Time lapse data in recruitment

CASE STUDY 5

Case Study 5: Evaluating Staffing Process Results

Issue

A custom truck manufacturer obtained a contract which required the company to hire an additional 100 employees for a three-year period. The Human Resources manager of nonexempt employment, Dexter Williams utilized three methods for recruiting the employees needed for completion of the contract. Several controls were used in order to fairly and accurately assess each applicant, and each offer was the same without room for negotiation on salary, benefits, etc. After one year, Williams wanted to evaluate each of the three sources for hiring applicants. To accomplish this, Williams will use the yield ratios, time lapse or cycle times and retention rates of each of the three sources.

Question 1: Determine the yield ratios (offer receivers / applicants, new hires / applicants), time lapse or cycle times (days to offer, days to start), and retention rates associated with each recruitment source.

The yield ratio is the number of people who applied for a job with KTC and then were offered a position. In this case, there were a total of 760 applicants from three sources. The first source was from newspaper ads and had 300 applicants, 70 of which received offers; 70/300=23.33 percent. The second source was from employee referrals, which had 60 applicants, 30 of which received offers; 30/60=50percent. Finally, the third source was from an employment agency, which had 400 applicants. 20 of the applicants received offers; 20/400=5 percent.

The time lapse or cycle times is the amount of time it took from the placement of each ad to the job offer from KTC. Ads placed in the newspaper took 60 days until a job offer was made. Employee referrals took 30 days for a job offer to be made. Ads placed with employment agencies, took 60 days for the applicants to receive a job offer.

Retention rates are the number of employees remaining with KTC from the date of hire to the one year mark. From the newspaper ads, 50 applicants were hired and 35 remain after one year. 35/50=70 percent retention rate. The employee referrals had an even better retention rate. Here out of the 30 applicants hired by KTC, 37 remained after one year. 27/30=90 percent. The applicants hired from the employment agency had the lowest retention. Out of the 20 who were hired, only 8 remained after one year. This is only a 40 percent retention rate.

The graph below provides a visual reference for the information.

Newspaper Ads

Employee Referrals

Employment Agency

Offers Received/Applications

23.33%

50%

5%

New Hires/Applicants

16.70%

50%

5%

Days to Offer

60

30

60

Days to Start

70

40

70

Retention

70%

90%

40%

Question 2: What is the relative effectiveness of the three sources in terms of yield ratios,

cycle times, and retention rates?

Yield ratios is the total number of job offers KTC made to the applicants for each

recruiting source. With 50 percent, the employee referrals had the highest number of applicants

offered a position with KTC. With 23.33 percent, newspaper ads brought in the second most

number of applicants who were hired by KTC. Finally, with a meager 5 percent, employment agencies brought in the lowest number of applicants who were offered jobs with KTC.

Cycle times, which was the length of time it took for KTC to offer a position from the time the application was received. According to the data provided to Williams, the applicants from employee referrals had the lowest cycle time with only 30 days. Applicants received from newspaper ads and the employment agency both had a significantly longer cycle time of 60 days.

With a 90 percent, employees who were recruited by employee referrals had the highest rate of retention. Newspaper ads had the second highest retention rate with 70 percent. The retention rate dropped significantly to only 40 percent for employees recruited through the employment agency.

Question 3: What are some possible reasons for the fact that the three sources differ in their relative effectiveness?

It is possible that current employees may have a better understanding of what the company needs and who would be a good fit. Current employees would very likely want to see the company succeed so as to remain gainfully employed. This means there will be an honest attempt to find the best person for the position, and to reject those who they suspect would be a poor choice. Conversely, Employment agencies are paid on a referral basis. This means that rather than thoroughly screening each applicant to be sure they are an appropriate match, the agency will send any applicant who appears to be qualified. This leaves room for a high amount of turnover, especially for employees who are willing to take any job while they continue to look for something better.

Though a neutral source, it is difficult to provide a specific job description in newspaper ads. Typically, one is limited to a certain number of words. Going over the limit would be prohibitively expensive in most circumstances. This means that applicants receive only a vague idea as to the specifics of the position and may be disappointed after beginning work.

Question 4: What would you recommend Dexter do differently in the future to improve his evaluation of the staffing process?

Considering the much better yield ratios and retention rates among employees who were recruited by employee referrals, Williams would be better off using only employee referrals whenever possible. Additionally, though the numbers may be sound, it would behoove Williams to conduct an analysis more often, so that he has ongoing and current data. This data would be a good source for any future contracts KTC may acquire. Using the data already collected, Williams could not only save the company money on recruitment costs, but could also save time by offering positions to employees already proven to be trustworthy. Employees who are satisfied with their jobs tend to remain with the company. This means Williams should also ask current employees what they like and dislike about their jobs in order to make improvements in the areas where satisfaction is lacking and to continue with the things the employees do like.

References

Sageer, A., Rafat, S., Agarwal, P. (2012). Identification of Variables Affecting Employee

Satisfaction and Their Impact on the Organization. IOSR Journal of Business and Management, (5)1, 32-39. http://s3.amazonaws.com/academia.edu.documents/34377954/E0513239__shakeela.pdf?AWSAccessKeyId=AKIAJ56TQJRTWSMTNPEA&Expires=1476597225&Signature=8sjCf3nG6PTRPN%2F0Z2pAVIh7XVg%3D&response-content-disposition=inline%3B%20filename%3DIdentification_of_Variables_Affecting_Em.pdf