Human resources is a term used to describe the individuals who make up the workforce ofan organization, although it is also applied in labor economics to, for example, business sectors or even whole nations. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of indiv iduals (i.e. the human resources). This function title is often abbreviated to the initials " HR". Human resources is a relatively modern management term, coined as early as the 1960s - when humanity took a shift as human rights came to a brighter light dur ing the Vietnam Era. The origins of the function arose in organizations that introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management'. From these terms emerged a largely administrative management ac tivity, coordinating a range ofworker related processes and becoming known, in time, as the 'personnel function'. Human resources progressively became the more usual name for this function, in the first instance in the United States as well as multination al or international corporations, reflecting the adoption of a more quantitative as well as strategic approach to workforce management, demanded by corporate management to gain a competitive advantage, utilizing limited skilled and highly skilled workers. Human resources purpose and role In simple terms, an organization's human resource management strategy should maximize return on investment in the organization's human capital and minimize financial risk. Human resource managers seek to achieve this by aligning the supply of skilled and qualified individuals and the capabilities of the current workforce, with the organization's ongoing and future business plans and requirements to maximize return on investment and secure future survival and success. In ensuring such objectives are achieved, the human resource function is to implement an organization's human resource requirements effectively, taking into account federal, state and local labor laws and regulations; ethical business practices; and net cost, in a manner that maximizes, as far as possible, employee motivation, commitment and productivity. Key functions Human Resources may set strategies and develop policies, standards, systems, and processes that implement these strategies in a whole range of areas. The following are typical of a wide range oforganizations: Maintaining awareness of and compliance with local, state and federal labor laws (Department ofLabor federal labor law information)
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Human resources is a term used to describe the individuals who make up the workforce of
an organization, although it is also applied in labor economics to, for example, business
sectors or even whole nations. Human resources is also the name of the function within an
organization charged with the overall responsibility for implementing strategies and policies
relating to the management of indiv iduals (i.e. the human resources). This function title isoften abbreviated to the initials " HR".
Human resources is a relatively modern management term, coined as early as the 1960s -
when humanity took a shift as human rights came to a brighter light dur ing the Vietnam
Era. The origins of the function arose in organizations that introduced 'welfare management'
practices and also in those that adopted the principles of 'scientific management'. From
these terms emerged a largely administrative management ac tivity, coordinating a range of
worker related processes and becoming known, in time, as the 'personnel function'. Human
resources progressively became the more usual name for this function, in the first instance
in the United States as well as multination al or international corporations, reflecting the
adoption of a more quantitative as well as strategic approach to workforce management,
demanded by corporate management to gain a competitive advantage, utilizing limited
skilled and highly skilled workers.
Human resources purpose and role
In simple terms, an organization's human resource management strategy shouldmaximize return on investment in the organization's human capital and minimizefinancial risk.
Human resource managers seek to achieve this by aligning the supply of skilled andqualified individuals and the capabilities of the current workforce, with theorganization's ongoing and future business plans and requirements to maximizereturn on investment and secure future survival and success.
In ensuring such objectives are achieved, the human resource function is toimplement an organization's human resource requirements effectively, taking intoaccount federal, state and local labor laws and regulations; ethical businesspractices; and net cost, in a manner that maximizes, as far as possible, employeemotivation, commitment and productivity.
Key functions
Human Resources may set strategies and develop policies, standards, systems, and processes that
implement these strategies in a whole range of areas. The following are typical of a wide range of
organizations:
Maintaining awareness of and compliance with local, state and federal labor laws (Department of
development is a tool and a means to an end, not the end goal itself" (Elwood F.
Holton II, James W. Trott Jr). The broader concept of national and more strategic
attention to the development of human resources is beginning to emerge as newly
independent countries face strong competition for their skilled professionals and the
accompanying brain-drain they experience.
Recruitment and selection
Applicant recruitment and employee selection form a major part of an organization 's
overall resourcing strategies, which identify and secure people needed for the
organization to survive and succeed in the short- to medium-term. Recruitment
activities need to be responsive to the increasingly competitive market to secure
suitably qualified and capable recruits at all levels. To be effective, these initiatives
need to include how and when to source the best recruits, internally or externally.
Common to the success of either are: well-defined organizational structures with
sound job design, robust task and person specification and versatile selection
processes, reward, employment relations and human resource policies, underpinned
by a commitment for strong employer branding and employee
engagement and onboarding strategies.
Internal recruitment can provide the most cost-effective source for recruits if the
potential of the existing pool of employees has been enhanced through training,
development and other performance-enhancing activities such as performance
appraisal, succession planning and development centres to review performance and
assess employee development needs and promotional potential.
Increasingly, securing the best quality candidates for almost all organizations relies,
at least occasionally if not substantially, on external r ecruitment methods. Rapidly
changing business models demand skill and experience that cannot be sourced or
rapidly enough developed from the existing employee base. It would be unusual for
an organization to undertake all aspects of the recruitment process without support
from third-party dedicated recruitment firms. This may involve a range of support
services, such as: provision of CVs or resumes, identifying recruitment media,
advertisement design and media placement for job vacancies, candidate responsehandling, shortlisting, conducting aptitude testing, preliminary interviews or reference
and qualification verification. Typically, small organizations may not have in -house
resources or, in common with larger organizations, may not possess the particular
skill-set required to undertake a specific recruitment assignment. Where
requirements arise, these are referred on an ad hoc basis to government job
Except in sectors where high-volume recruitment is the norm, an organization faced
with sudden, unexpected requirements for an unusually large number of new recruits
often delegates the task to a specialist external recruiter. Sourcing executive-level
and senior management as well as the acquisition of scarce or µhigh-potential¶
recruits has been a long-established market serviced by a wide range of µsearch andselection¶ or µheadhunting¶ consultancies, which typically form long-standing
relationships with their client organizations. Finally, certain organization s with
sophisticated HR practices have identified a strategic advantage in outsourcing
complete responsibility for all workforce procurement to one or more third-party
recruitment agencies or consultancies. In the most sophisticated of these
arrangements the external recruitment services provider may not only physically
locate, or µembed¶, their resourcing team(s) in the client organization's offices, but
work in tandem with the senior human resource management team in developing the
longer-term HR resourcing strategy and plan.
Trans-national labor mobility
An important controversy regarding labor mobility illustrates the broader
philosophical issue with usage of the phrase "human resources". Governments of
developing nations often regard developed nations that encourage immigration or
"guest workers" as appropriating human capital that is more rig htfully part of the
developing nation and required to further its economic growth.
Over time, the United Nations have come to more generally support the developing
nations' point of view, and have requested significant offsetting "foreign aid"
contributions so that a developing nation losing human capital does not lose the
capacity to continue to train new people in trades, professions, and the arts.
Human resource management (HRM)
It is the strategic and coherent approach to the management of an organization's
most valued assets - the people working there who individually and collectivelycontribute to the achievement of the objectives of the business. The terms "human
resource management" and human resources (HR) have largely replaced the term
"personnel management" as a description of the processes involved in managing
people in organizations. In simple words, HRM means employing people, developing
their capacities, utilizing, maintaining and compensating their services in tune with
But these traditional expressions are becoming less common for the theoretical
discipline. Sometimes even employee and industrial relations are confusingly
listed as synonyms, although these normally refer to the relationship between
management and workers and the behavior of workers in companies.
The theoretical discipline is based primarily on the assumption that em ployees are
individuals with varying goals and needs, and as such should not be thought of as
basic business resources, such as trucks and filing cabinets. The field takes apositive view of workers, assuming that virtually all wish to contribute to the
enterprise productively, and that the main obstacles to their endeavors are lack of
knowledge, insufficient training, and failures of process.
Human Resource Management(HRM) is seen by practitioners in the field as a more
innovative view of workplace management than the traditional approach. Its
techniques force the managers of an enterprise to express their goals with specificity
so that they can be understood and undertaken by the workforce, and to provide the
resources needed for them to successfully accomplish their assignments. As such,
HRM techniques, when properly practiced, are expressive of the goals and operatingpractices of the enterprise overall. HRM is also seen by many to have a key role in
risk reduction within organisations .
Synonyms such as personnel management are often used in a more restricted
sense to describe activities that are necessary in the recruiting of a workforce,
providing its members with payroll and benefits, and administrating their work -life
needs. So if we move to actual definitions, Torrington and Hall (1987) define
personnel management as being:
³a series of activities which: first enable working people and their employing
organisations to agree about the objectives and nature of their working relationship
and, secondly, ensures that the agreement is fulfilled"
information, self-managed teams, high pay based on company performance and the
reduction of status differentials. However, there is a huge number of studies which
provide evidence of best practices, usually implemented in coherent bundles, and
therefore it is difficult to draw generalised conclusions about which is the 'best' way
(For a comparison of different sets of best practices see Becker and Gerhart, 1996.
Best fit, or the contingency approach to HRM, argues that HRM improves
performance where there is a close vertical fit between the HRM practices and the
company's strategy. This link ensures close coherence between the HR people
processes and policies and the external market or business strate gy. There are a
range of theories about the nature of this vertical integration. For example, a set of
'lifecycle' models argue that HR policies and practices can be mapped onto the stage
of an organisation's development or lifecycle. Competitive advantage models takePorter's (1985) ideas about strategic choice and map a range of HR practices onto
the organisation's choice of competitive strategy. Finally 'configurational
models' provide a more sophisticated approach which advocates a close
examination of the organisation's strategy in order to determine the appropriate HR
policies and practices. However, this approach assumes that the strategy of the
organisation can be identified - many organisations exist in a state of flux and
development.
The Resource Based View (RBV), argued by some to be at the foundation of modern
HRM , focusses on the internal resources of the organisation and how they
contribute to competitive advantage. The uniqueness of these resources is preferredto homogeneity and HRM has a central role in developing human resources that are
valuable, rare, difficult to copy or substitute and that are effectively organised.
Overall, the theory of HRM argues that the goal of human resource management is
to help an organization to meet strategic goals by attracting, and maintaining
employees and also to manage them effectively. The key word here perhaps is "fit",
i.e. a HRM approach seeks to ensure a fit between the management of an
organisation's employees, and the overall strategic direction of the company (Miller,
1989).
The basic premise of the academic theory of HRM is that humans are not machines,
therefore we need to have an interdisciplinary examination of people in the
workplace. Fields such as psychology, industrial relations, industrial
engineering, sociology, economics, and critical theories: postmodernism, post-
structuralism play a major role. Many colleges and universities offer bachelor and
master degrees in Human Resources Management or in Human Resources and
Industrial Relations.
One widely used scheme to describe the role of HRM, developed by Dave Ulrich,
defines 4 fields for the HRM function:
Strategic business partner
Change Agent
Employee champion
Administration Expert
HRM strategy
An HRM strategy pertains to the means as to how to implement the specific functions of Human Resourse Management. An organization's HR function may possess recruitment and
selection policies, disciplinary procedures, reward/recognition policies, an HR plan , or
learning and development policies, however all of these functional areas of HRM need to be
aligned and correlated, in order to correspond with the overall business strategy. An HRM
strategy thus is an overall plan, concerning the implementation of spe cific HRM functional
HRM - which is defined by Lepak and Snell as "...a network -based structure built on
partnerships and typically mediated by information technologies to help the
organization acquire, develop, and deploy intellectual capital."
E-HRM is in essence the devolution of HR functions to management and employees.
They access these functions typically via intranet or other web -technology channels.The empowerment of managers and employees to perform certain chosen HR
functions relieves the HR department of these tasks, allowing HR staff to focus less
on the operational and more on the strategic elements of HR, and allowing
organisations to lower HR department staffing levels as the administr ative burden is
lightened. It is anticipated that, as E -HRM develops and becomes more entrenched
in business culture, these changes will become more apparent, but they have yet to
be manifested to a significant degree. A 2007 CIPD survey states that "The i nitial
research indicates that much-commented-on development such as shared services,
outsourcing and e-HR have had relatively little impact on costs or staff numbers"
Human Resource Management System (HRMS) or Human Resource
Information System (HRIS) :
It refers to the systems and processes at the intersection between human resource
management (HRM) and information technology. It merges HRM as a discipline and
in particular its basic HR activities and processes with the information technology
field, whereas the programming of data processing systems evolved into
standardized routines and packages of enterprise resource planning (ERP) software.
On the whole, these ERP systems have their origin on software that integrates
information from different applications into one universal database. The linkage of its
financial and human resource modules through one database is the most important
distinction to the individually and proprietary developed predecessors, which makes
this software application both rigid and flexible.
Purpose
The function of Human Resources departments is generally administrative and
common to all organizations. Organizations may have formalized selection,
evaluation, and payroll processes. Efficient and effective management of " Human
Capital" progressed to an increasingly imperative and complex process. The HR
function consists of tracking existing employee data which traditionally includes
personal histories, skills, capabilities, accomplishments and salary. To reduce the
manual workload of these administrative activities, organiza tions began to
electronically automate many of these processes by introducing specialized Human
Resource Management Systems. HR executives rely on internal or external IT
professionals to develop and maintain an integrated HRMS. Before the
client architecture evolved in the late 1980s, many HR automation processes wererelegated to mainframe computers that could handle large amounts of data
transactions. In consequence of the high capital investment necessary to buy or
program proprietary software, these internally-developed HRMS were limited to
organizations that possessed a large amount of capital. The advent of client±
server , Application Service Provider , and Software as a Service SaaS or Human
Resource Management Systems enabled increasingly higher administrative control
of such systems. Currently Human Resource Management Systems encompass:
1. Payroll
2. Work Time
3. Benefits Administration
4. HR management Information system
5. Recruiting
6. Training/Learning Management System
7. Performance Record
8. Employee Self-Service
The payroll module automates the pay process by gathering data on employee time
and attendance, calculating various deductions and taxes, and generating periodic
pay cheques and employee tax reports. Data is generally fed from the human
resources and time keeping modules to calculate automatic deposit and manual
cheque writing capabilities. This module can encompass all employee -related
transactions as well as integrate with existing financial manag ement systems.
The work time module gathers standardized time and work related efforts. The
most advanced modules provide broad flexibility in data collection methods, labor
distribution capabilities and data analysis features. Cost analysis and efficiency
metrics are the primary functions.
The benefits administration module provides a system for organizations to
administer and track employee participation in benefits programs. These typically
encompass insurance, compensation, profit sharing and retirement .
The HR management module is a component covering many other HR aspects
from application to retirement. The system records basic demographic and address
data, selection, training and development, capabilities and skills management,
health, safety and security, while others integrate an outsourced Applicant Tracking
System that encompasses a subset of the above.Assigning Responsibilities Communication between the Employees.
Workforce Planning
It is a continual process used to align the needs and priorities of the organisation
with those of its workforce to ensure it can meet its legislative, regulatory, service
and production requirements and organizational objectives. Workforce Planning
enables evidence based workforce development strategies.
Workforce Planning Definitions
Workforce Planning is the business process for ensuring that an organization has suitable
access to talent to ensure future business success. Access to talent includes consider ing all
potential access sources (employment, contracting out, partnerships, changing business
activities to modify the types of talent required, etc.). By talent is meant the skills, knowledge,
predisposition and ability to undertake required activities i ncluding decisions making.Strategic Planning considers the business risks concerning insufficient, disrupted, mis -
deployed talent on the organization's business priorities. Workforce planning is considered
an iterative discipline. The cycle of workforce p lanning includes filling resource requests,
analyzing resource utilization, forecasting capacity, managing and identifying the resources
(human) to fill that capacity, and then re -starting the cycle.
Strategic Workforce Planning is broader and longer term than operational Workforce
Planning. Strategic Workforce Planning is the framework applied for Workforce Planning and
Workforce Development, where the links between corporate and strategic objectives and
their associated workforce implications are demonstrated. Strategic Workforce Planning
should take into account the projected loss of knowledge through employee exits and the
projected knowledge requirements for sustaining and progressing the business. Knowledge
requirements may include technology, new skills, new roles, documentation of key workforce
intelligence or new business demands. Operational Workforce Planning is narrower in
context and shorter term than strategic Workforce Planning. Operational Workforce Planning
involves the systems and processes adopted and evolved to enable strategic Workforce
Planning through the production of the evidence required for executive decision -making on
workforce matters. Operational Workforce Planning should initially be process based and
focused on building understanding and capabilities in Workforce Planning, supported by
simple tools, templates and techniques. Once established and practiced, these tools,
templates and techniques can become more sophisticated and linked to existing or new ITsystems to enable Workforce Planning to be integrated into normal business practice.
One of the more restrictive and potentially dangerous assumptions is that Strategic Planning
is only about talent in the form of employees. Hiring is a strategy for accessing talent and will
often be the superior one. However, the use of employees to meet talent needs carries with
it unique risks that can be mitigated using alternative access sourcing arrangements.
Regardless of the access source used, insightful asse ssment of the strategy's attendant
business risk is prudent.
The process for starting out Strategic Workforce Planning is linked with the organization's
strategy. This means identifying the critical talent needs that if not met can materially
adversely impact business success. Once the business risks are fully appreciated then
attention turns to schedule and timing. Assessing current internal capability and assessing
its relative position when it will be called upon in the future. Speculating on future sour cing
options and identifying the preferred sourcing option. Implementation and execution follow.
Attention to periodically reviewing the "sanity" of the current plan is prudent.
Workforce Analytics Approach
The focus is to analyse current and historical employee data to identify key
relationships among variables and use this to provide insight into the workforce they
need for the future. Workforce analysis usually includes reviewing employee
recruitment, promotion and turnover patterns. In addition the an alysis can also
include reviewing the age and gender profiles of the workforce.
An analytical approach is important as it provides a fact based method of
understanding workforce behaviours. Workforce analytics also provides further
context to workforce planning efforts by ensuring perceived workforce behaviours
are consistent with actual behaviours identified using a more quantitative approach.
Steps in Workforce Planning
Though there is no definitive µStart here¶ activity for any of the approaches to Strategic
Workforce Planning, there are five fundamentals activities that most Workforce Plan models
mid- and large-size organizations often retain professional recruiters or outsource
some of the process to recruitment agencies.
The recruitment industry has five main types of agencies: employment agencies,
recruitment websites and job search engines, "head-hunters" for executive and
professional recruitment, niche agencies whi ch specialize in a particular area of staffing, or employer branding strategy and in-house recruitment. The stages in
recruitment include sourcing candidates by advertising or other methods, and
screening and selecting potential candidates using tests or i nterviews.
Headhunters
A "head-hunter" is an industry term for a third-party recruiter who seeks out
candidates often when normal recruitment efforts have failed. Headhunters are
generally considered more aggressive than in -house recruiters or may have pre-existing industry experience and contacts. They may use advanced sales
techniques such as initially posing as clients to gather employee contacts as well as
visiting candidate offices. They may also purchase expensive lists of names and job
titles but more often will generate their own lists. They may arrange a meeting or a
formal interview between their client and the candidate and will usually prepare the
candidate for the interview, help negotiate the salary and conduct closure to the
search. They are frequently members in good standing of industry trade groups and
associations. Headhunters will often attend trade shows and other meetings
nationally or even internationally that may be attended by potential candidates and
hiring managers. Headhunters are typically small operations that make high margins
on candidate placements (sometimes more than 30% of the candidate¶s annual
compensation). Due to their higher costs, headhun ters are usually employed to fill
senior management and executive level roles. Headhunters are also used to recruit
very specialized individuals; for example, in some fields, such as emerging scientific
research areas, there may only be a handful of top-level professionals who are
active in the field. In this case, since there are so few qualified candidates, it makes
more sense to directly recruit them one-by-one, rather than advertise internationally
for candidates. While in-house recruiters tend to attract candidates for specific jobs,
headhunters will attract both candidates and actively seek them out as well. To do
so, they may network, cultivate relationships with various companies, maintain large
databases, purchase company directories or candidate li sts and cold call prospective
The proper start to a recruitment effort is to perform a job analysis, to document the
actual or intended requirement of the job to be performed. This information is
captured in a job description and provides the recruitment effort with the boundariesand objectives of the search.Oftentimes a company will have job descriptions that
represent a historical collection of tasks performed in the past. These job
descriptions need to be reviewed or updated prior to a recruitment effort to reflect
present day requirements. Starting a recruitment with an accurate job analysis and
job description ensures the recruitment effort starts off on a proper track for success.
Sourcing
Sourcing involves 1) advertising, a common part of the recruiting process, oftenencompassing multiple media, such as the Internet, general newspapers, job ad
newspapers, professional publications, window advertisements, job centers, and
campus graduate recruitment programs; and 2) recruiting research, which is the
proactive identification of relevant talent who may not respond to job postings and
other recruitment advertising methods done in #1. This initial research for so -called
passive prospects, also called name-generation, results in a list of prospects who
can then be contacted to solicit interest, obtain a resume/CV, and be screened (see
below).
Screening and selection
Suitability for a job is typically assessed by looking for skills, e.g.
communication, typing, and computer skills. Qualifications may be shown
through résumés, job applications, interviews, educational or professional
experience, the testimony of references, or in-house testing, such as for software
knowledge, typing skills, numeracy, and literacy, through psychological
tests or employment testing. Other resume screening criteria may include length of
service, job titles and length of time at a job. In some countries, employers are
legally mandated to provide equal opportunity in hiring. Business management
software is used by many recruitment agencies to automate the testing process.
Many recruiters and agencies are using an applicant tracking system to perform
many of the filtering tasks, along with software tools for psychometric testing.
"Onboarding" is a term which describes the process of helping new employees
become productive members of an organization. A well -planned introduction helps
new employees become fully operational quickly and is often integrated with a new
company and environment. Onboarding is included in the recruitment process for retention purposes. Many companies have onboarding campaigns in hopes to retain
top talent that is new to the company; campaigns may last anywhere from 1 week to
6 months.
Internet recruitment and websites
Such sites have two main features: job boards and a résumé/curriculum vitae (CV)database. Job boards allow member companies to post job vacancies. Alternatively,
candidates can upload a résumé to be included in searches by member companies.
Fees are charged for job postings and access to search resumes. Since the late
1990s, the recruitment website has evolved to encompass end -to-end recruitment.
Websites capture candidate details and then pool them in client accessed candidate
management interfaces (also online). Key players in this sector provide e -recruitment
software and services to organizations of all sizes and within numerous industry
sectors, who want to e-enable entirely or partly their recruitment process in order to
improve business performance.
The online software provided by those who specialize in online recruitment helps
organizations attract, test, recruit, employ and retain quality staff with a minimal
amount of administration. Online recruitment websites can be very helpful to find
candidates that are very actively looking for work and post their resumes online, but
they will not attract the "passive" candidates who might respond favorably to an
opportunity that is presented to them through other means. Also, some ca ndidates
who are actively looking to change jobs are hesitant to put their resumes on the job
boards, for fear that their current companies, co-workers, customers or others might
see their resumes.
Job search engines
The emergence of meta-search engines allows job-seekers to search across multiple
websites. Some of these new search engines index and list the advertisements of
traditional job boards. These sites tend to aim for providing a "one -stop shop" for job-
seekers. However, there are many other job search engines which index pages
solely from employers' websites, choosing to bypass traditional job boards entirely.
These vertical search engines allow job-seekers to find new positions that may not
be advertised on traditional job boards, and online recr uitment websites.
Recruitment Process Outsourcing
It is a form of business process outsourcing (BPO) where an employer outsources or
transfers all or part of its recruitment activities to an external service provider.
The Recruitment Process Outsourcing Association defines RPO as follows: "when a
provider acts as a company's internal recruitment function for a portion or all of its
jobs. RPO providers manage the entire recruiting/hiring process from job profiling
through the on boarding of the new hire, including staff, technology, method and
reporting. A properly managed RPO will improve a company's time to hire, increasethe quality of the candidate pool, provide verifiable metrics, reduce cost and improve
governmental compliance."
The RPO Alliance, a group of the Human Resources Outsourcing Association
(HROA), approved this definition in February 2009: "Recruitment Process
Outsourcing (RPO) is a form of business process outsourcing (BPO) where an
employer transfers all or part of its recruitment processes to an external service
provider. An RPO provider can provide its own or may assume the company's staff,
technology, methodologies and reporting. In all cases, RPO differs greatly from
providers such as staffing companies and contingent/ retained search providers in
that it assumes ownership of the design and management of the recruitment process
and the responsibility of results."
Occasional recruitment support, for example temporary, contingency and executive
search services is more analogous to out-tasking, co-sourcing or just sourcing. In
this example, the service provider is "a" source for certain types of recruitment
activity.The biggest distinction between RPO and other types of staffing is P rocess.
In RPO, the service provider assumes ownership of the process, while in other types
of staffing the service provider is part of a process controlled by the organization
buying their services.
Benefits
RPO's promoters claim that the solution offers improvement in quality, cost, service
Quality and Cost - RPO providers claim that leveraging economies of
scale enables them to offer recruitment processes at lower cost while economies
of scope allow them to operate as high-quality specialists. Those economies of
scale and scope arise from a larger staff of recruiters, databases of candidate
resumes, and investment in recruitment tools and networks. RPO solutions arealso claimed to change fixed investment costs into variable costs that flex with
fluctuation in recruitment activity. Companies may pay by transaction rather than
by staff member, thus avoiding under-utilization or forcing costly layoffs of
recruitment staff when activity is low.
Service and Speed - The commercial relationship between an RPO provider and
a client is likely to be based on specific performance targets. With remuneration
dependent on the attainment of such targets, an RPO provider will concentrate
their resources in the most effective way - at times to the exclusion of non-core
activity. Traditional internal recruitment teams are less likely to have such clearly
defined performance targets.
Organizations with efficient hiring process that are viewed as employers of choice by
potential staff may stand to gain benefits from an RPO process.
Functions
The Human Resources Management (HRM) function includes a variety of activities,and key among them is deciding the staffing needs of an organization and whether
to use independent contractors or hire employees to fill these needs, recruiting and
training the best employees, ensuring they are high performers, dealing with
performance issues, and ensuring your personnel and management practices
conform to various regulations. Activities also include managing your approach to
employee benefits and compensation, employee records and personnel policies.
Usually small businesses (for-profit or nonprofit) have to carry out these activities
themselves because they can't yet afford part- or full-time help. However, they
should always ensure that employees have²and are aware of²personnel policieswhich conform to current regulations. These policies are often in the form of
employee manuals, which all employees have.
Note that some people distinguish a difference between HRM (a major management
activity) and HRD (Human Resource Development, a profession). Those people
might include HRM in HRD, explaining that HRD includes the broader range of