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According to Flippo, recruitment process is one where companies search for prospective employees, further stimulate and motivate them to apply for the job openings. It enables firms to identify the sources of talent all over and match them to job requirements and specifications. For instance, the Arcadia Group Ltd. attracts people to apply for jobs through career fairs, presentations, posters & ads. (Arcadia Group Ltd., 2006) The basic aim of recruitment process is to accelerate and facilitate the selection process - as it provides with a pool of talented candidates for the firm and later selection process is implemented to pick the right people out of this pool and reach to a decision. Moreover, it's a positive and continuous process whereby firms encourage more and more people to apply and make efforts to keep record of the gained pool of candidates for future human resources needs even though there's no current vacancy.
Usually, there are 3 types of recruitment needs:
Planned - changes within organization (growth, diversification) and retirement policy occurs.
Anticipated - needs that arise from changes that a firm can predict by reviewing past trends in external and internal environment.
Unexpected - due to sudden events or accidents like resignation, disease, deaths etc. (Lingham, L., 2008)
As recruitment process brings together job seekers and employer, it's known as a joining process too. Thus, the recruitment process initiates when new employees are hunted and ends when their applications are submitted. (Pretti, 2010)
While Selection maximizes the effectiveness of the human resources, it is essential to have satisfactory match between people and their job. Selection is picking up the right individuals out of the pool, possessing relevant qualifications and competencies that prove to be beneficial for the firm and match the designed criteria for a specific job. Selecting a candidate on the basis of the 'fit' between the job needs and candidate's profile means rejection of unsuitable candidate occurs and so it happens to be a negative process. The end result of this process is a contract between the firm and the selected candidate. A mismatch will waste firm's money and time in terms of training and operating costs. Moreover, it will affect the extent and quality of employee's work. Also, a mismatched candidate has the tendency to corrupt firm's environment like the candidate disliking his/her job might not follow authority orders, spoil other staff members, spread negative information about the company etc. (Preeti, 2010)
Overview of Recruiting methods or strategies:
Recruiting methods have evolved a lot overtime due to innovation and globalization. Basically, there are two kinds of methods - internal and external.
Internal Recruitment is when job openings are filled in by existing employees. A firm would take such a step as if it believes that it already holds the right people with the right skills specifically for those employees who had been through training and development programs. Following are the ways:
Transfers/ job rotations - it's a lateral movement from one department to another but within the same level. Changes in duties and responsibilities, working conditions might occur but the salary remains the same.
Promotions - is when an employee is upgraded in terms of job, status, salary, duties and responsibilities. For instance from middle to senior manager.
Job postings - firm advertises specific vacancies within the office via announcement boards or intranet etc. This opens up growth opportunities for applicants who are worth it.
Employee Referrals - a way in which personal contacts are used to discover job openings. Existing employees refer names of their friends for any upcoming vacancies. This has become a known way of recruiting people in highly competitive industries these days. (Grensing, P., 2006)
Conversely, the external method is the one where job openings are filled in from individuals outside the business. This approach is mostly used by companies growing rapidly or industries that tend to have high employee turnover like marketing jobs. (Pretti, 2010)
Advertisements - involves using the usual mode of communication i.e. newspapers, business journals, media (tv and radio) and recently internet too. These modes brief people about the job responsibilities and salaries. It is suitable to do so when a firm wants to reach out to large group of people and intends to have a pool of talented people located worldwide.
Campus Recruitment - companies visit and participate in known college campuses with an intention to choose candidates acquiring requisite qualifications and technical skills. Initial screening is done within the campus and short listed students are directed to rest of the selection process. Usually reputed banks & IT companies opt for this method.
Employment Agencies - the recruitment and selection processes are partially handed over to agencies specialized in hiring process. These agencies shortlist the candidates registered with them and submit the list to the companies to make the final decision.
Recruitment Consultancies - companies hand over the hiring process entirely Recruitment Consultants who identify and make the final decision of right candidate for the company. (Preeti, 2010)
The last two methods are similar to out sourcing of hiring process. A major advantage of external recruitment is that it brings in knowledge and skills new to a firm and contributes to long term benefit.
Arguments FOR Internal Recruitment method:
According to Lateral Hiring and Integration Survey report2008, 69% of the firms stated that internal referrals as the major means of recognizing new lateral partners.(IOMA, 2009) Due to the fact that this approach is cost and time effective as training costs are eliminated and the employees are already familiar with the business and its operation they prefer this method over external recruitment, for instance, the Birmingham City Council managed to reduce its annual wage bill by £10 million by employing this policy. (Dale, P., 2010)
Moreover, such an approach enhances employees' morale as they are being preferred over the outsiders and this definitely leads to 'promoted employees' motivating other employees within the firm to become more productive to end up with the same results. Further, this method allows people possessing great knowledge to grow upward in their career. Also, by using internal method companies are able to retain quality talent and increase employee satisfaction. (Tax Club Reporters, 2010) The Shangri-La Group in Hong Kong utilizes this approach where existing staff members are offered job vacancies before outsiders, making them highly committed and satisfied and hence, the hotel has staff turnover rates lower than the market average. (Wong, C., 2007)
As world is going through an economic crisis, this approach is the most beneficial for firms. By using transfers and promotions, companies can face any unexpected situations like shortages in any departments. For instance, the Tomball regional hospital operating with 400 - 500 nurses had 20 - 25 shortage of nurses in critical care department. Rather than hiring nurses from outside, it promoted medical/ surgical nurses to critical care nurses and handled this sudden situation. (Canon, K., 2001)
Also, as the firm is well aware of the strengths and weaknesses of the candidate there is no chance of any sort of mismatch between the job specification and the person personality. The selection of police manager in UK Home Office has improved due to the implementation of internal recruitment when compared to the historical processes. (Wall, D., 2003)
Arguments AGAINST Internal Recruitment method:
Companies following internal recruitment policies can't cope up with rapid growth of the firm - more vacancies and less supply of candidates. Green Line and New North Media faced many problems when these firms experienced rapid growth and their parental companies - TD & NBTel respectively, couldn't provide manpower and talent required fast enough. (Belcourt, M.m 1998)
It's not always necessary to find the 'perfect candidate' for a specific job from within the business but companies prioritizing this approach over external might settle for an employee who has competencies below the requirement which is again not good for the company. Powermat Inc. faced problems in filling up middle management positions as the firm has been recruiting people from within and later find out that these people lack the skills essential in performing their duties. Thus, many at times firms need to think out of the box and search for required talent from outside. (Dessler, G., 2000)
While practicing internal recruitment, the focus is on few employees who are promoted more often and grow more and more which makes them more powerful too. It happens so that firms become too dependent on these few talented employees that its survival without these employee isn't possible. Russell Reynolds - one of the known Hong Kong's hiring firms faced terrible problems with its internal recruitment when two highly experienced and talented MDs resigned and left the company in succession. (Tabakoff, N., 1996). Moreover, it inhibits new and fresh talent and knowledge from entering the firms that could otherwise lead to development of competitive advantage for the firm and this leads to stagnation in the firm.
Employees who get rejected may develop resentment against other employees. They may even take the decision to resign or harm the firm in any way. Baker & Hostetler, law firm in Houston experienced a case where an employee filed a 'discrimination case' against the firm just because he didn't get any one job out of 14 jobs that he had applied for. This was due to his mismatch with the job specification but he couldn't bear this and so took such a step. (Grensing, P., 2006)
Different firms have different needs and depending on that a firm should decide between these internal and external option. Usually, it depends on the structure and size of the firm. Large and profitable companies should opt for internal recruitment whereas company with diversified culture and rapid growth should opt for external recruitment. (Zimmermann, S., 2008) Moreover, some companies would prefer to have a balance of both of these recruitment methods to avoid overreliance on inside employees as well as to be fair. Looking at the recent trends companies are opting for a method called 'poaching' that involves purchasing of talent rather than developing it by providing attractive pay packages. Companies employ an expert and skillful person already working with some other well-known company by offering pay and incentives better than the current employer and so it appears to be unethical and not publicly talked about.