08-09-2016, 10:10 AM
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Introduction to the Company
Larsen & Toubro Limited (L&T) is an Indian multinational conglomerate company founded in
1938 and headquartered in Mumbai, India. The company has four main business sectors:
technology, engineering, construction and manufacturing. L&T has revenue of around US $ 14
billion and over 45117 employees with a global presence with 60 units in 25 countries. Larsen
& Toubro Infotech Ltd. (L&T Infotech), a 100 per cent subsidiary of the L&T, founded in 1997, and
one of the fastest growing IT Services companies, was ranked 8
th in India IT companies in 2011-
2012. L&T Infotech has revenue of US$ 650 million and it employs over 15000 employees. L&T
Infotech offers services like application outsourcing, ERP and architecture Services, consulting,
enterprise integration, IMS, IES etc.
Talent Acquisition
Talent acquisition (TA) is defined as “a strategic approach to identifying, attracting and on
boarding top talent to efficiently and effectively meet dynamic business needs”. Recruiting and
selecting forms a subset of TA, and includes the activities of sourcing, screening, interviewing,
assessing, selecting and hiring. Key goals of the process are to attract talented individuals to
work for the organization, complete the full cycle from planning to deployment in a timely
manner, place the right people in the right positions and ensure a pool of readily available
talent. Recruitment is the process of locating and encouraging potential applicants to apply for
existing or anticipated job openings. Whereas, selection is the process of choosing individuals
who have relevant qualifications to fill jobs in an organisation. Recruitment and selection
practices has undergone a drastic change in the recent years. Retaining employees has been a
tough task for all the employers and they are taking extra care while recruiting people. This is
where effectiveness of recruitment and selection plays a major role. Recruitment is now a
strategically aligned process.
Methods of Recruitment and Selection
Recruitment can be done by:
Internal Methods:
Promotions and transfers
Job posting and job bidding
Employee referrals
Direct Methods:
Campus recruitment
Indirect Methods:
Advertisements which include newspaper ads, television and radio ads
Third Party Methods:
Private employment search firms
Employment exchanges
Gate hiring and contractors
Unsolicited applications/walk-ins
Internet recruiting
Selection process includes shortlisting the appropriate candidates, and their assessment which
is done by general interview, competency based interview, role plays, presentations etc. Selection
process ends with the medical tests of the candidate and his/her reference check before onboarding.
The steps of the Talent Acquisition life cycle are planning, sourcing, assessing, hiring
and on-boarding.
Effectiveness of Recruitment and Selection
How to get the best return on investment for recruiting activities is as important as how to get
the best fit candidate on board. Hiring metrics is a quantifiable measurement that can be
weighed against to recognize benchmarks and encourage behaviours focused on candidate
quality and client experience. One can also choose to survey the recruited individuals when
presenting them with the offer by asking them what they found effective and ineffective in the
recruitment process. Some of the important metrics to be kept track of are:
Lead time or Hiring cycle: Record the date when the position becomes open. Next record the
date of the position filled. The difference is the time to fill or the lead time.
Quality of hire: Average percentage rating of hires after 6 and 12 months compared to
standard.
New hire failure rate: Percentage of new recruits in main positions that were terminated
or asked to leave in 12 months compared to standards.
Cost per Hire: The major expenditures one should track to determine the cost per hire are
advertising fees, job posting fees, recruiting agency fees, employee referrals, travel
expenses, relocation fees, internal recruiter costs and administrative costs.
Offer acceptance rate: This is obtained by dividing the number of accepted offers by the
number of offers made to recruitment targets.
Interviews per job offer: A measurement of the number of interviews per job offer, this is
an indicator of the efficiency and effectiveness of the HR department and Human Resources
Management process, and in particular the thoroughness of the recruitment process
Turnover of new hires: Percentage of hires who voluntarily quit within 12 months, or
average tenure compared to a standard
These hiring metrics differ across industries and companies according to the situation, with
some metrics being common. Hiring metrics drive specific behavior from the recruitment team.
These need to be tracked over a period of time to create internal benchmarks and analyze
internal performance.
Objectives of the Study
To analyze the effectiveness of the recruitment and selection process at L&T Infotech.
To make an attempt to address the problem of scarcity of available talent - a major
challenge to recruitment.
Methodology and Data Collection
The study sources data and information from :
Primary sources.
Secondary sources
Primary data was obtained through questionnaires filled by 50 employees. Out of this, 18 were
part of the Human Resources Management team and the rest were employees belonging to
various cadres such as software/senior software engineer, project lead, project manager etc.
The recruitment updates of each year maintained by the organization was studied. To address
the second part of the project, the primary data was sourced from the online job portal
www.naukri.com. Profiles of relevant candidates for different skill requirements were obtained.
The details that were downloaded from the portal included the work experience, the resume
title (which describes the skills possessed by the candidate in a nutshell), current location,
preferred location, current employer, current designation and annual salary. The secondary
data was obtained from internet, journals and articles.
Analysis and Findings
The following are observations made after studying the recruitment updates and reports made
by the HRM team at L&T Infotech (secondary sources). One method of analyzing the effectiveness
of recruitment and selection is to see whether the company adheres to the SLA standards they
have set for themselves and also the various other parameters that a recruiter should keep
track of, to ensure effective and quality recruitment.
1. Recruitment within Service Level Agreement (SLA) timelines has been adhered to strictly by
L&T Infotech, the percentage being 98.8%-100%.
2. Analysis of the reports from March 2012 to March 2013 shows that the average cost per
hire comes up to a figure which is well below the maximum limit allowed. L&T Infotech thus
takes care of the cost per hire dimension.
3. The joined/offered ratio compliance is set at 50%. This ratio is almost taken care to be met
by the company every year.
4. The individual recruiters also maintain a check of the offer acceptance rate and work to
improve it by keeping the offered candidates ‘warm’ and align offers with their expectations.
Another method of finding the effectiveness of recruitment and selection is to take into
consideration the candidates’ views, i.e., the views and opinions of the newly joined and other
employees about the process of recruitment and selection they faced. In order to gauge the
candidate satisfaction, a questionnaire was administered to 50 people including members of
the HRM team and also other employees of the organization. The outcomes of the study are
given below:
Out of the 18 members of the HR team who were surveyed,
1. 78% of the respondents feel that the company recruits based on the candidate’s experience
level, qualification and communication skills in this order of priority. The company has a
recent trend of preferring experienced candidates giving importance to their experience
levels first.
2. There are two levels of technical interviews and one HR interview that the candidates go
through. All these are stringent levels where the applicant has to prove himself.