Hiring and Firing Essay

This essay will identify and discuss the different recruitment and selection practices of organizations in the UK and these practices will be compared to the counterparts in the rest of European Countries. The essay will also comment on the pitfalls in the UK organizations which have led to tied hands of the managers in these corporations. The terminating practices in the organizations of UK will also be discussed and the pitfalls will be compared to the companies based in the European Countries. This is the reason why fewer students are choosing IT related fields in their graduate degrees as there are no jobs available for the locals in these companies. This is a pitfall that has been dug by these IT companies themselves as they will not receive any talent from the local market if there is a restriction of off-shoring in the future (MarketWatch 2006). Poor Recruitment Practice in UK A people assessment company, Talent Q that helps employers in managing and recruiting talent, has found many companies and managers to be taking poor decisions routinely when hiring employees. There are many bad consequences of this poor hiring practice as the fall in productivity is equal to GBP 2,400 per annum for each worker who finds himself misplaced in a job which he does not want to do or is not capable of performing. Effectively, the aggregate amount goes up to GBP 5million per annum for the economy of UK (M2PressWIRE 2007). According to an official survey of Talent Q, 24 percent of the employees who were recruited were not asked to give an aptitude test and another 44 percent of the personnel who were hired were not short-listed using any personality test. Based on 25 years of academic research across many companies of large scale, these findings were processed through a model which is universally accepted. This model demonstrates the cast iron effectiveness of the assessment. The true extent of the issues for the employers became clear when these results were combined with salary data from Office for National Statistics. The CEO of Talent Q commented that the organizations often fail to employ people on the basis of aptitude test and personality test. However, employing people on the basis of gut feeling is by far the worst employment technique known, whereas many studies have shown that when employers use assessment techniques to find out the personaliy and aptitude of a person, they get much better results (M2PressWIRE 2007). Word of Mouth Recruiting The applicants who apply through word-of-mouth are found to be more suitable than the recruits obtained by advertising and are more likely to stay longer in the job. However, it is not always the case that the best candidate for a job is selected through word-of-mouth applications. This practice for recruitment is being practiced in the UK at higher rates among the senior levels and is known as headhunting. The objective of these seniors is to fill the higher paying jobs with the people whom they know or are there relatives (HRM Guide Network 2007). Promise of Bonuses The promise of bonuses while recruiting the employees has been the worst pitfall of the recruitment practices in the UK. Mercer Consulting has found through research that the overall pay of CEOs in the UK from bonuses has grown from 13 percent to 19 percent in 2004 (Mercer Human Resource Consulting 2004). There has been a major effect on the earnings growth rates in the UK because of the large number of bonuses that were paid in the recent years (Freeman 2002). This practice of attracting talent through offering bonuses does not guarantee a motivated employee. This ensures only that decisions are made by the employees that get him the bonuses and these decisions may harm the company in the long-run. The companies in the UK are also using bonuses as a tool for employee retention and this practice is becoming quite common in the UK economy. However, the new plan to attract new talent and to lay off the existing employees is not in the hands of the managers at middle or lower level. The senior management is most of the companies makes such decisions (Nisar 2007). Off-shoring in the UK Many companies in the UK, especially those related to IT and innovation, are hiring skilled but relatively cheap labor from overseas. This hiring has been allowed by the government because of which work permits and visas have also been allotted to thousands of workers from abroad. Although these cost effective options cannot be ignored by the managers but they find their hands tied when they find cheap labor which can help the company reduce cost (MarketWatch 2006). The Responsibility of the Managers The managers and personal secretaries are getting increasingly responsible for the recruitment of unfilled vacancies. However, these managers cannot be so sure about hiring the right person or deciding a testing system for the vacancy. Where these managers are asked to cut costs, they are also asked to hire the best person. However, tests such as aptitude test, personality test, skill test or psychometric tests can be very expensive. This is in contradiction to cheap hiring and many managers find themselves in a position of hiring a person not fit for job because of fixed or limited budget allocated for hiring (Renshaw 2003). According to the head of a psychometric company, most of the employees are hired within the first five minutes of an interview which is done with the help of instincts. Although in these five minutes, the conversation does not go beyond smiles and introductions but many think that this is the best practice. Hiring through taking tests has been proved to be the best technique which many managers in the UK do not follow. Those employees who are hired without these tests, they are more likely to immerse the company in losses (Renshaw 2003). Lowering Hiring Requirements The companies with vacancies in the Europe mostly respond with lowering the hiring requirements so as to lower the cost associated with hiring. These chances although increase the chances of filling the vacancy but it also results in a match that resists or terminates when he is hit by a requirement that he cannot address to because of lower level of skills or experience. When searching costs are high, the European employers are more likely to hire under qualified employees for temporary positions. One of the consequences of hiring an under qualified person is high firing costs if the employee is able to get a permanent contract (Brencic 2009). Temporary Employment Practices in the Europe Many countries in Europe ban or restrict the use of temporary workers. However, there has been a growing acceptance for the temporary employment in the region. Many companies which do not want to rush in hiring and then make a wrong choice are hiring temporary employees. The UK, Luxembourg, Netherlands and Denmark are the countries among those which have temporary labor markets, but the countries like Greece, Italy, Spain, France, Belgium, Germany and Portugal still have stringent policies over temporary hiring (Messmer 1994). Firing Practices in Europe The economies of Europe have been awfully trailing US and other developed countries because of forests of red tape, vast welfare, overregulation and restrictive hiring and firing practices. Firing Limitations in UK Due to the implementation of several equal employment opportunity acts and laws in the United Kingdom, the employers are restricted to fire or layoff employees. This literally throws a manager at his seat with his hands tied as he cannot fire any employee who is not performing. According to the laws, based on the personal status of the worker, an employer may not establish hiring or recruiting criteria. Employers are not allowed to retaliate against, lay-off or fire their employees citing reasons based on the personal status outlined in the federal legislation of anti-discrimination. The labor is protected with the act of penalties and recourse which says that if an employee is discriminated in the areas of firing and hiring, he may collect all the monetary damages that are done by the employer (Pearson 2010). Firing Practices in Germany In December 2000, the Vauxhall Motors Luton announced the closure of a facility with firing of approximately 2000 people. No details were announced publicly about the firing of employees and what benefits would they get. The employees being affected were not told about the decision that the management was about to take about the closure of a facility. The employees were not even told why the facility was closed or why were they being fired (Butler, Sweeney and Crundwell 2009). This shows that the firing practices in Germany are very different as compared to UK, where a company has very limited power to fire permanent employees. In Germany, however, the companies have power to lay-off the employees whenever they want without presenting any reason. Similarities of Firing Practices in UK and other European Countries In this time of economic downturn, when many large corporations are engaging in downsizing practices, the countries like UK, Italy, France and Germany are targeting the older employees for lay-offs. The reason behind is quite logical as the employees grow older, they become less productive and the company find more talented young people to replace them (Cattaneo et al.  2010). The organizations in most of the economies of Europe view older employees as more disposable and give little value to them (Barth et al. , 1993; Eastman, 1993; Loretto and White, 2006). Conclusion There are certain similarities in the UK and Europe companies when it comes to laying-off or recruitment of the employees. However, the differences are more as the UK companies are bound by laws and strict regulations for firing employees which literally ties the hands of the managers when it comes to firing and hiring of the employees.