RECESSION & RECRUITMENT

Impact of Recession on Human Resource Recruitment and Selection

Executive Summary

The recession has been characterized by an epidemic of long-term unemployment and recruitment freezes—workers who have been out of their jobs for more than 27 weeks. Experts say that those experiencing long-term unemployment comprise a far higher percentage of the total number of jobless than had been the case in prior recessions. As the average length of time it has taken for unemployed workers to find new jobs has increased, many observers have begun to fear that the U.K. may never return to the low level of unemployment it enjoyed prior to the current recession. Although the economic environment around UK's recovering economy is weighing down on business and investor confidence, it still remains one of the world's most competitive markets to do business in. Its strong regulatory environment and prudent tax reforms encourage investments. However, skills shortages remain a persistent problem and consumer expenditure is likely to slow down sharply in 2010.

Impact of Recession on Human Resource Recruitment and Selection

Introduction

Just two decades ago, there was no such word in the English language as "downsizing." In the 1990s, however, the word is everywhere--in newspaper headlines, in politicians' speeches and on television talk shows (Garcia, 2010). Originally, downsizing referred to automobile makers' efforts in the 1970s to make smaller, more fuel-efficient cars. In the early 1980s the word took on the meaning it has today of reducing employment, usually by large companies, as part of a long-term growth strategy (Howden, 2011).

Recruitment is an essential function that HR department performs. It is not only important because this process arrange employees who can perform the required task for the organization, but there is also a cost associated with this process (Kiviat, 2009). Recruitment at University Hospital is much defined, and they adopt ways to recruit employees. At Container Store, they hire employees that are suggested by their employees. Otherwise, they prefer to hire their customers. They do not opt for the conventional methods of recruiting such as outsourcing and advertisement (Howden, 2011).

Economists and policy makers are divided over the issue of downsizing. Some of their differences can be explained by the fact that economics is an imprecise science; others split over ideology, such as whether the government should play a role in labour markets at all. Business interests, stock-market investors and many economic conservatives generally approve of downsizing as a trend. Those who have been affected by downsizing say that companies have lost any sense of compassion for their own workers and no longer recognize loyalty (Peter, 2010). They argue that downsizing is inherently unfair because it has devastated working families while stock-market investors have reaped millions of dollars--stock prices generally surge when downsizing plans are unveiled. Plenty of criticism has been levelled as well at high-level executives who, untouched by the downsizing that they are responsible for, receive multimillion-dollar salaries and bonuses (Douglas, 2009).

In U.K., powerful labour unions and government-imposed restrictions on hiring and firing workers give companies little flexibility ...