Employee
Relations
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Recruitment in small firms
Processes, methods and problems
Marilyn Carroll, Mick Marchington, Jill Earnshaw
236
Manchester School of Management, UMIST, Manchester, UK, and
Stephen Taylor
Manchester Metropolitan University, Manchester, UK
Keywords Employment, Recruitment, Small firms, Staff turnover
Abstract The article summarises findings from recent case study research into recruitment in
small firms. The research aims to ascertain whether small firms follow the procedures outlined in
the prescriptive literature on recruitment, and to what extent they rely on informal recruitment
methods. It finds little evidence of the adoption of the recommended systematic procedures and a
high use of ``tried and trusted'' methods including word-of-mouth recruitment and the hiring of
``known quantities''. The implications of this are examined. While these methods have certain
advantages, they may also give rise to a number of problems. The study argues that the adoption
of more formal procedures and methods could reduce staff turnover in small firms and its
associated costs. However, it concludes that many small employers would remain unconvinced by
the case for opening up recruitment channels, and may find their existing approaches more cost
effective in the short term.
Introduction
A considerable quantity of prescriptive literature is available to managers
responsible for recruiting staff aimed at helping them to increase the chances of
finding the right person for the job. Most of this advice, however, seems to be
aimed at large organisations. Assumptions are made about the degree of
formality which would normally characterise the recruitment process and the
extent to which employers are likely to adopt systematic and proactive
searches for new recruits. In contrast, relatively little material is available
specifically for small firms. As Hendry et al. (1995, p. 14) note, ``training and
human resource management advice to smaller firms has been monotonous in
its prescription of large-scale solutions''.
The project on which this article is based aimed to find out how practices in
small firms compare with the prescriptive ``textbook'' procedures; whether
these are seen by small firms as appropriate to their needs; the recruitment
problems small firms face, and what strategies they have adopted to overcome
them. The project also focused on the use of informal recruitment networks.
Research by Earnshaw et al. (1998) indicates that poor recruitment and
selection decisions are often blamed for subsequent disciplinary problems in
small firms. As a consequence, a number of these firms stated that recruitment
was now being undertaken with greater care to ensure they found the ``right''
person, and this included the widespread use of informal, word-of-mouth
Employee Relations,
Vol. 21 No. 3, 1999, pp. 236-250.
# MCB University Press, 0142-5455
The authors are grateful to the European Regional Development Fund, which financed this
project.
recruitment methods, and the hiring of ``known quantities''. While the authors
concede that this is understandable from the employer's point of view, they do
raise the question as to whether recruitment through informal networks
reinforces existing race, gender or disability imbalances within the workforce,
and whether certain groups are being permanently excluded from employment
in small firms.
The recruitment process
Texts on recruitment invariably recommend a systematic procedure
comprising four stages: an assessment of whether the vacancy needs to be
filled, a job analysis, the production of a job description and a person
specification. Torrington et al. (1991) suggest that in a small organisation it
may be sufficient for one person to consider ``the job's important aspects and
the requirements of the jobholder'' in place of the detailed job analysis/job
description/person
specification
procedure
usually
recommended.
Consideration is then given to whether the vacancy can be filled internally. If
the vacancy is to be filled externally, the methods by which suitable candidates
are to be attracted, how they should apply, and what selection techniques are to
be adopted should then be decided.
The prescriptive literature usually makes the distinction between formal
recruitment methods ± including press advertisements, Jobcentres and other
agencies ± and more informal methods, such as recommendations from
existing staff. Word-of-mouth methods are recognised as having some distinct
advantages. As well as the obvious advantages of speed and cost, not only is
the new recruit a ``known quantity'', he or she is likely to have been given more
prior knowledge about the firm and the job, and what to expect from it
(Watson, 1989). Furthermore, existing employees who have recommended
people tend to ``socialise'' the new recruit because it is in their interests to make
sure that the new employee fits in. Word-of-mouth recruitment is, therefore,
sometimes recommended to employers as a way of reducing staff turnover.
Bonn and Forbringer (1992) report that in the hospitality industry in the USA,
which is notorious for high rates of staff turnover, several large companies
actively encourage ``referrals'' by existing employees, through the use of
financial incentives and prizes for successful recommendations. However,
informal methods have two main disadvantages: they may leave a pool of
suitable recruits untapped, and may leave the firm open to accusations of
indirect discrimination against disadvantaged groups.
Despite the wealth of literature available on good recruitment practice,
Kilibarda and Fonda (1997) found little evidence that the textbook advice is
being followed, even by large employers. If this is the case in large
organisations, what is the situation in small firms?
Within the existing literature on employment in small firms there has been
disagreement as to the type and quality of employment opportunities offered.
While the ``small is beautiful'' approach maintains that smaller firms offer a less
formal, more personal, close working environment, Rainnie (1989) has
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questioned whether interpersonal relationships are better in smaller firms.
Ritchie (1993, p. 112) paints a particularly bleak picture, arguing that many
small firms seem more like ``personal fiefdoms, paternalistic homesteads,
backstreet workshops, temporary employment stopgaps, oppressive
sweatshops and generally less desirable workplaces''. On the evidence of
research both in the USA and the UK, Atkinson and Storey (1994, p. 11)
conclude that the quality of employment in small firms is, in fact, lower than in
large ones:
Wages are lower, training is less frequent, and the evidence for a compensating higher level of
job satisfaction is weak. Furthermore, in view of the financial weakness of many small
businesses . . . and their relatively low levels of unionisation, effective job security for
workers is likely to be lower than for workers in large firms.
In addition, researchers such as Lane (1994) and Hendry et al. (1995) point out
that small firms are less able to sustain internal labour markets. As a
consequence, they may struggle to retain key staff and are more vulnerable to
changes in the external labour market. Other commentators (Ritchie, 1993;
Atkinson and Storey, 1994; Thatcher, 1996) suggest that these factors have
serious recruitment implications for small firms, since they are therefore
unlikely to be able to attract as high a calibre of employee as large firms.
Indeed, Atkinson and Meager (1994) argue that it is only when businesses cease
to become small that recruitment problems can be resolved. They also point out
that for the small business, the engagement with the external labour market is
different from that of a large one. It is likely to be less frequent, ``less predictable
and less capable of systemisation'' (1994, p. 39). Moreover, a single event of
recruitment is likely to have more effect because of the smaller size of the
business. Indeed, as Atkinson and Meager (1994, p. 39) note, ``the smaller a
business is, the more critical is its engagement with the external labour market
likely to be, and recruitment is likely to be the most critical aspect of it''.
Evidence suggests that small firms do, in fact, find it hard to attract the
calibre of staff they need. According to Atkinson and Storey (1994) small firms
report labour market problems more frequently than any other, including
financial problems. The most frequent complaint was with the quality of labour
available, including a lack of basic literacy skills, particularly among young
people. Scott et al. (1989) also found evidence of dissatisfaction with the quality
of labour available for small firms. It is perhaps not surprising that this
dissatisfaction was greater in the high-technology sectors since these are more
likely to experience a genuine skills gap.
In the literature on small firms frequent reference is made to the widespread
use of informal, word-of-mouth recruitment methods. However, Scott et al.
(1989) found sectoral variations in small firms' approach to recruiting staff.
While in traditional manufacturing and service sectors there was a preference
for informal methods, there was a much more widespread use of formal
methods in the high-technology sectors. Atkinson and Meager (1994) found
that the use of word-of-mouth recruitment methods varied according to the
type of employee being recruited; while it was the most popular method for
recruiting managers and manual workers, more formal methods tended to be
adopted for recruiting clerical and technical employees. They also found
evidence of a correlation between business size and the adoption of formal
recruitment procedures: ``For the very smallest businesses the availability of a
known individual is virtually a precondition for recruitment'' (1994, p. 41).
However, once a business reaches a certain size it is suggested that more formal
procedures might need to be adopted in order to cope with the greater number
of recruitment events. Even so, there was evidence that these slightly larger
firms still continue ± and prefer ± to use informal methods where possible,
raising the question of whether managers who run small businesses ever
believe that formal methods are appropriate for their needs.
Holliday's (1995) in-depth case study research in three small firms also found
recruitment by word-of-mouth to be the most common method. Often an initial
approach would be made when it was known that a suitable employee had been
made redundant by a competitor. The firms preferred to recruit people who
were already trained and experienced, and the collapse of another similar local
firm would be ``viewed with relish'' as a provider of a ready-made pool of
experienced potential recruits (p. 146). Family members of existing employees
were also recruited frequently, which Holliday (1995, p. 142) believes is
``inextricably linked with the most important quality which an individual can
bring to the job, which is to be able to `fit in' with the existing workforce and
company culture''. The notion of ``fitting in'' is a recurring theme in the
literature on recruitment in small firms. Curran and Stanworth (1979), Scott et
al. (1989) and Kitching (1994) all suggest that the employer's judgement of a
potential recruit as a person is seen as the most important aspect of selection.
Each of the case study firms in Holliday's research had a mix of ``core'' and
``transient'' workers, in contrast to Atkinson's (1984) ``core/periphery'' model of
the flexible firm, which sees the core workers as specialists, or multi-skilled,
while the periphery consists of semi- and unskilled workers. Holliday's ``core/
transient'' model makes the distinction between those employees who can ``fit
in'' either socially, or with the ``idiosyncratic working methods'' adopted by
small companies and consequently stay with the firm, and those who cannot,
and leave shortly after appointment (1995, p. 149).
However, contrary to the more usual view of small firms being unable to
provide opportunities for career progression, she found that internal promotion
was common in the case study firms, not only because of cost, but for two
further reasons. First, job descriptions were vague, the jobs themselves
changed and developed over time, tasks were added and, to some extent,
employees ``created their own jobs'' (Holliday, 1995, p. 143). It would, therefore,
be difficult for an ``outsider'' to understand the range of tasks that an individual
would undertake. Second, an internal promotee is already ``encultured'' into the
organisation.
Despite the widespread use of word-of-mouth recruitment methods, research
indicates that small firms may well be unaware of the possibility of indirect
discrimination. Scott et al. report that the Sex Discrimination Act was of no
Recruitment in
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Employee
Relations
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240
concern for any of their case study firms and there was ``almost total ignorance
. . . since no firm reported having ever come into contact with it'' (1989, p. 88). In
one survey conducted by Lane (1994) in small and medium sized enterprises, 67
per cent of respondents said that equal opportunities issues arose either rarely
or never in their own companies.
The majority of firms surveyed by Scott et al. (1989) did not think their
recruitment system was adequate, and half believed it was a major problem.
Those using formal methods were less satisfied with recruitment procedures
than those using informal methods. The authors suggest that the
dissatisfaction stemmed from an unrealistic expectation of the calibre of
recruits available in the local labour market, rather than with their own
procedures.
The research and sample
Our research adopted a case study approach. It was decided to limit the case
studies to five sectors in order to ascertain whether industry-specific factors
influenced the procedures adopted. We aimed to select a cross-section of
industries covering service, manufacturing and transport, involving different
types of occupation from manual to professional. We also wanted to include
some sectors where occupations tend to be gender segregated, as well as some
which are known to have recruitment problems and/or high levels of staff
turnover. The project was funded by the European Regional Development
Fund, which imposed limitations on the sectors which could be studied, as well
as restricting the geographical area to Greater Manchester, Lancashire and
Cheshire. The sectors chosen were hotels and catering, road haulage, nursing/
residential homes, printing and solicitors' firms. A total of 40 firms were
involved, eight in each of the five sectors.
Before carrying out the research an advisory group comprising
representatives of employers' organisations and an independent consultant
was formed. The group was very helpful in providing background information
on the industries concerned, identifying issues which might be explored, and
gaining access to suitable firms. Access to 13 of the case study firms was
gained with the help of advisory group members. A further nine were
suggested by firms which had already taken part in the research. The source of
the remaining 18 was through personal contacts, either direct or indirect, of
members of the research team. While it is recognised that these methods of
selecting the case study firms could lead to an element of bias in the sample,
they did prove to be extremely successful. Only two of the firms which were
contacted declined to participate, and in both cases the reason given was lack of
time.
The case studies were carried out over a five-month period during the spring
and summer of 1998, and consisted of semi-structured interviews with the
business owner, partner, director or other manager responsible for the
recruitment of staff. The interview covered the following areas: general
information about the business, the composition of the labour force, human
resource management practices in general, and the recruitment process in
particular, awareness of the legal issues associated with recruitment,
recruitment problems and any steps taken to overcome them.
The size of the firms ranged from 7 to 207 employees. Of the firms, 13 had
more than one establishment, and individual establishment sizes ranged from 2
to 130 employees. A breakdown of the sample in terms of sector and total
number of employees is shown in Table I.
The case study organisations in the hotels and catering sector comprised a
diverse range of bars, pubs, restaurants, a club and a country house hotel.
Three were small, independent chains with a number of outlets. The majority
of the employees were bar staff, waiting staff, kitchen staff or cleaners. Many
worked part-time, and a large number were students.
Most of the road haulage companies were well-established family firms. The
majority of employees were drivers, but companies also employed mechanics,
warehouse staff, general maintenance yard staff, transport managers, traffic
operators, clerical/administrative staff and cleaners. Nearly all the staff worked
full-time.
The case study homes comprised a sample of eight nursing or dualregistered (nursing and residential) homes, all relatively new businesses
between 7 and 14 years old. Most of the home owners had an NHS background,
many were qualified nurses and one was a retired GP. The homes were heavily
regulated and subject to regular inspections by the District Health Authorities,
Social Services Departments and the Registered Nursing Homes Association.
Most of the homes' employees, i.e. nurses, care assistants and domestic staff,
were women and many worked part-time.
The printing industry in the UK is characterised by a large number of very
small firms, and the case study organisations reflected this with six having less
than 25 employees. The industry has undergone major changes in recent years
as trade union influence has declined and computers have revolutionised
production. Jobs in the industry fall into three main categories: pre-press,
printing and finishing. Work is heavily segregated along gender lines; the
majority of printers in the case study firms were men, while most women
worked in the finishing department as ``table-hands''.
The case study firms of solicitors comprised a diverse sample in terms of
size and type of work undertaken. Most had, or were in the process of
obtaining, a legal aid franchise. Jobs are divided into two main categories: fee
Hotels and catering
Road haulage
Nursing homes
Printing
Solicitors
Total
Under 25
25-49
3
4
6
3
12
6
1
11
50-99
7
2
1
1
11
Recruitment in
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241
100 and over
1
1
4
6
Table I.
The case study firms
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Table II.
The recruitment
process
earners (qualified solicitors) and support staff. The majority of support staff in
the case study firms were women. On the qualified side, although
approximately equal numbers of men and women are now entering the
profession they tend to specialise in different areas of work, with more women
opting for family and childcare work, while men seem drawn to commercial
and criminal work. Employment in the case study firms reflected this divide.
Recruitment in the case study firms
The first aim of the research was to ascertain whether small firms adopt similar
recruitment procedures to the first four stages prescribed in the literature.
Table II shows the number of firms in each sector which follow each of these
stages.
The solicitors' firms had most scope for considering alternatives to
recruitment. For example, if a solicitor left, his or her caseload might be shared
out among others. In contrast, the nursing homes had no scope at all for
considering alternatives to recruitment, as every vacancy had to be filled
because the inspecting authorities impose a ``staffing ratio'' of carers to
residents. Other firms said they could not consider alternatives to recruitment
because they were too small, ``we work on tight numbers anyway'', or staff are
``already stretched''.
We found no evidence whatsoever of formal job analysis being carried out
systematically. Indeed, most of the respondents were unsure of the meaning of
the term. Job descriptions were, however, used by the majority of firms,
although two only had them for certain categories of staff (office staff and
managers). Flexibility was the main reason for not having job descriptions ±
they were thought to be ``too rigid''. Another reason given was that the content
of the job was ``obvious'' and ``everybody knows what's involved''. Only nine of
the firms which had job descriptions had gone on to produce person
specifications, however. This suggests that job descriptions may be seen more
as a source of information for existing staff, rather than a stage in the
recruitment process.
A second aim of the research was to examine the methods small firms use to
attract candidates. Table III shows the methods used by the firms in each
sector. We have classified these recruitment methods into four types: ``internal
recruitment'', ``closed searches'', ``responsive'' methods and ``open searches''. We
will deal with each of these in turn below.
Does the vacancy need
to be filled?
Job anaysis
Job description
Person description
Hotels and
catering
Road
haulage
Nursing
homes
Printing
Solicitors
Total
(n = 40)
1
0
5
1
1
0
2
1
0
0
7
1
3
0
3
1
5
0
7
5
9 (23%)
0
24 (60%)
9 (23%)
Hotels and Road Nursing
catering haulage homes Printing Solicitors
Total
(n = 40)
No.
(%)
Internal recruitment
Existing staff
Offering permanent jobs to temps
8
1
5
0
3
0
5
0
6
2
27
3
(68)
(8)
Closed searches
Recommendations from staff
Network of contacts
Poaching
Former employees
Contacts in education
Recruitment consultants
8
3
3
4
2
0
8
2
3
7
0
0
8
0
3
5
5
0
8
2
1
5
4
0
8
4
3
6
5
2
40
11
13
27
16
2
(100)
(27)
(33)
(68)
(40)
(5)
Responsive
Former applicants
Casual callers
Register of interested applicants
4
4
7
2
4
4
2
7
1
7
6
8
7
0
8
22
21
28
(55)
(52)
(70)
Open searches
Jobcentres
Other agencies
Notice in own bar/shop
Local press
National press
Specialist journals
Other open
8
2
5
7
1
3
0
7
2
0
7
0
1
0
7
3
0
8
0
1
5
7
2
1
6
1
1
0
8
4
0
7
1
6
0
37
13
6
35
3
12
5 (13)
(93)
(33)
(15)
(88)
(8)
(30)
Although some firms might be considered to be too small to offer opportunities
for career progression or movement into a different type of work, there was a
great deal of evidence of the operation of internal labour markets. Reasons
given by the respondents were ``to motivate people'', ``to encourage loyalty to
the firm'', ``better the devil you know'', or because a lower level vacancy would
be easier to fill externally. In the hotel and catering sector and solicitors firms
there was most scope for internal promotion. Hotels and catering sector
managers tried to identify people with aptitude and ability and promote them
into a more senior or supervisory role when a vacancy arose. Those solicitors'
firms which took trainees said they liked to keep them on if possible after they
qualified and there is a recognised career path to associate, salaried partner and
equity partner. In the printing and road haulage sectors there were very few
opportunities for promotion because of the nature of the work. However,
printers sometimes had the opportunity to move on to operating a bigger
machine and drivers to a larger vehicle. The nursing homes, however, found it
most difficult to offer opportunities for career progression because, for a care
assistant, this would mean leaving to undertake formal nurse training.
Closed searches were among the most widely used recruitment methods in
the case study firms. All had used recommendations from staff, 27 per cent had
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Table III.
Methods of attracting
candidates
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found staff through a network of contacts in the industry and 13 per cent had
poached staff directly from competitors. One printing company had been able
to fill all its vacancies by these methods since starting six years ago.
Employing friends and family members of existing staff was especially
common in the hotels and catering, road haulage and nursing home sectors.
The view was expressed that people recruited in this way were more likely to
``blend in'' well. In the hotels and catering sector, especially for jobs which
involve cash-handling, some knowledge of the background of the potential
recruit was thought essential. However, a few employers expressed
reservations about employing friends and family members because ``if you fall
out with one you lose two''. For solicitors the recruitment of fee-earners
``through the network'' was widespread including offering employment to
solicitors who had worked for ``the other side'' in a case. The firms had ample
opportunities to assess the capabilities of potential recruits, by observing how
they performed in court, for example. Attitudes towards poaching staff varied.
While some interviewees would poach staff without any reservations, others
regarded the practice as ``unethical''. As the manager of an Indian restaurant
put it, ``it happens very often round here but I don't do it to other people because
I don't like it happening to me''. Sometimes competent staff were ``poached
back'' after leaving to work for another employer and, indeed, the hiring of
former employees was common, especially in the road haulage industry, where
drivers often moved around from one company to another. In all sectors, apart
from road haulage where drivers have to be at least 21 to train, some firms
recruited direct from local educational establishments. Typical reasons for
using closed searches included the belief that an existing member of staff is
unlikely to recommend someone unsuitable, the preference for a ``known
quantity'', and valuing someone who would ``fit in''. Only two of the
interviewees (solicitors) expressed reservations about informal, word of mouth
recruitment because of the equal opportunities implications, and because it was
thought preferable to consider ``the whole field''.
Responsive recruitment methods were also widely used. Over half looked at
former applications again if a similar vacancy arose. Similarly, over half would
offer work to casual callers who contacted the firm either by telephone or in
person, provided there was a vacancy and the person was suitable; 70 per cent
kept a register of interested applicants or a file of CVs. To some extent, this
approach is rather less proactive than the others, relying on a pool of potential
recruits who had happened to contact the firm. On the other hand, it could be
argued that these individuals utilised their initiative in seeking work, and
might be all the more attractive to employers because of this.
Of the more formal ``open search'' recruitment methods, advertising in
Jobcentres and the local press were the most common. Jobcentres were
routinely used by almost all the case study firms, at least for some categories of
staff. The advantages of Jobcentres were said to be that they are free, and the
advertisement stays in until the vacancy is filled. However, while some
interviewees found the Jobcentres to be a good source of new recruits, others
expressed dissatisfaction with the standard of service offered. The most
frequent complaints were that candidates were ``not properly vetted'', they
frequently failed to turn up for interview, or they were ``not really interested in
finding a job''. Fewer firms used other recruitment agencies, mainly because
they were regarded as expensive. Specialist driver agencies were criticised by
the road haulage companies, with only two having used them, and then merely
as a last resort. Once again, the people on their books were thought to be ``not
properly vetted'', inexperienced, or not looking for permanent, full-time work.
Although most firms had advertised in the local press, some only did so when
less expensive methods had failed to produce a suitable candidate. The whole
process of advertising, an initial telephone screening (sometimes), sifting
through CVs or application forms, shortlisting, interviewing, checking
references (possibly) and making a selection decision was thought to be not
only costly in terms of management time, but was regarded as a ``hit and miss
affair''. Only three firms had advertised in the national press, and in each case
this was a ``one-off'' to fill a management position rather than being used as a
regular recruitment method. Specialist journals were, however, more widely
used, especially by the solicitors' firms. Another open search method popular
with the bars and pubs was placing a notice of the vacancy in the bar itself,
which was felt had the advantage of attracting the same type of person as the
establishment's customers. Other open search methods of recruitment used by
the nursing homes were placing notices of vacancies in post offices and
newsagents and, in one case, advertising on local radio.
Having reviewed the extent to which these firms followed prescriptions
about the recruitment process and the methods they used to attract staff, we
can now turn to an assessment of the problems encountered in recruitment.
Despite using a variety of methods, several of the case study organisations
reported difficulties attracting staff. In some cases these difficulties were
compounded by high staff turnover rates so that, despite their small size, the
firms had ongoing recruitment drives, involving permanent advertisements in
the Jobcentre and/or regular advertisements in the local press.
The road haulage sector was particularly affected by recruitment
difficulties. A large number of LGV licence holders no longer work in the
industry and all the companies reported a shortage of ``good quality'' staff. In
fact, two of the companies reported that the shortage of suitable drivers had
hampered their expansion plans. Staff turnover rates were also high. Most of
the case study companies reported having a ``core'' of long-serving drivers
while others constantly ``come and go''. Recruitment and retention problems
were thought to come about for a number of reasons. First, truck driving is no
longer seen as a prestigious job and wages have decreased in real terms.
Second, hours are long and unsocial, and people are now said to be more
reluctant to stay away from home. In addition, some companies faced
competition for staff from other industries which were seen as more attractive,
and others competed for staff with road haulage companies in the area. Most
companies looked for experienced drivers, although two interviewees said they
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were happy to take inexperienced people and train them. One company held
interviews and carried out test drives for prospective drivers every weekend
and a list of suitable candidates was kept on the basis that even if there was no
immediate vacancy there was likely to be one in the near future. Because of the
long unsocial hours, and the implications for social and family life, it was said
to be important to spell out, especially to new drivers at interview stage,
exactly what the job entailed. Other strategies for reducing turnover included
tightening up on selection procedures ± including test drives, interviews and
requiring references ± introducing training opportunities and a pension scheme
open to longer serving staff, providing better vehicles, bonus and profit-sharing
schemes and, in one case, designing pay scales to reward long service as well as
good performance.
Many of the nursing homes also had problems with high turnover of staff
and a shortage of applicants, especially qualified nurses. The homes cannot
compete with the NHS in terms of non-pay benefits such as pensions and sick
leave, fewer people are entering the profession, and many of the homes now
rely on older nurses who are approaching, or even past, retirement age. For care
assistants, low wages, unsocial hours and the nature of the work itself were
seen as barriers to recruitment, and the homes relied on a pool of people in the
local labour market who might, for example, find it difficult to find other work
to fit in with family commitments, or who were drawn to working in a caring
profession. Some homes used press advertisements especially designed to be
eye-catching and to raise the profile of care work, and one had advertised on
local radio. Other recruitment and retention strategies included offering
working hours to suit the individual, providing opportunities to train for NVQs
and giving automatic pay increases after a qualifying period of service. One
matron expressed the view that low pay (typically between £3.00 and £3.75 an
hour for care assistants) was not the main reason why people left, but instead it
was the nature of the job itself. One owner invited potential recruits without
experience to a ``fly-on-the-wall'' evening to let them see the reality of the job,
and reduce the likelihood of their leaving in the early stages of employment.
Once new recruits had overcome the initial stages and were used to care work,
there was more likelihood that they would stay and, again, many homes
reported that they had a ``core'' of long-standing and loyal employees.
In the hotels and catering sector part-time staff, especially bar staff, were not
difficult to find because large numbers from the local student population looked
for this type of work. However, full-time staff, especially managers, were more
difficult to recruit. Another frequently reported problem was finding suitably
qualified and experienced kitchen staff. On the catering side there was said to
be a skills shortage. It was felt that colleges in the area did not turn out enough
qualified people each year to meet the demand created by the ever-increasing
numbers of new outlets. The Indian restaurant had a further problem because
the local colleges did not teach Asian cooking. The hotels and catering sector is
notorious for high rates of staff turnover and most of the case study
organisations seemed resigned to this situation, regarding it as a ``fact of life''.
However, some of the organisations considered their turnover to be lower than
others. Reasons given included ``a good team spirit'', ``hands-on'' management
style, paying above the ``going rate'', looking after staff well, management
accessibility, a ``family atmosphere'' and the interaction of job and social life.
In general the case study printing firms did not have a problem with staff
turnover, and their most common concern was that the printing industry is
facing a skills shortage. As older printers retire not enough young people are
entering the industry, perhaps because it still has a ``dirty'' ``old-fashioned''
image when, in fact, it is now very high-tech. Furthermore, the smallest firms
had problems taking on trainees because of the need to keep production going,
and because trainee pay rates seemed relatively high to the employers, even
though it was several months before they were producing any useful output.
The firms usually aimed to recruit someone with experience of operating a
particular type of machine. In the printing industry, for many years unions
played a major role in recruitment, and half the case study firms regretted that
this was not now a good source of potential recruits.
Staff turnover in the solicitors' firms was also said to be low, particularly
among fee-earners. Apart from occasional difficulties finding suitable support
staff, or solicitors in some specialisms, attracting staff was not seen as a
problem. On the contrary, the biggest problem the firms faced was dealing with
the large number of applications received each year for traineeships, typically
between 1,000 and 2,000 each year for one or two vacancies. Sifting through
these was extremely time consuming and most of the applicants, according to
the interviewees, would be perfectly suitable for the job.
None of the employers had actually calculated the direct and indirect costs of
recruitment and, indeed, some said they would rather not know. Typical
responses were ``it's a necessary evil'' and ``I don't need anything else to horrify
me''. Although several of the employers admitted to having made expensive
mistakes, generally high levels of satisfaction with recruitment methods were
expressed. Most employers used a range of different methods and many said ``I
don't know how else we'd do it''. Where there were problems, they were thought
to stem from a shortage of suitable candidates, rather than recruitment
methods as such.
Conclusions
The main purpose of this paper has been to outline and analyse the ways in
which recruitment takes place in small firms, drawing on data collected during
1998 from a sample of 40 organisations in the North West of England. The
project focused on five diverse industries (hotels and catering, road haulage,
nursing homes, printing and solicitors) in order to examine recruitment in a
range of circumstances, including workplaces where there are significantly
different proportions of men and women in employment. Despite this diversity,
we can not claim that the findings are capable of generalisation to the
workforce as a whole, although it is highly likely that similar processes,
methods and problems are observable in other workplaces. Once the more
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detailed results from the 1998 Workplace Employee Relations Survey (Cully et
al., 1999) become available, it may be possible to draw wider conclusions about
employment practices in firms employing ten or more people.
As might have been expected, the research found little in the way of
formalised and systematic procedures which are prescribed in the textbooks.
For example, none of the firms carried out any form of job analysis, and less
than a quarter overtly questioned whether or not the vacancy needed filling or
drew up a person specification. Job descriptions were, however, used in 60 per
cent of the firms. In terms of the methods which were used, all 40 firms used
recommendations from existing staff, and at least two-thirds used Jobcentres,
local newspapers, internal labour markets, the employment of former
employees and registers of interested applicants. Many of these could be
categorised as relatively closed searches (of internal and external labour
markets) or as responding to approaches from interested applicants. On the
other hand, there was a surprisingly high use of open searches, such as through
Jobcentres and the local press, as well as through other channels which had
proved effective in the past ± such as through a local college.
Whatever the method chosen however, it tended to rely heavily on tried and
trusted techniques/methods; for example, internal recruitment and Jobcentres
were used by all the hotel and catering establishments, former employees were
recruited by all but one of the road haulage firms, local press advertisements
were used by all the nursing homes, registers of interested applicants were
universal at the printing firms, while all the solicitors used registers and
Jobcentres for at least some grades of staff. While this may be potentially
problematic for a number of reasons, not least in terms of social exclusion and
the strengthening of imbalances in the workforce, it does have some
advantages for these small firms. In particular, it makes the recruitment
process simpler to conduct given that it relies on existing channels and
contacts, it does not require specialist expertise in personnel to undertake, and
it reduces the risk and uncertainly which is typically associated with hiring
new recruits. It is self-evident that the consequences of ``inappropriate''
selection are more immediately apparent in a workplace which employs few
people, and there is little opportunity for staff to be moved to other departments
or establishments. Clearly, there are differences between firms in different size
bands and in different industries, and this is something we will explore in a
separate paper.
There are a number of implications from these results. First, the ``core/
transient'' model proposed by Holliday gains support from our study, and is a
much better way of characterising the employment relationship in small firms
than the core/periphery model which is so widely quoted. We would like to
suggest that the use of stability indices for labour turnover would be rather
more effective than simple labour turnover calculations expressed in terms of
wastage rates; indeed, in several of these organisations, many new recruits did
not last longer than a few days. In many cases there was an almost fatalistic
acceptance of high turnover rates. Managers in small firms seem unaware of the
``costs'' of recruitment which tend to become manifest if employees leave within
a few days of starting, if they fail to perform at a satisfactory level or employers
have to appear before an employment tribunal to defend their actions. Second,
given that small firms are generally recognised as a major source of new
employment opportunities, despite the publicity gained by large employers
which open new establishments, it is worrying that their recruitment practices
tend to be ``exclusive'' in nature and often not ``open'' to applicants who fail to
find out about these opportunities. Third, the dominant emphasis at the
recruitment stage on ``interpersonal fit'', while understandable, is potentially
unstable given that relationships change over time and previously-close
friendships can be broken. Similarly, the highly personalised management
styles which characterise small firms can lead to reassessments of employee
worth and contribution, with the danger that once trust has been lost it is almost
impossible to maintain professional working relationships. Often the result is a
``forced'' dismissal or resignation (Goodman et al., 1998, pp. 544-45).
Of course, the key question remains of whether or not small firms should be
encouraged to adopt more systematic recruitment processes and methods, and
if so how this might be done. With some exceptions, it is unlikely in our view
that small employers would be convinced by the moral and ethical case for
opening up recruitment channels so as to widen the net and attract other
applicants. The business case might be more persuasive, as too would
examples of firms which had saved money in the longer term from more
systematic recruitment ± such as through lower levels of labour turnover in the
early stages of employment, through better quality work and less defects,
through employees offering alternative perspectives on work, or through less
need to discipline or dismiss employees on grounds of poor performance or
misconduct. Ultimately, however, the business case is also fragile as employers
may find it more cost effective in the short term to continue with existing
relatively amateur approaches. Whatever happens, it is clear that small
employers need to give rather more thought and attention to the management
of employment than is currently the situation.
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(Marilyn Carroll is a Project Officer, Mick Marchington is Professor of Human Resource
Management, Jill Earnshaw is Senior Lecturer in Employment Law, all at Manchester School of
Management, UMIST, PO Box 88, Manchester M60 1QD, UK. Stephen Taylor is Lecturer in
Human Resource Management at the Manchester Metropolitan University, All Saints,
Manchester M15 6BH, UK. Further information about this project is available from Marilyn
Carroll at UMIST.)