EMPLOYMENT

AGENCIES AND
SEARCH FIRMS
 Employment Agencies

Employment agencies operate in one of two

ways. They charge either the company or the
applicant when the applicant takes the job.
The amount charged usually ranges from 10%
to 30% of the applicant’s first-year salary.
• Employment agencies are especially useful in an HR
department is overloaded with work or if an
organization does not have an individual with the skills
and experience needed to select employees properly.
The disadvantage of employment agencies is that
company loses some control over its recruitment
process and may end up with undesirable applicants.
Remember, most “counselors” at employment agencies
are hired because of their solid background in the area
of personnel selection.
• The applicant can seldom go wrong using an
employment agency. If the fee is charged to company,
the applicant gets a job at no cost. However, even if the
fee is charged to applicants, the applicant may still
benefit.
 Executive Search Firms
• Executive search firms, better known as “head
hunters” differ from employment agencies in
several ways. First, the jobs they represent tend
to be higher paying, non-entry level positions
such as executives, engineers, and computer
programmers. Second, reputable executive
search firms always charge their fees to
organizations rather than to applicants. Third,
fees charged by executive search firms tend to be
about 30% of the applicant’s first year salary.
 Public Employment Agencies
• The third type of outside recruitment organizations is
state and local employment agencies. These public
employment agencies are designed primarily to help
the unemployed find work, but they often offer
services such as career advisement and resume
preparation. Many public employment agencies have
made finding jobs easier by placing kiosks in locations
such as shopping malls and public buildings. Applicants
can use the kiosks to search for the local job openings
and get information on how they can apply for the jobs.
Recruiting kiosks are increasingly being used by
employers that receive large numbers of walk-in
applicants.
 Employee Referrals
• Another way to recruit is by employee referral,
in which current employees recommend
family members and friends for specific job
openings. In a survey of 450 HR professionals,
employee referrals were rated as the most
effective recruitment method (SHRM, 2007).
Some organizations are so convinced of the
attractiveness of this method that they
provide financial incentives to the employees
who recommend applicants who are hired.
 Direct Mail
• Because direct mail has been successful in
product advertising, several organizations
have used is to recruit applicants, especially
those who are not actively job hunting. With
direct- mail recruitment, an employer typically
obtains a mailing list and sends help wanted
letters or brochures to people through the
mail, Direct mail recruiting is especially useful
for positions involving specialized skills.
 Internet
• The internet continues to be a fast- growing
source of recruitment; in 2004, hiring
managers said that they received 56% of their
resumes electronically (Stimson, 2004).
Internet recruiting efforts usually take one of
two forms: Employer-based websites and
Internet recruiting sites.
 Employer-Based Websites
• With employer- based websites, an organization
lists available job openings and provides
information about itself and the minimum
requirements needed to apply to a particular job.
Though, the level of sophistication varies across
organizations websites, on most, applicants can
download their resumes, answer questions
designed to screen out unqualified applicants ,
and then actually take employment test. On
many sites, the tests are instantly scored, and if
the applicant is deemed qualified, interviews are
scheduled electronically.
 Internet Recruiters
• Internet recruiters continue to grow and have an
impact on hiring: In 2000 there were more than
30,000 employment-related websites (Leonard,
2000) and 82% of organizations used an internet
recruiter either to list jobs or to search through
resumes (Gere et al .,2002) An internet recruiter
is a private company whose websites lists job
openings for hundreds of organizations and
resumes for thousands of applicants. The largest
Internet recruiter, Monster.com, had more than
26 million unique visitors per month in 2008.
• Employers are finding that there are many advantages to
using Internet recruiting compared with traditional
newspaper help-wanted ads. Internet recruiting reaches
more people over a larger geographic area than do
newspaper ads, and whereas the Sunday edition is the main
newspaper recruitment tool, “every day is Sunday” on the
internet.Though the internet changes every day, these were
the leading recruitment websites in early 2009:

www.monster.com
www.CareerBuilder.com
www.hotjobs.com
www.careerbank.com
www.usajobs.com
 Job Fairs
• Job fairs are used by 70% of organizations (SHRM,
2001b) and are designed to provide information in a
personal fashion to as many applicants as possible.
Job fairs are typically conducted in one of three ways.
In the first, many types of organizations have booths
at the same location. Your college probably has one
or two of these job fairs each year, in which dozens of
organizations send representatives to discuss
employment opportunities with students and to
collect resumes. In addition, representatives usually
hand out company literature and souvenirs such as T-
shirts, yardsticks, and cups. If you haven’t been to a
campus job fair, contact your career services center
to see when they are scheduled on the campus.
• The second type of job fair has many
organizations in the same field in one location.
For example, a technology job fair in New York
city in 2000 in 2000 had 83 companies
represented and attracted more than 5,000
potential programmers (Maroney, 2000). The
advantage to this type of job fair is that with a
single employment field represented, each visitor
is a potential applicant for every organization.
• The third approach to a job is for an organization to hold its
own. Here are some examples:
• Gaylord Palms in Kissimmee, Florida held a job fair attended
by more than 12,000 people interested in the resort’s 1,400
job openings. The job fair began with an overnight “pajama
party” attended by 3,000 applicants.
• First Union Bank held a Thursday job fair that attracted more
than 400 people interested in the bank’s 70 openings.
• Microsoft held a job fair in Atlanta that attracted 3,000
people, and Concentra Corporation held an “open house”
that attracted more than 100 applicants and resulted in four
job openings being filled.

Although this approach is certainly more expensive, it has

the advantage of focusing the attention of the applicants on
only one company.
 Incentives
• When unemployment rates are low,
organizations have to take extra measures to
recruit employees. One of these measures is
to offer incentives for employees to accept
jobs with an organization. Though these
incentives often come in the form of a
financial signing bonus, other types of
incentives are increasing in popularity.
 Non- Traditional Population
• When traditional recruitment methods are unsuccessful,
many organizations look for potential applicants from non
traditional populations. Here are few examples:
• Manpower Incorporated in Chandler, Arizona, The Chicago
Police Department and the Hackensack, New Jersey, Police
Dept. form partnerships with local churches that resulted in
successful hires (Tyler, 2000).
• Xerox, J.P Morgan, and American Express developed
recruitment strategies and such gay-friendly benefits as
domestic partner benefits to recruit and retain gay and
lesbian employees.
• Seventy percent of organizations have reported that hiring
welfare recipients has been a successful source of
recruitment.
• Cub Foods in Illinois hires people with Intellectual disabilities
to serve as baggers in their grocery stores (Andrews, 2005)
 Recruiting “Passive” Applicants
• With the exception of the direct-mail
approach and at times, the use of executive
recruiters, most of the recruiting methods
previously discussed in this chapter deal with
applicants who are actively seeking works.
Because “the best” employees are already
employed. Recruiters try to find ways to
identify this hidden talent and then convince
the person to apply for a job with their
company.
 Evaluating the Effectiveness of
Recruitment Strategies
• Considering the number of potential recruitment resources, it is
important to determine which source is the best to use. Such an
evaluation can be conducted in several ways. That is, if a
newspaper ad results in 100 applicants and an in- store sign
results in 20 applicants, newspaper ads could be considered the
better method.
• Thus, a second method for evaluating the success of a
recruitment campaign is to consider the cost per applicant, which
is determined by dividing the number of applicants by the
amount spent for each strategy. Although the cost-per-applicant
evaluation method is an improvement on the applicant-yield
method, it too has serious drawback. An organization might
receive a large number of applicants at a relatively low cost per
applicant, but none may be qualified for the job. Therefore, the
third and fourth strategies would be to look at either number of
qualified applicants or the cost per qualified applicant.
• Another method for evaluating the effectiveness of
various recruitment sources, and perhaps the best one,
looks at the number of successful employees generated
by each recruitment source. This is an effective method
because, as shown in figure 4.7 every applicant will not
be qualified, nor will every qualified applicant become a
successful employee.
• A final method for evaluating recruitment source
effectiveness is to look at the number of minorities and
women that applied for the job and were hired. Though
there has not been much research on this topic, Kirnan,
Farley, and Geisinger (1989) found that women and
African Americans were more likely to use formal source
of recruitment (e.g., newspaper ads, job fairs) than were
men and nonminorities.
• To determine differences in recruitment source
effectiveness a meta-analysis conducted by
Zottoli and Wanous (2000) first categorized
recruitment methods as being from either an
inside source (employee referrals, rehires) or an
outside source (advertisements, employment
agencies, school placement offices, recruiters).
They found that employees recruited though
inside sources stayed with the organization
longer (high tenure) and performed better than
employees recruited through outside sources.
 Realistic Job Previews
• One such method is the realistic job preview (RPJ). RPJ
involve giving an applicant an honest assessment of a
job. For example, instead of telling the applicant how
much fun she will have working on the assembly line,
the recruiter honestly tells her that although the pay is
well above average, the work is often boring and there
is little chance for advancement.
• A varation of the RPJ is a technique called an
expectation- lowering procedure (ELP). Unlike an RPJ,
which focuses on a particular job, an ELP lower’s an
applicant’s expectations about work and expectations
in general ( Buckley, Mobbs, Mendoza, Novicevic,
Carraher, & Beu, 2002)
 Effective Employee Selection
Techniques
• Effective Employee Selection System share three
characteristics: They are valid, reduce the chance of a
legal challenge, and are cost-effective. A valid selection
test is one that is based on a job analysis (content
validity), predicts work-related behavior (criterion
validity) and measures the construct it purports to
measure (construct validity). Selection test will reduce
the chance of a legal challenge if their content appears
to be job related (face validity). Ideal selection tests
are also cost-effective in terms of the costs to purchase
or create, to administer, and to score. With these
characteristics in mind, let’s begin our discussion of
selection techniques with the employment interview.