LUẬN văn THẠC sĩ (KINH tế) an investigation of recruitment and selection practices within SMEs in the irish IT sector

Aninvestigationofrecruitmentandselecti onpracticeswithinSMEsintheIrishITse ctor Dissertationsubmittedinpartialfulfilmentoftherequir ementsforthedegreeofMastersofBusinessAdministr ationMB

Aninvestigationofrecruitmentandselecti onpracticeswithinSMEsintheIrishITse

ctor

Dissertationsubmittedinpartialfulfilmentoftherequir ementsforthedegreeofMastersofBusinessAdministr

ation(MBA) atDublinBusinessSchool

JessicaFurtado

10216067 Worldcount:20169 22thAugust2016ResearchS upervisor:DavidWallace

Declaration:I,J e s s i c a Furtado,declaret h a t t h i s researchi s myoriginalworkandt h a t i t hasneverb

e e n presentedt o anyinstitution o r u n i v e r s i t y fort h e awardo f Degreeo r Diploma.Inaddition,Ihavereferencedc o r r e c t l y alll i t e r a t u r e andsourcesu s e d i n t h i s workandt h i s t h i s workisfullycompliantwith theDublinBusinessSchool’sacademichonestypolicy

Signed:JessicaFurtado

Date:22/08/2016

Iwould

liketoexpressmydeepestgratitudeforthosewhohelpedmewritethisdissertation.Firstofall,IwouldliketothankmysupervisorDavidWallaceforhisguidance,patienceandf o r allthehelpfulinsightsthatheprovidedmeinourmeetings.Moreover,Iwouldliketothankt h e participantsin this

studyfortheirtimeandwillingnesstoparticipate

Specialt h a n k s t o mymotherw h o enabledmet o studyatDBSandalwayss u p p o r t e d m e throughoutt h e c o u r s e a n d myboyfriendS e b a s t i a n f o r allt h e patience,m o t i v a t i o n andproofreadingofmanyassignmentsmadeduringthe entirecourseaswellasthisdissertation

Sincerethanks tomyclassmateswhomadethis journeymuchmorepleasant andenjoyable

ObjectiveandScope:The aimofth is dissertationisto gainanu n d e r s t a n d i n g ofrecruitmentand

selectionpracticesintheIrishITsector.Withtheproliferationoftechnology,SMEsintheITsectorareamajoreconomic driver.InIreland,SMEsaccountf o r $10billionannually ande m p l o y morethan900,000people.However,researchonrecruitmentandselectioninSMEsisscarceand–

SMEsface,itiseverm o r e importantforthemknowhowtoallocatetheirlimitedresourcesmosteffectivelytofindandrecruitt h e bestt a l e n t , s i n c e h u m a n resourcesi s t h e l i f e b l o o

d o f a n y company.T h i s research,consequently,aimstofillthegapintheliteratureregardingrecruitmentandselectioni n SMEsandseekstoidentifywaysSMEscanimprovetheirrecruitmentandselectiontoattractandm o t i v a t e employees,w i t h a focuso n millennials,t h e generationn o w enteringt

h e workforce.Ultimately,this studyintendstoprovide SMEs withactionableinsightsandrecommendationsthattheycanimplementtoincrease recruitmenteffectiveness

Methodology:T h i s s t u d y i s b a s e d o n a qualitativeanalysisofintervieweesw i t h technicalp

articipantsinvolvedinrecruitinginfourdifferentSMEsin theITsectorbased in Dublin

Results:T h e intervieweesrevealmanyinsights,s o m e o f whicha r e i n accordance,s o m e o f whic

hare

incontrasttotheconsensusintheliterature.Amongt h e manyi s s u e s thatweidentified,t h e t w o m

o s t importantonesa r e t h e importanceo f culturalfitandt h e v a l u e o f a s t r o n g foundingteam

H i r i n g f o r culturalf i t i s importantp a r t i c u l a r l y f o r S M E s , asa s t r o n g cultureformsthefoundation forthecompany’slong -

termvision Ontheother hand,a strong teamisvaluableforitsroleinbuildingaculture,forthepeopleitattracts,foritsimpactonthecompany’sreputation,and–finally–

asafoundationforthecompany’smostimportantrecruitmentinstrument, its ownnetwork

Chapter1Introduction 8

1.1 -Thebackgroundof theproblem 8

1.2 -ResearchGapandResearchObjective 9

1.3 -Researchquestion 10

1.4 –Sub-ResearchQuestions 11

1.5 -DissertationOrganisationandStructure 11

Chapter2 -LiteratureReview 14

2.1 -Introduction 14

2.2 -Recruitmentandselection 14

2.3 –ChallengesfacedbySMEs in theITsector inIreland 15

2.3.1 –EnvironmentalchallengesaffectingSMEsin theITsector inIreland 16

2.4 -RecruitmentandSelectionin SMEs in theITsector 16

2.4.1 –RecruitmentandSelectionCriteria 16

2.4.2 –FactorsofAttractionandApplicants’Expectations 17

2.4.3 –RecruitmentandSelectionProcesses 19

2.4.4 –RecruitmentandSelectionChannels 21

2.5 –RecruitingMillennials 21

2.5.1 -Motivation inGenerationY 22

2.5.2 -Extrinsicmotivationfactors 23

2.5.3 -Intrinsicmotivationfactors 23

Chapter3 Methodology 26

3.1 -MethodologyIntroduction 26

3.2 -ResearchQuestion 27

3.3 -ResearchDesign 27

3.3.1 -ResearchPhilosophy 27

3.3.2 -ResearchApproach 28

3.3.3 -ResearchStrategy 29

3.3.4 -ResearchChoice 30

3.3.5 -Time horizon 31

3.3.6 -Sampling-SelectingRespondents 31

3.4 -DataCollectionInstruments 32

3.5 -DataAnalysisProcedures 33

3.5.1 -Coding 33

3.6 -ResearchEthics 34

3.7 -ScopesandLimitationsof theResearch 34

Chapter4:Findings 36

4.1 –Introduction 36

4.2 –Findings 37

4.3 –Interviewee andorganizationbackground 37

4.4 –Sizeof thecompanyandhiringculture 40

4.5 –Recruitmentchannels 41

4.6 –ChallengesfacedbySMEs in theITsector inIreland 44

4.7 –RecruitmentandSelectionCriteria 46

4.9 –RecruitingMillennials 50

4.10 –Bestpractices 52

4.11 –Conclusion 54

Chapter5:DataDiscussion 55

5.1 –Introduction 55

5.2 –Theroleofthecompany’ssizein recruitment andselection 55

5.3 –BootstrappingHR 56

5.4 –ChallengesfacedbySMEs in theITsector inIreland 57

5.5 –RecruitmentandSelectionCriteria 58

5.6 –FactorsofAttractionandApplicants’Expectations 59

5.7 –Recruitmentchannels 61

5.8 –Measuringeffectiveness 62

5.9 –Recruitingstrategies 62

5.10 –Theroleofculture 63

5.11 –RecruitingMillennials 64

Chapter6: ConclusionandRecommendation 65

6.1 –Recruitmentcriteria 65

6.2 –Recruitingstrategies 65

6.3 –Attractingtalent 66

6.4 –Recruitmentchannels 66

6.5 –Measuringeffectiveness 67

6.6 –Conclusion 67

Chapter7:Self-Reflexion 68

7.1 –Background 68

7.2 –Skillsdevelopment 68

7.2.1 –Publicspeaking 69

7.2.2 –WritinginEnglish 69

7.2.3 –Timemanagement 69

7.2.4 Futureapplicationoflearning 70

7.3 –ChallengesfacedduringtheMBAthesis 71

7.3.1 –Preparationandplanning 71

7.3.2 –Duringthedissertation 71

7.4 –Conclusion 72

Chapter8Bibliography 73

Chapter9Appendix 79

ListofFigures Figure1–RelativecostofrecruitmetntmethodsbyFITframeworkquadrant………20Figure2 -PWCreport“MillennialsatworkReshapingtheworkplace”……… …22Figure3– Theresearchonion………26Figure4 -DataAnalysisfor QualitativeResearch……….33

1.1 -Thebackgroundoftheproblem

Fueledbytheproliferationoftechnologyanditsapplicationstootherindustries,thegrowtho ftheITsectorpresentsintrinsicchallengesfor

HumanResourcemanagementallovertheworld.A shortageo f s k i l l e d workersi s amplifiedasthedemandf o r specifics k i l l setscontinuest o outpacethesupplyofsuitablecandidates.Asaresult,globalcompetitionfortalenthasintensifiedandt h e traditionalp o w e r balancei n recruitinghass h i f t e d fromemployerst o candidatesandemployees.TheHRdepartment,aswellashiringmanagers,areunderpressuretofindtherightcandidatesandretaincurrentstaff.Forthisreason,companiesaredevelopingnewstrategiestoincreaset h e i r attractiveness–

y impactedw i t h skillshortage(RandstadTechnologies,2014).Accordingt o Lee( 2 0 1 4 ) ,

S M E s oftenfaceproblemsin sixareas:recruitment,skillshortages,obtainingfinance, cash flow,skillmanagement,andfindingsuitablepremises

Theeffortt o attract,m o t i v a t e andretainemployeesi s a challengef o r e v e r y organization;however,itbecomesevenmoredauntingforSMEs.AsthereisnouniversaldefinitionofSMEs,m o s t countriesadoptnumberofemployeesasthemaincriterion ;othercountriesseethefirm’sassetsandrevenueasadditionalcriteria(Abrahametal.2015).Thepreferreddefinitionforthiss t u d y istheoneproposedbytheEuropeanUnionrelatingtoemployment:Itdefinesthatmicrofirmsasthosewithlessthan10employees,smallfirmswithbetween10and49,medium-sizedfirmswithbetween50and 249andlargefirmswith over249employees

SMEshaveanenormousimpactintheIrisheconomy.TheIrishgovernmenthasrecognizedt h e mtobeoneofthekeydriversofthecountry’seconomywhileTheIrishTimeshasaccreditedS M E s tobet

he“spine”oftheIrisheconomy.In2010,SMEscontributedover€10billion andemployedover900,000individuals(McHugh,2010).

SMEs,havingl i m i t e d resources,experiencea l o t o f competitionf o r attractingtalentb o t h fromhugeinternationalcompaniesthatofferlargesign-

upbonusesandstockoptionpackagesaswellasfromcompetingS M E s Mayson& Barrett(2006)highlightt h a t S M E s g e n e r a l l y l a c k threeimportantfactors,whichnegativelyinfluencetheirrecruitmentopportunities:poorstrategicp l a n n i n g andf o c u s , t h e competitionw i t h largecompanie

sf o r h u m a n r e s o u r c e s , andfinally,S M E s aregenerallynot thefirstchoiceofapplicants

InIreland,whichhasmanagedt o attractn u m e r o u s ITcompaniesi n recentyears,t h e s e challengesareaccentuated.InadditiontothecompetitionandskillshortagethattheITindustryandparticularlySMEsfaceallovertheworld,inIrelandtheyalsofaceseriousdifficultiestogetcreditandloansfromIrishbanks.AccordingtoIreland’sCompetitivenessScorecard(2015),itisnoticeablet h a t t h e valueo f impairedS M E l o a n s hasbeend e c l i n i n g s l ow l y inr e c e n t quarters,w h i l e

1.2 -ResearchGapandResearchObjective

Accordingto Chin (2010), thenumberofresearcheson HRM forSMEs isscarce

fromthebeginningofthe2000’s,whichclearlydemonstratestheneedf o r m o r e researchi n t h i s f i e l d Ina c c o r d a n c e , i n a m o r e recentscenario,Abrahametal

(2015)arguet h a t t h e r e isa particulargapi n t h e literaturer e g a r d i n g r e c r u i t m e n t andselectionprocessesi n S M E s T h e y indicat e t ha t t h e s t u d i e s availablei n v e s t i g a t e generalH R M practicesrelatedtojobsatisfactions,organisationperformance,andproductivityratherthanhiring

methodsandbestpractices.This researchaimstofillthe gapintheliteratureregardingrecruitmentandselectionin SMEs,particularlyofprofessionalsin theITindustryinIreland

Furthermore,t o t h e b e s t o f t h e author’sk n o w l e d g e , n o t a singlea r t i c l e investigatingITprofessionalsinIrelandexists.ThefewarticlesfounddiscussingSMEsinIrelandarenotrelatedt orecruitmentandselectionanddonotdealwiththeITsector.Theyaremainlyarticles

discussingtheimpactofSMEsinthecountry’seconomy aswellastheproblemsgeneratedbydifficultiesin obtainingcreditsinIrishBanks.

1.3 -Researchquestion

ThisstudyaimstoidentifythebestpracticesforattractingthebestcandidatesintheITsectori n IrelandforSMEswithlimitedresources.Theoverarchingresearchquestionthusisthefollowing:

How canSMEsimprove recruitment and selectionspractices to attract

and motivateemployees, with a focus on generation Y in the Irish IT sector?

influenceITprofessionalsduringtherecruitmentandselectionphases.Ino t h e r words,t h i s researchaimst o detectwaysi n whichS M E s canm o s t e f f e c t i v e l y usetheirresourcestoattractITprofessionals

Thedatacollectionw i l l b e conductedthroughinterviewsw i t h ITrecruiterso r h i r i n g managers.InterviewswithITrecruiterswillshedlightonthehiringpracticesofITprofessionalsi n IrelandandonwhattheybelievetobethebestpracticesinrecruitmentandselectionintheITsector

Thegoalo f t h i s assessmentc o n s e q u e n t l y i s t o enablecompaniest o o b t a i n anintimateu n

d e r s t a n d i n g oftheexpectationsofITprofessionals.Equippedwiththisunderstanding,itwill

beoutlinedhowtheycanbestusetheirresourcestofocusonthoseaspectsthatareofthehighestsignificancefor thecandidates.

Tosummarise,regardingt h e literaturer e v i e w , t h e factorsrelevantf o r effectiverecruitmentandselectionpresentedbytheliteraturewillbeoutlined.Additionally,theliteratureaboutmotivationinGenerationYwillbereviewed,whichconstitutesthemajorityofITprofessionalst h a t areb e i n g recruited.T h i s w i l l allowu s t o gaina betterunderstandingo f t h e aspectsthatmotivatethemtojoinacompany.ItisfundamentaltothisresearchtojuxtaposewhatcandidatesareexpectingfromajobtowhatSMEsaredoingtomeettheseexpectations.Onceabetterunderstandingofthemotivationsoftheirfutureemployeeshasbeenachieved,thisu n d e r s t a n d i n g c a n beleveragedtoeliminatediscrepanciesinthecurrentfulfilmentofsaidexpectationsandallowsreallocationandr e p r i o r i t i z a t i o n o f financialresourcest o w a r d s a m o r e effective recruitmentprocess

1.4 –Sub-ResearchQuestions

Ino r d e r t o elaborateo n t h e contento f t h e

researchproject,thesub-researchq u e s t i o n s asdetailedbelowaimtoenrichandwidenthescopeoftheprimaryresearchproject,thesub-researchquestionbyevaluatingt h e relevance andeffectivenessofcurrenthiringpracticesintheITsectorinIrelandaswellasthechallengesthesepracticesimpose toSMEsandtheimprovementsthatcanbemade inordertoachieveamoreefficientrecruitmentandselectionprocess

Thesub-researchquestionsarethefollowing:

• Whatarethecurrenthiringpracticesin theITsector inIreland?

• WhatarethechallengesfacedbySMEs inIrelandin theITsector?

andsub-questions,whichconstitutethebasisfortheresearchandguidethegatheringofprimarydata.Furthermore,thissectionpresentsthesuitabilityoftheresearcherandmotivatesherinteresti n

t h e subject,whileacknowledgingthe scopeandlimitations of theresearch

Chapter2:LiteratureReview

Thissectionpresentsvaluableandrelevantthemesi n c l u d i n g r e c r u i t m e n t andselection,challengesfaced bySMEsinthe ITsectorandalsoreviewstudiesregarding motivationoftheGenerationY

Chapter3:ResearchMethodology

Thepurposeofthissectionistodemonstrateanddiscusstheexistingresearchmethodsaccordingt o theResearchOnionDiagramModel(Saundersetal.,2012)focusingontheresearchm e t h o d o l o g y choicess e l e c t e d f o r t h e b e s t c o n d u c t i o n o f t h i s particularresearch.A d e t a i l e d analysisofthemethodologyresearchchoiceswilltouchtheoptimalresearchphilosophy,approach,andstrategicoptionsinothertogatherrelevantprimaryandsecondarydatatoproceedw i t h

d a t a analysis

Chapter4:DataAnalysisandfindings

Theaimofthischapteristoanalyseanddiscussthegatheringofprimarydata.Itpresentsanin-depthanalysisoftheresults,whichsupportstheresearcherinfindingrelevantandvalidcontenti n ordertodrawwell-

groundedconclusionsandrecommendationsregardingeffectiverecruitmentandselectionprocesses

Chapter5: Discussions, conclusionandRecommendations

Thissectionattemptstosummarisethemainfindingsofthisresearchstudy,touchingitsimplicationsandadditionsf o r t h e f i e l d o f s t u d y byd r a w i n g relevantandvalidc o n c l u s i o n s i n c l u d

i n g recommendations for SMEs in theITsector inIreland

Chapter6:Self-ReflectiononOwnLearningCurveandPerformance

Int h e f i n a l parto f t h e researchstudy,a s e l f

-assessmento f t h e researcher’sexperienceandlearningsthroughouttheconductionofthisresearchstudyispresentedaswellasinsightsoftheentireprocessof theMaster’sstudies

Chapter7: BibliographyChapter8:Appendices

Chapter2-Literature Review

2.1 -Introduction

Inthissection,theliteraturereviewoftwocentralthemesofthisresearchwillbeconducted:RecruitmentandselectionprocessesaswellasmotivationalfactorsofGenerationY.Specifically,wewilldiscusscharacteristicsofefficientrecruitmentmethods,thepreferredrecruitmentchannelso f S M E s , aswellast h e expectationsrecruitersh a v e towardsprospectiveapplicantsandt h e f a c t o r s t h a t attractapplicantst o companies,p a r t i c u l a r l y SM E s Buildingo n t h i s , weexplorethedifferentintrinsicandextrinsicmotivationalfactorsformillennials,asthesecomprisethemajorityofemployeesenteringtheworkforce

2.2 -Recruitmentandselection

Asrecruitmentandselectionisanessentialpartofeverysuccessfulcompany,numerousstudieshavesoughtt o i d e n t i f y andanalyzeit s aspects.Breaugh's( 2 0 0 8 ) m o d e l o f recruitmentcharacterizesf o u r stagesast h e keycomponentsi n t h e processofattractingt h e rightt a l e n t : Firstly,clearandspecificrecruitmentobjectivesaredrawn.Inasecondstep,strategiestofillthevacantpositionareestablished.Duringthethirdphase,specificrecruitmentactivities,whichaimt o attractt h e rightc a n d i

d a t e s arec o n d u c t e d T h e fourthandfinals t a g e i s dedicatedt o t h e evaluationof

theoutcomes of thefirstthreestagesof therecruitmentprocess

Severals t u d i e s d r a w attentiont o t h e significanceo f t h e t h i r d phase:W i l l i a m s o n etal

g t o Armstrong,t h e analysisofrecruitmentstrengthsandweaknesses, aswellastheanalysisofrecruitmentobjectivesandi d e n t i f i c a t i o n o f t h e sourcesf o r candidatesa r e keyf o r aneffectivecandidateattraction

Inaccordance,Williamsonetal

(2010)determinethattherearetwomainobjectivesthataneffectiver e c r u i t m e n t t o o l s h o u l d accomplish:Firstly,s u c h a t o o l s h o u l d c a p t u r e t h e applicant’sattentionandappealtothemtogatherin