Tài liệu The personnel recruitment of small and medium enterprises in ha noi area in the international integration period

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- NGUYỄN THANH TÙNG THE PERSONEL RECRUITMENT OF SMALL AND MEDIUM ENTERPRISES IN HANOI AREA IN THE INTERNATIONAL INTEGRATION PERIOD CÔNG TÁC TUYỂN DỤNG NHÂN LỰC TẠI CÁC DOANH NGHIỆP VỪA VÀ NHỎ TRÊN ĐỊA BÀN HÀ NỘI TRONG THỜI KỲ HỘI NHẬP LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2018 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --------------------- NGUYỄN THANH TÙNG THE PERSONEL RECRUITMENT OF SMALL AND MEDIUM ENTERPRISES IN HANOI AREA IN THE INTERNATIONAL INTEGRATION PERIOD CÔNG TÁC TUYỂN DỤNG NHÂN LỰC TẠI CÁC DOANH NGHIỆP VỪA VÀ NHỎ TRÊN ĐỊA BÀN HÀ NỘI TRONG THỜI KỲ HỘI NHẬP Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: TS. TRỊNH NGỌC HUY Hà Nội - 2018 DECLARATION The author confirms that the research outcome in the thesis is the result of author‟s independent work during study and research period and it is not yet published in other‟s research and article. The other‟s research result and documentation (extraction, table, figure, formulaand other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration. Hanoi, date of …… / …… /…….. ACKNOWLEDGEMENT I hereby certify that I am the sole author of this thesis and no part of this thesis has been published or submitted for publication. I certify that, my thesis does not violate anyone‟s copyright. Additionally, all ideas, quotations, or material from the work of other people included in my thesis, published or otherwise, are fully acknowledged with the standard of references. I declare that this is a true copy of my thesis. The content of this thesis has been approved by the committee of Vietnam National University, Hanoi – Hanoi School of Business (HSB). This thesis has not been submitted for a higher degree to any other University or Institution. In order to finish this project successfully, I have received many helps, supports and guidance from many people who I would like to thank sincerely. First of all, I would like to thank all the professors of MBA program, especially Dr. Trinh Ngoc Huy – my suporvisor. Then I would like to thank deeply the respondents and interviewees who allowed me to gather enough data for this research. Finally, I would like to express my thanks to my family, my colleges and my fellow friends who created convenient conditions and give me encouragement and understanding for me to complete this degree. I sincerely thank you! Hanoi, date of …… / …… /…….. MỤC LỤC ABBREVIATION ............................................................................................ i LIST OF FIGURES ........................................................................................ ii LIST OF TABLES ......................................................................................... iii INTRODUCTION ........................................................................................... 1 1. Rationale ................................................................................................. 1 2. Aims of research ..................................................................................... 3 3. Objects of research.................................................................................. 3 4. Scope of research .................................................................................... 3 5. Research methodology ............................................................................ 3 6. Thesis structure ....................................................................................... 6 CHAPTER I. THEORETICAL BACKGROUND ON RECRUITMENT AND SELECTION .......................................................................................... 7 1.1. Literature review of recruitment and selection in SMEs...................... 7 1.2. Small and medium sized enterprises .................................................. 10 1.3. Employee Recruitment ....................................................................... 12 1.4. Recruitment process ........................................................................... 14 1.4.1. Employee recruitment ..................................................................... 15 1.4.2. Employee selection.......................................................................... 26 1.5. Recruitment in small and medium enterprises ................................... 30 1.5.1. Limited resources ............................................................................ 31 1.5.2. Formality of HRM ........................................................................... 32 1.5.3. Source of candidate ......................................................................... 33 1.5.4. Selection practices ........................................................................... 33 1.5.5. Challenges facing SMEs in recruitment and selection .................... 34 1.6. Impact of recruitment and selection ................................................... 34 1.6.1. Positive impacts of recruitment and selection practices ................. 34 1.6.2. Negative impacts of poor recruitment practices.............................. 36 1.7. Proposed model .................................................................................. 37 CHAPTER 2: RECRUITMENT AND SELECTION PRACTICE IN SMALL AND MEDIUM SIZED ENTERPRISES .................................... 39 2.1. Overview of SME in Vietnam ............................................................ 39 2.2. Description of data.............................................................................. 44 2.2.1. Survey methodology........................................................................ 44 2.2.2. Description of sample ...................................................................... 45 2.3. Recruitment practices in SMEs .......................................................... 47 2.3.1. Human resource planning and recruitment policy .......................... 47 2.3.2. The use of job analysis .................................................................... 49 2.3.3. Multiple source of candidates ......................................................... 53 2.4. Selection practices in SMEs ............................................................... 55 2.4.1. The use of application screening and preliminary interviews......... 55 2.4.2. Use of selection tests ....................................................................... 57 2.4.3. The use of interviews ...................................................................... 60 2.4.4. Reference check............................................................................... 62 2.5. The impact of recruitment practice on employees attitude and performance ................................................................................................. 64 2.5.1. Reliability analysis of dependent variables ..................................... 64 2.5.2. Reliability analysis of recruitment and selection variables ............. 66 2.5.3. Multiple regression analysis ............................................................ 67 CHAPTER 3: IMPLICATIONS AND SUGGESTIONS TO IMPROVE RECRUITMENT AND SELECTION PRACTICES IN VIETNAM SMEs ............................................................................................................... 72 3.1. The role of small and medium sized enterprise in Vietnam............... 75 3.2. Human Resource Challenges facing SMEs in Vietnam ..................... 76 3.2.1. Human Resource Planning .............................................................. 76 3.2.2. Job analysis ...................................................................................... 77 3.2.3. Recruitment and selection ............................................................... 77 3.3. Summary of research findings ............................................................ 78 3.3.1. Human resource planning ................................................................ 78 3.3.2. Job analysis ...................................................................................... 79 3.3.3. Sources of candidates ...................................................................... 79 3.3.4. Use of preliminary screening .......................................................... 80 3.3.5. Use of delection test ........................................................................ 80 3.3.6. Use of interviews ............................................................................. 80 3.3.7. Reference check............................................................................... 81 3.4. Suggesttions for SMEs in improving recruitment and selection practices ....................................................................................................... 81 3.4.1. More attention should be paid on HR planning .............................. 81 3.4.2. Establish recruitment policy ............................................................ 82 3.4.3. Conduct thorough job analysis ........................................................ 86 3.4.4. Ultilize multiple sources of candidates ........................................... 89 3.4.5. Conduct effective selection interview ............................................. 92 3.4.6. Doing proper reference check ......................................................... 94 3.5. Limitations .......................................................................................... 96 CONCLUSTION ........................................................................................... 97 REFERENCE ................................................................................................ 98 APPENDIX. QUESTIONNAIRE IN VIETNAME ................................. 106 ABBREVIATION SME Small and medium sized enterprise HR Human Resource HRM Human Resource Management GSO General Statistical Office WTO World Trade Organization TPP Trans-Pacific Partnership GDP Gross Domestic Product . i LIST OF FIGURES Figure 1.1. Recruitment and selection process .........................................................14 Figure 1.2. Research model .......................................................................................37 Figure 2.1. Size of enterprises in Vietnam ................................................................40 Figure 2.2. Total number of SMEs by year ...............................................................41 Figure 2.3. Allocation of SMEs in Vietnam by industry ..........................................42 Figure 2.4. Size of the enterprises in the sample ......................................................45 Figure 2.5. Types of the firms in the sample by ownership ......................................46 Figure 2.6. Distribution of firms in the sample by industry......................................46 Figure 2.7. The implementation of HR planning by SMEs ......................................48 Figure 2.8. How often does your company use formal job analysis .........................49 Figure 2.9. The availability of job descriptions and job specification ......................50 Figure 2.10. The use of job descriptions and job specifications for recruitment and selection .....................................................................................................................52 Figure 2.11. The use of multiple source of candidates .............................................53 Figure 2.12. Uses of preliminary screening by SMEs ..............................................56 Figure 2.13. Use of reference check with candidate-nominated referees .................63 Figure 2.14. Use of reference check with candidate-nominated referees .................64 Figure 3.1. Link between HR planning and organization‟s mission .........................82 ii LIST OF TABLES Table 2.1. Presents details of the average income of workers in SMEs by type of ownership and economic activity. .............................................................................42 Table 2.2. The availability of recruitment and selection policy ...............................48 Table 2.3. ANOVA with firm characteristics as factors and dependent variable: How often does your company use formal job analysis ...........................................50 Table 2.4. ANOVA with firm characteristics as factors dependent variable: the availability of job descriptions and job specifications ..............................................51 Table 2.5. ANOVA with firm characteristics as factors and dependent variable use of JD and JS for selection and recruitment ...............................................................52 Table 2.6. ANOVA of dependent variables with firm characteristics as factors ......54 Table 2.7. Adoption of selection tests by SMEs .......................................................58 Table 2.8. ANOVA of dependent variables with firm characteristics as factors ......58 Table 2.9. Adoption of selection interview by SMEs ...............................................60 Table 2.10. Reliability of dependent variables .........................................................65 Table 2.11. Reliability analysis of independent variables ........................................66 Table 2.12. Results of regression analysis ................................................................67 Table 2.13. Results of regression analysis ................................................................68 Table 2.14. Results of regression analysis ................................................................69 iii INTRODUCTION 1. Rationale Small and medium enterprises (SMEs) typically account for a large proportion (about 90% numbers of enterprises) worldwide. In Vietnam, this rate at about 98% so SMEs play a very important role in national economy. While big enterprises are often located in the economic centers of the country, the SMEs are present in all locals, regions… and contribute a great deal to government budget, generate mass of local jobs, and significantly contribute to the national GDP in value. According to Vietnam General Statistic Office (GSO, 2016), small and medium enterprises employ 51% social workers and contribute over 40% of GDP for the country. In the status of national economic renovation and international integration, (especially while Vietnam was official member of WTO (2007), TPP (2016) and lots of important free trade agreements - FTA), Vietnam‟s enterprises (especially SMEs) catch up several big business opportunities and enormously challenges, vice versa. Economic researchers and experts affirm that the key visible challenge for domestic enterprises is the competitive pressure from multinational corporations and international groups. Under this pressure, SMEs is the mostvulnerable. Because SMEs are in lack of finance, naturally, have less ability in capital mobilization, and possess not-good-enough human resource and technology for survival. Once again, the shortage of highly qualified personnel and skilled workers are the most worrying problems of SMEs. In addition, the experience of international market access and understanding of the common conventions and international charters of SMEs is also very limited. Therefore, innovation and improvement of business capacities are imperative requirement for SMEs to seek a position in the market in the current period.The task of innovation and improvement of business capacities of SMEs are not only focused on the issue of organizational structure, financial, technical infrastructure ... but also towards the content of human resources in business. Especially when the competitiveness in finance, technology 1 cannot be easily changed, the problem of human resources is the most important requirements and able to change than other factors. SMEs are having many difficulties in both recruitment and maintainance high quality workforce throughout the whole their business process. One part due to restrictive in the ability to pay for high-quality employment of SMEs is not possible due to financial constraints, another because these businesses do not have effective strategies in labor recruitment.In order to maximize the human resources, SMEs must pay attention to recruitment of employees to attract a qualified and qualified workforce in line with the objectives, work nature work position. This requires SMEs need to build their own suitable recruitment policy because a suitable recruitment policy will be an important material for good human resource. In fact, most ofSMEs now are facing with many difficulties in the recruitment of human resources. Hanoi is the capital city of Vietnam and is one of the most improtant drivers of the country‟s economic development. As a result, there have been dramatic development in the number of of enterprises including SMEs. While there were about 69,000 enterprises in Hanoi in 2008, the total number of enterprises in Ha Noi was 142,000 by 2014 (GSO, 2015). A very large proportion of SMEs in Hanoi operate in the field of services and construction and therefore they mostly employ skilled workers. Because there are also many FDIs and other large enterprises in the area of Hanoi, many of the SMEs find it difficult to find qualified candidates because of fierce competitions. Results from a survey by CIEM (2016) indiacted that 79% of SMEs face difficulties with recruitment. The main reasons included low pay, poor working conditions and lack of career advancement opportunity. From that actual situation, the author decides to choose the theme "The personnel recruitment of small and medium enterprises in Ha Noi area in the international integration period" to complete the master thesis. With research content as above, the author poses research questions for his topic as follows: 2 - How is the current status of recruitment and selection practice among SMEs in Hanoi? -What is the impact of recruitment and selection practices on SMEs performance and human resource? 2. Aims of research 2.1. General objective The overall objective of this study is to assess the current status of recruitment and selection practices in SMEs and to provide recommendations to improve recruitment and selection practices in these SMEs. 2.2. Detail objectives - Survey and evaluate the current actual situation of personnel recruitment and selection in SMEs in Hanoi area. - Investigate the inpact of recruitment and selection practices on individual and SMEs performance. - Propose suggestionss in order to improve effectiveness of personnel recruitment activity for SMEs in Hanoi in the near future. 3. Objects of research Objects of research are Personnel recruitment and selection activities of SMEs in Hanoi 4. Scope of research Location scope: This study will be carried out at level of SMEs in Hanoi area - Scope of contents: the current study only focuses on recruitment and selection practices of SMEs but not on other aspects of human resource management. - Scope of space: The research focuses on SMEs in Hanoi Metropolitan areas and not all SMEs in Vietnam. - Scope of time: the data were collected from 8/2017 to 9/2017, the analysis was based on current data. Suggestions are valid until 2020. Research methodology Data collection method * Secondary Data Collection: Secondary data will be collected through the 3 GSO, and data from previous research on HRM and SMEs. In addition, the thesis will use some documents as well as information about SMEs and recruitment & selections from books, dissertations, magazines, internet. * Primary data collection: Primary data collection methods are questionnaires surveys, expert indepth-interviews. In addition, synthetic analytical methods will be applied. The questionnaire survey is the most important method in the study, which is described in detail as follows: - Sampling:  Sample size: 150 by random sampling  Sampling objects: SMEs located in the areas on Hanoi. Name and address as well as telephone numbers of the SMEs were collected from enterprises database extracted from the website thongtindoanhnghiep.co - Design of questionnaires: Questionnaires are designed to be in line with the objectives of the thesis and theoretical framework in a clear and concise manner. To ensure accuracy, the questionnaire will be designed according to the following process:  Based on research objectives and frameworks to identify the information needed: factors, variables and metrics;  Determine the type of question;  Determine the content of each question;  Determine the terms used for each question;  Determine the logic of the questions;  Draft questionnaire;  Submit a questionnaire to the instructor;  Carry out pilot survey to receive feedback on questionnaires  Review and finalize questionnaires; Data analysis method The dissertation uses two methods of data analysis: qualitative and qualitative. 4 * Quantitative methods - Statistical aggregation: Collected data and information collected, selected and statistical information needed. - Comparison: After collecting and analyzing the necessary data, comparison will be made over time. - Processing survey data using SPSS software 18.0 Cronbach Alpha Assess the scale reliability by using the Cronbach Alpha coefficient. Variables with an item-total correction factor less than 0.3 will be excluded and the criterion of scale selection is that it has Cronbach Alpha reliability of 0.6 or higher (Nunnally & Bernstein, 1994). In this study, Cronbach Alpha must be from 0.6 to be retained. Oneway Anova Analysis Assumptions for one-way analysis of variance (One-Way Anova): - Comparative groups should be independent and randomly selected. - Comparative groups must have standard distribution: use the KolmogorovSmirnov test. - The variance of the groups should be the same: use the Levene test to look at the equality of variance. The Levene test was conducted with the hypothesis H0 that the variance of the groups were the same, if the test result for the significance level was less than 0.05 then rejected the Hypothesis H0. If one of the above assumptions does not meet, the Kruskal-Wallis nonparametric test will be used instead of ANOVA. Hypothesis: - H0: There is no difference between the mean of the groups classified by variables. - H1: There is a difference between the mean of the groups classified by variables. If: + Sig. (2-tailed)> 0.05 is not sufficient basis to reject the Hypothesis H0 should accept Hypothesis H0, which means that the average value is different from the test value. 5 + Sig. (2-tailed) <0.05 is sufficient basis to reject Hypothesis H0 and accept Hypothesis H1, meaning that the mean is different from the test value. * Qualitative method: regression method In statistics, regression analysis is a statistical tool for the investigation of the relationships between variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables. More specifically, regression analysis helps one understand how the typical value of the dependent variable (or 'criterion variable') changes when any one of the independent variables is varied, while the other independent variables are held fixed. The investigator assembles data on the underlying variables of interest and employs regression to estimate the quantitative effect of the causal variables upon the variable they influence. The investigator also typically assesses the “statiscal significance” of the estimated relationships, that is, the degree of confidence that the true relationship is close to the estimated relationship. 5. Thesis structure In addition to the introduction, conclusion, references, appendixes; the contents of the dissertation is divided into three chapters: Chapter 1: Theoretical background on recruitment and selection Chapter 2: Recruitment and selection practice in small and medium sized enterprises Chapter 3: Implications and suggestions to improve recruitment and selection practices in SMEs 6 CHAPTER I. THEORETICAL BACKGROUND ON RECRUITMENT AND SELECTION 1.1. Literature review of recruitment and selection in SMEs Ravi and SantoshKumar (2015) explore the relationship between human resource management measures and SME financial results in Mysore and Bangalore, India. Human resource management practices used by research firms include recruitment and selection, training, performance appraisal, remuneration and bonus, and welfare. The financial results are also measured based on the subjective assessment of the participating companies. The results show the positive relationship between the five measures of human resource management practices and the financial results of enterprises including recruitment and selection, training, performance based pay. The research by Kauanui, Dang Ngoc Su and Ashley-Cotleur (2005) explores the relationship between three aspects of human resource management including training, performance appraisal, and incentive pay. The authors collected data from 200 SMEs in Hanoi for analysis. Results of the study show that the positive relationship between the control measures and the results of enterprises in which the incentive fee has the greatest impact. Nguyen Tung (2014) in his article on "Human Resource Management Practices and Performance of Small and Medium Enterprises in Vietnam" has identified five human resource management teams to be used, including (i) personnel recruitment channel, (ii) personnel selection, (iii) remuneration and compensation, (iv) personnel training and development, and (v) personnel assessment. The results of the standard survey used for the study included 96 randomized enterprises in nine northern provinces, including Hanoi. The total number of formal employees in each surveyed enterprise was no more than 300. The author's conclusion is that the application of professional business management practices in small and medium enterprises in Vietnam is limited to all operations related to personnel recruitment channels, personnel selection, compensation and 7 training, human resources development and training, and personnel assessment. There are a number of human resource management practices that are new or are not / are rarely applied in businesses such as recruitment through job fairs (recruitment channels), psychological tests (selection of candidates), the program encourages groups and individuals to work, share profits, supplement financial benefits (compensation and benefits); training programs by outsourced trainers, the use of formal training programs, management development training (personnel development and training) and personnel assessment criteria (personnel assessment). Le Thi Kim Anh (2013) in the thesis on the impact of human resource management on production and business activities of small and medium enterprises in Thai Nguyen province, has achieved specific results. Firstly, the thesis proposed methods, analytical tools and questionnaire system to assess the impact of human resource management practices on small and medium enterprises' production and business activities. Secondly, the thesis has shown that the good practice of human resource management will help small and medium enterprises improve their profitability as well as business efficiency. Third, the thesis indicates that the training programs of small and medium enterprises based on the needs assessment, the evaluation of the work of employees, the direct application to the work of the staff will bring the impact on the efficiency of production and business activities. Fourth, the thesis has pointed out the human resource management factors affecting production and business activities: (1) Recruitment and selection; (2) training and development; (3) professional planning system; (4) Participation and companionship; (5) Compensation for damages and benefits; (6) Performance evaluation. Finally, the thesis proposes the necessary solutions to improve the efficiency of production and business activities by improving the efficiency of human resource management, namely: (1) recruitment and selection: transparent system should be applied through the assessment of individual capacities; (2) The training program should continuously update the new skills required for production 8 and business activities to meet the challenges of modern competition; (3) In order to improve the efficiency of production and business activities, small and medium enterprises should have appropriate career planning systems for employees and workers; (4) The compensation and reward system for workers should be based on market prices, which will help retain more qualified employees in the business. Cuc (2016) studied HRM at small and medium sized enterprises in Vietnam and found that HRM in these enterprises was still weak and underdevelped. She found that there are few SMEs planning human resources in the long run. According to statistics, 85% of total enterprises forecast demand based on the number of employees to replace, only about 15% is based on changes in science, technology, demand products and services, scale capital. Even more, many Vietnamese SME owners have not identified the need for human resources in the short term. Only medium-sized enterprises (50-300 employees) are interested in and set up a human resource management strategy. However, human resource training and development strategies are not closely linked to vision and objectives. Human resources management, due to the lack of interest in development, in SMEs are not effective. The author also cited from survey that most Vietnamese SMEs now carry out job analysis, however, this work is only carried out when there are recruitment needs in the enterprise. For recruiting staff, the source from the training institute and mass media play an important part to ensure that the company recruited the right people to work. However, this form of recruitment is mainly applied in mediumsized enterprises, as the human resources of small and medium enterprises are small, the advantage for recruiting through training institutions and mass media is not much. According to statistics, 25% of enterprises recruited through mass media, this number is low compared to developed countries as well as some countries in the region. As for recruitment, each SME has its own way of recruiting, but the whole process is done through the following steps: receiving dossiers and research; Select qualified candidates for interview. Candidates who pass the interview will be admitted to the trial within 3-6 months, then the company will sign official contract. 9 However, the reality is that many small and medium-sized enterprises have limited awareness about the need for assessing recruitment practice. Only about one-fourth of the SEMs evaluate the effectiveness of selection. Most SMEs use the point-based methodology, however, the criteria are often subjective but not based on the job descriptions. 1.2. Small and medium sized enterprises The definition of small and medium sized enterprises varies across countries. In Japan, the criteria for small and medium sized enterprises are different between manfacturing and non-manufacturing sectors. In manufacturing sectors, SMEs are those which employee less than 300 employees and have capital of less than 300 million Yen. While in non-manufacturing sector, SMES are enterprises with less than 100 employees and capital of less than 100 million Yen. Similarly, in Taiwan a firm with less than 200 employees is classified as SMEs if it is operating in manufacturing sector, in non-manufacturing sector, however, the total number of employees less than 50 is the threshold. In the United State of America, the only criterion for SMEs is that the total of employees less than 500. In Vietnam, there have been many different concepts of small and medium enterprises. However, since the issuance of Decree No. 90/2001/NĐ-CP dated 23 November 2001 on SME development assistance, the definition of SMEs has been understood as follows: "Small and medium enterprises are independent business establishments, having registered business under the current law, with the registered capital of not more than 10 billion or average number of employees does not exceed 300 employees per year. Thus, the criteria for determining SME are: + Registered capital of less than VND 10 billion (approximately USD 650,000), or + Having a workforce of less than 300 people. According to Article 4: "This Decree applies to SMEs, including: Enterprises established and operating under the Enterprise Law, Enterprises established and 10