Strengths and Weaknesses of Internal and External Recruitment - Essay Example

Compare the relative strengths and weaknesses of internal and external recruitment Recruitment is the process of identifying the organization’s needs, ending at the point when an application from a prospective candidate for the position arrives at the organization. Ideally, this has to be achieved at the lowest possible cost. This process begins when new recruits are sought, and ends when applicants have submitted application forms or resumes. The result is a pool of job seekers from which the organization selects the most qualified. Selection then consists of the processes involved in choosing from hopeful applicants, a suitable candidate to fill the post. Training consists of a range of processes involved in making sure that jobholders have the right skills, knowledge and attitudes required to help the organization to achieve its objectives. Finding the Right Strategy for Recruitment Smart companies recruit employees they can retain, and retention depends on getting the right people in the right job in the first place. Therefore, while getting a large pool of applicants is important, getting the right type of applicant is even more important. Of course, the major challenge is to select the individual who will best fit into both the position, as well as the organisational culture. Before considering any candidates, however, the first decision will be to determine whether the recruitment should be internal, external or both. An accurate job description is an essential step before a suitable candidate is considered or even deciding where to look for one. Developing a job description that defines the key responsibilities and outputs of the position is the first step. This will lead to a desired profile of the candidate. Finally, the key responsibilities and methods to screen the resumes, gauge skill levels, and conduct interviews should be established. Determining Resources In order to decide the type of recruitment strategy to be used, a company must first determine whether it already has suitable employees that possess the knowledge and professionalism required to fill the vacant position. If the answer is yes, then a recruitment strategy can be planned and undertaken internally, otherwise the company will search for external candidates. Organizational Constraints on Recruitment: Organizational Policies Affirmative-action Programs Recruiter Habits Environmental Conditions Job Requirements Profile of Job Generally, skilled workers are more difficult to find than unskilled workers are. Hence, the job profile is a major determinant for the method of recruitment. While unskilled workers are easier to attract by simpler, more prevalent media like classified ads, the more skilled worker needs techniques that are more sophisticated. In addition, a company with a good training program has a better talent pool internally than a company without such a program. Internal recruitment Internal recruitment is defined as when a business recruits one of their current employees for another job within the business. For example, a person working on the cash desk of a shop might successfully apply to become the manager of the shop. The most widely employed methods of internal recruitment: Computerised Record systems: Computers have enabled the creation of data banks that contain the qualifications, work history and the personal details of each employee. Such information can also be sorted as skill inventories and replacement charts. These permit the organization to locate the potential candidate in case of necessity. Job postings: The purpose of job posting is to inform the employees about job vacancies. This is done through bulletin boards, company newsletters, or now increasingly through online posting programs or the Intranets which instantly allow an employee to match a job vacancy with their skills. Staff meetings: Weekly or monthly meetings are also used to inform the employees about job openings as and when they occur. Often jobs are posted in prominent places where it is visible to the employees. Most companies try to fill positions internally before they begin to look for external applicants. These job postings also emphasise the required skill levels, qualifications required etc. but also let the employee know the job criteria, whether it is based on seniority of service, performance factors or other requirements of a specific skill. It also clearly states whether there is a transfer opportunity involved and whether it a permanent position or a “trainee” opportunity where the candidate is under observation for a certain period within which he has to prove his worth to continue in the position. External Recruitment Most job vacancies are filled by recruiting people from outside the firm - workers from another firm or organization, people who have never worked before, or people who are unemployed. There are several methods of external recruitment for a job. “Walk-ins”: “Walk-ins” or “Write-ins” are unsolicited applicants have the advantage of being cost-effective but the downside of it is that walk-ins may not have skill set organization needs; skilled minorities don’t tend to be walk-ins. Employee referrals: Employee referrals have the advantage of the recommender being knowledgeable about both job and applicant to determine appropriate fit but the problem is that a lot of bias or favouritism is possible. Media advertising: Newspaper Ads are relatively cheap, although some specialised ads can be expensive. However, the ad has to be strategically placed to reach the right targeted segment. College recruiting: University does help in obtaining applicants with the needed education or skills. Often though, they lack in experience and may require more training before they start contributing. Professional organizations/association placement services: These professional organizations like project managers association or lawyers association are associations’ with specialised skill oriented people. Therefore, these are a good solution when those kinds of candidates are needed, but they also try to restrict the supply in order to keep the demand going. Recruiting agencies: Job placement agencies have huge databases often across global markets for finding applicants for a specific industry and hence are more probable to find the right candidate but their fees are very expensive and would be substantial if the volume of candidates required are high. Electronic Recruiting: The Internet is fast gaining ground due to its immense potential o reach a wider audience at a relatively lower cost. The applicant base is very wide offering a better probability of finding the right candidate. However, the downside of it is that it will not reach people who are not electronically connected and at the same time, improper screening of candidates who do, will result in a wasted talent pool. Comparison of the relative strengths and weaknesses of Internal and External Recruitment Internal and external recruitment are characterized by unique inherent strengths and weaknesses and for this reason, it is often very difficult to determine whether one is better than the other. The major advantage of internal recruitment is cost. Since there is often very little or no advertising costs involved, it is a very cost effective way of filling up a vacancy. Since the recruiting machinery is focused on an already existing pool of employees to fill a vacant position, the selection process is less time and money consuming. In the case of external recruitment, the costs involved are high. Cost of recruitment as well as the time taken to recruit is much more compared to internal recruitment. Also the there has to be sufficient staff involvement to continue the recruitment process and there will be some loss of productivity of existing staff involved in the candidate search process. Attracting and selecting new employees may be more difficult. Recruiting an internal candidate creates a vacancy for the post he vacated earlier and that needs to be filled causing what is known as a “ripple” effect. This is a cost in the recruitment process too. Often these cause some shuffling of jobs in an organisation. An external candidate coming in creates no such problems since he merely fills the required void and the remaining jobs continue as before. Internal recruitment is especially beneficially in a tight labour market situation where the supply of the skilled workers is in short supply. External recruitment on the other hand will reach a potentially skilled wider audience and will increase the probability of finding the right candidate for the job. Internal recruiting sets up a welcome precedent and contributes to increased morale. Employees are often very pleased when they see that "one of their own" has been promoted to a better position. Moreover, when morale goes up, productivity most often follows, especially when the employees like or respect the newly promoted individual. It also serves to motivate the employees through the belief that "If it can happen to that person, it can happen to me, too!" Therefore, other employees see an internal promotion as a tangible, credible and attainable goal for themselves. Any motivational theory will emphasise that an employee striving to achieve better higher-level goals, and striving for increased productivity and visibility, are important sources of motivation. This leads to increased productivity, and that often leads to better rewards and hence increased employee satisfaction. In the case of good valuable candidates to the company, it may serve as a motivational incentive to help retain employees who may otherwise plan to leave. Recruitment always causes some displacements. External recruitment, which brings in people from outside, may affect the morale of the existing staff being passed over for the opportunity. Whereas, internally, when one person is singled out for promotion, it can affect morale and cause resentment. Workers from the same team may resent taking orders from an equal and may be envious. All this will reduce cooperation and curb productivity. It may also set unnecessary expectations about promotions among the staff. Existing staff may feel they have the automatic right to be promoted, whether or not they are competent. Bringing in an external candidate on the other hand does not affect the group cohesion. An internal candidate is most likely already familiar with the functional aspects of their new job. This person knows the corporate culture, the procedures, policies, processes, employees, and internal and external customers associated with the job. They know the ins and outs--the "how things get done around here"--of the job. Therefore, this person can generally hit the ground running. Hiring an internal candidate clearly decreases or erases the usual amount of time spent advertising a position, interviewing, selecting, training and waiting for the new hire to get up to speed with the new job and its environment. An external candidate is new to the organizational culture and may require time to adjust and "fit-in" to the organization before they are fully productive. In addition, the new externally recruited candidate may not immediately understand the “organizational culture” within the organization’s work unit. He may also require some extra time to build a good working relationship with the existing work force before his influence can be geared towards increased productivity. However, the downside of this is that internal candidates may be affected by situations from the past in which they did not perform well, shirked responsibilities or angered some co-workers. Now a manager, this person could conceivably have difficulty managing his former peers and justifying his past performance. Just as the employers make assumptions based on the employee’s record of accomplishment, the employee bases his assumptions of the workings of the organisation on the past too, and makes his decisions based on them. This may not bode well for the organisation since what was relevant in the past may not be applicable to the future and this bias may pose a problem. New employees are not part of existing cliques and therefore, join the organization unaffected by internal politics. Another reason to consider hiring from the outside is that external candidates do not bring along any negative baggage regarding the company and would have no such problems. Another important factor is that the ability and work history of the current employee is known and documented. Knowing the employees strengths and weaknesses help determine the expectations. When expectations are clearly defined all around, there are fewer misunderstandings. In external candidates, the reliance is more on the interview performance and reference reports, which may hold an inherent risk due to a wrong perception of the applicant. It should be also borne in mind that while the current skills of the internal employee are known, it does not mean that they are automatically geared to take charge at the next level as well, that is they may be promoted above their level of competence based on their past performance. While a person may be good as a team player, he may not have the leadership skills to be a team lead, and although he may be promoted based on his past record, he may not be the right candidate for the job. External candidates might be better suited or qualified for the job. External candidates already have the required skill; that is the main reason they were considered for the job at the company. It could be the knowledge about knowing how to motivate, how to lead, what can be delegated, what tasks deserve close attention, what issues to avoid, and how best to work with the crucial people etc. which will help define success in the future. Internally shuffling existing candidates may create a "stagnant" workforce lacking innovation. Inbreeding stifles creativity. The internal system may become bureaucratic. It also results in a paucity of newer thought processes, reducing the likelihood of innovation, important in this globalisation era. A lack of new employees from the outside leads to a lack of new approaches and strategies. External candidates usually bring new energy, ideas, enthusiasm and perspectives to the job. They most likely have experience doing things differently at other companies, so they can bring a fresh burst of information to their job within the firm. Their exposure to other organizations, products or services will bring in “new blood” that the organisation needs to thrive and grow. Cross-cultural employees often try to imbibe the current organizational culture and blend it with their earlier experiences, leading to greater efficiency than the “beaten” path followed by the company executives. When an organization looks to recruit internally, it often is constrained by the limited talent pool available within its organisation. Since recruitments have to be accomplished within a small base, the right candidate for the position may not be often found. External recruitment, though offers a much wider and skilled base and the company is able to pick the specialised skilled person required for the job. It also allows an organization to undertake labour market testing to ensure it is employing the best possible candidates and seek "specialist" expertise in a particular field. Whereas the firm saves money by eliminating orientation sessions for employees recruited internally, other training costs may go up. If company policies mandate internal recruitment, then employees promoted from within may not have all the requisite skills required for the job. In such cases, employees will have to be trained for their new jobs. This can be a costly process. It becomes even more costly if the chain-effect of successive internal promotions requires a series of training sessions to be implemented. External candidates are often recruited with required skills hence other than a basic orientation they often do not need further training. In summary, both internal and external recruitment have their own strengths and weaknesses as seen above and using one method over another is not a pre-determined criteria. When a job vacancy exists, the first replacement source to consider is often within the organization. Organizations such as BHP, Cathay Pacific, IBM, Lend Lease, Dow Chemical, and Shell have all had a policy of filling vacancies through internal transfers and promotions. But the hidden benefits of using independent contractors, temporary workers and executive leasing has now led to look outside their existing pool of workers. The entire scenario with the organisational needs and resources and the purpose of finding the right candidate for the job needs to be evaluated on a unique basis and the strategy that will bring in the best candidate for the job needs to be adopted. Sometimes firms may try internally before they decide to recruit outside or adopt a mix of both. Conclusion Today’s dynamic companies need to adapt swiftly to the changing environment, for they otherwise might seem obsolete. Often the human resources department is required to fill vast number of jobs as the company develops new markets and pursues new strategies. New positions tend to require specialized skill sets while new management philosophies look for softer skills such as interpersonal skills. To complicate the matter further, today’s employees are more likely to change jobs, due to the availability of myriad opportunities. The human resources department must define the job requirements, advertise the position, sort though the applicants and choose the best candidates effectively and efficiently. The most successful recruitment will depend on the amount of preparation before the actual process. There are many ways to attract a pool of suitable applicants. The method chosen will depend on the time and resources the organisation can afford and the nature of the business. This can be accomplished by weighing the knowledge level, skills etc. of the required candidate to fill the job, how much training he will require, and how much value add the candidate would bring to the table. This is influenced by the time and resources the company will be able to afford to find the right person. Then it can decide whether internal or external hiring will be able to the reach the goals set. Investing the time and resources in getting a successful recruit represents sound business practice. An evaluation of the current employment situation is likely to determine the HR manager’s decision to use one or several of the recruiting methods separately or simultaneously to generate the required candidates for the job. Whatever the method of hiring, the candidate who is a “best-fit” contributes to the company’s productivity right from the beginning. Above all, being an employer of choice is a reputation you build within your industry that is a powerful tool in attracting top talent. 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