button Vol. 9
No. 1

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State Of The Unions: Changes & Tactics
line Recruitment Concerns: Crucial Changes Evolving
line Retention: The Flip Side of Recruiting
line Terminating Employees:
Ten Tips On Firing

line Employer Briefs

Braun Consulting News
News on Personnel, Labor Relations and Benefits

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Top Recruitment Concerns: Crucial Changes Evolving

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Checkmark Graphic Overview: Key Changes Predict Growing Challenges

A number of factors are converging to create a situation in which recruitment of employees will become increasingly more challenging with each passing year.

The most common of those factors known today are the predicted loss of significant numbers of employees due to the upcoming retirement of key personnel, and the expectation of a rising level of competition for a shrinking number of qualified employees who remain.

By 2010 about 64 million workers - 40 percent of the nation's workforce - will be positioned for retirement. The number of people ages 35 to 44 in the workforce will actually drop by 10 percent, while the number of workers 45 to 54 will grow by 21 percent. By that time the number of 55- to 64-year-olds will expand by 52 percent.

According to the Bureau of Labor Statistics we will have nearly 168 million jobs to be filled by skilled workers by the year 2010 but our workforce supply will only be about 158 million.

These factors will hit some sectors harder than most - such as government agencies, chemical companies, aerospace, utilities, and the oil and gas industry.

For some sectors the problem is already very difficult.

83 % of U.S. manufacturers could not find enough skilled workers to remain productive, with more than 80 percent reporting a "moderate or severe shortage" of machinists, operators, craft workers, distributors, technicians, and other workers, according to the National Association of Manufacturers.

In a recent poll by Robert Half International 55 percent of executives reported that their firms are concerned about losing key staff to retirement in the next 5 to 10 years.

And for those who remain or are new to the job market the employment picture will continue to improve and will create a climate where many of them no longer feel they must remain in a position simply because it is the only one available.

Already nearly 25% of all employees changed jobs over the past 18 months, and among young families with children under the age of six, 33% of employees reported a change of employers over the past year and a half, according to a study by MetLife.

The demographics and diversity of the workforce will change significantly over the next decade.

Job descriptions and company missions will need to adjust to meet the requirements of a shifting economy. And as a result it is expected that the challenges of recruiting qualified employees will increase inexorably over time.

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Checkmark Graphic Key Elements of Changing Landscape

     - Changing Benefits Issues

One area that recruitment efforts are focused on now is in identifying and maximizing the value of various benefits issues to potential job candidates.

In light of relatively tight pay restraints that are still prevalent in many sectors employers are now paying greater attention to work-life balance and family friendly policies in order to attract new workers.

To meet the needs of new prospective employees a wider variety of benefits and programs will be needed to stay competitive. But to complicate the matter further, the relative value of various benefits varies according to the increasingly diverse needs of a workforce changing in complexion.

In addition to the pre-baby boomers there are also "Boomers", "Generation Xers", "Generation Y", and the latest generation sometimes known as "Netsters".

These groups have different perceptions about the work place and perceive their own needs differently than in the past.

Mix into this a more culturally and ethnically diverse workforce and you have a whole smorgasbord of overlapping areas that fall into the "benefits" category that employers will need to address to attract qualified applicants.

Some studies show that pre-baby boomers were more motivated by bottom-line compensation and bonuses, but that the younger generations put less stock in the cash value of their paycheck and more on flexibility, more time off and overall job satisfaction.

According to the annual MetLife Employee Benefits Trend Study more than half (56 per cent) of today's employees rate work-life balance as a key job selection criterion, with a roughly equal percentage of men (56 per cent) and women (58 per cent) saying it was critical factor for them.

The study also showed that among employees aged between 21 and 30, work-life balance has now become the single most important consideration when deciding whether to join or remain with an employer, even more important than the opportunity for financial growth and advancement or skill building and professional growth.

Employers are now offering everything from more time off or flextime to concierge services like on site car wash, oil change, dry cleaning, dinners to go, and dog walking. Some offer child care assistance while others may offer aging parent assistance.

Other benefits offered include long-term care insurance, disability insurance, prepaid legal plans, and auto and home insurance.

It is advisable that any benefit that an employer provides should have a dollar value attached to it so that they can show the full value of the benefits they are offering.

It is now in the interest of employers to respond to a tightening labor market with pricing and establishing the value of their benefits programs in a way that helps candidates to do side by side comparisons.

But remember, it is important that companies add and promote benefits that actually matter to employees. And if benefits are offered their value must be properly communicated to be effective. Great sounding programs that no one buys into can wind up being self-defeating.

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     - Background Checks

Background checks are an increasingly critical part of employment screening and hiring.

To reduce turnover and attempt to secure a better quality employee employers are more diligent in using background checks with each passing year.

The number of background checks performed on new job candidates has increased by 12% over last year, according to a study by ADP Employer Services. They found that 4,861,435 background checks were carried out last year.

The study showed that nearly half of reference checks revealed inconsistencies between what candidates have claimed and what the reference checks actually returned.

The most common background checks included screening for social security validation, address verification, and felony criminal record checks.

5% of the criminal background checks revealed a criminal record in the past seven years, and 46% of the completed credit report checks showed a judgment or bankruptcy or had been reported to a collection agency. 8% of the workers' compensation checks revealed an existing claim.

And 49% of the education, employment and credential verifications revealed a "data inconsistency" compared with what the applicant reported, it said.

It is important to note that background checks can be false, inaccurate, misleading, or even completely wrong. Therefore it is the duty of the employer to be aware of this and not just blindly assume all information is absolutely true and as a result make potentially bad decisions based on wrong information.

Background checks are being carried out proportionately more in some sectors, with eight out of ten manufacturers doing background checks for all job positions within their organization.

In weighing the relative importance of background checks in the recruitment process more companies are reaching the conclusion that it is much cheaper to do proper background checks before hiring an employee rather than paying the cost of turnover and money lost in rehire costs, lost production, training time, morale and company reputation.

For more information on background checks see our earlier article Background Checks: Necessary but potentially flawed.

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     - Identifying Key Skills & Jobs For Employer's Mission

With various changes in the workplace due to downsizing or significant job changes keeping job descriptions up to date can be neglected or relegated to a low priority task.

However, accurate and up to date job descriptions are essential recruiting tools.
With good job descriptions key competencies can be realized and targeted.

It is necessary to know what it will take to make a candidate a hiring success. For example "good communication skills" doesn't say much... what does that mean?

Instead if it is clear the person must conduct technical training, or encourage consensus among coworkers then these skills can more clearly be recognized and recruited. Vague generalities relating to a job that isn't really even being done anymore can be a disaster when it comes to hiring and recruiting the best person for the job.

Good job descriptions are a part of the overall system of identifying key skills and jobs to complete the company mission.

Some studies show that as many as two thirds of companies cannot even definitively identify areas where they may lose workers with important knowledge or key skills.

In fact IBM's 2005 Global Human Capital Survey found that 60% of human resources executives at mature organizations had trouble even identify what skills and experience were crucial to the company's mission. This study included more than 300 companies.

Identifying critical areas of key competencies can be vital to the future of a company. Often this most essential step in the process is not given adequate focus and resources, and therefore the rest of the recruitment chain can be ineffective or miss the mark entirely.

Step one in the recruitment process is identifying key skills and jobs to fulfill the core mission of the company and then clearly spelling them out in the appropriate job descriptions that lead to an actual new hire.

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Checkmark Graphic Some Examples: Trucking Industry and U.S. Army

The trucking industry in the U.S. has been experiencing some of the most difficult recruiting challenges over the last several years that any industry has had to face.

According to the America Trucking Association in 2004 turnover hit 121%. The demand is high and increasing, and competitive pay draws drivers from one company to another creating a revolving door situation for some companies.

To compete in this environment companies are looking for new ways to reduce turnover and shorten the time to get a new hire on the job.

Southeastern Freight Lines worked to cut hiring time and after improvements using new software programs and a streamlined application process they reduced the period between filling in an application and the first day on the job by 40%.

In part they did this be creating a better job application and did away with paper applications entirely, putting applications on their corporate web site. The online access made it so much easier to apply for a job that the company received six times the number of applications in a year than it had previously. Their heaviest application day was Sunday.

Since recruitment is so difficult retention becomes even more critical.

Better training and mentoring new drivers has proven effective in the trucking industry, as has conducting better exit interviews to identify problems and weaknesses that lead to turnover.

Referral bonuses are working where sign-on bonuses have failed, and job fairs are becoming a more popular cost effective recruiting technique. Minorities and women are also being targeted more than ever.

The Army is a different story.

Each year the U.S. Army recruits 80,000 new troops, which amounts to 16% of its 500,000 active duty soldiers.

The Army has had to lower its entry standards dramatically after repeated failures to meet its recruitment goals. First it loosened its restrictions against high-school dropouts and then it started letting in more applicants who score in the lowest third on the armed forces aptitude test. This category is known as "Category IV".

In September of 2005 the Department of Defense released DOD Instruction 1145.01, which allows 4% of each year's recruits to be Category IV applicants. This is up from 2%, which had been in place since the mid-1980s. In October of 2005 12% of that months active-duty recruits were Category IV.

Though the percentage of the Category IV level recruits is still relatively low overall, the numbers of these recruits is going up, and is proportionately higher each year. These are the soldiers that the Army has long avoided but are now actively recruiting.

According to the military's own studies this category of soldier seriously degrades the competency of every unit they end up joining. Ultimately they wind up costing significantly more money to produce the same result as higher graded soldiers.

Some companies in the trucking industry are competing better in hiring competent drivers because of innovative technology and streamlined operations, while the U.S. Army currently has been reduced to lowering its standards to meet its recruitment goals.

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Checkmark Graphic Online Recruitment

It is estimated that 73% of all Americans use the Internet in their job search.

Almost 25% of employees who use a computer at work admit to having used it to look for a new job online, a U.S study has suggested.

Though extremely important to most companies for the recruitment process, some recruiters have begun to use the large Internet posting boards less due to the relatively high volume of resumes received after posting a position. A growing number are using on-line pre-screening automation tools that reduce the time it usually takes to review resumes.

Recruiters only want to review candidates that have the minimum skills outlined for a position that is listed. This is facilitated by short and simple online questionnaires that can be created to isolate and spot the specific skills needed even prior to the traditional resume review.

By using the Internet and more tailored screening available through software and online forms candidates can be reached that were never before accessible.

More companies understand the importance of using their online web sites for recruitment and are allocating the necessary resources to achieve this. Companies with efficient and motivating online recruiting tools are finding they have a significant competitive edge.

This information should not be used as legal advice or as legal opinion on any matter. Obtain proper professional advice prior to using any information, including the above that could affect your legal liability.

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Retention: The Flip Side of Recruiting Next Page

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