Building HR Decision Support

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1 Building HR Decision Support Insights from Empirical Research Jochen Malinowski Institute for Information Systems Frankfurt University, Germany 2006 IRMA International Conference Washington, May

2 Agenda Research motivation The recruitment function and its forms of IS support Empirical analysis Implications for management Conclusion 2

3 Research motivation Malone and Laubacher s vision (1998) of the e-lance economy implies that people are matched more often to new jobs / tasks and collaboration partners within their employment history This is also true as lifetime employment slumps and team-based and project-based work structures gain importance (Guzzo 1996, Anderson et al. 2004) Empirical research shows that IT has an increasing impact on HRM and that several advantages are linked to such new practices The objective of our research is to empirically observe the IT driven changes in the recruitment field, to develop and implement methods for E-HR and to derive recommendations for HR managers 3

4 The Recruitment function as part of the HRM Personnel Planning Personnel Planning Recruitment Recruitment Retention Development & Retention Attraction phase Selection phase Planning activities Determination of target groups Design of measures to attract or directly approach candidates from target group Definition of overall strategy based on overall personnel planni planning ng Determination of selection criteria and methods Execution activities Employer branding Attraction of direct applications Applicant management Pre - screening Final selection 4

5 The Recruitment function: Current IS support Potential candidates Longitudinal quantitative research since 2002 with the German Top companies in Germany and with SMEs Corporate Homepage Internet Job Portals Multiple case studies with large and small companies, some of them repeated after one year time Applicant management system Corporate users from HR- and specialized departments Purpose: - observe changes in usage patterns for the three different forms of IT support (see left) - understand drivers and inhibitors of IT usage in corporate HR processes 5

6 The importance of IT-based candidate attraction Percentage of vacancies posted in candidate attraction channels 90,0% 80,0% 85,0% 76,8% 75,8% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 52,4% 54,1% 48,9% 37,4% 30,3% 30,0% 25,7% 23,1% 24,4% 16,6% 18,4% 12,5% 0,0% Corporate Website Job-Portal Print Media Labour Offices Other The Internet has replaced print media as the most important channel to attract candidates in what concerns the percentage of vacancies posted but also the percentage of vacancies filled: 58% of the new hires go back to an ad in an Internet attraction channel such as the corporate website or Internet job-portals. 6

7 Diffusion of electronic applications Past and expected diffusion of electronic applications 80% 60% 40% 69,8% 30,2% 61,5% 38,0% 54,8% 43,4% 52,5% 46,3% 31,5% 67,3% 20% 0% Paper-based applications Electronic applications The ratio between paper-based and electronic applications is expected to invert within only seven years 7

8 A model of E-HR diffusion number of loci of impact HRD: human resource departement SPD: specialized departement interorg. diffusion models all applications (all candidates) HRD/SPD and external Organisations stage and process models all applications (all candidates) all applications HRD/ (external candidates) SPD HRD/ SPD only digital applications (external candidates) only HRD factor models passive active search search (Internet (Online Job Ads) Resume DBs) stage 0 stage 1 stage 2 stage 3 stage 4 degree of diffusion % of large employers per phase 96% 56% 22% 14% <5% market tendency no. of case study partners per phase 17/ /17 10/17 7/17 3/17

9 Implications for Management With regard to personnel marketing, employer branding activities and job ads on the Internet can help to reach high volumes of candidates at low cost and employers should continue to shift budgets from print media to the online world With regard to the internal processing of applications, employers should increase the ration of digital applications and especially structured digital applications Internal candidate databases or corporate skill pools can provide many benefits to candidates and employers. Also, they can drive internal mobility of employees and can ease cross-border recruitment. Inter-organizational process optimization might be the next wave in the E-HR field. 9

10 Conclusion IT is increasingly important in fields of HRM such as personnel recruitment. When considering the recruitment process, all indicators (1) grow over time but (2) diminish with increasing stages of the recruitment process. The attraction of candidates over the Internet together with decline on the labor market in recent years has driven the number of applications received by many companies. Also, within this growing absolute number of applications, the percentage of digital applications ( or web-form) increases, too. In order to process these masses of incoming applications, HR decision support needs to be developed. As structured digital applications via web-forms can be more easily processed, companies should invite candidates to use digital and at the same time structured application channels. 10

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