RECRUITING: CHANNEL OPTIMISATION
Overview
Investment in people is a major source of a company's competitive advantage. As one of Germany´s largest employers, with a workforce of more than 220.000 employees Deutsche Bahn (DB) is continuously searching for new talents from several target groups. Today, high-quality recruits are harder to reach and entice. Thus, DB has developed a wide variety of recruiting activities to attract them. However, in the field of Human Resources (HR), the effectiveness of these activities is often difficult to measure and compare.
Objectives of the project
The Multi Criteria Decision Analysis (MCDA) methodology applied in this project aimed to provide the HR department of DB with a consistent evaluation framework for its recruiting activities. Current and potential activities were examined in order to meet the following objectives:
- Determine and analyse "value-for-money" of different recruiting activities, including DB's currently supported portfolio of activitie
- Generate insights for an overall optimal portfolio of recruiting activities
- Provide a basis for the discussion of the most effective recruiting channel composition, aligning subunits within the HR department, and enhancing information transfer between departments
Modelling approach
Three HR sub-departments, each with different recruiting pools, were included in the scope of the MARA1 project. The respective educational levels of the recruiting pools of the sub-departments include: 9th and 10th grade pupils, high school graduates, and university students and graduates. In accordance with this internal structure, the constructed model includes a set of past, current and potential options for each sub-department. These sets are furthermore split into three activity types (investment areas) to allow for a better overview and a meaningful evaluation of activities. Each investment area corresponds to one column in the graph below. Additionally, one area (the column on the right end) summarises activities that address recruits from more than one target pool.
- Portfolio of recruiting options
In order to enable the evaluation of such a diversified range of recruiting activities, an appropriate set of criteria needed to be developed. In the end, the agreed upon criteria collection consisted of four benefit and one cost criterion. On the benefit side the criteria included: the number of quality applications achieved by the activity, its long-term effectiveness, its positive impact on employer image, and its spill-over effect on recruits outside the core target groups. The cost criterion was defined as including the money spent during the implementation of a recruiting activity as well as the incurred internal personnel cost.
Results and impact
In a final Decision Conference with representatives from all sub-departments, the included recruiting activities were prioritised according to their benefit/cost ratio. Efficiency improvements were identified via two levers: 'local value-for-money' optimisation within each area of investment, and a 'portfolio improvement' across the departmental subunits which would require a departmental shift of resources.
- Cost/Benefit values of different portfolios (P current spending)
The 'envelope' in the graph on the right includes all possible portfolios of options (recruiting activities). On its upper boundary are the most efficient portfolios. Thus, it is referred to as the 'efficiency frontier'. According to the conducted analysis, the currently supported portfolio (P) is suboptimal. Sticking to a similar budget, the status quo is dominated by a 'Better' portfolio (B). While, aiming to realise a similar amount of benefit as the status quo the 'Cheaper' package (C) would result less costly.
Conclusion
Before the project was carried out, DB encountered various difficulties when trying to consistently compare its recruiting activities. Within the framework of this MARA project, DB obtained a transparent overview and assessment of its recruiting channels and learned about ways to realise significant gains in efficiency. Thus, the model was able to provide the client with valuable insights for future portfolio constructions and the strategic composition of its recruiting activities. Furthermore, the participatory modelling process was successful in fuelling a cross-departmental discussion and in developing a shared understanding between the subunits.
Most relevant literature
- Hardin, G. (1968): The Tragedy of the Commons. Science, Vol.162, pp. 1243-1248.
- Karle, Roland (2005): Gutes Personal wird Mangelware. Financial Times Deutschland - Beruf und Karriere. 18.03.2005, p. 1.
- Millmore, Mike (2003): Just How Extensive is the Practice of Strategic Recruitment and Selection? Irish Journal of Management Special Issue 24 (1), pp. 87-108.
- Phillips, L.D. (1984): A Theory of Requisite Decision Models. Acta Psychologica, Vol. 56, 29-47.
- Phillips, L.D. and Bana e Costa, C. (2005). Transparent Prioritisation, Budgeting and Resource Allocation with Multicriteria Decision Analysis and Decision Conferencing. Working Paper LSE OR 05.75.
- Phillips, L.D. (2006), Decision Conferencing. In: Edwards, W. & Miles, J. Ralf F. & von Winterfeldt, D. (Eds.): Advances in Decision Analysis: From Foundations to Applications. Cambridge: Cambridge University Press.
