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Article Excerpt
The recruitment of Information Technology professionals has reemerged as an important issue in the workplace. In "The State of the CIO 2006 Survey," 55 percent of IT executives indicated they plan to increase their IT staffs by an average of 11 percent during the year (Overby, 2006).
Towers Perrin's study of 22 leading firms in 11 industries identified recruitment and retention of IT employees as a key to facilitating superior business performance (Towers Perrin, 2002).
Reports that show firms devoting more revenues to staffing activities than any other human resource ac tivity underscore the importance of understanding effective recruiting practices (Society for Human Resource Management, 2001). Driving this effort are estimates indicating that the average actual and opportunity costs for a professional position remaining unfilled are prohibitively expensive. An organization's costs for a position remaining vacant are estimated to be $1,200 per day (Stanton, 2000) and, on average, to be the cost of two years of pay and benefits for a typical exempt position and six months of pay and benefits for a typical nonexempt one (Oneal, 1998).
Importance of Recruiting Focus
Scholars cite three factors for the constant importance for recruiting and retaining IT workers. The first is the job-hopping proclivities of workers with specialized skills. The average employee reportedly remains with an organization for a maximum of five years before departing (Wiener, 1998). The rapid voluntary exit of employees from firms places great demand on the recruiting practices of organizations (Humber, 2005). The second element necessitating continued IT recruitment is workforce projections forecasting a labor shortage in areas of technical expertise. The Bureau of Labor Statistics projects positions for computer systems analysts, database administrators, and computer scientists will grow sharply faster than other occupations as organizations' needs for complex technologies advance (Bureau of Labor Statistics, 2004).
The final factor underscoring the importance of IT recruitment is that the increased importance of information technology in global competition has positioned human capital as the linchpin for organizational success (Gilpin, 2000). Research studies have found that information technology produces a lasting competitive advantage for those organizations that acquire human capital in the form of skilled employees who can match technology to the firm's needs (Mata et al., 1995; Ross et al., 1996). Human capital gives firms that optimally recruit IT professionals a strategic competitive advantage relative to their competitors (Agarwal and Ferratt, 1999).
Recruitment Methods
Organizations have available a wide variety of recruiting methods to identify and attract job applicants external to the organization. The present research investigates the effect of two commonly used recruitment practices on organizational performance measures. Prior surveys and recruitment research have found personal and professional relationships and monetary incentives represent, respectively, the second and third most commonly used recruitment practices to attract IT talent, trailing only local newspaper ads (Mencken and Winfield, 1998). This study focuses on the incremental impact of professional relationships and monetary incentives over other techniques (such as ads) due to the high costs in time, money and effort to implement these approaches.
Personal and professional relationship recruiting techniques include employee referrals and networking (Ram, 1999). These practices have the advantage of producing affordable costs per hire, reducing uncertainty about the applicant in the hiring stage, and securing high-quality hires (Feldman and Klass, 2002). Monetary inducements for recruitment include offering salaries higher than competitors' offers (to keep candidates from considering them), as well as retention and project milestone bonuses, short- and long-term incentive opportunities, and signing bonuses (Milkovich and Newman, 2002).
Personal and Professional Relationship Recruiting. Although they attract IT workers, recruitment practices based on interpersonal relationships and monetary incentives create difficulties for organizations seeking to staff vacant IT positions to improve organizational effectiveness. Besides the time and effort needed, critics fault recruitment activities based on interpersonal relationships for threatening diversity-enhancement activities. Using networking and employee referrals generally produces new hires similar to the current workforce (Linder and Zoller, 1996). Research shows diverse organizations composed of heterogeneous work teams demonstrate higher levels of creativity and better problem-solving capacities than homogeneous teams (Chatman et al., 1998; Fernandez, 1991; Nemeth and Wachtler, 1983; Hoffman and Maier, 1961).
Monetary Incentives. Historically, monetary incentives have been popular tools for attracting key IT talent (Liccione, 2005). But some might question the need for this obviously expensive endeavor. Compensation surveys and research indicate that young IT employees entering the workforce value such work/life programs as flexible work arrangements, career development opportunities and work-content satisfaction much higher than direct monetary compensation (Foote, 1998; Oneal, 1998). Emergent workers currently entering the workforce are reportedly most attracted to organizations providing opportunities for career development, growth experiences, and significant mentoring (Fitzgibbons and Seigel, 2002). Numerous compensation specialists report IT recruitment's traditional emphasis on wages is inconsistent with current recruits' values, saying the situation calls for a more holistic strategy based on the potential new hire's needs and expectations (Mulvey et al., 2000; Plachy and Plachy, 1999; Weiss, 1997).
Purpose of Study
When recruiting for open IT positions, which organizational practices should organizations use to maximize organizational efficiency and effectiveness? IT studies examining recruitment practices based on interpersonal relationships and monetary incentives have lacked an empirical investigation assessing the differential and incremental impact (if any) of these specific recruitment practices on staffing performance measures. Given the widespread organizational prevalence for monetary incentives and interpersonal relationships in recruiting IT employees, this lack of empirical investigation into their impact on organizational performance measures represents a significant gap in the staffing literature. Therefore, the research reported here sought to determine the incremental effectiveness of these sets of techniques over other methods. The study used three perspectives (socialization theory, realistic job preview findings, and efficiency wage theory) to explain the basis for this impact.
Socialization Theory
Socialization theory explores the perpetuation of an organization's culture, values, beliefs, and practices (Wanous et al., 1984). Successful socialization's explicit outcome is the successful transfer or continuation of a culture (Tuttle, 2003). Organizational socialization seeks to provide data to prospective new hires about job duties and the organizational culture in order to facilitate an effective person/job match (Adkins, 1995).
Recruitment practices based on such interpersonal relationships as networking and employee referrals effectively give potential employees forthright organizational and job duty information. The techniques let applicants speak informally with current employees about both...
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