scores on measures designed to assess such safety.

Hiring Blind

Kedar Iyer

Co-founder and CEO, GapJumpers

In the 1970s, many directors of U.S. orchestras-which were almost entirely made up of men-began asking auditioning musicians to play behind a screen and on a carpet, so judges couldn’t see them or hear whether they were wearing heels. As a result, women were 25 percent to 46 percent more likely to be hired.

It’s a story that inspired Iyer. His company, GapJumpers, tackles implicit bias-the prejudice we don’t realize we have-through an online blind-audition process. Applicants are given a jobrelated assignment-for example, Web developers are asked to create a webpage-and then hiring managers assess the completed task without seeing any personal identifiers, including name, gender, work experience or educational background.

Knowing from Experience

Iyer graduated from college 12 years ago looking for a computer science job. He had plenty of experience-but not a degree in that field. “I had to fight my way through the placement office to show companies I could actually program,” he says. “It took a lot of convincing to get my first break in computer science.”

Blinders On, Diversity Up

GapJumpers has conducted 1,600 auditions so far, and its clients have seen a 60 percent jump in applicants from traditionally underrepresented groups who make it through to interviews compared to resume-based screening. “Companies end up making offers to people they otherwise wouldn’t even have considered,” Iyer says. The process also reduces the time it takes a company to fill a position by almost 40 percent, according to Iyer.

Case in Point

At U.K. media company BBC, less than 10 percent of applicants for design and engineering jobs were from minority groups. That figure shot up to almost 40 percent after the company used GapJumpers. Moreover, applicants were more likely to have the skills the BBC required, Iyer says: By widening the pool, the BBC was “able to get more qualified applicants into the pipeline.”

Bolstering Women in Tech

Alaina Percival

CEO and board chair, Women Who Code

Women in the male-dominated tech industry often feel isolated. The San Francisco-based nonprofit Women Who Code (WWC) offers them a professional community.

“By the 10- to 15-year mark, women in the tech industry start dropping out,” says Percival, who describes this attrition as “death by a thousand cuts.” One cut: getting asked to take notes during meetings. Another: being encouraged to take positions in other fields. For example, women who are skilled at talking with people are advised to become recruiters. “Their male counterparts would never hear that,” Percival says. “They would be viewed as leaders [in the tech arena] because they bring in additional skills.”

Community Building

Each year, WWC hosts 1,500 free networking events in 60 cities and 20 countries for over 80,000 members. At a typical gathering, a member will give a technical talk on, say, a mobile language or data science. “Then we sit down and just code,” Percival says. WWC also has a global leadership program: “[Women] become leaders in the tech industry in their cities.” Among WWC members, 80 percent report that the group has had a positive impact on their careers.

Forming Partnerships

In addition to hosting a job board, WWC works directly with tech companies, helping them hire, retain and promote more women. It shares best practices with organizations, such as being transparent about the criteria for promotions and how long the process takes. “It’s socially less acceptable for women to promote their professional successes, so we’re creating a culture that helps counteract that societal barrier,” Percival says.

Success Stories

After WWC supported eight women at a cloud services company, half received promotions. Then there was the woman in the leadership program in Atlanta who had a hard time speaking at her first WWC event. “She had difficulty even saying her name in front of 20 nice people,” Percival says. After less than a year with WWC, she lectured at a tech conference with a standing-room-only crowd.

A Brainy Approach

David Rock

Director, NeuroLeadership Institute

For almost two decades, neuroscientists at the global research organization NeuroLeadership Institute have found “the signal in the incredibly noisy research about the brain,” Rock says. The institute currently partners with about 40 large organizations, mostly in technology or financial services, to develop leadership and promote diversity and inclusion.

One key recommendation: Don’t ignore thinking style as a factor in building diverse teams. “Cognitive diversity matters,” Rock says. “Diverse perspectives make teams smarter.” Include some people focused on the big picture and others driven by process.

Awareness Isn’t Enough

Leaders often try to mitigate unconscious bias by raising awareness of it. “That doesn’t do very much,” Rock says. “It’s called unconscious bias because it’s unconscious. It’s unconscious both before and after you learn about it.” The solution: “Individuals can’t catch themselves being biased, but teams of people can.” If leaders identify their organization’s biases before hiring begins, teams of employees can spot those partialities more effectively than any individual can.

Making the Case

Companies get a lot more buy-in for diversity and inclusion when they emphasize the business case for it. One company Rock worked with, Intel, realized “it needed a much more diverse and inclusive workforce”-not just for diversity’s sake but also to innovate more quickly. To that end, it achieved gender pay parity.

When Inclusivity Efforts Backfire

To promote inclusion, company leaders often try to raise the profiles of minority employees. Ironically, that can make those workers feel singled out-or even excluded. And that leads the majority group to feel sensitive about approaching them. “A strange, unintended consequence is that both groups feel less comfortable with each other,” Rock says. He advises instead creating “a very small set of very actionable habits” to promote inclusion. At a health care organization, for example, employees are asked to smile and greet anyone who comes within 10 feet of them. Rock also recommends focusing on the common goals that unite workers.

Data-Driven Diversity

Kieran Snyder

Co-founder and CEO, Textio

In August 2014, Snyder wrote an article for Fortune magazine about gender bias in performance reviews for tech jobs, noting that 88 percent of women’s reviews had critical feedback versus 59 percent of men’s. The piece generated so much interest that HR leaders at a number of companies wanted to hire her.

But she had other plans: In October of that year, she co-founded Textio, a Seattle-based company that offers client organizations a predictive engine that provides feedback on how likely a job description is to draw diverse candidates.

Data Deluge

Textio searches more than 40 million job listings, many from its own customers, and considers the outcomes: how many people applied, how long the job stayed open, the demographic groups the description did or didn’t attract. “Textio finds patterns in all that data,” Snyder says.

Color Coding

The engine highlights words that typically perform well in green and words that don’t in orange. Good performance is defined in terms of how quickly roles are filled and the proportion of qualified applicants. Purple indicates language that appeals to women (for instance, “passion for learning”); blue shows wording that speaks more to men (like “rock star”).

Some companies won’t post a job description until they get a gender-neutral Textio score. Textio’s research indicates that a description with such a rating will result in a hire two weeks faster than one at either gender extreme. Since using the engine, tech giant Mozilla reports filling positions 17 percent more quickly.

Use Your Words

Textio finds that less-inclusive language often appears in the form of business clichés-terms like “synergy,” “key performance indicators” or “stakeholders.” “Every demographic group dislikes corporate jargon, but people of color are even less likely to apply to jobs that have it,” Snyder says. “American corporate culture has been heavily white-dominated for decades, so this language is a cultural signifier.” If a hiring manager uses “stakeholders,” Textio might suggest “partners” as an alternative.

We see diversity and inclusion as a business imperative.’

TALENT MANAGEMENT

The Big Disconnect in Your Talent Strategy and How to Fix It by John Boudreau, Mara Swan and Amy Doyle DECEMBER 23, 2016

MARION BARRAUD FOR HBR

Today’s leaders must lead the work, not just the employees. Talent can move into and out of an organization, through a growing array of options such as freelance platforms, crowdsourcing efforts, and temporary, contract, or part-time work. The ManpowerGroup Contingent Workforce Index of 2013 showed 40% of all ManpowerGroup consulting engagements blended permanent and contingent workers.

2COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.http://www.wiley.com/WileyCDA/WileyTitle/productCd-1119040043.htmlhttp://ww2.cfo.com/hiring/2012/02/human-capital-in-the-cloud/http://www.mckinsey.com/global-themes/employment-and-growth/connecting-talent-with-opportunity-in-the-digital-agehttp://www.manpowergroup.com/wps/wcm/connect/manpowergroup-en/cwihttp://www.manpowergroup.com/wps/wcm/connect/manpowergroup-en/cwi

As the talent ecosystem evolves to offer more options, talent systems have not kept pace. Typical systems are fragmented between disciplines like HR (which focuses on the internal, “permanent” workforce) and Procurement (which focuses on the external, “contingent” workforce), each with different and competing goals. That leaves most organizations lacking a clear total workforce perspective and no integrated strategy to engage workers at the right time, cost, and contractual arrangement. ManpowerGroup found that 80% of companies lack a reliable picture of their total workforce.

This is increasingly risky, as contingent and other non-full-time workers possess more of your vital strategic skills and deal with sensitive intellectual property. Rapidly-changing work demands can preclude retraining the regular workforce, so organizations meet critical and fast-changing capabilities by tapping into alternative work arrangements, often blending work arrangements. Contingent workers often work beside employees, yet wear a badge signifying their different work arrangements, essentially shouting “I am valued differently.” Contingent workers are more engaged when they perceive a social connection and sense of continuity, but uncoordinated work systems can alienate them.

Why are typical work systems uncoordinated? HR typically owns the “employment system” for full- time and part-time employees. Their goal is to attract, engage, develop and retain employees – moving talent into, through and out of the organization. HR systems emphasize long-term relationships and high performance, with big investments in selection and development, amortized over a long career. Procurement typically owns your “resource planning system” for contract workers. Their goal is to meet time-bound work requirements at minimal cost and risk, relying on suppliers for selection and development. This leaves operating managers, the ultimate “consumers” of talent, to choose between two talent acquisitions methods (or “sourcing channels”): Either engage HR to acquire employees or engage Procurement to acquire contingent workers. The disconnect between HR and Procurement often means either choice is suboptimal on its own, so operating managers circumvent both HR and Procurement. For example, they may open their own talent sourcing channel to employ contractors, by writing a unique statement of work (SOW) to engage workers with known performance or reputation. Other talent sourcing channels might include temporary worker agencies, freelance platforms, etc. The result can be a chaotic system of ad hoc talent sources and work arrangements that is invisible to most leaders.

Organizations can realize untapped value, and reduce risk, when HR and Procurement share knowledge and work together to create an integrated talent strategy. Consider the case of a fast- growing biopharmaceutical company.

Powered by early blockbuster drug therapies, the company met its initial hyper-growth by hiring talent, not optimizing its total workforce. In 2014, the company set a strategic goal to double revenue by 2020, which required disciplined focus on specific strategic growth trajectories. Greater strategic focus required a new workforce approach. They could no longer simply hire new employees to meet every new demand, but needed a more comprehensive and integrated approach that would optimize

3COPYRIGHT © 2016 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED.https://hbr.org/2016/03/work-in-the-future-will-fall-into-these-4-categorieshttps://insights.tapfin.com/blogs/detail/recently-published/2015/07/10/finding-the-missing-workforcehttp://www.workforce.com/2012/08/03/contingent-workers-why-companies-must-make-them-feel-valued/https://www.cornerstoneondemand.com/rework/are-contingent-workers-more-engaged-you-think

workforce speed, quality, cost and flexibility, and balance value and risk across the total talent investment.

Here are five lessons they learned for driving a new, integrated approach to talent:

Understand your current workforce reality. This company needed a clear picture of its entire workforce, including employees and non-employees. Supported by TAPFIN, a division of ManpowerGroup, they gathered data from HR and Finance systems including the HRIS, VMS, ATS, GL/Finance and A/P. The analysis of this data provided resource visibility across their entire organization. The organization initially believed its workforce was 90% employees and 10% contract workers, but the data revealed an actual mix of 73% and 27%. Once the analysis was complete, they built a workforce planning system that provided dashboards and integrated data previously stored in multiple systems. The company better aligned the workforce mix to its strategy, by optimizing different talent acquisition channels, manager spans of control (number of workers reporting to them), and worker mobility.

Educate leaders on how and why to optimize a blended workforce. The data revealed that workforce planning focused exclusively on regular full-time employees could not optimize a workforce of 27% non-employees. This was a true threat to strategic growth due to an unsustainable workforce strategy with unacceptable costs, workforce churn and disruption. Yet HR leaders and operating managers were not aware of the reality revealed by the data. Top management and the executive HR team met with key HR leaders, and with every member of their Management Committee, presenting workforce analyses showing each unit-level leadership team their particular workforce reality. The workshops encouraged and equipped the operating managers and HR teams to take a fresh look at their workforce goals and options.

Create one integrated workforce strategy. The transition from hyper-growth to managed growth meant tapping into new work options, beyond hiring regular employees. The opportunity to demonstrate the value of this new approach came from an unexpected source. The company’s finance organization was developing a new three-year Operating Expense (OPEX) plan, at the same time that HR rolled out their new plan. Initial insights from HR’s plan led to the unprecedented step of placing HR leaders on the team to develop the OPEX plan. HR and Finance now partnered to transform a traditional “numbers exercise” of matching employee headcount to accounting budgets into an integrated system to optimize workforce planning and operating expense. The new Workforce Forecasting tool supported Business, Finance, and HR leaders worldwide as they developed their OPEX plans, allowing managers to include the complete array of workforce options in their forecasts, and to see the power of work optimization to achieve OPEX goals.

Break the silos between HR and Procurement. These early successes demonstrated the potential value in HR and Procurement collaboration, but breaking silos required structural changes as well. Again, a confluence of events offered a unique opportunity. In 2015, the company consolidated several unit-level procurement functions into one global strategic sourcing organization.

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Concurrently, HR introduced analyses of the pivotal work roles, such as strategic roles, core roles and support roles. Combining these allowed workforce analytics to go beyond traditional employee turnover rates, employee requisitions, and employment forecasts, to examine each position’s impact on growth, worker availability, cost and quality, comparing talent acquired through different sources, enabling more informed and purposeful decisions about talent.

Extend the insights beyond talent acquisition decisions. The demonstrated success encouraged leaders to look beyond talent acquisition channel decisions. One example comes from the R&D division. To increase agility and diversity, the R&D organization migrated from a regional structure to a center-of-excellence model, creating small work teams combining senior scientists and junior scientists. Traditional work analytics focused on regular full-time employees, and seemed to show that this change reduced senior scientist spans of control. Fewer junior scientists reported to each senior scientist. This was traditionally seen as wasteful – a symptom of under-used managers. The new system could see all worker types, and revealed that many of the highest-performing junior scientists were actually contract workers. Senior scientists overseeing these pivotal contract workers appeared under-leveraged in the old system, which reflected only junior scientists that were regular employees, but the new analytics captured the strategic value of contract workers, and thus the value of the senior scientists overseeing them.

The evolving work ecosystem demands strategically optimizing all work arrangements, including but not limited to regular employees. That requires better integrating your HR and Procurement systems. Indeed, the best future HR and Procurement leaders may resemble a hybrid, like a “Workforce Engineer,” adept at both Operations Engineering and Strategic HR. It’s time to convene your best and brightest Procurement and HR leaders to work together to meet your future strategic workforce challenges.

John Boudreau is professor and research director at USC’s Marshall School of Business and Center for Effective Organizations, and is the author of the book Lead the Work, with Ravin Jesuthasan and David Creelman, and Global Trends in Human Resource Management, with Edward E. Lawler III.

Mara Swan is ManpowerGroup’s Executive Vice President, Global Strategy and Talent. A recognized expert in Human Resources, she is a Fellow of the National Academy of Human Resources and sits on the Executive Committees of the Personnel Roundtable and the HR Policy Association, where she also currently leads the Association’s Workforce 2020 Initiative. She recently coauthored “It’s the Company’s Job to Help Employees Learn” for Harvard Business Review.

Amy Doyle is Vice President of Strategic Client Solutions for ManpowerGroup Solutions. Amy recently authored “Collaborating with Competitors: Sharing Talent Pools to Meet Workforce Challenges“, a whitepaper which explores the benefits of creating talent pools that are shared amongst competitors in the same industry.

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Copyright 2016 Harvard Business Publishing. All Rights Reserved. Additional restrictions may apply including the use of this content as assigned course material. Please consult your institution’s librarian about any restrictions that might apply under the license with your institution. For more information and teaching resources from Harvard Business Publishing including Harvard Business School Cases, eLearning products, and business simulations please visit hbsp.harvard.edu.

Source Cited:

Cascio, W. F., & Aguinis, H. (2019). Applied psychology in talent management (8th ed.). Retrieved from https://www.vitalsource.com

Chapter 11

11 Recruitment

Wayne F. Cascio, Herman Aguinis

Learning Goals

By the end of this chapter, you will be able to do the following:

11.1 Describe the recruitment process as a talent supply chain

11.2 Explain the three sequential stages of recruitment and key activities that affect each one

11.3 Identify fundamental questions to address when planning for recruitment

11.4 Discuss the pros and cons of hiring internally versus externally

11.5 Explain why a positive organizational image and employer brand help attract candidates

11.6 Know the fundamental questions about internal recruitment that all organizations need to address

11.7 Craft a strategy for increasing the diversity of an organization’s workforce

11.8 Identify situations in which realistic job previews will and will not work well

Whenever human resources must be expanded or replenished, a recruiting system of some kind must be established. Advances in technology, coupled with the growing intensity of competition in domestic and international markets, have made recruitment a top priority as organizations struggle continually to gain competitive advantage through people. Recruitment is a business, and it is big business (Bersin, quoted in Deloitte, 2015; Overman, 2008). It demands serious attention from management because any business strategy will falter without the talent to execute it. According to former Apple CEO Steve Jobs, “Recruiting is hard. It’s finding the needles in the haystack. I’ve participated in the hiring of maybe 5,000-plus people in my life. I take it very seriously” (Jobs, 2008).

This statement echoes the claims of many recruiters that it is difficult to find good workers and that talent acquisition is becoming more rather than less difficult (Kandefer, 2017; Maurer, 2017b; Ryan & Delaney, 2017). As an example, consider how the Internet has revolutionized the practice of recruitment. For the nearly 20% of the world’s workforce who change jobs each year, there are more than 50,000 job-recruitment sites globally, as well as the ability to research employers and to network (Maurer, 2016a).

About a third of LinkedIn’s revenue comes from corporate customers who buy rights for their recruiters to use LinkedIn’s software as a service. This rapid evolution is expected to continue, with dynamic, customized job postings that use cookie-based targeting to communicate job advertisements to relevant individuals based on their online behaviors and the incorporation of mobile technology to access Internet-based job information (Dineen & Allen, 2014; Maurer, 2016c). The result? A “leveling of the information playing field” brought about by Web technology.

Organizations recruit periodically in order to add to, maintain, or readjust their total workforces in accordance with HR requirements. Building on the ideas shown in Figure 3.2, the external staffing supply chain, Figure 11.1 illustrates the recruitment process as a talent supply chain.

In Figure 11.1, attract describes the overall process of generating and inducing interest among suitable applicants for potential employment opportunities in the organization. Source is the process of generating a pool of applicants. Assess is the evaluation of knowledge, skills, and abilities, and other characteristics in order to perform a job. Employ is the process of moving the desired candidate into employment. Note, however, that some of the activities associated with each function overlap other functions.

The logic of recruitment calls for sound strategic workforce planning systems (talent inventories, forecasts of workforce supply and demand, action plans, and control and evaluation procedures) to serve as a base from which to launch recruiting efforts. This will be evident as we begin to examine the operational aspects of the recruitment function.

In this chapter, our objective is to describe how organizations search for prospective employees and influence them to apply for available jobs. Accordingly, we consider recruitment planning, operations, and evaluation, together with relevant findings from recruitment research, and we include organizational examples to illustrate current practices. Figure 11.2, from Dineen and Soltis (2011), serves as an overarching framework for the processes described in this chapter. It integrates earlier views of recruitment in terms of sequential stages (Barber, 1998; Breaugh, Macan, & Grambow, 2008), while also integrating contextual/environmental and “key-process” issues (Rynes & Cable, 2003). As shown in Figure 11.2, two key decision points (application and job choice) separate these primary recruitment stages. Within each stage, the framework also identifies important subcategories.

Figure 11.1 The Recruitment Process as a Talent Supply Chain

Figure 11.2 An Integrated Model of the Recruitment Process

Three contextual/environmental features affect all recruitment efforts, namely, characteristics of the firm (the value of its “brand” and its “personality”; Cascio & Graham, 2016; Lievens & Slaughter, 2016); characteristics of the vacancy itself (is it mission critical?); and characteristics of the labor markets in which an organization recruits. Likewise, three sequential stages characterize recruitment efforts: generating a pool of viable candidates, maintaining the status (or interest) of viable candidates, and “getting to yes” after making a job offer (postoffer closure).

Figure 11.1 also identifies key activities that affect each of these three stages. These include strategies for targeting potential candidates and for communicating information to them (“messaging strategies”); issues related to screening viable candidates and interactions with organizational agents (recruiters, managers, and employees encountered during site visits); and issues related to actual job offers (e.g., timing, “exploding” offers that disappear after specified periods of time). Finally, Figure 11.2 identifies some key processes that affect the outcomes of each stage of the recruitment process, for example, social networking and information processing (seen through the lens of the elaboration likelihood model; Jones, Shultz, & Chapman, 2006) at the candidate-generation stage; communication, rapport building, and signaling to maintain viable candidates; and negotiation, decision making, and competitive intelligence at the postoffer stage. Space constraints do not permit us to discuss each of the issues, activities, and processes shown in Figure 11.2, but we present it here because it is rich in implications for advancing both the theory and practice of recruitment. Let’s begin by considering recruitment planning.

Recruitment Planning

The process of recruitment planning begins with a clear specification of HR needs (numbers, skills mix, levels) and the time frame within which such requirements must be met. This is particularly relevant to the setting of workforce diversity goals and timetables. Labor-force availability and internal workforce representation of women and minorities are critical factors in this process. In the United States, the Census Bureau provides such information based on national census data for specific geographic areas.

Beyond these issues, two other important questions need to be addressed, namely, whom to recruit and where to recruit (Breaugh, 2008; Ployhart & Kim, 2014; Rynes, Reeves, & Darnold, 2014). Answers to both questions are essential to determining recruitment objectives. For example, a prehire objective might be to attract a certain number of applications for pivotal or mission-critical jobs from passive job candidates—those who are not currently looking for a job. Objectives are also critical to recruitment evaluation, namely, if an employer wishes to compare what it hoped to accomplish with recruitment outcomes.

Having established recruitment objectives, an organization should be able to develop a coherent strategy for filling open positions. Among the questions an employer might address in establishing a recruitment strategy are (a) when to begin recruiting, (b) what message to communicate to potential job applicants, and (c) whom to use as recruiters. As Breaugh (2012) has noted, answers to these questions should be consistent with the recruitment objectives previously established. In terms of messages, consider the finding that satisfaction with coworkers enhances older-worker engagement (Avery, McKay, & Wilson, 2007). Messages to recruit older workers might therefore be geared toward enhancing perceptions of fit with immediate coworkers (person–group fit). Such messages might also build on the findings of a study by Rau and Adams (2005) that targeted EEO statements, the opportunity to transfer knowledge, and flexible schedules, all of which positively influenced attraction of older workers.

Internal Recruitment

Primed with a comprehensive workforce plan for the various segments of the workforce (e.g., entry level, managerial, professional, and technical), recruitment planning may begin and internal candidates should be considered first. There are four key advantages to recruiting internally (Breaugh, 2014; Maurer, 2016b). First, there is less transition time moving into new jobs. Current employees are already familiar with an employer’s products, people, and operating procedures. Second, there is a greater likelihood of filling a position successfully. In contrast to external candidates, an employer has considerably more information about internal candidates (e.g., past performance, temperament, work ethic). Third, it is generally cheaper to fill a higher level position internally than it is to fill it from outside. Fourth, assuming that those promoted from within are seen as deserving, there is a positive impact on the motivation levels of other employees.

At the same time, however, organizations must confront a common problem: the reluctance of managers to grant permission for their subordinates to be interviewed for potential transfer or promotion. In a recent survey, fully half of 665 firms reported talent hoarding as a serious problem (Lublin, 2017). To overcome this aversion, promotion-from-within policies must receive strong top-management support, coupled with a company philosophy that permits employees to consider available opportunities within the organization and incentives for managers to release them. At EY (formerly Ernst & Young), Johnson & Johnson, and PepsiCo, pay is now determined, in part, by how well a manager does at nurturing people. Technology consulting firm Avanade shifts leaders to new roles every few years to ensure that high-potential employees get noticed (Church, 2017; Lublin, 2017).

With respect to timing, the effective use of “in-house” talent should come first. If an organization undertakes external recruitment efforts without considering the desires, capabilities, and potential of present employees, it may incur both short- and long-term costs. In the short term, morale may degenerate. Over the longer term, an organization with a reputation for consistent neglect of in-house talent may find it difficult to attract new employees or to retain experienced ones. In light of those concerns, organizations are making wider use of job postings (via company intranets, on internal social media, or in company newsletters), employee referrals (one way to attract “passive” candidates; Ryan, 2017), and temporary worker pools (Kauflin, 2016).

External Recruitment

Today, firms are hiring externally to fill jobs at all levels (Cappelli & Keller, 2017). To do that well, begin by estimating three key parameters: the time, the money, and the staff necessary to achieve a given hiring rate (Hawk, 1967). The basic statistic needed to estimate these parameters is the number of leads needed to generate a given number of hires in a given time. Certainly, the easiest way to derive this figure is on the basis of prior recruitment experience. If accurate records were maintained regarding yield ratios and time-lapse data, no problem exists, since trends may be determined and reliable predictions generated (assuming labor-market conditions are comparable). Yield ratios are the ratios of leads to invites, invites to interviews, interviews (and other selection instruments) to offers, and offers to hires obtained over some specified time period (e.g., six months or a year). Time-lapse data provide the average intervals between events, such as between the extension of an offer to a candidate and acceptance or between acceptance and addition to the payroll.

If no experience data exist, then it is necessary to use “best guesses” or hypotheses and then to monitor performance as the operational recruitment program unfolds. For the moment, however, suppose ABC Engineering Consultants is contemplating opening two new offices and needs 100 additional engineers in the next six months. Fortunately, ABC has expanded in the past, and, on that basis, it is able to make predictions like this:

With technical candidates, we must extend offers to 2 candidates to gain 1 acceptance, or an offer-to-acceptance ratio of 2:1. If we need 100 engineers, we’ll have to extend 200 offers. Further, if the interview-to-offer ratio has been 3:2, then we need to conduct 300 interviews, and, since the invites-to-interview ratio is 4:3, then we must invite as many as 400 candidates. Finally, if contacts or leads required to find suitable candidates to invite are in a 6:1 proportion, then we need to make 2,400 contacts.

Figure 11.3 Recruiting Yield Pyramid—Engineering Candidates, ABC Engineering Consultants

With respect to timing, the effective use of “in-house” talent should come first. If an organization undertakes external recruitment efforts without considering the desires, capabilities, and potential of present employees, it may incur both short- and long-term costs. In the short term, morale may degenerate. Over the longer term, an organization with a reputation for consistent neglect of in-house talent may find it difficult to attract new employees or to retain experienced ones. In light of those concerns, organizations are making wider use of job postings (via company intranets, on internal social media, or in company newsletters), employee referrals (one way to attract “passive” candidates; Ryan, 2017), and temporary worker pools (Kauflin, 2016).

External Recruitment

Today, firms are hiring externally to fill jobs at all levels (Cappelli & Keller, 2017). To do that well, begin by estimating three key parameters: the time, the money, and the staff necessary to achieve a given hiring rate (Hawk, 1967). The basic statistic needed to estimate these parameters is the number of leads needed to generate a given number of hires in a given time. Certainly, the easiest way to derive this figure is on the basis of prior recruitment experience. If accurate records were maintained regarding yield ratios and time-lapse data, no problem exists, since trends may be determined and reliable predictions generated (assuming labor-market conditions are comparable). Yield ratios are the ratios of leads to invites, invites to interviews, interviews (and other selection instruments) to offers, and offers to hires obtained over some specified time period (e.g., six months or a year). Time-lapse data provide the average intervals between events, such as between the extension of an offer to a candidate and acceptance or between acceptance and addition to the payroll.

If no experience data exist, then it is necessary to use “best guesses” or hypotheses and then to monitor performance as the operational recruitment program unfolds. For the moment, however, suppose ABC Engineering Consultants is contemplating opening two new offices and needs 100 additional engineers in the next six months. Fortunately, ABC has expanded in the past, and, on that basis, it is able to make predictions like this:

With technical candidates, we must extend offers to 2 candidates to gain 1 acceptance, or an offer-to-acceptance ratio of 2:1. If we need 100 engineers, we’ll have to extend 200 offers. Further, if the interview-to-offer ratio has been 3:2, then we need to conduct 300 interviews, and, since the invites-to-interview ratio is 4:3, then we must invite as many as 400 candidates. Finally, if contacts or leads required to find suitable candidates to invite are in a 6:1 proportion, then we need to make 2,400 contacts.

A recruiting yield pyramid for these data is presented in Figure 11.3.

Increasingly, companies are using artificial intelligence to screen résumés. Here are some typical yield ratios (Weber, 2012): Of 1,000 people who notice a job posting online, approximately 200 will begin the application process. Of those, approximately 100 people complete the application process, and of those, a hiring manager reviews approximately 25 résumés. Roughly four to six candidates will be invited to interview for the vacancy, one to three finalists will complete the final steps of the qualification process, and one person will be offered the position. He or she accepts 80% of the time.

Figure 11.4 Time-Lapse Data for Recruitment of Engineers

Additional information, critical to effective recruitment planning, can be derived from time-lapse data. For ABC Engineering Consultants, experience may show that the interval from receipt of a résumé to invitation averages four days. If the candidate is still available, he or she will be interviewed five days later. Offers are extended, on average, three days after interviews, and, within a week after that, the candidate either accepts or rejects the offer. If the candidate accepts, he or she reports to work, on average, three weeks from the date of acceptance. Therefore, if ABC begins today, the best estimate is that it will be 40 days before the first new employee is added to the payroll. With this information, the “length” of the recruitment pipeline can be described and recruiting plans fitted to it. A simple time-lapse chart for these data is presented in Figure 11.4. Data on 350,000 cases from Glassdoor indicate that companies take an average of 23 days to screen and hire new employees (excluding the time from acceptance to report for work) (Shellenbarger, 2016). Time to fill averages 42 days (Society for Human Resource Management, 2016c).

All of this assumes that intervals between events in the pipeline proceed as planned. In fact, longitudinal research indicates that delays in the timing of recruitment events are perceived negatively by candidates, especially high-quality ones, and often cost job acceptances (Boswell, Roehling, LePine, & Moynihan, 2003; Bretz & Judge, 1998; Chapman, Uggerslev, Carroll, Piasentin, & Jones, 2005; Rynes & Cable, 2003; Wright, 2017). In addition, time to fill can be misleading, especially if measures of the quality of new hires are ignored (Maurer, 2015b). Here is a simple example: It is one thing to know that a firm’s sales openings average 55 days to fill. It’s another thing to know that the difference between filling them in 55 versus 30 days costs the firm $30 million revenue, or that a 20% improvement in quality of hire will result in an $18 million productivity improvement.

Note, however, that these yield ratios and time-lapse data are appropriate only for ABC’s engineers. Other segments of the workforce may respond differently, and widespread use of the Internet by job seekers in all areas may change both yield ratios and time-lapse data. From the perspective of job seekers, it takes people who apply online an average of three more weeks to get a job than if they contacted the employer directly and six more weeks compared to a personal referral (Maurer, 2016a). Of course, the time period also depends on labor-market conditions. As we noted on Chapter 10, a labor market is a geographic area within which the forces of supply (people looking for work) interact with the forces of demand (employers looking for people) and thereby determine the price of labor. However, since the geographic areas over which employers extend their recruiting efforts depend partly on the type of job being filled, it is impossible to define the boundaries of a local labor market in any clear-cut manner (Newman, Gerhart, & Milkovich, 2016). If the supply of suitable workers in a particular labor market is high relative to available jobs, then the price of labor generally will be cheaper. By contrast, if the supply is limited (e.g., suppose ABC needs certain types of engineering specialists who are unavailable locally), then the search must be widened and additional labor markets investigated in order to realize required yield ratios.

Table 11.1 Advantages and Disadvantages of Internal Versus External Recruitment

In traditional internal labor markets, employees are brought into organizations through a small number of entry-level jobs and then are promoted up through a hierarchy of increasingly responsible and lucrative positions. In recent years, however, internal labor markets have weakened, such that high-level jobs have not been restricted to internal candidates, and, as noted earlier, new employees have been hired from the outside at virtually all levels (Bidwell, 2017; Cappelli & Keller, 2017). This has had the predictable effect of weakening employee loyalty and trust in management, and it puts employers at a disadvantage when labor markets tighten. Table 11.1 presents some of the advantages and disadvantages of internal versus external recruitment.

Staffing Requirements and Cost Analyses

Experienced professional and technical recruiters can be expected to produce about 50 new hires per year, but that number varies by company size. It could be 85 hires per year for a large company, and as few as 20–30 for a small one (Glenn, 2009). Let’s assume four full-time recruiters will be required to meet ABC’s staffing requirements for 100 engineers in the next six months.

So far, we have been able to estimate ABC’s recruiting time and staffing requirements on the basis of its previous recruiting experience. Several other parameters must be considered before the planning process is complete. The most important of these, as might logically be expected, is cost. Before making cost estimates, however, let’s assume that an organization has no prior recruiting experience (or that the necessary data were not recorded). The development of working hypotheses about yield ratios is considerably more complex under these conditions, though far from impossible.

It is important to analyze the external labor market by source, along with analyses of demand for similar types of people by competitors. It is also important to evaluate the entire organizational environment in order to do a “company advantage study.” Numerous items must be appraised, including geographic factors (climate, recreation), location of the firm, cost of living, availability of housing, proximity to shopping centers, quality of local public and parochial schools, and so forth.

Capitalizing on special factors that are likely to attract candidates, such as organizational image, reputation, and future opportunities, is important as well (Collins, 2007; Collins & Han, 2004; Feffer, 2016; Weber, 2016). Image is a strong predictor (ρ = .48) of organizational attraction (Allen, Mahto, & Otondo, 2007; Lievens & Slaughter, 2016). Such information will prove useful when developing a future recruiting strategy and when gathering baseline data for estimates of recruiting yield.

Here are three reasons why a positive organizational image or reputation might influence prospective candidates to apply (Lievens & Slaughter, 2016; Rynes & Cable, 2003): (1) People seek to associate themselves with organizations that enhance their self-esteem. Job seekers might pursue high-reputation companies to bask in such organizations’ reflected glory or to avoid negative outcomes associated with working for an employer with a poor image. (2) A positive reputation may signal that an organization is likely to provide other desirable attributes, such as high pay and strong opportunities for career growth and development. (3) A positive reputation may make applicants more receptive to whatever information an organization provides.

Yield ratios and time-lapse data are valuable for estimating recruiting staff and time requirements. Recruitment planning is not complete, however, until the costs of alternative recruitment strategies have been estimated. Expenditures by source must be analyzed carefully in advance in order to avoid any subsequent “surprises.” In short, analysis of costs is one of the most important considerations in determining where, when, and how to approach the recruiting marketplace.

The International Organization for Standardization (2017) has issued a cost-per-hire (CPH) international standard. The CPH metric is designed to measure the costs associated with the sourcing, recruiting, and staffing activities borne by an employer to fill an open position in the organization. CPH is a ratio of the total dollars expended (in both external and internal costs) to the total number of hires in a specified time period (see Equation 11.1).

CPH = ∑ (External Costs) + ∑ (Internal Costs)/Total Number of Hires in a Time Period (11.1)

External costs include all sources of spending outside the organization on recruiting efforts during the time period in question. Examples of external costs include third-party agency fees, advertising costs, job-fair costs, and travel costs for recruiting.

Internal costs include all sources of internal resources and costs used for staffing efforts during the time period in question. Examples of internal costs include the fully loaded salary and benefits of the recruiting team and fixed costs, such as physical infrastructure (e.g., talent-acquisition system costs).

Total number of hires refers to the total added during the time period in question. Regardless of the hires’ staffing type (e.g., regular full time, regular part time, temporary) and total number, we assume that the fully loaded costs to staff the included positions have been calculated in external costs and internal costs.

Source Analysis

Analysis of recruiting sources facilitates effective planning. Three types of analyses are typical: cost per hire, time lapse from candidate identification to hire, and source yield. In terms of cost per hire, the most expensive sources generally are private employment agencies and executive search firms, since their fees may constitute as much as 35% of an individual’s first-year salary (Stewart, 2015). The next most expensive sources are field trips, for both advertising expenses and recruiters’ travel and living expenses are incurred. Less expensive are advertising responses, Internet responses, write-ins, and internal transfers and promotions. Employee referrals, direct applications (mail or Web based), and walk-ins are the cheapest sources of candidates.

Time-lapse studies of recruiting sources are especially useful for planning purposes, since the time from initial contact to report onboard varies across sources. In the case of college recruiting, for example, a steady flow of new employees is impossible, since reporting dates typically coincide closely with graduation, regardless of when the initial contact was made.

For those sources capable of producing a steady flow, however, employee referrals and direct applications usually show the shortest delay from initial contact to report (Maurer, 2016a). By contrast, when an organization has an efficient recruiting infrastructure in place, it may be difficult to beat the Internet. Today’s cloud-based applicant tracking systems, such as IBM Kenexa BrassRing, Greenhouse, or SmartRecruiters, have intuitive interfaces and tools that allow recruiters to cast a wider net for candidates. They also include robust analytics with “dashboards” that illustrate key recruitment metrics (Maurer, 2017a; Zielinski, 2015). Fully 75% of hiring and talent acquisition managers use applicant tracking or recruiting software to improve the hiring process (Kandefer, 2017).

From an applicant’s perspective, it takes an average of about 15 applications to different employers to get a job through an online job site, versus 10 for those who apply directly to a company, and six for those who are referred by current employees (Maurer, 2016a). Competition for top candidates is intense; the organization whose recruiting section functions smoothly and is capable of responding swiftly has the greatest likelihood of landing high-potential people.

The third index of source performance is source yield (i.e., the ratio of the number of candidates generated from a particular source to hires from that source). Although no ranking of source yields would have validity across all types of organizations and all labor markets, Breaugh, Greising, Taggart, and Chen (2003) examined the relationship between five recruitment methods (i.e., employee referrals, direct applicants, college placement offices, job fairs, and newspaper ads) and prehire outcomes for applicants for information-technology jobs. They found no difference for level of education or interview score. Not surprisingly, those recruited from college placement offices had less experience than applicants in the other groups. In terms of a job offer, employee referrals and direct applicants were more likely to receive one than were those in the other groups. This pattern also held for those who were hired. Thus, although employee referrals and direct applicants did not differ from those in the other groups on two measures of applicant quality, they still were viewed as being more deserving of job offers.

A more recent study of employee referrals used longitudinal data from 386 referrer–referral hire pairs at the same job level in a U.S. call center over a two-year period (Pieper, 2015). Referral hires from high-performing referrers performed better but had higher turnover propensities than did those from lower-performing referrers.

The most commonly used sources are changing, however (Ryan & Delaney, 2017). Fully 87% of recruiters now use LinkedIn and 55% use Facebook (many use both sources) (Kandefer, 2017). At the same time, informal contacts are used widely and effectively at all occupational levels. In fact, word-of-mouse (informal, Web-based conversations about companies) are viewed as more credible and associated with higher organizational attractiveness than are Web-based testimonials (Farrell, 2012; Van Hoye & Lievens, 2007).

Having examined source yield, we are almost ready to begin recruiting operations at this point. Recruiting efficiency can be heightened considerably, however, once employment requirements are defined thoroughly in advance. This is an essential step for both technical and nontechnical jobs. Recruiters must be familiar with the job descriptions of available jobs; they must understand (and, if possible, have direct experience with) the work to be performed. Research has shown clearly that characteristics of organizations and jobs (e.g., location, pay, opportunity to learn, challenging and interesting work) have a greater influence on the likelihood of job acceptance by candidates than do characteristics of the recruiter (Barber & Roehling, 1993; Rynes, 1991; Taylor & Bergmann, 1987).

Nevertheless, at the first stage of recruitment, characteristics of recruiters (personable, trustworthy, informative, competent) do affect the perceptions of candidates (Chapman et al., 2005), particularly with respect to the procedural justice of the process (Chapman & Webster, 2006), but not their intentions to accept job offers (Stevens, 1998). Neither the job function (HR versus line management) nor the gender of the recruiter seems to make much difference to candidates (Chapman et al., 2005). At the same time, there are at least three reasons why recruiters might matter (Breaugh et al., 2008). Different types of recruiters may be important because (a) they vary in the amount of job-related information they possess (and therefore can share), (b) they differ in terms of their credibility in the eyes of recruits, and (c) they signal different things to job candidates. In online social networks, recruiters who secure a central network position as a connector and who brand themselves well (in addition to employer branding) are most successful in attracting quality candidates (Ollington, Gibb, & Harcourt, 2013). Still, it is likely that applicants rely less on recruiter signals as more information about job and organizational characteristics becomes salient (Dineen & Soltis, 2011).

Planning is now complete. Strategic workforce plans have been established; time, cost, and staff requirements have been specified; sources have been analyzed; and job requirements and employment standards have been determined and validated. Now we are ready to begin recruiting operations.

Operations

Operationally, all organizations need to address five important questions about internal recruitment. To illustrate each one, consider the role of technical professionals and their potential moves to managerial positions (Cascio, 2018):

How does the organization create a talent pool? For example, how does it prepare technical professionals for future management positions?

How does the organization attract candidates for promotion? Do the most suitable technical professionals want to advance to management, or do they prefer to pursue technical work?

How does the system choose candidates? Are promotion candidates chosen as a reward for good technical performance or for their leadership abilities?

How does the organization make offers to land candidates? How successful is the organization in convincing technical professionals to move into leadership positions?

How does the organization bring new employees on board? How much support and training are technical professionals given after they assume their new positions to help them become effective leaders?

Internal mobility may be beneficial from the standpoint of creating social network ties to new areas of the business (Somaya, Williamson, & Lorinkova, 2008). In many cases, however, organizations turn to external sources to fill entry-level or higher level jobs, jobs created by expansion, and jobs whose specifications cannot be met by present employees. To that topic we now turn.

External Sources for Recruiting Applicants

A variety of external recruiting sources are available, with the choice of source(s) contingent on specific hiring requirements and source-analysis results. Available sources include the following:

Advertising—Internet-based job boards or talent platforms, newspapers (physical or online), social media, technical and professional journals, television, radio, and (in some cases) outdoor advertising

Employment agencies— federal and state agencies, private agencies, executive search firms, management consulting firms, and agencies specializing in temporary help

Educational institutions—technical and trade schools, colleges and universities, co-op work/study programs, and alumni placement offices

Professional organizations—technical society meetings and conventions (regional and national) and society placement services

Military—out-processing centers and regional and national retired officer associations’ placement services

Labor unions

Career fairs—physical or virtual

Outplacement firms

Direct application (walk-ins, write-ins, online applicants)

Intracompany transfers and company retirees

Employee referrals

To illustrate how companies try to gain a competitive advantage over their rivals in university recruiting for top talent, consider the example in Box 11.1.

The sources listed here may be classified as formal (institutionalized search methods such as employment agencies, advertising, search firms) or informal (e.g., walk-ins, write-ins, employee referrals). In terms of the most popular sources used by employers, evidence indicates the following (Breaugh, 2012; Dineen & Soltis, 2011; Griffeth, Tenbrink, & Robinson, 2014):

Use of public employment services declines as required skills levels increase.

The internal market is a major recruitment source except for entry-level, unskilled, and semiskilled workers.

Larger firms are the most frequent users of walk-ins, write-ins, and the internal market. They clearly have a hiring advantage ([email protected], 2014).

There is no consistent relationship between recruitment sources and person–job fit.

Use of multiple recruitment sources together with informal sources provides the most realistic and accurate information.

In practice, most applicants use more than one recruitment source to learn about jobs. However, the accumulated evidence on the relationship among recruitment sources, turnover, and job performance suggests that such relationships are quite weak (Griffeth et al., 2014). What may be more important than the source per se is how much support and information a source provides, or the extent to which a source embeds prescreening on desired applicant characteristics (Maurer, 2017b; Rynes et al., 2014).

With respect to job advertisements, those that contained more information resulted in a job opening being viewed as more attractive (e.g., Allen et al., 2007) and as more credible (Allen, Van Scotter, & Otondo, 2004) than those that contained less information. Research also has shown that advertisements that contain more specific information about a position increase applicant interest in the position and may result in better person–organization fit (Roberson, Collins, & Oreg, 2005). Meta-analysis shows that fit, in turn, is the best predictor of applicant attraction (Uggerslev, Fasina, & Kraichy, 2012). Box 11.2 highlights the special issues associated with recruiting for diversity.

Employee referrals have been and remain extremely popular. They are a major source of new hires at many levels, including professionals. The logic behind employee referral is that “it takes one to know one.” Interestingly, the rate of employee participation seems to remain unaffected by such efforts as higher cash bonuses, cars, or expense-paid trips (Breaugh, 2012). This suggests that good employees will not refer potentially undesirable candidates, even if the rewards are outstanding. Finally, considerable research evidence indicates that referrals result in consistently lower quit rates than other sources (Griffeth et al., 2014).

Research shows that employee referrals work for three major reasons. First, assuming that current employees value their reputations, they prescreen referrals. Second, referrals are more likely to have accurate expectations about jobs, assuming they have discussed them with current employees. Third, newly hired employee referrals have someone they can go to for coaching (Breaugh, 2014, Griffeth, Hom, Fink, & Cohen, 1997). Employee referrals clearly have advantages, but from an EEO perspective, employee referrals are fine as long as the workforce is diverse in gender, race, and ethnicity to begin with. A potential disadvantage, at least for some firms, is that employee referrals tend to perpetuate the perspective, the belief systems, and, in some cases, the lack of diversity of the current workforce. This may not be the best way to go for organizations that are trying to change those things.

Managing Recruiting Operations

Administratively, recruitment is one of the easiest activities to foul up—with potentially long-term negative publicity for the firm. Recent evidence indicates that this area needs serious work, as almost 60% of job seekers report having a poor candidate experience (see Box 11.3). Of those, 72% proceeded to share information about their poor experiences online on an employer-review site, such as Glassdoor, on a social networking site, or directly with a colleague or friend (Kandefer, 2017). Among other things, organizations are trying to eliminate operational problems by using an applicant tracking system (ATS). Figure 11.5 shows the flow of activities in a typical ATS.

The process begins with a requisition from a hiring manager to authorize the filling of one or more positions. Once a job posting is created, it is published in a variety of potential hiring channels (e.g., company website, job boards, social media). As candidates apply, they receive acknowledgments, and the documents they submit proceed through rough screening on a pass/fail basis. Hiring managers then interview the most promising candidates and select the one or more who receive the highest ratings.

Figure 11.5 Flow of Work in an Applicant Tracking System

Through cloud- or computer-based ATS applications, firms have reengineered the entire recruitment process (see Box 11.4). ATS applications have evolved from résumé databases to well-rounded recruitment-optimization tools—cloud-based models that incorporate intuitive interfaces and tools that allow recruiters to cast a wider net for candidates (Maurer, 2017b; Zielinski, 2015, 2017). For example, HiringSolved is using artificial intelligence and machine learning to develop a conversational interface to a robust talent analytics platform—basically “Siri” for recruiting—to leverage massive data analysis and learning capabilities known as RAI (recruiting artificial intelligence) (Maurer, 2017a). Many ATS applications can easily be integrated with “add-on” recruiting technologies from outside vendors, such as video interviewing, prehire assessments, and the sourcing of passive candidates. The last are not actively looking for jobs. To attract them, LinkedIn has a feature called “Open Candidates” that lets users announce to recruiters their openness to changing jobs while keeping that decision hidden from their current employers (Maurer, 2016f).

Measurement, Evaluation, and Control

If advance recruitment planning has been thorough, later evaluation of the recruitment effort is simplified considerably. Early hypotheses regarding cost and quality can be measured against actual operating results. Critical trade-offs can be made intelligently on the basis of empirical data, not haphazardly on the basis of hunch or intuition. Any number of cost and quality analyses might be performed, but it is critical to choose those that are strategically most relevant to a given organization (Cascio & Boudreau, 2011b; Feffer, 2017; Maurer, 2016d).

Another consideration is to choose measures of recruiting success that are most relevant to various stages in the recruitment process (see Figure 11.2). An important metric in the first stage, whose objective is to generate viable candidates, is total résumés received. In the second stage, maintaining the status of viable applicants, analysis of postvisit and rejection questionnaires is particularly relevant. In the final stage, postoffer closure, the acceptance-to-offer ratio, combined with an analysis of reasons for acceptance and rejection of job offers, are appropriate metrics. Ultimately, however, the success of recruitment efforts depends on the number of successful placements made.

To assess the quality of hires, it is necessary to calculate metrics both pre- and posthire. Quality measures that focus on recruitment (e.g., time-to-fill, candidate assessment scores) are distinct from those that focus on posthire performance quality (e.g., measures of performance, productivity, and cultural fit) (Maurer, 2015b). Here are some other possible metrics, including those noted above:

Cost of operations

Cost per hire

Cost per hire by source

Total résumés received

Résumés by source

Quality of résumé by source

Source yield and source efficiency

Time lapse between recruiting stages by source

Time lapse between recruiting stages by acceptance versus rejection

Workflow conversion rates (time spent in each of the workflow steps of an ATS)

Geographical sources of candidates

Individual recruiter activity

Individual recruiter efficiency

Acceptance-to-offer ratio

Offer-to-interview ratio

Interview-to-invitation ratio

Invitation-to-résumé input ratio

Biographical data analyses against acceptance/rejection data

Analysis of postvisit and rejection questionnaires

Analysis of reasons for acceptance and rejection of job offers

Analysis of post–reporting date follow-up interviews

Placement-test scores of hires versus rejections

Placement-test scores versus observed performance

Salary offered—acceptances versus rejections

Salary versus age, year of first degree, and total work experience

Results of these analyses should be presented graphically (e.g., via “dashboards”) for ease of interpretation and communication. Software makes that easy to do. With this information, each recruiter can analyze his or her own performance, and senior managers can track cost and hiring trends. In addition, future needs and strategies can be determined.

Formal procedures for translating recruitment-related differences in sources and costs into monetary payoffs from recruitment and selection activities are also available (Boudreau & Rynes, 1985; Cascio & Boudreau, 2011a; De Corte, 1999; Law & Myors, 1993; Martin & Raju, 1992). Operating executives want to see the financial return on their investments in recruiting, and monetary payoffs can provide this additional perspective.

Job Search From the Applicant’s Perspective

How do individuals identify, investigate, and decide among job opportunities? Research has found that many job applicants (a) have an incomplete and/or inaccurate understanding of what a job opening involves; (b) are not sure what they want from a position; (c) do not have self-insight with regard to their knowledge, skills, and abilities; and (d) cannot accurately predict how they will react to the demands of a new position (Breaugh, 2008, 2012; Breaugh et al., 2008; Rynes & Cable, 2003). At the same time, the Internet has been a game changer in recruitment. Dineen and Allen (2014) noted how it has increased the richness of information, especially early in the process; increased the customization of information; changed from pushing information to job seekers to candidates pulling information; and decentralized the recruitment function in organizations.

Applicants should exploit the vast capabilities of the Internet, since 92% of companies use social media for recruitment, and 45% of Fortune 500 firms include links to social media on their career-page sections (Staff.com, 2013). Beyond that, company websites such as Accenture, Goldman Sachs, Ikea, and L’Oréal offer interactive tools to help candidates assess person–organization fit (Ryan & Delaney, 2017). Online networking sites—such as LinkedIn, Facebook, Google+, and Twitter—have become increasingly important to job seekers. Geared toward professional relationships, networking websites allow their members to build a web of social and business associates and to interact person-to-person with new contacts. As an example, consider SilkRoad Technology’s OpenHire. Once a candidate submits a résumé to a job site using OpenHire, he or she can view potential connections between the organization and his or her existing professional network (Career Profiles, n.d.).

Networking is crucially important (Rosato, 2009; Sundheim, 2014; Wanberg, Kanfer, & Banas, 2000; Yang, 2009), because it’s often casual contacts who point people to their next jobs. Social networking sites such as LinkedIn, Twitter, or Facebook can facilitate virtual networks, but experts caution that a solid network of 50 people is better than 1,000 acquaintances (Rosato, 2009).

How do organizational characteristics influence applicants’ attraction to firms? This is an important question, since many applicants are at least as concerned about picking the right organization as with choosing the right job. Chapman et al.’s (2005) meta-analytic evidence revealed that work environment (ρ = .60) and organizational image (ρ = .48) are both strong predictors of organizational attraction. Employer image is part of the broader multidimensional construct of organizational image (e.g., financial image, image as a responsible corporate performer, and image as a provider of goods and services) (Lievens & Slaughter, 2016). Employer image is an amalgamation of transient mental representations of specific aspects of a company as an employer, as held by individual constituents (Highhouse, Broadfoot, Yugo, & Devendorf, 2009). Lievens and Slaughter’s (2016) review confirmed earlier findings that organizations with a positive image are able to attract more and better applicants. They also emphasized that external employer branding is a synonym for employer image management.

The most feasible way to improve an employer’s recruitment image is to provide more information, not only recruitment information, but also product and service advertisements (Cable, Aiman-Smith, Mulvey, & Edwards, 2000). Being a good community citizen is another strategy to enhance the employment brand. Employers can sponsor community events and provide opportunities for employees to donate their work time in community projects. Finally, be sure to emphasize information about the company’s culture, values, collaboration, and teamwork (Society for Human Resource Management, 2016a). Show how those elements may affect a new employee on a day-to-day basis. What about information customized to job seekers? Dineen and Noe (2009) found that the effects of customization tend to encourage poor-fitting job seekers to self-select out, rather than encouraging well-fitting job seekers to self-select in.

In today’s global markets it is crucial to invest in effective employer branding (Cascio, 2014; Cascio & Graham, 2016; Graham & Cascio, in press). Since employer branding is targeted at current and prospective employees, it is important to understand target employees cross-culturally and to develop branding strategies that fit those differences. Thus, the employer-brand message of global accounting giant EY reflects key features of the work environment—diversity, challenge, variety, flexibility, and teamwork—in all countries and in all cultures where it operates (Society for Human Resource Management Foundation, 2012). Likewise, KFC Asia Pacific operates thousands of restaurants in the Asia-Pacific region, and millennials staff many, if not most, of them. To attract and retain talent, KFC emphasizes three key features of its work environment in its employer-brand message: fun, family, and flexibility. That is, working at a KFC restaurant is fun, crew members at each restaurant treat each other like family, and employees have a lot of flexibility to set a work schedule that fits the constraints of their lifestyles (Society for Human Resource Management Foundation, 2015).

Finally, what about the effects of site visits on candidates? They clearly affect the eventual choices of candidates (Ryan & Delaney, 2017), but Slaughter, Cable, and Turban (2014) provided a more nuanced interpretation. They found that when recruits had little confidence in their initial views, they were much more likely to be affected by the site visit than those who already had strong image perceptions (positive or negative). The latter group’s views were less likely to change.

Realistic Job Previews

Realistic Job Previews

A final line of research deserves mention. Given that many employers try to make themselves appear to be a good place to work (Buss, 2017), applicant expectations generally are inflated. If hired, individuals possessing inflated job expectations are thought to be more likely to become dissatisfied with their positions and more likely to quit than applicants who have more accurate expectations. Nearly all (90%) of the 1,817 executives polled in a recent survey by Futurestep said that new-hire retention is an issue for their organizations. More than half said that up to 25% of newly hired workers leave within the first six months (Maurer, 2017d). One way to counter these tendencies is to provide realistic information to job applicants.

Numerous investigations have studied the effect of a realistic job preview (RJP) on withdrawal from the recruitment process, job acceptance, job satisfaction, performance, and turnover. In general, when the naive expectations of job applicants are lowered to match organizational reality, job acceptance rates may be lower but job performance, job satisfaction, and survival are higher for those who receive an RJP (Breaugh, 2008; Hom, 2011; Landis, Earnest, & Allen, 2014; Phillips, 1998; Premack & Wanous, 1985; Wanous, 1977; Weller, Michalik, & Muhlbauer, 2014). Over many studies, meta-analysis shows that RJPs improve retention rates, on average, by 9%, but smaller improvements can be expected in low-complexity jobs than in high-complexity jobs (McEvoy & Cascio, 1985).

Despite their potential advantages, RJPs are not appropriate for all types of jobs. They seem to work best (a) when few applicants are hired (i.e., the selection ratio is low); (b) when used with entry-level positions (because those coming from outside to inside the organization tend to have more inflated expectations than those who make changes internally); and (c) when unemployment is low (because job candidates are more likely to have alternative jobs to choose from) (Breaugh, 1983, 1992; Wanous, 1980, 2017).

Longitudinal research shows that RJPs should be balanced in their orientation. That is, they should be conducted to enhance overly pessimistic expectations and to reduce overly optimistic expectations. Doing so helps to bolster the applicant’s perceptions of the organization as caring, trustworthy, and honest (Meglino, DeNisi, Youngblood, & Williams, 1988). Applicants’ overall evaluations of organizations, however, are influenced more by the average intensity of their immediate emotional reactions to an RJP, rather than by the relative balance of positive and negative information in the message. Thus, one extremely positive aspect may offset multiple mildly negative aspects (Reeve, Highhouse, & Brooks, 2006).

Intrinsic rather than extrinsic job factors seem most in need of an RJP. Recruiters find it much easier to communicate factual material than to articulate subtle, intrinsic aspects of organizational culture. Yet intrinsic factors are typically more potent contributors to overall job satisfaction than are extrinsic factors (Kacmar & Ferris, 1989). Those responsible for recruitment training and operations would do well to heed these results.

Thus far, we have been discussing RJPs in the context of entry-level hiring, but they can also be quite useful for internal recruitment. For example, a study by Caligiuri and Phillips (2003) described how an employer successfully used an RJP to help current employees make decisions concerning overseas assignments. Similarly, Templer, Tay, and Chandrasekar (2006) documented the effectiveness of an RJP in facilitating cross-cultural adjustment for employees transferred to non-U.S. assignments. RJPs are sound management practices from the employer’s perspective. Box 11.5 presents advice from experts to job candidates about what not to do when trying to find a new job.

For ease of exposition, we have treated recruitment as if it exists separately, but as Figure 11.1 shows, it is part of a talent supply chain. All components of the recruitment–selection process are interrelated, for they are dynamic, open systems. Keep this in mind as you read subsequent chapters in this book.

Oedekoven, O. O., Robbins, D. K., Bishop, B., Thomas, M., & Mansheim, R. (2018). Hiring: A practical guide for selecting the right people . Retrieved from https://www.vitalsource.com

Personnel Psychology and Talent Management in Perspective

People have always been subjects of inquiry by psychologists, and the behavior of people at work has been the particular subject matter of industrial and organizational (I/O) psychology. Yet sciences and subdisciplines within sciences are distinguished not so much by the subject matter they study as by the questions they ask. Thus, both the social psychologist and the engineering psychologist are concerned with studying people. The engineering psychologist is concerned with the human aspects of the design of tools, machines, work spaces, information systems, and aspects of the work environment. The social psychologist studies power and influence, attitude change, communication in groups, and individual and group social behavior.

As noted earlier, personnel psychology is a subfield within I/O psychology. Some of the major areas of interest to personnel psychologists include job analysis and job evaluation; recruitment, screening, and selection; training and development; and performance management.

Personnel psychology and talent management overlap both psychology and the broader field of HRM. Both exclude, for example, such topics as labor and compensation law, organization theory, industrial medicine, collective bargaining, and employee benefits. Psychologists have already made substantial contributions to the field of HRM; in fact, most of the empirical knowledge available in such areas as motivation, leadership, and staffing is due to their work. Over the past decade, dramatic changes in markets, technology, demographics, organizational designs, the “psychological contract,” and the respective roles of managers and workers have inspired great emphasis on and interest in personnel psychology and talent management (Cascio, 2010; Cascio & Boudreau, 2016). The following sections consider each of these topics in more detail. Figure 1.2 illustrates them graphically.

Figure 1.2 The Changing Nature of Work and Organizations

Globalization of Product and Service Markets

Globalization—the ability of any individual or company to compete, connect, exchange, or collaborate globally—is exploding. The ability to digitize so many things, to send them anywhere and to pull them in from everywhere via our mobile phones and the Internet, has unleashed a torrent of global flows of information and knowledge. Global flows of commerce, finance, credit, social networks, and more are interlacing markets, media, central banks, companies, schools, communities, and individuals more tightly together than ever before (Cascio, 2018). That same connectivity is also making individuals and institutions more interdependent. As author Tom Friedman notes, “Everyone everywhere is now more vulnerable to the actions of anyone anywhere” (Friedman, 2016, p. 27). Product and service markets have truly become globalized.

Global labor markets are another feature of globalization, created by cheap labor and plentiful resources, combined with ease of travel and communication. This is fueling mobility as more companies expand abroad and people consider foreign postings as a natural part of their professional development. Beyond the positive effects that such circulation of talent brings to both developed and developing countries, it enables employment opportunities well beyond the borders of one’s home country (Dulebohn & Hoch, 2017). This means that competition for talent will come not only from the company down the street but also from the employer on the other side of the world (Economist Intelligence Unit, 2014).

Consider three other emerging trends spawned by globalization (Cascio, 2018). The first is increasing workforce flux as more roles are automated or outsourced and more workers are contract based, are mobile, or work flexible hours. This may allow companies to leverage global resources more efficiently, but it also will increase the complexity of management’s role. Second, expect more diversity as workers come from a greater range of backgrounds. Those with local knowledge of an emerging market, a global outlook, and an intuitive sense of the corporate culture will be particularly valued. Not surprisingly, talented young people will more frequently choose their employers based, at least in part, on opportunities to gain international experience. Finally, technical skills, although mandatory, will be less defining of the successful manager than the ability to work across cultures and to build relationships with many different constituents (Lublin, 2011; McGovern, 2017).

Why then, is there sometimes a backlash against globalization? It stems largely from a fear on the part of many people that globalization benefits big companies instead of average citizens, as stagnating wages and growing job insecurity in developed countries create rising disenchantment. In theory, less-developed countries win from globalization because they get jobs making low-cost products for rich countries. Rich countries win because, in addition to being able to buy inexpensive imports, they also can sell more sophisticated products, like financial services, to emerging economies. The problem, according to many experts, is that workers in the West are not equipped for today’s pace of change, in which jobs come and go and skills can quickly become redundant (Brynjolfsson & McAfee, 2014; Friedman, 2016).

Despite these concerns, economic interdependence among the world’s countries will continue. Global corporations will continue to be created through mergers and acquisitions of unparalleled scope. These mega-corporations will achieve immense economies of scale and compete for goods, capital, and labor on a global basis. As a result, prices will drop, and consumers will have more options than ever (Bhagwati, 2007; Ghemawat, 2017).

It takes more than trade agreements, technology, capital investment, and infrastructure, however, to deliver world-class products and services. It also takes the skills, ingenuity, and creativity of a competent, well-trained workforce. Workers with the most advanced skills create higher value products and services and reap the biggest rewards. Attracting, developing, and retaining talent in a culture that supports and nurtures ongoing learning is a continuing challenge for all organizations. Human resource professionals are at the epicenter of that effort.

Impact on Jobs and the Psychological Contract

The job churning that characterized the labor market in the 1990s and early twenty-first century has not let up. If anything, its pace accelerated during and after the Great Recession (Farber, 2011; Schwartz, 2009). Both white- and blue-collar jobs aren’t being lost temporarily because of a recession; rather, they are being wiped out permanently as a result of new technology, improved machinery, and new ways of organizing work (Friedman, 2016; Hamlin & Roberts, 2017). These changes have had, and will continue to have, dramatic effects on organizations and their people.

Corporate downsizing has become entrenched in American culture since the 1980s, but it was not always so. It was not until the final 20 years of the 20th century that such downsizing and the loss of the perceived “psychological contract” of lifelong employment with a single employer in the public and private sectors of the economy came to characterize many corporate cultures and the American workforce (Cascio, 1993b, 2002a, 2002b). The psychological contract refers to an unwritten agreement in which the employee and employer develop expectations about their mutual relationship (Payne, Culbertson, & Boswell, 2008; Rousseau, 1995). For example, absent just cause, the employee expects not to be terminated involuntarily, and the employer expects the employee to perform to the best of his or her ability.

Stability and predictability characterized the old psychological contract. In the 1970s, for example, workers held an average of three to four jobs during their working lives. Change and uncertainty, however, are hallmarks of the new psychological contract. Soon workers will hold 7–10 jobs during their working lives. Job-hopping no longer carries the stigma it once did. Indeed, the massive downsizing of employees has made job mobility the norm rather than the exception. This has led workers operating under the new psychological contract to expect more temporary employment relationships. Paternalism on the part of companies has given way to self-reliance on the part of employees, and also to a decrease in satisfaction, commitment, intentions to stay, and perceptions of an organization’s trustworthiness, honesty, and concern for its employees (Lester, Kickul, Bergmann, & De Meuse, 2003; Llopis, 2013). Indeed, our views of hard work, loyalty, and managing as a career will probably never be the same.

Effects of Technology on Organizations and People

We live in a global world where technology, especially information and communication technology, is changing the manner in which businesses create and capture value, how and where we work, and how we interact and communicate. Consider five technologies that are transforming the very foundations of global business and the organizations that drive it: cloud and mobile computing, big data and machine learning, sensors and intelligent manufacturing, advanced robotics and drones, and clean-energy technologies. These technologies are not just helping people to do things better and faster but also enabling profound changes in the ways that work is done in organizations (Cascio & Montealegre, 2016).

The new wave of technological innovation features the emerging general paradigm known as “ubiquitous computing,” or an environment where computational technology permeates almost everything, enabling new ways of connecting people, computers, and objects. The ubiquitous computing infrastructure also enables the collection of enormous amounts of structured and unstructured data, requiring the adjective big to distinguish this new paradigm of development. Ubiquitous computing also blurs the boundaries between industries, nations, companies, providers, partners, competitors, employees, freelancers, outsourcers, volunteers, and customers. These blurred boundaries yield opportunities to unify the physical space and the electronic space, which has implications for privacy and security, as well as how companies are organized and manage talent (Montealegre & Cascio, 2017).

As with other new developments, there are negatives as well as positives associated with new technology, and they need to be acknowledged. Workers may be bombarded with mass junk e-mail (spam), company computer networks may be attacked by hackers who can wreak havoc on an organization’s ability to function, and employees’ privacy may be compromised. A comprehensive review of literature in this area revealed three lessons about the effects of ubiquitous computing. One, the effects of ubiquitous computing on jobs is a process of creative destruction. Ubiquitous computing is not the first technology to affect jobs. From steam engines to robotic welders to ATMs, technology has long displaced humans, often creating new and higher skilled jobs in its wake. Two, ubiquitous computing can be used to enable or to constrain people at work. As an example, consider electronic monitoring systems. Evidence indicates that attitudes in general, and attitudes toward monitoring in particular, will be more positive when organizations monitor their employees within supportive organizational cultures (Alge & Hansen, 2014). Supportive cultures welcome employee input into the monitoring system’s design, focus on groups of employees rather than singling out individuals, and focus on performance-relevant activities. Three, ubiquitous computing is changing the nature of competition, work, and employment in ways that are profound and that need to be managed actively.

A caveat is in order here, however. It relates to the common assumption that since production and service processes have become more sophisticated, high tech can substitute for skill in managing a workforce. Beware of such a “logic trap.” When it comes to engaging and inspiring people to move in the same direction, empathizing with customers, and developing talent, humans will continue to enjoy a strong comparative advantage over machines. No computer will ever manage by walking around, but inspirational leadership will always be in demand (Cascio & Montealegre, 2016). At a broader level, to succeed and prosper in a world where nothing is constant except the increasingly rapid pace of change, companies need motivated, technically literate workers who are willing to retrain continually. However, organizations of the future will look very different from organizations of the past, as the next section illustrates.

Changes in the Structure and Design of Organizations

Many factors are driving change, but none is more important than the rise of Internet technologies. Like the steam engine or the assembly line, the Web has already become an advance with revolutionary consequences, most of which we have only begun to feel. The Web gives everyone in the organization, from the lowliest clerk to the chairperson of the board, the ability to access a mind-boggling array of information—instantaneously from anywhere. Instead of seeping out over months or years, ideas can be zapped around the globe in the blink of an eye. Organizations are adapting to management via the Web: premised on constant change, not stability; organized around networks, not rigid hierarchies; built on shifting partnerships and alliances, not self-sufficiency; and constructed on technological advantages, not bricks and mortar (Cascio, 2018; Friedman, 2016). Twenty-first-century organizations are global in orientation, and all about speed. They are characterized by terms such as virtual, boundaryless, and flexible, with no guarantees to workers or managers.

This approach to organizing is no short-term fad. The fact is that organizations are becoming leaner and leaner, with better and better trained “multi-specialists”—those who have in-depth knowledge about a number of different aspects of the business. Eschewing narrow specialists or broad generalists, organizations of the future will come to rely on cross-trained multi-specialists in order to get things done. One such group whose role is changing dramatically is that of managers.

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