Additionally, the context the business finds itself in at a specific point in time can influence the recruitment and selection functions. A PEST analysis of the industry, along with a SWOT analysis of the company can elucidate the factors affecting the business and its strategies at all levels, including recruitment and selection. Appendix 2 focuses on context, analyzing the coffee shop industry through a PEST analysis (Appendix 2a), and Starbucks through a SWOT analysis (Appendix 2b).
The subjective weighting of these analysis tools are positive, showing an attractive industry to the consumers, with strengths of Starbucks outweighing the threats imposed from competitors in the market. Starbucks can benefit from its brand image in recruitment and selection strategies. Additionally, in order to maintain the image, the future employees need to have the competencies required to work towards the company’s ethical strategy. Williams (2000), cited by Haywood (2009, p209) argues that the right environment in a company is a main factor affecting recruitment and selection, and, more importantly, retention. He considers that ‘creating a winning environment consists of developing a high-achieving company with values and brand images of which employees can be proud’ (ibid). The SWOT analysis of Starbucks shows the company has managed to achieve this winning environment and thus should be very successful in retaining staff.
The HR Managers’ Involvement in the Recruitment and Selection Process
‘From a human resource management perspective, recruitment processes derive from effective job design and description, and form the basis for subsequent human resource management functions such as selection, human resource development, career planning and rewards systems’ (Compton et al, 2009, p16). At a strategic level, recruitment and selection is thus seen as an integrated part of the overall HRM strategy, as well as integrated into the business strategy. The role of HR managers in constructing an effective and efficient recruitment and selection strategy is vital to the performance of its existing and future employees, as well as for the overall business performance.
According to Hutchinson and Wood’s research (1995) as cited by Armstrong (2006, p96), line managers are ‘more heavily involved in recruitment, selection and training decisions’; nonetheless, human resource managers are ‘still largely responsible for such matters as analysing training needs, running internal courses and pay and benefits’.
The main HRM theory is that the workforce is a very important resource and thus must be managed efficiently and effectively, whilst conferring them a high level of importance. On a strategic level, recruitment and selection shifts from its traditional approach to a processual approach, being considered the main HR activity able to ‘secure strategic leverage’ (Millmore et al, 2007, p279).
As Boxall et al (2003) suggest, cited by Armstrong (2009, p54), ‘HR planning should aim to meet the needs of the key stakeholder groups involved in people management of the firm’. Thus, human resource managers need to take in account the line managers and their set objectives and strategies, as well as the workforce. In planning for recruitment and selection procedures, HR managers need to ensure that they work towards an integration of overall strategy in the company. Additionally, they must determine what are the ‘performance drivers’ (Armstrong, 2009, p55) of the line manager’s objectives and how these are influenced by the workforce’s competences, while being aware of the influence the HR strategies have on ‘the skills, motivation and structure of the workforce’ (ibid).
In order to create and develop an effective and efficient recruitment and selection plan, HR managers need to ensure they ‘achieve vertical fit’ (Armstrong, 2009, p56) between their strategy and the overall business strategy. Porter (1985) evaluates the ways in which the vertical integration can be fulfilled. Armstrong (ibid) cites Porter’s competitive strategies in a table found in Appendix 3a. According to the table, resourcing strategies created by HR managers need to take into account the competitive strategies imposed throughout the company and advise line managers towards achieving these competitive objectives through recruitment and retention of ‘high quality people with innovative skills’. Additionally they need to devise ‘sophisticated selection procedures’ to be implemented by line managers in order to recruit people who show the capability to ‘deliver quality…customer service’, as well as plan in order to ‘recruit people who are likely to add value’ or take the approach of ‘downsizing humanely’ (ibid).
Additionally, HR managers need to ensure the recruitment and selection strategy is horizontally integrated within the bundle of their strategies in order to be effective and efficient. Thus, strategies dealing with labour turnover can be linked with strategies of recruitment and selection in order to achieve lower rates of turnover in the future, while at the same time recruiting future employees with adequate competences that will add competitive advantage. Retention of staff is a very important part of the recruitment and selection process and HR managers need to advise line managers on the importance of it relating to the overall performance of the business. From a processual approach, recruitment and selection doesn’t stop when the fit candidate is found, but continues with strategic retention plans which, amongst other things, help reduce labour turnover.
Line Managers’ Involvement in the Recruitment and Selection Process
‘When considering a new hire it is appropriate [for line managers] to refer to the human resources plan to ensure that the decision to recruit is in line with the short, medium and long-term requirements of the organization in terms of skills, competencies and diversity mix’ (Compton et al, 2009, p17).
Line managers have the role of implementing the policies and procedures of the recruitment and selection process conducted by HR managers. Armstrong (2009, p97) cites Purcell et al (2003) to state that ‘the way line managers implement and enact policies’ is crucial in achieving greater competitive advantage. This process spans from gathering the potential candidates for a job position to short listing and in the final stages, selection. This is done at the lowest managerial level but where the span of control is wide, thus managing many subordinates, it requires demanding competencies to carry out this job. The line manager therefore is the closest of management to its employees and would likely know the more specific qualities needed for various job vacancies in their department than other management (Haywood, 2009, p.375). They may have this knowledge of suitable candidates; however it is the ability to recruit the ‘right’ people for the ‘right’ job through, essentially, a systematic and fair, procedural process. Furthermore, they may have benefited from direct feedback from their resigning subordinates on reasons why they are leaving, in order to tackle labour turnover and improve retention, highlighting the importance of giving ‘careful attention’ to the recruitment process.
Interviewing prospective employees and supporting the HR manager in writing up job descriptions, along with updating department reports and liaising with HR managers are a few of the key functions of the line manager. Job descriptions or person specifications provide the information for drafting advertisements, posting vacancies on the internet, briefing agencies or recruitment consultants and then assess the candidates by interviews and selection tests. (Armstrong, 2009, p537). If a job-fit is calculated incorrectly by the line manager, the employee would likely be dissatisfied at work and leave soon after, costing the business time and money from the whole recruitment process for that individual, so careful attention is crucial. ‘The selection stage is equally essential in the whole process, as it attempts to capture the most suitable of candidates by predicting the extent to which they will be able to carry out a specific role successfully’. (Armstrong, 2009, p538).
A fair procedural process will work effectively if the line manager is kept informed and supported by the HR manager, especially in relation to Employment Law. When carrying out the activities of the recruitment and selection process, every precaution should be taken to ensure no kind of discrimination will be made. The Sex Discrimination Act 1975 and Race Relations (Amendment) Act 2000 particularly need to be taken into consideration, where candidates may be refused a job on the grounds of their sex or race, as this would be unfair, and illegal, unless on the exception that it is a job only males or females can do, such as in leisure facilities, females may teach and work with the women and men with the men. If these procedures are carried out fairly, the corporate image will be enhanced, and more people will want to work for that particular company, giving a larger pool for future job posts, as it shows that the company is in line with its social responsibility to its job applicants.
This process depends on a range of factors. Small coffee shops, for example, will have less need for policies and procedures, compared to Starbucks, where management of the masses is needed. This shows that context is important. Working in a small family owned coffee shop, Claudia experienced some pressure from her supervisor which also played the role as a line manager, but only at busy times when the extra effort was needed and she actually felt recognised for her potential, motivating her.
Despite the HR manager devising the HR plan and recruitment planning, the line manager is involved in the implementation of these plans in advising HR managers of their objectives and strategies in order to work towards vertical integration.
The necessary policies and procedures depend on what type of organisation is in question, and can vary from good to bad practices, more commonly in the smaller companies, where procedural issues tend to arise. For example, McDonalds as a large organisation has a vast range of different procedures, but they are usually very strict, particularly the health and safety related ones. This makes their practices notably significant, as opposed to a smaller company such as a small local business, where, with a smaller workforce, such procedures are not needed, or are more relaxed and flexible.
Line managers therefore need to take care that all the stakeholders’ expectations and interests have been met whilst implementing their recruitment and selection plan. The model in Appendix 1e shows these stakeholders and the controls they exercise on the recruitment and selection practices. Additionally, line managers need to be aware of the pool of candidates potentially existent inside the organisation, before choosing to recruit externally. The recruitment and selection model in Appendix 1c shows the process and the implications line managers have throughout this process.
If HR and line managers can maintain a talent management strategy in the selection process, they could recognise the full potential of a candidate but also something unique and special about them that allows them to perform higher than others. This talent directly gives the organsiation that competitive edge and strategically speaking, is very important, as, if employees don’t feel recognised or fully utilised for their talents, they become dissatisfied (Armstrong, 2009, p.517), resulting in high labour turnover. This is where over-qualified candidates may get turned down, as they would have high expectations of the job they intend to get, but then sadly the job is less demanding than they originally perceived. In addition, the Psychological Contract comes into play then in this context, as both parties have their own expectations that all the legal requirements have been met and loyalty to one another should lead to a prosperous future.
Linking back to SWOT and PEST, through the use of technology and building on the company’s strengths, such as on their brand name, more E-recruitment methods these days are being chosen. Such problems like unfair discrimination and costly posting of relevant job documentation can be avoided, as the candidate or business can find each other online and make decisions via email discussion and send copies of documents to one another. Candidates will be employed solely on what is on paper and not from impressions within a personal interview.
Recruitment and selection can be costly and time consuming and thus ‘a systematic and objective approach’ (Cornelius, 2001, p36) is needed to be able to reduce the ‘possibility of selecting the ‘wrong’ person when a selection decision is reached’ (ibid).
The Candidate
‘In deciding on the strategy for attracting candidates for an assigned role, we must consider what really matters from the candidate’s perspective’ (Grimshaw, 2009, p98). Human Capital is a very important theory as it regards employees as value adders and thus places a high importance to their satisfaction, both as individuals and in the workplace. Thus, candidates need to be presented with a very clear description of the job they will potentially fulfill in the organisation, as line managers need to detail the benefits as well as the requirements for the job in the organisation. Berman et al (, p85) quote Rynes’ (1993) suggestions for line managers in conducting the recruitment and selection process stating: ‘In the interview process, candidates appreciate a realistic job preview’. Additionally, ‘good’ candidates expect the process ‘to result in timely notification of being in contention, prompt follow-ups and enough time to make a reasonable choice amongst offers’ (ibid), as well as feedback, either negative or positive. Another key point to be considered by line managers is the way the interviews are carried and having an ‘enthusiastic, informative and credible’ (ibid) approach to the interview and the candidate. Line managers need to take in consideration the fact that candidates are motivated by external factors and be aware primarily of the motives for which they have applied for the job. Weather the candidates are ‘dissatisfied with their current position’ (Grimshaw, 2009, p100) or are ‘proactively seeking to broaden their experience’ (ibid), line managers need to identify these motives and be aware of them in order to make the recruitment and selection process effective and efficient for the candidate and for the company.
Recruitment and selection only proves efficient and effective if it is followed by effective retention of staff. In order for that to happen, candidates must be aware of the company’s culture and the requirements they are asked to fulfill.
It is important to view recruitment and selection from the candidate’s viewpoint as it can increase its effectiveness and ensure the future employee will act as a value adder throughout their experience in that particular role. If unfair recruitment and selection procedures are in place, the candidate will find him/herself unmotivated and thus their performance in the company will decrease.
The processual approach in the selection stage will make the candidate feel more valued by the company they will potentially work for. The negotiation between both parties will enable both to make their own decisions on whether the job is really a good ‘fit’ or not. If the ‘fit’ is achieved, and if the process is carried out properly, then the employee is more likely to be retained within the company. For instance, if they are satisfied by one of Maslow’s higher factors in his Hierarchy of Needs, such as self-actualisation, they would likely be even more motivated to stay.
Strategy Integration
‘If organization selection is informed by the organisation’s environment, linked to strategy, socially responsible, valid, periodically evaluated and maintained by knowledge of leading theory and practice, then selection is, indeed, strategic’ (Lundy et al, 1996, in Millmore, 2007, p282)
Strategic recruitment and selection takes place ‘when practice is aligned with and integrated into the strategic planning process of organisations’ (Millmore et al, 2007, p284); adding ‘employee attributes’ to the mission and vision of the organisation is part of a long term strategy that aims to ‘develop recruitment and selection practice to source an organisation with those attributes deemed critical to its future success’. This view relies on labour forecasting and puts recruitment and selection at the starting point of an overall business strategy which views human resources as a high determinant of success.
In order to be strategic, Purcell (2001), quoted by Millmore et al (2007, p15), considers that ‘HRM needs to demonstrate a two-way link to strategy’. Thus, ‘HRM will be informed by organizational strategy as well as helping to shape the nature of that strategy’ (ibid). It is essential that HR strategies are integrated in the organisations strategy from the beginning, as well as it is important for HRM to devise strategies that look into recruiting and selection candidates to fulfill the company’s objectives in the short, medium and long term.
In practice, integration of strategies at all levels is hard to achieve depending on the management style and size of the company, as well as its culture and employee involvement. Nevertheless, its importance is highly prominent in large companies which deal with high labour turnover and low motivation levels.
Williams et al (1997), quoted by (Millmore et al, 2007, p279) go so far as to argue that ‘where SHRM strategies in general and selection specifically are coherent and aligned to current and future business strategy, personnel selection will make a significant contribution to organizational performance’.
Conclusion
Recruitment, selection and retention are seen as the main human resource activity because, seen from a processual approach, they are ‘designed to deliver an organisation’s strategic objectives rather than an isolated activity conducted in a vacuum’ (Millmore et al, 2007, p285). Whether recruitment and selection is carried out because of a growth strategy or because of a vacancy, the strategy devised by HR managers need to be vertically integrated with the business strategy and horizontally integrated in the bundle on HRM strategies. Additionally, it has to be a fair and indiscriminative process in order to be of benefit to the company and to the candidates. HR managers need to work together with line managers and advise them on policies and procedures that need to be carried out in order to recruit and select the candidate with the right competences or with the ability to achieve the competences desired.
Recruitment and selection as a HR activity is indisputably significant in importance, for line and HR managers alike, but also the candidate. The HR manager puts the restrictions and procedures in place, and the line manager, after carrying out job analyses, where such vacant job positions may have changed, then sifts through the pool of candidates. It is the line manager’s duty and ‘careful attention’ however, to select the right people in the final selection stage that will hopefully add value to the potential job, evidently giving that all important competitive advantage.
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Appendices
Appendix 1 – Recruitment and Selection Models
Appendix 1a – Demand and Supply of Labour and Pricing
(Haffner, 2010, p5)
0
Appendix 1b - The process of human resource planning
Armstrong, (p370) in Haffner (2010, p16)
Appendix 1c – Recruitment and Selection Model
Adapted from Mullens (2002, p740), in (Haffner, 2010, p17)
Appendix 1d – Strategic Recruitment and Selection
(Millmore et al, 2007, p278)
Appendix 1e -Internal and External Controls on Organisational Decisions
(Haffner, D. Unpublished: 2006)
Appendix 1f – Strategic recruitment and selection: an explanatory model
Source: Millmore (2003, p92) in Millmore et al (2007, p284)
Appendix 2 – Context
(Sources: Keynote, Mintel)
Appendix 2a – PEST Analysis of Coffee Shop Industry
Political Factors
- Fairtrade Foundation – set up to obtain better prices and long-term contracts for coffee growers, with the main objective to achieve better standards of living for small farmers – ethical coffee moving into the coffee shop industry
+5
- Food Standard Agency encourages healthier eating-out habits +4
TOTAL: +9
Economic Factors
- Economic recession – leads to outlet closures or loss of profit -8
- Competition from retailers: supermarkets, department stores and variety stores – some of them providing their own coffee shops; however, most of them offer coffee shops like Costa, Starbucks, Nero etc. +2
- Competition from others: chicken and burger bars and some pubs have lowered their price points to drive footfall in the recession +2
- Price-focused market- 1 in 4 people think that low price doesn’t automatically equal good value and only 1 in 6 see good quality ingredients as worth paying more for -3
- 30% of adults have cut back on lunch spending, but only 7% have switched to a less expensive outlet -3
TOTAL: -10
Social Factors:
- Long term increase in the number of working women in the UK +6
- Nutritional information about junk food – major coffee shops ‘take salt and fat out of sandwiches and cakes’ +4
- Declining daily usage of bread under rising competition from other products
+2
- The expected rise in the number of 25-34 year olds over 2009-2014 is good news for coffee shops as they are keen buyers +3
- More than ½ of adults (54%) have cut back on their spending on eating out and 30% on spending on lunch, creating demand for variants at lower price points -4
- Almost ¾ (73%) of adults buy sandwiches, with purchasing declining with age and rising with household income. Students are top sandwich buyers, at 90% +5
- Shorter lunch breaks -1
TOTAL: +15
Technological Factors:
- Coffee- making systems for home and office +2
- New coffee grinding technology +2
TOTAL: +4
PEST TOTAL: +18
Appendix 2b – SWOT Analysis of Starbucks
Strengths
- Brand image +7
- Fairtrade option +5
- Economy of scale +6
- Product range +6
- Product quality and consistency +7
- Brand equity +5
TOTAL: +36
Weaknesses
- Vulnerable to economic downturn -6
- Lack of differentiation -5
- Continues to be perceived as overpriced -4
- Seemingly failing to engage with customers -3
TOTAL: -18
Opportunities
- Growth potential for UK markets +7
TOTAL: +7
Threats
- The rising price of coffee and dairy products -4
- Copy-cat coffee shops as competition -7
TOTAL: -11
SWOT TOTAL: +14
Appendix 3 – Tables
Appendix 3a – Porter’s Vertical Fit between HR and Competitive Strategies
