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Traditionally applicants went looking for job openings in companies that suit their career profile and their future development plans. That is not the case anymore. Employers have recognized the need of recruiting the right candidates for their organizations so they compete proactively to attract the right candidates to their organizations. Companies have realized the strategic importance of efficient HR function to attract and retain employees who have the potential to add competitive advantage to the organization.
The company chosen for the purpose of this report is Abdullah A. M. Alkhodari Sons Company (KSC) which was founded in 1966, by the late Abdullah A. M. Alkhodari. The company started with small projects in major industries and local municipality corporations but has steadily grown since then to be 80th in the Top 100 companies in Saudi Arabia. The company has organically grown into other countries in Gulf, Middle East and Africa, a latest development being a major Joint Venture with a UK Shipping Company.
The company has spread its activities into different segments in the construction industry like general contracting, city cleaning, waste management, steel manufacturing, industrial services, transportation, equipment trading, industrial trading, insurance services, and travel services and has developed with the growth of Saudi Arabia by playing an active role in its development.
KSC being a market leader in earth works also has a significant market share in general construction in a variety of industries.
Terms of reference
The author of this report evaluates the operation and effectiveness of recruitment and selection policies followed in their family owned business, KSC.
Analysis of the recruitment and selection policies of KSC
The Recruitment procedure followed in KSC has been evaluated under each stage of recruitment. The existing recruitment policy has been attached in Appendix;
Communication of job vacancy
Recruitment process starts when the request to fill a position is received by the HR department from the relevant department heads or the line managers. This could be done by filling out a requisition form detailing the job role, minimum qualifications required, relevant experience and the type of job. Once the HR department receives such requisition appropriate source is chosen for sourcing the applicants.
KSC follows a very formal and efficient system of job requisition whereby a reference number is generated for each job requests to track the progress of recruitment. There is also an authorization system in place depending on the grade of position that will be filled by the applicant.
It is important for the people involved in the recruitment process to understand the job description of the vacant position and the level of experience required by the proposed candidate. This is because without the accurate job description it is difficult for the HR department to target their efforts in filling the position.
In KSC the job requisition form filled in by the department heads/ line managers is very detailed with the relevant section for job responsibilities, pay scale, urgency of filling the position etc which must help HR department in their sourcing efforts. This is again run very efficiently by the HR department. So if a job must be filled urgently it is vital to have as detailed the profile of the position as possible to expedite the recruitment process.
Establish remuneration/ compensation package
Once the job role is defined the pay scale and the related benefits that the potential employee would be entitled to claim must be finalized. This is a crucial stage and there is no formal yardstick available most of the times while deciding on the pay package.
KSC follows the Internal Equity method for this stage to decide the pay. The wages of employees in similar role internally is considered to decide the salary of the new recruit. This method is more towards the traditional Personnel Management where the employees' decisions are made on Collectivism rather than Individualism. So each employee is considered as part of a group and the decisions are made for the group rather than for the individual employee.
The advantage of collectivism is the satisfaction among the employees that there is equity and less discrepancy in the pay levels, while Individualism adds to the motivation of the employees as they feel that they are being trusted by the organization and the organization recognizes them as separate individual during appraisals.
Establish general employment policies and procedures
This stage of the recruitment process is mostly standard as the general employment terms don't change very much including the company's equal opportunity, data protection and sick leave procedures.
KSC values the importance of equal opportunities as it believes that people from different backgrounds and race bring different competences to the business and if there should be a criterion to filter the candidates then it must be based purely on the capability of the candidate.
What source to choose for recruitment?
There are different sources for recruitment which the companies compare to opt for the most suitable and effective method for the organization. A company may choose to recruit from external source or if there is an existing employee available who is eligible for the job then promote from within. One of the popular sources which cater for the majority of the recruitment is online using the Information Technology.
Choosing the right source can be very crucial depending on the type of job role the company is looking to fill but most companies ignore the multitude of options available and resort to using the same source every time there is a vacancy. This limits the scope for the company as they would be trying to find people from the same source for different department while there could be dedicated sources available which focus on the database of candidates from particular fields, like management.
KSC at the moment is also using a range of sources to recruit the potential employees like the existing databank of the company, placing advertisements in the local and national news paper, using national and international recruitment agencies, job portals and employee references. There is also a provision of applying from the company's job section of the website, www.alkhodari.com where all the current job openings are listed and are open for public to apply.
This stage of the procedure is very efficient as the right source can be chosen depending on the jobs to be filled. There is however scope of improvement in choosing the dedicated newspapers and recruitment agencies for placing advertisements for job depending on the job specification and department e.g. dedicated construction industry journals can be used to place an advert for jobs requiring specific prior industry experience.
Processing the applications
Once the advertisements are placed in the chosen source, the applications of the potential candidates are processed to shortlist based on the information provided on their CVs.
KSC has a very good system of screening the employees given the strict legal procedures in place in Saudi Arabia. Candidates are divided into national and international to establish the documents required and then the relevant documents such as ID cards and/or Visa documents together with references are checked to ensure the genuineness of the applicant. If the candidates are unable to provide required documents their applications are rejected.
The HR department then conducts telephone interviews to further shortlist the applicants. This is a cheaper method of short listing before inviting the applicants for interviews.
Selection of the right candidate
This is a crucial stage as the shortlisted candidates are interviewed to establish competence to do the job. In KSC potential candidates are invited for interviews by providing them the travel fare ranging from bus fare to air fare, depending on the job scale of the applicant.
The interviews are carried out by the HR Director, Head of recruitment and the relevant department head using the pre determined questions to be asked. Candidates are selected based on their merit and their performance in the interview.
A good systematic procedure is followed allowing the HR department to participate in the interview which can help clarify some of the questions that the candidates may have regarding the company policies and procedures.
Once the right candidate is selected an offer letter is sent off for signing and returning back within one week in most cases except for the cases where a longer period is agreed by the company director. Once the job is accepted two copies of formal descriptive contract is prepared, one for the HR records and the second for the candidate. If the offer is not accepted by the candidate the next best candidate is contacted and job offered after further interviews.
KSC follows a strict system to verify the documents like Visa, degree certificates, work experience and references provided by the candidates. If the verification is not upto the accepted standards of the company then the application is rejected.
Expatriate HR policy
Following the recent joint venture of KSC with LV Shipping and Logistics Company based in the UK, there is a potential for expatriate employees to be placed from Saudi Arabia. A policy regarding the expatriate employee selection is missing in the existing recruitment procedure of KSC. It can choose from the following options of expatriate policies;
Under this policy, key management positions are filled by the parent country national i.e. Saudi nationals to overcome any lack of skilled mangers in the host country, to continue with the culture of the parent country and to make sure that the core competencies are preserved in the top management to make strong strategic decisions. This can however create resentment in the host country, UK, as this creates a separation from the local culture.
It is not a very straight forward selection process as other than the basic skill set there will have to be following considerations related to the candidate's;
Level of self orientation as they will have to take initiatives and keep themselves motivated while they have set backs in their jobs
Interaction ability in the host country's language could be seen as a key benefit as this would reduce the communication gap.
Ability to perceive the situation and people in the host country where candidate doesn't speak that language.
Ability to adjust to the host country's culture and society. This is because the success of a candidate's stay abroad may not be easy if they find it difficult to adjust to new environment, people, climate and culture.
In this case the host country nationals manage the subsidiaries while the parent company holds the key management positions in the head office. This policy removes the cultural difference to an extent with the people from the host country managing the operations in that country. And it is less expensive to implement as the training cost and the cost involved in the expatriate failure is substantially reduced.
More independence and responsibility is transferred to the host country in this case. Parent company will find more time to focus on other issues of their main business and also on the expansion into other countries.
The final approach to staffing is to choose the best people to do the job without considering their nationality. The idea is to increase the efficiency of the job role and the success of the overseas venture. This helps in the building of a strong relationship and culture among the employees.
There could however be issues related to immigration policies in the host country and it could prove expensive as well if the best people to do the job are not available in the host country.
Pay review timing
In KSC's Recruitment policy the pay is discussed and finalized once the application of a proposed employee has been accepted by the company and the job is offered. The applicants must have prior knowledge of what to expect from the job in terms of pay scale and benefits which is formally documented on the employee contract. Pay scale is decided based on the applicant's education, work experience, existing salary and also looking at the internal equity of pay.
There is however no mention of the periodic pay review date which depends from company to company and also from job to job e.g. for an accountant there could be an annual pay review but for an employee working in the sales and marketing who is exceeding the sale targets may get a half yearly or even a quarterly pay review. This is an area that the applicants will be interested in as well to be informed about while joining the company. It is beneficial for KSC's HRM as well to inform the employees at the time of joining to add to their motivation.
Training and development program
Due to the varying organization cultures and work practices there could be a need of training the new employee. Although this is a function following the recruitment, the interviewers and selectors must have the idea of the amount of time and money that the company is willing to invest on training and development of the employee to enable effective short listing.
Hiring a trainee could be cheaper than actually hiring an experienced person but there would be high initial costs that the company has to bear to train and develop the employee to do their job. There would be long term benefits for the company in the form of well developed employee to take on more responsible job roles within the company without the need to adjust to the cultural change.
Choosing a mix of both Hard and Soft approaches to HRM
Looking at the current HR policies of KSC, the recruitment policies are more focused on the Hard version of HR where candidates are considered as any other source available to the organization which is used to get the maximum benefit for the company. Current policies of pay equity and the importance of 'parity', the amount of bureaucracy in the organization structure point towards the existence of Hard form of HRM
A mix of Hard and Soft versions however will enable the HR department to participate even more in the employee development and retention. Employee appraisals and communications with the line managers will be more direct reducing time taken for decision making.
Length of recruitment cycle
KSC has a recruitment cycle of 75 days which can be seen as normal in filling some of the key positions however there should be definition of recruitment cycle for employees of different grades. A lower grade employee can normally be selected in half of the time taken to select the candidate for a higher grade.
Limit on employee reference
At the moment the maximum limit on the number of employees that can be referred to the company is just two. Although this would help create an unbiased business environment in the company, references must be considered if the proposed position to fill is in a different department without direct interaction with the referee and the referred employees. This is one of the cheapest sources of recruitment available to the company, so based on the judgment of the HR director there is scope for flexing this limit. Any referred employee is always put through the same selection process as other applicants so there won't be scope for bias.
Looking at the outcome of the evaluation in this report it can be concluded that KSC has a strong recruitment policy however the policies needs to expand and be more flexible to adapt to the organizational changes for example, to include the International HR policies for recruitment given the changing nature of the organization.