Corporations' innovativeness in recruiting in tight labor market.

ABSTRACT

Currently, corporations are recruiting in a tighter labor market than ever before due to the many changes and forces taking place such as increased use of technology, the retirement of the baby boomers, the aging population, the numbers desiring job sharing and part-time work, and many other forces. Many new sources of workers are being tapped--from migrant workers, the mentally iii, and the homeless all the way to corporations making a concerted effort to be featured on the "best companies" list. In addition, innovative companies become more aggressive in their recruiting strategies running the gamut from the virtual job fair to running an ad with the movie theatre previews.

1. INTRODUCTION

Corporations today are recruiting in a tighter labor market than ever before due to the many forces and changes taking place. The need to incorporate technology has led to shortages in IT workers, a dip in the people in the 35-to 45-age range where leaders have traditionally been drawn has led to shortages in the executives ranks, and the beginning retirement of baby boomers has led to general shortages. Further, the aging population has led to shortages in hospital and other health care facilities personnel, extended adult care facilities/nursing home employees, and in other companies serving the needs of the elderly. This will only exacerbate since by 2015 more than half the population will be over age 55. In addition, the increase in the numbers desiring job sharing, part-time work, and the low unemployment rate will compound the recruiting problem. The Generation X'er who does not consider a career as a major goal will cause more frequent turnover in this age group thus adding to recruiting difficulties. The two and a half million functionally illiterate Americans who enter the work force each year when the jobs require an educated workforce will add to the recruiting problem.

To combat these forces and changes, executives are becoming very inventive in their recruiting procedures. Some of these are presented below.

2. NON-TRADITIONAL POTENTIAL EMPLOYEES TARGETED

In addition to the traditional search methods and the traditional targeted markets, in a tight labor market, innovative human resource professionals are targeting very different groups as a source for potential employees.

Several companies have turned to migrant workers as sources of labor. For example, JSF Material Handling turned to the migrant workers who came to their area to work during the harvest season. Management of JSF was so pleased with the quality, they traveled to Cancun and other parts of Mexico and found many workers eager to come to the United States and work (Milligan, 2001). Some companies are considering recruiting locations in the English-speaking border nations (Canada and the Caribbean) where unemployment rates are higher and wages are lower (Moline, 1999).

Police departments are targeting the gender not associated with police work--the female. The ads targeting the female emphasize the social contribution to be made, prominently feature women from various ethnic backgrounds, and are written in different languages. The director of the New Haven Police Academy says of their unusual recruiting methods that:

   We've brought pizza to college dorms, tofu and fruit to fitness
   centers, held teas after religious services at churches,
   synagogues and mosques, facilitated potluck 'house parties' on
   back porches and in kitchens, and plastered the ceilings of women's
   health clinics with flyers strategically positioned above the exam
   tables (Lonsway, 2001).

Companies are also tapping into the urban youth, the homeless, and the ex-convict labor market (Overman, 1999). Examples of the recruiting of the urban youth include forming liaisons with such youth-aid facilities as Covenant Houses, the Phoenix CALL-A-TEEN Youth Resources Program, and others. Binding Together, Incorporated in New York targets assistance to the homeless adults where such companies as Chase Manhattan Bank, Ernst & Young, and Saloman Smith Barney hire their graduates. South Forth Corporation in New York placed over 1,000 men and women in jobs in 1998 who were ex-convicts. This particular program provides an additional incentive to employers by providing $2500 for every ex-convict hired (Overman, 1999). In addition, former welfare recipients and ex-military personnel are other groups being targeted. For example, in North Carolina, "several grocery-store chains were working with the state to employ people under a welfare-reform program called Work First (Anonymous, 1999). The state pays for training, and companies such as Food Lion Inc., and Harris-Teeter, Inc., pledge to employ a certain number of people coming off the welfare rolls. In addition, ex-military personnel have been trained in many of the needed areas in high demand.

Also, some companies are successfully developing relationships with religious-based organizations as potential sources of job applicants. "Churches, mosques, and synagogues can offer recruiting benefits such as first crack at newly transplanted workers" (Tyler, 2000). Manpower, Inc., the Chicago Police Department, the Southeast Alaska Regional Health Consortium, and others have reported that the ministry has been a tremendous help for them.

In addition, part-time workers are being viewed differently. In fact, "The number of companies offering some benefits to part-time workers has been rising in recent years because of the tight labor market" (Verespej, 2000). Companies that stand out in the packages they provide to part-time workers include Medtronic, Sun Microsystems Inc., Baxter International Inc., Steelcase Inc., and Hewlett-Packard Company, according to Verespej.

Recruiting and hiring employees away from the competition becomes a strategy as well as a necessity in an ultra-tight labor market. Of course, different human resource strategies must be applied and checking to determine if the applicant is bound by a noncompete or nondisclosure agreement is the number one mistake that is made (Leonard, 2001). McPherson, regional director for western Oklahoma for the Oklahoma Employment Security Commission stated "It's almost to the point that you have to take someone from another employer" (Potts, 1999). Linda Haneborg, executive vice president of marketing at Express Personnel Services, says, "We are becoming as much educators as employers" (Potts, 1999). The temporary staffing companies have to invest so much money into training in order to have the qualified employees needed in industry.

Mel Kleiman, president of Humetrics, a Houston-based consultancy firm, says, "Former employees are absolutely your best source of prospects to fill your available positions" (Perry, 1999). Kleiman suggests waiting six months before calling higher-level employees about returning to the company. Kleiman says that "the greener grass on the new side of the fence has some pesky weeds" (Perry, 1999).

The 266 unit Bennigan's chain looks for potential employees at Parent-Teacher Association meetings for the 9:00 a.m. to 3:00 p.m. shift, senior citizen's organizations for the perfect congenial host, and the disabled community for the cashier's position (Ruggless, 2000). Clearly, Bennigan's is taking a marketing approach to recruitment by identifying what the target applicant looks like (Harris, 2000). The older worker is, many times, re-entering the labor market. Carter said that many of these people have often retired and they've been home for a year and they're bored and want to go back to work (Carter, 2000).

Another group, the mentally ill could represent a large pool for employers. The National Institute for Mental Health has estimated that there are more than 5 million Americans suffering from serious and persistent mental illnesses such as bipolar disorder, schizophrenia, and major depression. Many of the mentally ill have good work records when they are not battling their illnesses. In at least part of the mentally ill population, work has been on the increase in the last five years. The Massachusetts Clubhouse Coalition's job-secured rate rose 229 percent between 1996-2000; they found that the key was to rotate members into jobs at businesses and guarantee that those jobs would always be covered (Eckelbecker, 2000).

Some companies are turning to third-party recruiters as a solution to the tight labor market. Martinez's research suggests a company-written contract that covers such topics as confidentiality, off-limits agreement, fee structure, reporting responsibilities, EEOC considerations, and others (Martinez, 2001). Mazda North American Operations restructured its HR department by taking recruiting out of the hands of managers. The manager of workforce strategies said, "It was just taking up too much time" (Hays, 1999). Mazda hired a senior recruiting consultant and insisted that she not recruit for any other company.

Another group to look to is in the second-job category of applicant. The economy is forcing many people to look for a second job. Kim Neese-Brown, president of Terry Neese Personnel Services, has seen a rise in this category. She found this to be a major source of qualified part-timers in the retail industry.

Companies are paying close attention to their interns. Pricewaterhouse Coopers says "If students have interned with us, they have an edge over students with little to no prior hands-on accounting experience" (Woodward, 1999). They also credit the prior experience of the intern in the initial job offer making the starting salary higher.

The shortage of qualified accountants has resulted in two changes in recruiting practices--recruiting other majors and starting to develop relationships before senior year. Accounting school enrollments have dropped 22 percent over the past three academic years (Rooney, 2001). International Paper has started to recruit students with a degree in finance but who had taken a number of accounting courses. Arthur Anderson has started to recruit college sophomores to invite them to seminars to learn about the accounting world (Rooney, 2001). In addition, the nursing profession, which is also experiencing a shortage of qualified employees, begins their recruiting at the high-school career day event (Cullen, 2001).

3. AGGRESSIVE RECRUITING STRATEGIES UTILIZED

In addition to looking at the nontraditional applicant and searching for nontraditional sources, the innovative corporations are also developing more aggressive recruiting strategies.

For example, the open house, with the entire company available to assist with recruiting, has made a comeback (Parmelee, 2001). Fuertes found that "They (the open house) are fast becoming a recruiting tool of choice during these days of low unemployment, particularly in the information technology marketplace" (Fuertes, 1999). Nancy McKinney, director of human resources for Classified Ventures, a Chicago-based consortium of major national newspapers, settled on invitation-only open houses and found them to be really cost effecting at only $1,000 for each open house. Fuertes's research revealed that "Open houses are cheaper and faster than hiring through recruitment agencies and they also beat out the career fairs in popularity" (Fuertes, 1999).

Developing a web site to show potential employees that the company is a great place to work is a technique that Pitney Bowes, Eastman Kodak Company, and many others are using. A recent survey found that 71 percent of the Web sites examined make employment information only one click away from their home pages (Workforce, Anonymous, 2000). Harris found that "Many candidates will turn down a company based on the way its site looks (Harris, 2000). Sites should be user-friendly, interesting, and provide information on how to apply for jobs. Parus added that the web site needs to be fast, easy to navigate and contain information that students are looking for such as the opportunities, salary, and hours. The use of the web allows for the applicant to attend virtual career fairs, where the applicant can participate in a live resume drop (Parus, 2001). The Internet is a powerful recruiting tool, especially if targeting the 23- to 35-year-olds. However, a recent study of E-Recruiting by Mark Hurst of Creative Good and Jakob Niesen of the Nielsen Norman Group revealed that the web sites were so poorly designed that applicants succeeded in completing an application just 26 percent of the time (Wildstrom, 1999). It seems that you can simply beat your competitors in recruiting by improving your web site.

In addition, Michael Campbell, senior vice president of human resources, involves top-level managers in the interview process and other recruiting processes (HR Focus, Anonymous, 2000). In fact, in states where there is a drain on the knowledge worker, the governor of the state helps the state to pitch to recent college grads an aggressive marking campaign (Moline, 1999).

Many companies are using financial recruiting incentives such as signing bonuses, referral fees, and above-market benefits according to a recent survey conducted by the Bureau of National Affairs. Dash found that the referral fees that many companies were paying were to people who neither work for them nor work for a professional recruiting firm (Dash, 2000). As an example, Allaire Corporation in Cambridge will offer $1500 to anyone who refers a candidate who's hired for one of the five positions listed on job board Refer.com. In 2000, this site listed 75,000 openings, most of them in IT positions (Dash, 2000). Several companies are structuring the reward program for referrals to pay the referring person half of the fee when the new employee has remained 90 days and the balance at the six-month anniversary.

Some savvy managers see the key to recruiting problems as that of improving retention. To retain talented workers Walker's research revealed that companies (1) provide pay packages superior to the market for critical talent, (2) provide work that is interesting and challenging, (3) provide learning resources specifically targeted to identified development needs, including distance and e-learning programs, and expanded tuition assistance, (4) encourage team building, project assignments involving work with peers, and opportunities for social interaction, (5) show appreciation through recognition of employees, and (6) assure work/life balance (Walker, 2001).

An innovative recruitment strategy implemented by Minneapolis-based Medtronic Inc., producer of pacemakers and other implants, is to advertise job openings with movie theatre previews. Others have found splashy classified ads in Sunday newspapers to be an effective way to reach potential employees (Buchanan, 1999).

One study conducted by the banking industry found that the financial institutions that were the most successful in recruiting were the ones that "made recruiting and retention issues a part of their written strategic plan for the organization" (Hunt, 1999). In addition, many companies, particularly in the area of recruiting the IT worker has had a misplaced focus on recruiting star applicants, and an inability to accommodate different levels of employee contributions (Cappelli, 2001).

4. CONCLUSIONS

In a tight labor market, companies run the gamut in the variety of their target market from migrant workers, the mentally ill, and the homeless all the way to a concerted effort to be featured on the "best companies" list that attracts the recent college graduate. In addition, these innovative companies become more aggressive in their recruiting strategies which range from the virtual job fair, the invited open house, and unusual referral fees all the way to running an ad with the movie theatre previews. Certainly, the tight job market has seen an innovative response from aggressive companies.

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Dr. Gayle Webb White is Jaen McFadden Turner Professor of Management at Southern Arkansas University. She earned her Ed.D. degree at the University of Mississippi and completed postgraduate study at Harvard University and University of Illinois. Dr. White was Dean of the School of Business Administration from 1980 through 1994 at Southern Arkansas University.