The recruitment process

Recruitment begins with a vacancy identified by workforce planning. The business then produces two documents:

• Job description — the job: title, duties, responsibilities, who it reports to, hours, location.
• Person specification — the person: essential and desirable qualifications, skills, experience and attributes.

Internal recruitment (promoting or redeploying existing staff): cheaper and faster, the candidate is a known quantity and already knows the culture, and it motivates staff by showing a career path. But it creates a second vacancy, limits the pool and brings in no new ideas.

External recruitment (advertising outside): a far larger pool, fresh ideas and skills the firm lacks. But it is expensive, slower, riskier and can demotivate staff passed over.

Selection methods

• Application form / CV and covering letter — used to shortlist against the person specification.
• Interview — cheap and universal, but a poor predictor on its own: prone to interviewer bias and to candidates performing rather than working.
• Psychometric and aptitude tests — objective, measure personality or ability, but can be gamed and may be culturally biased.
• Assessment centres — group tasks, presentations, in-tray exercises over a day or two. Much better predictive validity; expensive.
• References and trial/probation periods.

Cost of getting it wrong: a bad hire costs the recruitment spend, the training, the lost productivity and the cost of doing it all again. That is the business case for expensive assessment centres in senior roles.

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Types of training

• Induction — for new starters: policies, safety, systems, people. Speeds settling in and cuts early leavers.
• On-the-job — training at the workplace (shadowing, mentoring, coaching, apprenticeships). Cheap, directly relevant, production continues — but the trainer's bad habits get passed on and quality may dip.
• Off-the-job — training away from the workstation (college courses, external providers). Expert delivery, broader and transferable skills, no disruption to production — but costly, output is lost while away, and the newly qualified employee may leave.

Training raises productivity, quality and motivation (Herzberg: advancement and growth), reduces accidents and supports retention. Its costs are direct (fees, trainer time) and indirect (lost output).

Measuring HR performance: labour turnover

High turnover means high recruitment and training costs, lost expertise, disrupted teams and often falling quality. Causes: poor pay relative to the market, weak leadership, boring jobs, poor selection (wrong person hired), a booming local labour market.

Some turnover is healthy — it brings in new ideas and lets the business flex its workforce. Zero turnover can mean stagnation.

Your turn — labour turnover

Retention, productivity and absenteeism

They interlock. Low motivation → high absenteeism → colleagues cover → stress → higher turnover → more inexperienced staff → lower productivity and quality → higher unit costs. Explaining that chain is what separates a top answer from a list.

Your turn — retention

Your turn — labour productivity

Your turn — absenteeism

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Sort the HR measures

Tap a formula or fact, then tap the measure it belongs to.

How firms improve HR performance

• Better selection — hire people who actually fit the role, so they stay.
• Financial incentives — competitive pay, bonuses, share schemes.
• Job design — enrichment, rotation, teamworking, empowerment.
• Training and development — a clear route to promotion.
• Flexible working — hybrid, compressed hours, term-time contracts; strongly linked to retention.
• Appraisal — regular structured feedback linked to targets and development.

Evaluation: every one of these has a cost. The judgement is whether the saving from lower turnover and higher productivity exceeds the spend — and how quickly. In a low-margin business with easily replaced labour, a hard-HRM approach may be defensible; in a skills-scarce business it is not.

Match the measure to its formula

Tap a card on the left, then its partner on the right.

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Appraisal and performance management

Appraisal is the structured review of an employee's performance against agreed targets. Done well it identifies training needs, sets objectives, supports promotion decisions and feeds performance-related pay.

• 360-degree appraisal gathers feedback from peers, subordinates and customers as well as the manager — rounder, but slow and uncomfortable.
• Risks: if appraisal is tied to pay, staff hide problems rather than discuss them; a rushed, box-ticking appraisal actively demotivates.

Your turn — the cost of turnover

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