The external context HR Management

The processes of recruitment and selection take place within a framework of external and internal influences. External direction, through legislation and published codes of practice, suggests that approaches will be standardised, in the UK at least. However, other factors in both external and internal contexts result in variations in both philosophy and practice.

The overall context in which human resources are managed is well illustrated in Figure (Schuler and Jackson, 1996). This section concentrates on the potential impact of factors in the external environment on recruitment and selection activities. A later section considers the impact of internal organisational factors.

  • External labour market factors

When organisations choose to recruit externally (as opposed to in-house), the search takes place in local, regional, national and/or international labour markets, depending on numbers, skills, competences and experiences required, the potential financial costs involved and the perceived benefits involved to the organisation concerned. External labour markets vary considerably in size, as Table demonstrates. Some, like China, Brazil and Mexico, are growing rapidly, others such as Germany, Japan and Great Britain are static or falling.

Within a given external labour market, the recruiter requires knowledge on the makeup of that population. Age profiles give a potential indication of ‘trainees’ as opposed to ‘experienced’ people available, as well as the proportion of those close to retirement age. Knowledge of gender breakdown is important. While some southern European countries have only half or less of women active in the labour market, nearly three-quarters of women in Scandinavian countries are deemed ‘economically active’ (Social Trends, 2002).

In 2001, UK census figures suggest that 13.2 million women and 16.3 million men make up the UK labour force, with nearly 5 million of the women working parttime. A high proportion of women in the labour market may suggest a higher proportion of people seeking part-time or ‘family friendly’ contracts as opposed to inflexible and/or full-time hours. Unemployment rates affect the number of people potentially available and in the UK unemployment levels were running at a national average of 4.9 per cent in spring 2001.

The contexts of managing human resources

The contexts of managing human resources

National comparisons of economically active populations 2001

National comparisons of economically active populations 2001

Younger rather than older people, men rather than women, people from minority ethnic groups (especially black and Pakistani/Bangladeshi groups) rather than white groups, and people with a disability have a greater tendency to be unemployed. Difficulties overcoming ill health (men) and family commitments (women) were the two most common reasons given by those not actively seeking employment (Social Trends, 2002). The skills and experiences available in a labour market, and the extent of competition for them, are critical factors for recruiters.

Where shortages of appropriate recruits have occurred, moves towards flexible work patterns can be considered. The 2002 Labour Force Survey reports statistics on flexible working and annualised hours, four and a half-day weeks, term-time working, job sharing and nine-day fortnights (Office for National Statistics, 2002a). While it is not suggested that all of these have been established to alleviate recruitment difficulties, some have the potential to increase the number of potential recruits available.

The availability of required skills and competences is influenced by the range and quality of learning experiences available to individuals within that market. Table suggests that illiteracy levels still block potential skills development in a number of countries and affect the potential use of these labour forces by firms looking to recruit in the global labour market However, Crabb (2003: 30) reports a rapidly growing pattern of UK organisations shifting their operations to the Indian sub-continent (especially where these operations involve information technology and/or financial services), taking advantage of significantly lower wage rates available in the ‘huge, well-educated, English speaking labour force’.

Adult literacy rates as percentage of population

Adult literacy rates as percentage of population

The number of young people remaining in full-time compulsory education in European countries varies considerably, as Table demonstrates. Take-up of higher education influences both the extent of higher-level skills available within the economy and conversely the numbers of young people available to undertake focused work-based learning. Labour markets, education and learning activities are considerably influenced by government policy. For example, within the UK there has been a long-standing debate about the relative roles and responsibilities of central and local government, employers and individuals in respect to skills training and qualifications.

Historically, reliance has been placed on voluntarist approaches, with employers expected to achieve an adequate level of skill for the nation as a whole, the market supposedly ensuring that such provision is made. More recently, the issue of preparing current and future workforces through lifetime learning has resulted in national learning targets being set by the UK government for young people and adults. By autumn 2002 it was reported that nearly 52 per cent of 19-year-olds, 54 per cent of 21-year-olds and 49 per cent of adults had qualifications at NVQ level 3 or equivalent, with 28 per cent of adults possessing NVQ level 4 or equivalent qualifications (Department for Education and Skills, 2003).

Education and training rates 1995 (%)

Education and training rates 1995 (%)

The highest qualification held appears to be related to a number of factors, such as ethnic group (the highest percentage of people of working age with qualifications at levels 4 and 5 being of Chinese origin), gender (with males far more likely to hold qualifications at GCE A level or equivalent) and age (with older people of both genders, but especially women, more likely to hold no qualifications at all) (Social Trends, 2002).

UK national learning targets 2002

UK national learning targets 2002

Other government initiatives to influence the number of people and levels of skill available in the labour market include the New Deal (for young people age 18–24, 25+, 50+ and New Deal jobseekers with disabilities) and Modern Apprenticeship schemes (foundation and advanced). Current proposals in the government White Paper on higher education may affect the demand for traditional and foundation higher education places.

Through the growth of technological applications, alternative ‘university’ provision becomes possible, some via government initiatives (e.g. University for Industry under its brand name Learn Direct, and the National Health Service University) or private initiatives such as Barclays University or Unisys University. Despite these initiatives to increase the quality and quantity of skills and competencies available in the UK, difficulties remain when recruiting externally. The sixth CIPD annual report on recruitment and selection practices, issues and trends reports widespread and increased recruitment difficulties in 2001. Major causes cited are:

  • candidates’ lack of relevant experience (54.8%);
  • candidates’ lack of relevant technical skills (53.5%);
  • recruiters’ inability to meet salary expectations, (48.8%);
  • a shortage of high-quality applicants (48.8%). (CIPD, 2002a)

Organisations experiencing severe problems included those in the public sector (where over a quarter of employers reported receiving no applications for some posts) and those in the South East and South West, irrespective of organisational size. These difficulties exist despite ‘harsher economic conditions for manufacturers and some services firms in the private sector’. (CIPD, 2002a: 6)

  • Technological developments

Advances in technology, particularly the growth and use of both the Internet as a whole and organisation-specific intranets, are affecting the type of labour demanded, with more equirements for those with expert systems and knowledge management experiences and knowledge. By the end of 2004, it is estimated that the number of jobs in call centres worldwide will have doubled since 1999 to 10.5 million from 1999. ‘Call centres are getting ready to become overall customer contact centres, working with the opportunities afforded by the Web to offer a full range of services at a cost effective price’ (Bradshaw, 1999).

Within existing organisations the potential for a growth in employment based away from the traditional office environment grows as technology allows individuals to communicate with others and be supervised at a distance. Homeworking and teleworking become possible through the use of e-mail and videoconferencing. The potential exists for wide-scale change from traditional classroom-based group learning to individual and ongoing computer-based training and development.

Technological developments permit the constant (and sometimes covert) monitoring of employee behaviour. As jobs are lost in manufacturing (with technological advances replacing shopfloor employees with robots), traditional retailing (a wide range of goods and services are available via the Internet), and the financial sector (where Internet and internal computer systems are introduced to enhance profitability and retain competitiveness), new employment opportunities are found in organisations supporting and using this technological growth.

Further discussion of the impact of job redesign is found in Chapter. These changes impact on the skills required by both existing jobholders and potential applicants. The recruiter has to be able to locate those possessing these skills (or the potential to learn and apply them effectively).

  • Government policy and legislation

While organisations have considerable freedom of choice in the type of people they want to recruit, legislation plays a significant role in the recruitment and selection process, particularly in attempts to prevent discrimination on the grounds of sex, race or disability.

  • Sex and race discrimination

Two Acts are specifically designed to prevent discrimination in employment on the basis of sex or race. The Sex Discrimination Act 1975 makes it unlawful to discriminate against a person directly or indirectly in the field of employment on the grounds of their sex or marital status.

The Race Relations Act 1976 makes it unlawful to discriminate against a person in the field of employment on the grounds of their race, colour and nationality, including ethnic or national origin. Both Acts prohibit direct and indirect discrimination. Direct discrimination occurs when an individual is treated less favourably than another because of their sex, marital status or race. Indirect discrimination occurs when requirements are imposed that are not necessary for the job, and that may disadvantage a significantly larger proportion of one sex or racial group than another.

Both Acts make it lawful for employers to take positive action to encourage applications from members of one sex or of racial groups who have been under-represented in particular work over the previous 12 months. However, positive discrimination is unlawful, which means that, although advertisements can explicitly encourage applications from one sex or particular racial group, no applicant can be denied information or be discriminated against in selection because they do not fit the ‘preferred’ category. Sex or race discrimination is permitted only where sex or race is a defined ‘genuine occupational qualification’ (GOQ).

Examples of GOQs include those for models, actors and some personal welfare counsellors. These Acts have had only limited success in achieving sexual and racial equality: there has been a significant reduction in overt discrimination, particularly in recruitment advertising, but there is less evidence of eradication of discrimination in employment practices generally. National statistics indicate that, at a macro level, little has changed in the distribution of employment on the grounds of gender and race.


  • 44% of all those of working age in employment are women.
  • 43% of women are in part-time employment, compared with 8% of men.
  • Women account for 69% or more of administrative and secretarial, personal service, sales and customer service occupations, while men make up 69% or more of managers and senior officials, skilled trades, and process, plant and machine operatives (ONS, 2002a).
  • Female employees working full-time earn on average 82% of the average pay of men in full-time employment (ONS, 2002b).
    Ethnic minorities (ONS, 2002a)
  • 58% of the working age population of ethnic minority groups are in employment compared with 76% of white people.
  • Unemployment statistics vary widely for different ethnic communities: for example, unemployment rates are highest for Bangladeshi men at 21%, compared with 7% for Indian men and 6% for Chinese men.
  • Cultural diversity is also reflected in varying rates of labour market participation for women. Bangladeshi and Pakistani women have the lowest employment rates at 17% and 24%, compared with 69% for Black Caribbean women and 71% for white women.

Continued indications of inequality in the labour market may be partly due to the fact that, until fairly recently, legislation has been aimed at ending discrimination rather than requiring organisations to promote equality. The situation has now changed, at least with regard to race in the public sector. The Race Relations (Amendment) Act 2001 imposes a positive duty on public authorities to promote racial equality. In relation to recruitment and selection this includes:

  • ensuring that employment practices attract good candidates from all ethnic groups;
  • setting targets and taking action to encourage applicants from ethnic groups currently under-represented in particular areas of work;
  • monitoring employees and applicants for employment, training and promotion by ethnic group.

Findings of the fourth Workplace Employee Relations Survey, WERS 4 (Cully et al., 1999), suggest that monitoring does not occur as much as one might expect. Fewer than half of organisations with a formal equal opportunities policy collect statistics on posts held by men and women, or keep employee records with ethnic origin attached, and only a third review selection procedures to identify indirect discrimination. The new requirements should increase the incidence of monitoring in the public sector but whether or not the private sector will follow suit is open to debate.

In the private sector, equalising opportunity is still largely dependent on initiatives undertaken voluntarily by organisations such as targeted recruitment, pre-recruitment training or participation in national initiatives such as the CRE’s Leadership Challenge for ethnic minorities. In order to encourage diversity, some organisations are adopting a more flexible approach to recruitment and selection. The CIPD Recruitment and Retention Survey (CIPD, 2002a) highlights a number of measures, including:

  • Advertise vacancies in media targeted towards under-represented groups.
  • Ensure that images or words in advertisements do not discourage any groups from applying.
  • Take account of a broader range of qualities when selecting (e.g. personal skills rather than formal qualifications).
  • Appoint people who have the potential to grow but don’t currently have all that is required.

Other initiatives to increase the diversity of the workforce include building up relationships with community groups. The retailer Littlewoods did this and reported some positive results, including more applicants, lower recruitment costs and the generation of extra sales (Pickard, 1999: 42). Pre-employment training can also help to increase the number of employees from previously under-represented groups, but is used by only a small number of organisations (Dickens, 2000).

These forms of positive action may be aimed at improving opportunities for previously disadvantaged groups by creating a ‘level playing field’. However, these types of initiatives can be seen as counter-productive because people who are perceived to have gained advantage through positive action may be viewed negatively by others. In addition, offering extra training and help to underrepresented groups implies ‘that they are deficient in some way and that consequently they are the problem . . . [when] invariably the problem lies not with the targeted group itself but elsewhere in an organisation’s own processes or culture’ (Kandola, 1995: 20).

  • Disability discrimination The Disability Discrimination Act (1995) came into force at the end of 1996.

The Act defines disability as a physical or mental impairment that has a substantial and long-term adverse effect on a person’s ability to carry out normal day-to-day duties, and includes progressive conditions such as cancer and multiple sclerosis. The legislation makes it unlawful for companies with 15 or more employees to treat people with disabilities less favourably than they do others unless they can justify their actions. In addition, employers are required to make ‘reasonable adjustment’ to the workplace or to working arrangements where this would help to overcome the practical effects of a disability.

The requirement for reasonable adjustment includes modifying the recruitment and selection procedure if required: for example, providing application forms in large print or accepting applications by audio tape. The use of testing during the selection process may present a potential problem for people with disabilities, and reasonable adjustments might include modifying test materials, allowing a disabled candidate assistance during a test, or flexibility in the scoring and interpretation of test results (IRS, 1999a).

Discrimination against disabled people has been unlawful only since 1996. Before then, legislation relating to the treatment of disabled people at work was primarily to ‘secure for the disabled their full share, within their capacity, of such employment as is ordinarily available’ rather than preventing discrimination. It is therefore not surprising that disabled people still appear to be disadvantaged in the labour market. Labour Force Survey (ONS, 2002a) statistics show that:

  • 1 in 5 people of working age in the UK has a long-term disability.
  • 52% of disabled people are economically active compared with 79% for the whole working age population.
  • Disabled people are more likely than non-disabled people to be unemployed (9% and 5% respectively) and are also more likely to have been unemployed for at least a year.

Despite these rather depressing statistics, it is possible to find examples of companies that have gone beyond compliance with the Disability Discrimination Act. In 2002 Lloyds TSB won a Business in the Community Award for its work on eliminating barriers for disabled employees and customers. The company is investing £26.2 million over six years and initiatives include targeted recruitment programmes; a thorough programme of ‘reasonable adjustments’ for employees; a career progression scheme for disabled employees; and the establishment of a national network of disabled employees, managers and advisers (IRS, 2002a).

  • Age discrimination

There is no current legislation prohibiting discrimination on grounds of age, although this is likely to change in 2006 in order to comply with the EU Equal Treatment Directive. In 1999 the UK government introduced a code of practice designed to promote age diversity in employment, arguing that ‘to base employment decisions on preconceived ideas about age, rather than on skills and abilities, is to waste the talents of a large part of the population’ (DfEE, 1999).

The code covers six aspects of the employment cycle: recruitment, selection, promotion, training, redundancy and retirement. Specifically in terms of recruitment the code recommends employers to recruit on the basis of skills and abilities necessary to do the job rather than imposing age requirements or making stereotypical judgements based on the age of the applicants. Similarly, for selection the code recommends that employers select on merit by focusing on application form information relating to skills and abilities and on interview performance.

The government claims that the elimination of unfair age discrimination will enable businesses to reap a number of benefits, including a greater ability to create a more flexible, multi-skilled workforce

  • Employment of people with criminal records

People who have a criminal record are also likely to be disadvantaged in the workplace: current estimates suggest that it is at least eight times harder for a person with a criminal record to obtain employment than someone without (CIPD, 2002b). The Rehabilitation of Offenders Act (ROA) 1974 provides some protection for certain categories of exoffenders, as it enables offenders who have received sentences of 30 months or less to have their convictions ‘spent’.

This means that, after a specified period, they can reply ‘no’ when asked if they have a criminal record. Although it is unlawful for an employer to discriminate on the grounds of a ‘spent’ conviction, the candidate who is discriminated against has no individual remedy (IDS, 1992). In addition, a wide range of jobs and professions are exempt from the provisions of this Act, including teachers, social workers, doctors, lawyers and accountants.The potential for discriminating against people with a criminal record has increased with the establishment of the Criminal Records Bureau, set up as part of the 1997 Police Act. Once fully operational, the bureau will undertake three different levels of criminal record checks (CIPD, 2002b):

  • Basic disclosure: shows current, unspent convictions.
  • Standard disclosure: contains details of spent and unspent convictions and is available for posts exempt from the ROA, e.g. those involved with children or vulnerable adults and for certain professions such as law and accountancy.
  • Enhanced disclosure: standard disclosure plus relevant, non-conviction information held on police records.

This level of disclosure is only for posts involving regular care for, training, supervising or being in sole charge of children or vulnerable adults. Government research (cited in IRS, 2002b) concludes that the availability of these checks will make it more difficult for people with criminal records to get a job, or may increase their chances of dismissal through the discovery of previously undisclosed convictions. In the light of this, a number of public bodies, including the CIPD, CBI and TUC, are trying to raise awareness of the business case for recruiting ex-offenders.

One of the main supporting arguments is that in the continuing battle to recruit the best talent, employers simply cannot afford to exclude such a large group of people. It is estimated that more than 5 million people in the UK have convictions for crimes that could have involved imprisonment (CIPD, 2002b). At the same time, a number of overnment initiatives have been introduced to develop the skills of ex-offenders to increase their chances of employment. For example, the New Deal for Unemployed People targets exoffenders and a partnership between the Department for Education and Skills and the Prison Service aims to raise prisoners’ qualifications (Manocha, 2002).

  • Professional codes of practice

The Chartered Institute of Personnel and Development has over 110 000 members, and is perceived as the body representing a large number of those involved in the recruitment and selection activities carried out in the UK. Members are expected to follow Institute policy and can in fact lose their membership for major breaches. Guidelines on various aspects of recruitment and selection are available, thus demonstrating that ‘best practice’ is both prescribed and expected. Other bodies, including the Equal Opportunities Commission and the Commission for Racial Equality, also produce codes of practice relating to recruitment and selection.

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