The Challenge of Employee Recruitment and Retention in Australian Organizations - Literature review Example

The Challenge of Employee Recruitment and Retention in Australian organisations (Name) (Institution) (Course) (Module) (Instructor’s Name) (Date of submission) Introduction In the recent past, HR management has gained increased prominence as a part of strategic organizational management. Modern day organisations and HR experts have turned their attention to employee productivity and suitability for certain positions and the necessary skills in the workplace. Attracting and retaining the right kind of employees to organisations remains to be the biggest challenge for employers now and in the near future as it shapes performance (Naughton-Travers & Monica 2001, pp. 7-10). Different suggestions have been made on the best ways to attract young employees from training institutions and experienced ones in different work positions. Some organisations prefer to recruit inexperienced employees and train them while others prefer to headhunt or poach for already trained and experienced employees usually from competitors or other firms. Either way, organisations have to strategically plan on how to attract such employees and retain them in the organisation long enough to enjoy their productivity and contribution to organisational growth. It is from this background that this paper gathers ideas and views suggested by different authors and scholars in the HR field on the challenge of recruiting and retaining employees in Australia to develop a discussion. The paper draws its views from published books and journal articles from accredited authors. Discussion Relative low unemployment levels in Australia and around the world as compared to some years ago have led to increased competition for quality employees amongst employers. Technologic growth and general economic growth demand have pushed organisations into higher productivity levels calling for more human resources, both skilled and unskilled (Naughton-Travers & Oss 2001, pp. 7-10). However, the quest for skilled labour is more specialised than the quest for unskilled labour. Larson et al (1998) propose four broad categories of strategies to cope with recruitment and retention strategies challenges namely “prehire strategies, strategies for organizational entry, strategies for organizational socialisation and ongoing strategies” (p. 27). Matching employee skills and qualifications with job requirements, duties and responsibilities is of utmost importance to employers. Only employees whose abilities are needed and applicable in an organisation are hired and their satisfaction with the role influences their willingness to stay (Chew 2004, pp.124). With changes in technology and industry environment, new job positions are created while some are lost on a regular basis. Employee turnover, which is termination of employment, creates the need for recruitment hence should be addressed first. Employee turnover is the movement of employees from internal position in an organisation to another one position, within or without the organisation. Employee turnover is both beneficial to an organisation and also detrimental. According to (Ranklin 2003, p. 403), organisations willing to change have to let go some employees and seek new talents and skills in the market as training existing employees maybe time consuming and costly. On the other hand, firing employees is a cost to organisations in terms of pension and termination benefits paid to them and experience and knowledge possessed by such employees. New employees on the other hand are a challenge to the existing organizational culture. A large number of recruits have the potential of destabilising the existing organisational culture which is fundamental to organisational performance. Naughton-Travers and Oss (2001, pp. 8) indicate that employee turnover is a direct cost to organisations. They cite the 2000/2001 Survey of Office Personnel Commission which found out that the average cost of employee turnover is 25% of the employee’s annual salary plus 25% of the benefits package offered. Therefore, organizations can only avoid this cost through employee retention strategies. Staff turnover may also create temporary labour shortages given that the recruiting process may take some time. Eley et al (2007, pp. 4) investigated the case of Australian nurses’ retention and mobility in the workplace. They noted that a large number of cases pertaining to absconding of duty by some nurses. This largely affects the delivery of services as such termination of employment is unexpected. Their study also indicated that labour mobility in the same profession was lower as compared to labour mobility to other professions. This implies that there is fall in HR development costs particularly training when labour mobility take place within the same profession. However, the findings do not reflect the true picture on the ground given the high level of expertise required for nursing roles which limits competition from potential employees from other professions. With low supply of skilled labour, there is a greater need for retaining employees. Gullatte and Jirasakhiran (2005, pp. 597-604) investigated the retention of registered nurses in the US and came up with interesting findings that can be adapted by Australian employers. They in particular note that recruiting new staff is costly to employers in terms of “direct salary of the new hire and preceptor, education and development cost, marketing and recruitment costs, loss of productivity during orientation, and intangible cost of turnover on current staff” (Gullatte & Jirasakhiran 2005, pp. 597). Some of the intangible costs that organisations suffer as a result of a high rate of employee turnover is reduced organizational continuity, fall in organisational performance as a result of increased dedication of resources to recruitment and induction. The authors add that wages for new recruits are oftentimes higher than for existing employees which add costs to the organisations. Australia, as one of the global employment destinations has undergone numerous changes in labour management to attract and retain employees on a national (immigrant workers) and organisational level. Brewster et al (2000, pp. 284) write that a number of studies have been conducted to asses the changes in labour management amongst Australian organisations. They note that the major concepts of change have been pay, job design, training and development, conflict resolution and career development among others. These are some of the strategies that employers have enlisted in their attempts to attract new recruits. Arthur (2001, pp. 33) writes that the most important issue in HR for employees is financial and job security hence changes should be directed towards that. Other strategic management practices used in labour management include performance based pay, flexible employment practices and performance appraisals (Chew 2004, pp. 97). While such practices are important to employees, they are not obviously noticeable to potential recruits and oftentimes are not included in job advertisements. However, the corporate brand plays a more significant role in attracting new employees. Branding, same way as is used in product marketing is necessary to market organisations as employers. St. Aubin and Carlsen (2008, pp. 13) make a distinction between product marketing and organisational marketing by using the terms internal branding and external branding. They continue to say that an external brand displays products and services meant for customers while the internal brand identifies and describes the organisation’s relationship with its employees. Therefore, the branding strategies differ a lot more so in the marketing message. In internal branding, the organisation introduces itself to the labour market and potential recruits. This however, should also encompass the existing employees and is best accomplished by aligning the company’s mission statement and values with the external brand (Hor et al p.23; St Aubin and Carlsen 2008, pp. 13). Unfortunately, this has often proved difficult for many organisations because mission statements and values do not often reflect the changes in the external branding strategies such as introduction of new products. Changes in product portfolio are usually a response to business environmental changes which also affect staff recruitment and retention. Global and national economic fluctuations impact on employment policies adopted by organisations in major ways. Brewster et al (2000, pp. 287) note that Australia and other European countries have gradually shifted from the traditional fulltime employment basis to either flexible employment contracts or flexible working hours such as part time jobs or casual jobs. In the last decade, flexible jobs have gone up by 41% at the cost of fulltime jobs. Flexible employment allows organisations to use labour resources on an as-is-needed basis without incurring extra costs on unproductive work hours. Casual workers in most cases are excluded from non-wage benefits hence employers view them as cheap to maintain. However, excessive use of flexible employment by organisations denies them an opportunity to create a skill inventory or knowledge inventory. It is also deny organisations continuity and also exposes the organisation to competition given that employees may be hired by competitors at will. Therefore, employers are faced with the challenge of striking a balance between the benefits and detriments of flexible employment. The strategies used in retaining or/and recruiting employees have to match with organisational strategy which is not an easy task. Ranklin (2003, pp. 405) notes that high rate of staff turnover is bad for business while at the same time a stagnant workforce is bad for business too. The major cause for staff recruitment is increase in production hence demand for labour and replacement of retired employees as indicated by Gullatte and Jirasakhiran (2005) and Eley et al (2007) in discussing Australian healthcare industry. Organisations pursuing change are at times forced to part ways with some employees, especially senior ones who are seen as possible threats to change. On the other hand, organisational growth calls for more human resources hence recruitment of new employees. Replacement of retired employees does not affect the labour force very much in costs as it is foreseen though it impacts on the organisational knowledge. Conclusion Balancing the acts of recruiting new employees and retaining existing ones requires meticulous planning. Managers have to identify what retention strategies such as pay system, benefits and rewards system or even performance appraisals works best for their employers which deters them from seeking shifting to another employer. On the other hand, employers need to be keen enough to identify when retention is necessary and when its not. Long serving employees have been known to be resistant to changes. Retaining employees for long periods of time also hinders injection of new knowledge in an organisation. All these are the issues and challenges that HR managers in Australia have to face in the next five years. References Arthur, D. (2001). The employee recruitment and retention handbook. New York: AMACOM Brewster, G. Mayrhofer, P. and Morley, L. (2000). New challenges for European human resource management. London: Palgrave Macmillan  Chew, J. (2004). The influence of human resource management practices on the retention of core employees of Australian organisations: an empirical study. Retrieved online on 6/01.2011 from, http://researchrepository.murdoch.edu.au/656/2/02Whole.pdf Eley, R., Hegney, D., Buikstra, E., Plank, A., & Parker, V. (2007). “Tenure, mobility and retention of nurses in Queensland, Australia: 2001 and 2004” Journal of nursing management. 15(3); p 285-293 Gullatte, M. & Jirasakhiran, E. (2005). “Retention and recruitment: reversing the order” Clinical journal of oncology nursing, 9(5); 597-604 Hor, J., Keats, B. & Holmes, B. (2008). Finders Keepers - How to attract and retain great employees. Sydney: CCH Australia Limited Larson, S., Lakin, K., Bruininks, R. & Braddock, D. (1998). Staff recruitment and retention: study results and intervention strategies. New York: AAMR Naughton-Travers, J., & Oss, M. (2001). A Guide to Human Resource and Operations Management: An OPEN MINDS Special Report. London: Open Minds Ranklin, N. (2003). IRS best practice in HR handbook. New York: Butterworth-Heinemann St Aubin, D & Carlsen, B. (2008). Attract, Engage & Retain Top Talent: 50 Plus One Strategies Used by the Best. London: AuthorHouse Read More