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Asian Journal of Management Cases
DOI: 10.1177/097282010600400103
Asian Journal of Management Cases
Piyali Ghosh and Geetika
Industry
Recruitment Strategies: Exploring the Dimensions in the Indian Software
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Lead Article
R
ECRUITMENT STRATEGIES: EXPLORING THE DIMENSIONS
IN THE
INDIAN SOFTWARE INDUSTRY
Piyali Ghosh
Geetika
People’s skill sets rather than technology drive the growth and success of software
organizations, where ideas and information form the basis for profit generation and
wealth accumulation. This article is an attempt to establish the significance of recruitment
strategies, especially in the Indian software industry. The size of an organization,
among various other factors, plays an important role in determining the type and
shape of a strategy, including human resource strategies. This article aims to examine
the different strategies of recruitment by software organizations on the basis of size
(in terms of number of employees) with the help of a survey. The findings corroborate
the proposition that recruitment strategies of such organizations vary with their
size and that such strategies are focussed to meet short-term requirements.
Keywords:
Recruitment, strategies, software, dimensions, size
I
NTRODUCTION
The rapid diffusion of technological innovation all over the globe has dramatically accelerated
competition (Bettis and Hitt 1995; Friedman 1999) and organizations are experiencing
a shift in the source of competitive advantage from tangible resources to knowledge
and know-how (Buderi 2000; Quinn 1992). Strategists have found that a focus solely on
physical resources is shortsighted, as they cannot render sustained competitive advantage
in the long run. Superior human resource, on the other hand, can help organizations attain
such a competitive advantage. Any futuristic organization that has long-term vision
would thus set its corporate goals contingent upon accumulation of knowledge and talent
inherent in quality human resource. This trend has led scholars to begin to study the
knowledge creation capability, especially regarding how firms can develop this unique
competence (Grant 1996; Kogut and Zander 1992; Nahapiet and Ghoshal 1998).
Contemporary management practices indicate that many leading organizations have
adopted an investment perspective towards their human resource (HR). They are focusing
on their workforce composition as an integral part of their human resource strategies.
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DOI:
10.1177/097282010600400103
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Here too one must look at the basics. The quality of human resource is to be ensured at
the time of recruitment; the most important way a company can ensure that it has the
right type of people is by hiring the right type of people in the first place (Collins et al.
2005). Getting the right number and right kind of people in the right places at the right
time, doing the things that benefit them as individuals and the organization as a whole, is
gradually becoming an arduous and multi-faceted process. This, along with the changes
in the external as well as internal environment of any organization, demand a more
comprehensive and more strategic outlook towards the recruitment of employees.
The purpose of this article is to conceptualize the different dimensions of recruitment
strategies and examine the impact of organizational size on recruitment strategies. To support
and complement our argument, we studied these dimensions in the Indian software
industry. This article also attempts to highlight the popular measures in recruiting software
professionals. The following sections develop the logic for these relationships in greater
detail.
H
UMAN RESOURCE STRATEGY AND DISTINCTIVE CAPABILITIES
HR strategy focuses on the development of workers central to a firm’s advantage. These
‘gold collar workers’ (Huey 1998) have substantial autonomy in pursuing initiatives on
which the firm is likely to build its future strategies. Strategic recruitment starts from the
premise that an organization’s workforce makes a significant contribution to its achievement
of strategic goals in the short and long runs. Recruitment strategies refer to its process
of creating a strategic plan for the organization, having specific requirements for
each job and aligning them with the corporate and business strategies of the organization.
They focus on the development of workers that are central to a firm’s advantage and also
incorporate decisions about the balance and mix of different types of human capital
within the organization. At the same time, they are oriented towards preserving existing
relationships with employees, as well as making more use of a contingent workforce that
includes part-timers and temporary workers.
The quality of workforce is a function of the recruitment and selection process (Evenden
1993). Several specific practices have been shown to be effective. For example, recruitment
can be enhanced through the use of multiple recruiting sources to build larger applicant
pools (Koch and McGrath 1996). Firms requiring higher levels of employee education and
experience can use extensive recruiting and selective staffing practices as a means for
improving their human capital (Koch and McGrath 1996; Snell and Dean 1992). Because
candidates with specialized knowledge, skills and abilities (KSAs) command a premium
in the labour market, above-market starting salaries and other recruitment inducements
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(e.g., signing bonuses) can attract higher levels of human capital (Snell and Dean 1992).
In addition to recruitment, selective screening practices that increase the amount of
relevant information gathered permit firms to identify and hire employees with stronger
KSAs (Hunter, et al. 1982). In the area of employee staffing decisions Barney (1997), Wright
et al. (1994) and Snell et al. (1999) have applied the resource-based theory and have argued
that organizations enhance their value by deciding which human resource capabilities
remain within the firm (specific skills) and which are acquired in the market (general
skills). The knowledge, skills and abilities that contribute to a firm’s unique capabilities
should be developed within the firm and those that do not should be acquired on demand
in the external labour market. Snell et al. (1999) suggest that human resource capabilities
can be characterized by two dimensions: contribution to firm value and uniqueness of
human capital. Using this framework, they define four staffing options: develop internally;
acquire externally and keep; out-source and partner. The two staffing options that are high
on the value dimension (develop internally and acquire externally and keep) represent
human resource capabilities that should reside within the firm. These capabilities should
be developed by human resource practices emphasising what Tsui et al. (1997) refer to as
a mutual investment, where both employer and employee make open-ended and longterm
investments in each other. Recruitment strategies herein must incorporate decisions
about the balance and mix of different types of human capital, the expectations placed
upon them by the firm and the investments made in their development, etc.
The size of an organization, among various other factors, plays an important role in
determining the type and shape of a strategy, including human resource strategies. A
large organization with a different vision and scope will look at the same aspect from different
dimensions compared to a small organization. In many large organizations, the
recruitment strategy revolves around creating a competitive compensation and benefits
package. However, smaller organizations consider attracting the best talent—a lost cause
for them because they cannot offer the competitive compensation packages that their big
brothers offer (Raju 2004). Companies reputed as top recruiters realize that the organizational
characteristic that their competitors can most easily duplicate is money (Brannick
2001). Therefore non-monetary strategies are also widely used by companies to attract top
talent; the mix of monetary and non-monetary means for attracting workers may also vary
across organizations of different sizes. The difference in perspective among small, medium
and large organizations in a given environmental framework makes strategy formulation a
very challenging task for them.
This backdrop prompted us to analyze the recruitment strategy dimensions and see
their relationship with the size of the organization. Hence, first an attempt is made to
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refine the concept of a recruitment strategy. It has been explained on the basis of three
basic dimensions, viz., whom, how and from where to recruit. Second, these dimensions
were studied by taking a sample survey of one of the most flourishing industries in India,
i.e., the software industry. In order to systematically come to certain conclusions, a basic
premise is taken that strategy formulation is contingent upon the size of the organization
and that organizations with different sizes differ in their strategies. Thereby the sample
companies are segregated into three categories, Large (L), Medium (M) and Small (S) on
the basis of number of employees. Then a number of hypotheses are proposed and tested
on the basis of the survey.
D
IMENSIONS OF RECRUITMENT STRATEGIES
Blending the facets of recruitment with strategic analysis is becoming an uphill task in
today’s dynamic environment and workforce fragmentation. Organizational responses
to specific human resource interventions place new demands on strategies of recruitment
as a component of HR strategies, which now focus on fitting the job to the person
(Collins et al. 2005), rather than the person to the job; fitting the person to the organization
rather than the job; and recruiting against core competencies or skills (Thornhill et al.
2000). Carefully planned recruitment strategies help organizations by-pass sufferings of
over-endowment and mal-allocation of human resources. Such strategies may largely be
influenced by factors like the strategy phase and planning horizon of the company and
reconciliation of the supply and demand situations in the market. At the start-up stage,
an organization may adopt external recruitment techniques, while during expansion it
may adopt strategies of succession planning, promotions and external recruitment. A
diversifying organization may go in for redeployment and retraining, apart from succession
planning, promotions and external recruitment. It may also go for lay-offs and retrenchment
during the turnaround period.
In our article we suggest the following dimensions of recruitment strategies of any
organization:
i. Whom to recruit
ii. From where to recruit
iii. How to recruit
i. Whom to recruit:
Organizations must decide whether to hire less skilled employees
and invest on their training and education programmes, or to hire skilled
labour and professionals. Essentially this is the ‘make’ (hire less skilled workers)
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or ‘buy’ (hire skilled workers and professionals) decision. If it is affordable to have
less skilled workers, such workers may be hired by offering them low wages. This
would save on the organizational wage bill at the cost of tolerating a high rate of
employee turnover. At the other extreme, surveys show that firms are increasingly
hiring fully trained workers from their competitors rather than developing them
internally (Rynes et al. 1997); such professionals, if hired, may be offered such
lucrative packages that they may be willing to have a longer stay in any organization,
but at the cost of a higher wage bill.
ii. From where to recruit:
In order to reduce costs, organizations look into those
labour markets that are most likely to offer the required job seekers (Aswathappa
2002). Generally they look into the national and international markets for managerial
and professional employees, regional or local markets for technical employees
and local markets for clerical and blue-collar employees.
iii. How to recruit:
How to recruit refers to the methods of recruitment that may be
broadly categorized as internal and external. Internal recruitment may be by means
of promotion and transfers, job posting and succession planning. External recruitment
may be by means of advertisements (including advertising on the Internet),
campus recruitment, employment agencies, contingent workers, temporary help
agencies, job fairs or career days and headhunting.
I
NDIAN SOFTWARE INDUSTRY: THE CASE STUDY
Recruitment as a core human resource function has gained special dimensions in the
software industry. Unlike mass production, software organizations are service-oriented,
rendering customized solutions to target markets. To add to this aspect is the high rate of
obsolescence of software skills. All these make software jobs less formalized and less
standardized and recruitment of knowledge workers a specialized function.
With a dynamically changing and volatile demand-supply equation, especially against
erratic attrition trends and cut-throat competition (www.nasscom.org) no longer restricted
to local or regional boundaries, software the world over has been continually experiencing
a need for strategizing and putting in place a robust mechanism for attracting and retaining
top talent. New career horizons within the industry have multiplied the prospects of mobility
of software professionals across organizations; a growing number of such employees
no longer want to spend their career with the same employer or occupation (Das 1996).
Professional loyalty has replaced the age-old concept of organizational loyalty (Das 1996).
Moreover, since this industry is entirely knowledge-driven, its primary emphasis is more
on traits like innovativeness, dynamism, communication skills and teamwork and less
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on qualifications. Search for software professionals is contingent upon skill sets commensurate
with the demand of the projects at hand. This industry still survives on projects
rather than on products. Such projects usually being of a short duration, software companies
tend to pursue short-term, need-based recruitment strategies. All these factors
have rendered recruitment strategies in this industry a distinct identity and have made
it an area of introspective study.
Recruitment as a strategy in the software industry can be studied across distinct phases
of prosperity, recession and recovery of the life cycle of this industry.
Recruitment during prosperity:
This period saw large-scale recruitment of professionals,
with their demand out-stripping their supply. From a base of 6,800 knowledge
workers in 1985–86, growing to 280,000 employed in 1998–99, the number increased to
522,000 software and services professionals by the end of 2001–02, of which, almost
170,000 were estimated working in the IT software and services export industry; nearly
106,000 in IT enabled services and over 220,000 in user organizations (www.nasscom.org).
Quality standards were lowered and quality was virtually replaced by quantity; with the
working principle of recruiting being ‘Cage them at any cost, or simply lose them’
(dataquest.ciol.com); even professionals with certifications could get a good job. NASSCOM’s
Manpower Resources Survey in 2001–02 on the IT workforce status revealed that the hiring
of new IT professionals was the highest in south India at 41 per cent and lowest in the
eastern region at 6 per cent. Multiple opportunities created a penchant among software
professionals to switch jobs frequently, in search of greener pastures. All these were supplemented
by an increasing tendency among companies to ‘buy in’ professionals from
competing firms; firms in Bangalore experienced very high turnover rates as their best
and more experienced personnel were ‘poached’ by other firms in Bangalore (http://www.
exchange.usg.uu.nl).
Recruitment during recession:
The scenario, however, was dramatically reversed
with the recession in the industry, mainly as a consequence of the US economic slowdown
and the South East Asian crisis. Projects became few; funds dried up fast. An even greater
blow came with the dot com debacle. The overall ICT business was also affected by the
global economic downturn, which lead to IT budget slashes among customers, and a loss
in revenues for the worldwide software and services community. These setbacks proved
to be a turning point for the domestic industry, which experienced oversupply of skill
sets as compared to earlier years and a strategic shift in the recruitment policies of corporates
(NASSCOM)
. Companies started issuing pink slips during the global economic
downturn (www.nasscom.org). Since the economy started its decline, companies increasingly
turned to downsizing as a way to cut costs and remain competitive (www.nasscom.org).
Mobility went down; recruitment was no longer the primary HR activity. Indian software
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companies moved towards better management practices by optimally utilizing existing
resources and hiring as per demand (www.nasscom.org). Companies resorted to retrenchment
of less productive professionals and retention of only selected performers.
Recruitment during recovery:
The sector, which had managed to sustain growth
during the challenging 2000–02 period, built up steam once again, reverting gradually to
its performance levels prior to the global economic recession (www.nasscom.org). Key
findings of the NASSCOM Survey in 2004 revealed that the pace of recruitment has picked
up for IT services. The total direct employment in the Indian IT-ITES sector is estimated
to have grown by over a million, from 284,000 in FY 1999–2000 to a projected 1,287,000
in the current fiscal (2005–06); companies in the IT software exports sector recruited
75,000 professionals in 2004–05, compared to 65,000 professionals recruited in 2003–04.
Lavish spending by companies to retain key performers has come to be replaced by
‘intelligent’ spending, that would help in building a long-standing, stronger relationship
between the employer and the employees.
H
YPOTHESES
Keeping the objective in perspective, we framed the following hypotheses to seek empirical
evidence of the three dimensions of recruitment from the software industry in India:
Dimension I: Whom to recruit
Hypothesis 1:
H
0: There is no difference among the Large (L), Medium (M) and Small (S) organizations
regarding recruitment of people with right skills
.
H
1: There is a difference among the Large (L), Medium (M) and Small (S) organizations
regarding recruitment of people with right skills
.
Dimension II: From where to recruit
Hypothesis 2:
H
0: There is no difference among the Large (L), Medium (M) and Small (S) organizations
regarding internal recruitment in the event of a vacancy
.
H
1: There is a difference among the Large (L), Medium (M) and Small (S) organizations
regarding internal recruitment in the event of a vacancy
.
Hypothesis 3:
H
0: There is no difference among the Large (L), Medium (M) and Small (S) organizations
regarding external recruitment in the event of a vacancy
.
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H
1: There is a difference among the Large (L), Medium (M) and Small (S) organizations
regarding external recruitment in the event of a vacancy
.
Dimension III: How to recruit
Hypothesis 4:
H
0: There is no difference among the Large (L), Medium (M) and Small (S) organizations
regarding the strategy of succession planning
.
H
1: There is a difference among the Large (L), Medium (M) and Small (S) organizations
regarding the strategy of succession planning
.
Hypothesis 5:
H
i: There is no difference among the Large (L), Medium (M) and Small (S) organizations
regarding identification of manpower requirements well in advance
.
H
1: There is a difference among the Large (L), Medium (M) and Small (S) organizations
regarding identification of manpower requirements well in advance
.
Hypothesis 6:
H
0: There is no difference among the Large (L), Medium (M) and Small (S) organizations
regarding manpower planning done with 5 yearly projections
.
H
1: There is a difference among the Large (L), Medium (M) and Small (S) organizations
regarding manpower planning done with 5 yearly projections
.
R
ESEARCH DESIGN
A good theory is one, which passes the test of application; this is especially relevant in
the context of management science because management theory must have a behavioural
orientation. The three dimensions of recruitment, discussed herein, have been tested
taking the case of the Indian software industry. The testing has been done by using statistical
tools of analysis, sampling, questionnaire administration and data interpretation.
The collected data have been analyzed to examine differences, if any, in recruitment
strategies across different sizes of organizations.
Sampling
As mentioned earlier, the study was conducted on the Indian software industry; the main
reason being that in Indian corporate history this industry has introduced many innovative
and unconventional HR strategies. A sample of forty-three companies was selected from
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among 950-odd NASSCOM-registered companies (NASSCOM is a quasi-government
software industry promotion organization).
The main proposition of the study being that recruitment strategies vary with the size
of the organization, the study aimed to examine the different strategies of recruitment
by software organizations on the basis of size. They have accordingly been divided into
three groups: less than 200 employees categorized here as small (S), 201 to 1,000 employees
categorized here as medium (M) and 1,000 employees and more categorized here as
large (L). Small organizations represent 25.88 per cent, medium organizations represent
39.53 per cent and large organizations represent the remaining 34.88 per cent of the total
43 organizations surveyed.
All of the forty-three organizations that participated in the survey are engaged in software
development and all but two are organized as private limited. Other activities of
these organizations range from software consultancy to web-based solutions (including
web-designing and web hosting) to ERP services and database administration.
D
ATA COLLECTION
In order to ascertain the different strategies of recruitment in the software industry, a
questionnaire was designed with two parts: the first with a set of closed-ended questions
and the second with statements using the Likert Scale, ranging from ‘Strongly Agree’ to
‘Strongly Disagree’ on such statements. Apart from information pertaining to recruitment
strategies, the respondents were also asked about information on the year of inception of
the organization, its locations, branches and size (in terms of number of employees). Detailed
explanations of the purpose of the study and a copy of the questionnaire for initial
approval were electronically mailed to the respondents. Some of the companies were
personally visited while final questionnaire was sent to other companies via e-mail. Since
the information to be collected pertained to the HR Department of any organization,
the HR Manager of every respondent organization was contacted.
Variables
The research premises were examined on the basis of the following variables:
i. Internal Recruitment in the Event of a Vacancy (PRMT):
In the modern corporate
culture of quick career advancement and multiple job opportunities, mobility
among knowledge workers is on the rise. Frequent job changes are no longer a
stigma, but they are becoming the norm (Kodwani and Kumar 2004). This is in the
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face of stiff competition among organizations to attract the best talent, in order to
attain a competitive advantage in the market. Ensuring a healthy team of committed
and productive employees necessitates organizations to look for suitable employees
in-house, rather than opting for external sources. They may, as such, offer promotions
to deserving employees as a motivational tool. The variable PRMT examines
the tendency among software organizations to go for promotions and transfers. The
rationale behind this is that such organizations usually have a high attrition rate
and hence may not prefer to promote their existing employees to higher positions.
ii. External Recruitment in the Event of a Vacancy (EXTRNL):
This variable
examines the tendency among software organizations to go for external sources
for any vacancy. The rationale behind this is that having a high employee turnover,
organizations may not have competent internal staff to be promoted to higher
positions and may thus look for external sources.
iii. Recruitment of People with Right Skills (RTSKILL):
Given the premise that
getting the right number and right kind of people in the right places at the right
times is a major concern for any organization, it is obvious that faulty recruitment
may lead to a person-job misfit and would adversely affect the productivity
of an organization. As such an attempt has been made to gauge whether software
organizations vouch for recruiting the right people every time. The variable
RTSKILL tries to evaluate the premise: do software organizations always recruit
people with the right skills?
iv. Strategy of Succession Planning (SPLNNG):
Appropriate and well-designed
career development opportunities may prove to be a vital tool to enhance the level
of motivation of the workforce. Succession planning may prove to be an internal
motivator that may help organizations attract and retain a quality workforce. An
attempt has been made to gauge whether software organizations plan for the succession
for their employees. The variable SPLNNG examines the tendency among
software organizations to design succession plans for their existing staff. The rationale
behind this is that such organizations usually have a high attrition rate and
hence may not plan for the succession of their existing employees.
v. Identification of Manpower Requirements in Advance (MPWR):
Recognition
of manpower requirements becomes crucial in an industry like software, which
thrives on projects; planning becomes difficult in the face of uncertainty in projects,
which may require specific skill sets. An attempt has been made to gauge whether
software organizations identify manpower requirements in advance. The variable
MPWR examines whether software organizations identify manpower requirements
pro-actively.
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vi. Manpower Planning with 5 Yearly Projections (MPLNNG):
Human resource
planning helps to determine the number and type of employees needed by an
organization; effectiveness of such planning can play a major role in determining
the resources that must be expended on other human resource activities and their
ultimate success. Hence effective human resource planning can have a significant
and positive impact on the organization, while poorly designed and executed planning
may bring both short- and long-term repercussions. An attempt has been
made to gauge whether software organizations plan with 5 yearly projections. The
variable examines the tendency among software organizations to go for need-based
manpower strategies.
Tools of Analysis
In this survey we used an ordinal scale (Likert Scale), hence to report the findings, the
proper statistic to use is the
median for a measure of the central tendency (instead of the
mean
). A typical question using a Likert Scale in this study poses a statement and asks
the respondents whether they Strongly Agree, Agree, Neither Agree nor Disagree, Disagree
or Strongly Disagree. The data collected are ordinal: they have an inherent order or sequence,
but one cannot assume that the respondent means that the difference between
agreeing and strongly agreeing is the same as between agreeing and being undecided.
Hence among the descriptive techniques we have summarized data using a median (not
a mean). Hypotheses testing in this study has been done by analyzing the statements in
the questionnaire with the help of the Likert Scale. For this we have followed an iterative
two-step procedure. In the first step we try to find out the Kolmogorov-Smirnov D value for
a variable; if the critical value of D (D
critical) is less than the calculated D (Dcal), we reject
the null hypothesis and conclude that there exists a difference in ratings among the
respondents with regard to the particular statement. In the next step, we move further
and try to locate any difference in the average (here median) responses of the three
groups of respondents by using the Median Test. If
χ2
cal
> χ2
critical
, we reject the null hypothesis.
This implies that difference in median values between groups L, M and S regarding
a particular variable is significant.
F
INDINGS AND ANALYSIS
1. Selecting the Right People
H
1: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding recruitment of people with right skills
.
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H
1a: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding recruitment of people with right skills
.
The Kolmogorov-Smirnov D value is 0.59 (Table 1). As the sample size in this case is
43, D = 1.07/
√43 = 0.163. Since Dcal > Dcritical, we reject the null hypothesis and conclude
that there exists a difference in ratings among the respondents, with regard to recruitment
of people with the right skills.
On the basis of the Median Test, the value of
χ2
cal
= 3.1 (Table 1). Since χ2
cal
< χ2
critical
, we
cannot reject the null hypothesis. This implies that difference in median values be-tween
groups L, M and S in recruiting people with the right skills is significant.
Table 2 reveals that average response on RTSKILL is 5 (Strongly Agree) across all sizes
of organizations. As such we may infer that software organizations of all sizes claim to
always recruit the right kind of people.
Table 1
D and
χ2 Values for Recruitment Strategy
Variables
Test Prmt Extrnl Rtskill Splnng Mpwr Mplnng
D
0.35 0.33 0.59 0.28 0.29 0.28
χ
2 5.25 3.26 3.1 4.857 0.676 2.103
Note:
For a sample size of more than 35, the critical value of D at an α = 0.20 is 1.07/√N.
For k-1= 2 df at 0.20 level of significance,
χ2
critical
= 3.219.
Table 2
Median Values for Recruitment Strategy
Size Prmt Extrnl Rtskill Splnng Mpwr Mplnng
Large
4 3 5 4 4 2
Medium
4 4 5 5 4 2
Small
3 4 5 4 4 2
2. Mode of Recruitment
H
2: There is no difference among the respondents from Large (L), Medium (M) and Small (S)
organizations regarding internal recruitment in the event of a vacancy
.
H
2a: There is a difference in agreement ratings among the respondents (L, M and S groups)
regarding internal recruitment in the event of a vacancy
.
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The Kolmogorov-Smirnov D value is 0.35 (Table 1). As the sample size in this case is
43, D = 1.07/
√43 = 0.163. Since Dcal> Dcritical, we reject the null hypothesis and conclude
that there exists a difference in ratings among the respondents, with regard to internal
recruitment in the event of a vacancy.
On the basis of the Median Test, the value of
χ2
cal
= 5.25 (Table 1). Since
χ2
cal
> χ2
critical
,
this implies that difference in median values between groups L, M and S with regard to
internal recruitment in the event of a vacancy is significant.
Table 2 reveals that average response on PRMT is 4 (Agree) for L and M, though S have
an average response of 3 (Neither Agree or Disagree); this reveals a greater preference
for internal sources among large and medium organizations than small ones. Between
groups L, M and S there exists difference in median values. As such we may infer that
strategy to recruit from internal sources may differ across different sizes of software
organizations.
H
3: There is no difference among the respondents (L, M and S groups) regarding external
recruitment in the event of a vacancy
.
H
3a: There is a difference among the respondents (L, M and S groups) regarding external
recruitment in the event of a vacancy
.
The Kolmogorov-Smirnov D value is 0.33 (Table 1). As sample size in this case is 42,
D=1.07/
√43 = 0.165. Since Dcal>Dcritical, we reject the null hypothesis and conclude that
there exists a difference in ratings among the respondents with regard to external
recruitment.
On the basis of the Median Test the value of
χ2
cal
= 3.26 (Table 1). Since χ2
cal
> χ2
critical
,
this implies that difference in median values between the groups L, M and S with regard
to external recruitment is significant.
Table 2 reveals that the average response on EXTRNL is 3 (Neither Agree or Disagree)
for L, though M and S have an average response of 4 (Agree); this reveals a greater preference
for external sources among medium and small organizations than large ones. Between
groups L, M and S there exists significant difference in median values. As such we
may infer that strategy to recruit from external sources may differ across different sizes
of software organizations.
3. Human Resource Planning
H
4: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding identification of manpower requirements
well in advance
.
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18 P
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H
4a: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding identification of manpower requirements
well in advance
.
The Kolmogorov-Smirnov D value is 0.29 (Table 1). As one sample size in this case is
43, D=1.07/
√43 = 0.163. Since Dcal> Dcritical, we reject the null hypothesis and conclude
that there exists a difference in ratings among the respondents, with regard to identification
of manpower requirements well in advance.
On the basis of the Median Test, the value of
χ2
cal
= 0.676 (Table 1). Since
χ2
cal
< χ2
critical
,
we cannot reject the null hypothesis. This implies that difference in median values between
groups L, M and S with regard to identification of manpower requirements well in
advance is not significant.
Table 2 reveals that the average response on MPWR is 4 (Agree) across all sizes of
organizations; between groups L, M and S there is no significant difference in median
values. We may thus infer that software organizations of all sizes identify manpower requirements
well in advance.
H
5: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding the strategy of succession planning
.
H
5a: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding the strategy of succession planning.
The Kolmogorov-Smirnov D value is 0.28 (Table 1). As the sample size in this case is
42, D=1.07/
√42 = 0.165. Since Dcal> Dcritical, we reject the null hypothesis and conclude
that there exists a difference in ratings among the respondents with regard to the strategy
of succession planning.
On the basis of the Median Test, the value of
χ2
cal
= 4.857 (Table 1). Since χ2
cal
> χ2
critical
,
we reject the null hypothesis. This implies that difference in median values between
groups L, M and S with regard to the strategy of succession planning is significant.
Table 2 reveals that the average response on SPLNNG is 4 (Agree) for L and S, though
M have an average response of 5 (Strongly Agree). Between groups L, M and S there
exists a significant difference in median values. As such we may infer that the strategy of
succession planning differs across different sizes of software organizations.
H
6: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding manpower planning done with 5 yearly
projections
.
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H
6a: There is a difference in agreement ratings among the respondents from Large (L), Medium
(M) and Small (S) organizations regarding manpower planning done with 5 yearly
projections
.
The Kolmogorov-Smirnov D value is 0.28 (Table 1). As the sample size in this case is
42, D = 1.07/
√42 = 0.165. Since Dcal>Dcritical, we reject the null hypothesis and conclude
that there exists a difference in ratings among the respondents with regard to manpower
planning done with 5 yearly projections.
On the basis of the Median Test, the value of
χ2
cal
= 2.103 (Table 1). Since χ2
cal
< χ2
critical
,
we cannot reject the null hypothesis. This implies that difference in median values
between groups L, M and S with regard to manpower planning done with 5 yearly projections
is not significant.
Table 2 further shows that the average response on MPLNNG is 2 (Disagree) across all
sizes of organizations; between groups L, M and S there is no significant difference in
median values. As such we may infer that software organizations, irrespective of their
size, do not have manpower planning with 5 yearly projections.
A
NALYSIS
Even though highly qualified talent is more readily available in India than it is in the
United States, recruitment of software professionals seems to be a large issue facing software
organizations. This study examined the differences in recruitment strategies across
different sizes of organizations in the software industry in India. For the variable organizational
size (in terms of number of employees), we used various aspects of a recruitment
strategy, and have analysed the data as:
Whom to recruit:
In their decision to ‘make’ or ‘buy’ professionals, software organizations
may opt for different qualification profiles of their employees, on the basis of a
number of factors like the size of the organization and requirements of skill sets (both
short- and long-term). The organizations surveyed reveal a wide diversity with regard to
‘whom to hire’; this is reflected in the varied proportions of different qualification profiles
of employees across different sizes of organizations.
Qualification Profile of Software Employees
Professionals in the organizations surveyed have been categorized into five types: graduate
(non-engineering+ IT certification), graduate (engineering), post-graduate (engineering),
post-graduate (non-engineering) and others (including MBAs, Chartered Accountants,
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20 P
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Graphic Designers, diploma holders and administrative staff). These are further classified
on the basis of the size of the organization (Table 3).
Table 3
Qualification Profile of Employees
Qualifications Large (per cent) Medium (per cent) Small (per cent)
Graduate (Non-Engineering) 5.06 11.3 22.5
Graduate (Engineering) 63.29 60.9 42.4
PG (Engineering) 17.23 12.9 16.3
PG (Non-Engineering) 11.18 6.6 7.9
Others 3.23 8.2 10.9
Total 99.99 99.9 100.0
Graduates (non-engineering) have the lowest presence in large organizations. Graduates
(engineering), on the other hand, have the highest presence in large organizations and
the least in small organizations. Post-graduates (both engineering and non-engineering)
have the highest presence in large organizations. ‘Others’ are most commonly found in
small organizations. It is evident from Table 3 that the percentage of graduates (nonengineering)
follows a declining trend with an increase in the size of the organization
and the percentage of graduates (engineering) follows an increasing trend with an increase
in the size of the organization. With regard to large organizations, the lowest presence of
graduates (non-engineering) at 5 per cent may imply requirement of higher skill sets in
the different activities of such organizations. Relatively higher (more than one-fifth) is the
presence of post-graduates (non-engineering and engineering). This may be due to the
fact that large organizations need to take care of other activities (like HR and marketing)
apart from their core activities on a broader scale than the other two categories of organizations.
The wider domain of such activities may compel these organizations to look for
people with diversified skill sets. Hence there is greater variation in the qualification
profiles of employees in large organizations.
Medium-sized organizations have a comparatively higher presence of graduates (nonengineering)
and a lower presence of graduates (engineering) than large organizations.
This may hint towards requirement of lower skill sets in such organizations and a tendency
of multi-tasking by employees. This would explain a lesser presence of post-graduates
(non-engineering and engineering) than in large organizations.
Smaller organizations seem to stress more on core activities (here software development)
and hence have a lesser presence of post-graduates (non-engineering) at around
8 per cent. These organizations may also opt for multi-tasking of their employees and
would hence need less higher qualification in their employees.
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Source and mode of recruitment:
The organizations surveyed were asked about the
different external sources of recruitment, the primary ones in use being campus, placement
agencies, advertisements, online and employee referrals. An attempt was also made
to capture the rates of change in such modes adopted by organizations before and after
the software industry entered the period of maturity (after 2002). Hence the questions
reflect changes in the recruitment strategies of software organizations across this phase
and the reasons thereof.
In the phase after 2002, large organizations have shown an increase in the use of the
online mode, advertisements and employee referrals to recruit staff; the biggest increase
being in the online mode (Figure 1). They revealed that they had kept the other two
sources at the same levels. Medium-sized organizations opted for more campus recruitment;
they also reported the highest increase in the online mode. But such an increase in all the
Figure 1
1
60
Change in Mode of Recruitment 2002 onward
s
120
80
40
Percentage
–40
0
Large Medium
S
ize of Organization
Small
1
6.67
50.00
50.00
–11.11
66
.67
14.2
9
6
2.50
15.
38
–
6.25
1
6.67
9
.09
7
1.43
18.18
0
0 Campu
s
Employee
Referrals
Placement Agency
Adverti
sements Online
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22 P
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other modes of recruitment in such organizations seems to be at the cost of hiring through
placement agencies, which has suffered a fall of 6.25 per cent. The most remarkable increase
in the use of the online mode was registered in this phase by small organizations;
such organizations also went in for more campus recruitment.
It can thus be inferred that the phase of maturity has experienced an overall increase
in the use of the online mode of recruitment and an average lowered use of placement
agencies by software organizations. Campus recruitment, on the other hand, has increased
among medium-sized and small organizations, the greater increase being in case of the
latter (by a remarkable 66.67 per cent). Recruitment by advertisements seems to have
gained popularity among all the groups; the highest increase being over 50 per cent in
the case of small organizations. Employee referrals enjoyed an overall increase across all
the three categories, the highest being in case of small organizations.
Overall it can be inferred that except recruitment by campus and placement agencies
(for large organizations) and placement agencies (for both medium and small organizations),
all the other modes have enjoyed an increase in usage 2002 onwards.
Change in existing strategy of recruitment:
Reasons cited by large organizations in
changing their existing strategies of recruitment are dominated by focus on new skills,
followed by plans for expansion. Only 20 per cent of such organizations stated changes
in economic conditions as the driving cause (Table 4). An equal percentage of medium
size organizations opted for plans for expansion and focus on new skills as the main reasons.
Even in case of these organizations, the lowest percentage reveals economic conditions
as the reason behind changing their strategies of recruitment. For small organizations
the highest percentage reveals plans for expansion as the main reason. Surprisingly,
changes in economic conditions have had no influence in this change. Of all the organizations
surveyed, 13.33, 23.53 and 45.45 per cent of large, medium and small organizations
respectively, revealed no change in strategies of recruitment.
Table 4
Reasons Behind Change in Existing Strategy of Recruitment
Reasons Large (per cent) Medium (per cent) Small (per cent)
Plans for Expansion 33.33 52.94 63.64
Company Focus on New Skills 46.67 52.94 27.27
Change in Economic Conditions 20.00 23.53 0.00
Quality Consciousness 26.67 47.06 27.27
No Change 13.33 23.53 45.45
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C
ONCLUSION
To conclude, we can say that recruitment strategies do vary with the size of the organization
in the software industry; in our study a majority of the dimensions of such strategies
showed variance across different sizes of organizations. The qualification profile of knowledge
workers showed the major diversity: the percentage of employees with non-technical
background was seen to follow a declining trend with an increase in the size of the organization,
while the percentage of engineering graduates was seen to follow an increasing
trend with an increase in the size of the organization. Major differences were also perceived
in modes of recruitment used by different sizes of organizations. The modes used by these
organizations include advertisements, placement consultants and recruiting on university
and college campuses. Some of them claimed to pursue very stringent recruitment
criteria. Except recruitment by campus and placement agencies (for large organizations)
and placement agencies (for both medium and small organizations), all the other modes
enjoyed an increase in usage ever since the industry entered the phase of maturity. Online
recruitment registered the highest rate of growth among all other ‘traditional’ modes
of recruitment across all the three categories of organizations surveyed; small organizations
come up as the highest users of this mode. This spells out the gradual gaining of popularity
of online recruitment over other modes of recruitment and affirms the fact that this
method is affordable for even small organizations. The only aspect in which the software
organizations have shown similarity in this study is the strategy of manpower planning.
Today, decisions about what work should be kept internally; what should be out-sourced;
the quality of incumbents and skill set requirements of the organization are as central to
recruitment strategy, as they are to the human resource strategy in particular and the
business strategy in general. Organizations in the software industry encounter the twin
problems of recognizing the skill sets in demand in the industry and hunting for human
resource proficient in such skills at the right time and right place. Besides, recruitment
strategies in such a dynamic industry also need to incorporate decisions about the balance
and mix of different types of human capital within a typical software organization.
In order to deal with so many dimensions in the recruitment of knowledge workers,
software organizations must strive to set the right recruitment strategy with manifold approaches.
Organizations in this industry must realize that learning is a key area of their
concern; hence they need to consider individual learning needs of employees and address
them suitably by creating learning opportunities for them (Kodwani and Kumar 2004).
Realizing that employees have definite career needs, organizations should not only chart
different career paths in accordance with such needs, but also make such paths known
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to all the employees. Promotion routes within the organization should also be made public.
Openness should be the hallmark of an effective organization in this area (Pattanayak
2001). Besides, the bond between employees and their organization should be strengthened
by a number of factors like job scope, job challenge, occupational commitment, job involvement
and job satisfaction, thus leading to organizational commitment. This will have
multiple advantages for the organization: one it will result in a lower turnover, contribute
to greater productivity and will also attract prospective employees.
One caveat in this study is that we have focused on recruitment strategies with reference
to the size of the organization. We believe this is a reasonable strategy dimension. Yet, an
examination of the relationship between other business strategies and recruitment would
be beneficial. Another issue that needs to be addressed is the time period in which the
research has been conducted. We collected data from 2003 to 2004, when the Indian
economy and the software industry had started recovering from a recessionary trend.
Although data relating to 2004–05 could have added more weight to the study, our data
may be considered to be relatively recent as compared with other studies. Besides, it does
not affect the foundation of the study.
To conclude, our study confirms that strategy-size fit applies to organizations in the
software industry as well. Whatever be the industry, organizations should develop their
recruitment strategies considering their size keeping in mind the critical place of recruitment
in the overall strategic gamut.
R
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