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Recruitment and selection, as a human resource management function, is one of the activities that impact most critically on the performance of an organisation (Richardson, 2004). (Armstrong, 2008) believes that the main aim of recruitment and selection process is to get the right number and quality of workers that is needed to satisfy the human resources need of a company, at the lowest possible cost.
Recruitment can therefore be defined as a process that involves the search and identification of quality candidates in sufficient numbers, from which an organisation can select the most suitable person to fill in its vacant posts (Richardson, 2004).
It is the aim of all organisations (international or domestic) to recruit and select a worker that will perform effectively and efficiently in the post he/she has been hired to fill. This is to say that the HR of any organisation is very important and is a source of competitive advantage for the company, it is therefore necessary that the recruitment and selection process be done efficiently and effectively to ensure that the company does not lose its competitive advantage Âand rate of labour turnover  due to attrition is greatly reduced.
The focus point of this essay is to;
Discuss the two methods of recruitment (informal and recruitment agencies) available to a Multinational that has recently created a new foreign subsidiary and to;
Evaluate the advantages and disadvantages of the two methods.
Methods of Recruitment and Selection
When a Multinational Enterprise  decides to open a new subsidiary it is usually faced with the problem of staffing and the best method of recruitment and selection process to adopt (Dowling et al; 1999).
Considering the fact that the MNE is opening up in a foreign country that may have different cultures and different labour legislations  , there is need to take into consideration all these, before deciding on the best approach to adopt for the recruitment and selection process.
Dowling et al. (1999) identified four approaches to multinational staffing decisions; they reflect managerial attitude towards international operations held by top management at headquarters.
Ethnocentric Approach: in this approach the key positions of the firm will be filled by workers who are nationals of the parent country
Polycentric approach: in this approach all positions are filled in by nationals of the host country, while they report back to the corporate head quarters.
Geocentric approach: in this approach the organisation selects the best people for the post irrespective of their nationality.
Regiocentric approach: in the last approach the organisation selects staff for its foreign subsidiary, by dividing workers into geographic region and subsequently transfers workers within the regions  .
Multinational Enterprises most times do not use one of these approaches but usually use a mix of different approaches depending on the state of affairs  in the foreign subsidiary.
Candidates could be recruited internally or externally, considering the fact that the MNE has just been recently created recruiting internally will be impossible in the new foreign subsidiary.
As was mentioned above the two methods that will be evaluated are the informal method and then the recruitment agencies.
Informal method of recruitment is when the MNE rely on the contacts of its existing employees or the applicants that are just applying. This involves the use of referrals, word of mouth and unsolicited applications (walk in applicants).
An MNE that wishes to fill most of the managerial and the highly technical posts with PCN's may decide to send staff from the corporate headquarters or one of its other subsidiaries as expatriates to fill up those posts, this could be considered as internal and informal form of recruitment.
There are some advantages to the firm when it decides to use this method;
It already knows the capabilities of the workers and they will fit well into the structure of the firm. There will be no misunderstandings between the managers at the new subsidiary and the corporate headquarters because they already know how things work in the firm, and they will therefore carry on the culture of the firm in the new foreign subsidiary.
It is a very cheap form of recruitment above and it saves the firm the time and money they would have spent looking for a suitable external candidate, also the internal staff may already have had training and would not need to be trained again, so it saves training costs as well.
According to (Brewster, et al; 2008) the informal method of recruitment aids a sense of community among workers, when workers have their friends and family around them in their workplace, it may be a source of motivation and it could also create job satisfaction and in turn may reduce the rate of labour turn over. If these workers were recruited as a form of favour for a highly placed relative, it may act as a form of informal control preventing the person from behaving in a manner that is inappropriate so as not to tarnish the image of the relative.
The Parent Country national may not fit into the culture of the country where the new subsidiary has been created, due to lack of international training; it may cause dissatisfaction and affect the overall work performance of the worker. There may be other external candidates who may be more qualified to handle the difficulties that may arise in working in the new foreign subsidiary than the internal candidate.
Informal recruitment could be viewed as being very discriminatory  and in countries like UK that has laws against such discriminatory practice this form of recruitment may not be suitable.
The candidates that have been employed as a favour to their relatives may not have been the most suitable for the post; this may prove costly for the firm if it has to replace the worker later on with a more suitable external candidate, or if the worker's performance is affecting the overall performance of the organisation.
Recruitment agencies are a formal form of external recruitment method; they are seen as service providers that provide employers with details of suitable candidates to fill in a vacancy.
The newly created foreign subsidiary may have need for a highly specialise skills, it will be best for the MNE to contract the recruitment for the post to recruitment agencies that specializes in recruiting workers with such skills.
Surge of new ideas: when recruiting externally through recruitment agencies, the external candidates are usually a source of new and innovative idea that may further leverage the competitive edge of the business.
Wider pool of applicants: using recruitment agencies provides the organisation with a wider pool of suitable applicants, to select from. The recruitment agency has a wider data base of applicants and can easily match applicants to jobs faster. In a foreign country this is very useful to the MNE because they don't yet have any database or even a HR department that may handle the recruitment.
The recruitment agency of the host country has knowledge on the various labour legislation, ways of creating the job advert to attract suitable HCN's and also they know the best means of circulating the advert through internet, magazines, etcetera.
On the other hand the newly recruited employer may take some time to adjust to the corporate culture of the MNE; it may affect the results that they can produce even though they have the necessary skills. This may take months or years depending on the MNE and the individual.
Expensive: the cost of using recruitment agencies are quite high most times it is up to 30% of the recruited worker's salary. It could be quite costly for the firm to use recruitment agencies.
There could be corruption in the recruitment agencies and they may try to put their own people regardless of their unsuitability to the post they are about to fill.
The method used by the firm is also dependent on the post to be filled. Low level posts like cleaners, clerical staff and secretaries may be filled through informal means but the MNE may decide to use Recruitment agencies to fill the higher level posts like senior managers.
Recruitment and selection processes differs from one country to the other, for example, a US company that just opened up a foreign subsidiary in France sent one of its executives to recruit people for the new subsidiary. The US Company made two major mistakes; first they situated their office in the remote part of France and secondly they tried to use the American style of recruitment in France. They finally found out that if you wish to attract good workers to your corporation you need to locate at the city centre (downtown) and during interviews asking a graduate of Ecole Polytechnique de Paris for his/her GPA is unacceptable, even if it is the way it is done in US, because they believe that any graduate of the school is the best. The US Company also found out that there was a strong old boy network among the alumni of the school, since they all called after then and cancelled their interviews (Lionel, 2002).
It is necessary to evaluate the advantages and disadvantages of the various methods of recruitment and selection, it is also important for the firm to adapt its recruitment methods to the culture of the country. If it fails to do so it may also fail to attract good employees to its firm.