Recruitment and Selection – the Great Neglected ... - Cardiff University

Two key questions then are what drives the choice between formation or
acquisition and between internal labour markets and external labour markets? In
making these choices, an organisation’s options are liable to be constrained by the
attractiveness of the job opportunities it has on offer. If the supply of labour,
particularly good quality labour, is finite there will be a relative pecking order
between organisations, sectors and occupations (see below).
For example, one trade-off that the employer has to think about is that between
the relative costs of recruitment and retention. In much of the HRM literature high
levels of labour turnover are seen as a ‘bad thing’ (Gallagher and O’Leary, 2007) and
its cost to the firm is stressed. For example, the CIPD’s (2008) Annual Survey Report
on Recruitment, Retention and Turnover indicated that the estimated average
expenses associated with filling a single vacancy were £4,667 (rising to £5,800 when
labour costs were factored in), and that 70 per cent of respondents to the survey
thought that loss of staff was having a negative impact on business performance.
However, there is another side to this coin. In some instances (and given the
data we have it is very hard to know how many) high levels of turnover, rather than
indicating a failure of personnel management may reflect a conscious and calculated
strategic trade-off between the cost of better pay, better working conditions, better
designed and more interesting (although perhaps less productive) jobs versus the costs
of R&S and the availability of labour (Beynon et al, 2002). For example, Lloyd
(2007) provides an account of how the ready availability of appropriately qualified
staff, not least recent graduates whose training costs have not been borne directly by
employers, allows companies in the fitness industry to accept high levels of staff
turnover and fashion R&S strategies to take account of this abundant supply of labour.
Turnover will also get rid of burnt out staff, which are sometimes deemed an
inevitable consequence of a favoured model of work organisation and job design that
centres on stressful and repetitive work with little opportunity for progression
(Beynon et al, 2002: 152-3). Thus, R&S activity levels may often be higher in a firm
with a mass of low paid workers doing unattractive jobs, either within the
organisation itself, or among the pool of agency workers from which the organisation
draws staff to fill some or all of these positions (Beynon et al, 2002: 152-3). As Asset
Skills (the SSC for the property services, housing, cleaning and facilities management
sector) observes of the cleaning industry in its 2006 Skill Needs Assessment for the
UK:
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