2). Internal and External Recruitment
Introduction
Recruitment and selection are one of
the most important parts of an organization's growth. Recruiting guarantees
that as many people as possible apply to work for the company, making the
selection of the best applicants easier because many qualified people join the
talent pool generated by recruitment. The concept of selection operates by
identifying deficiencies in organizations’ and selecting the best candidates
from the talent pool to fill those voids. In simple terms, it means selecting
the best candidate for the job (Kepha, 2014).
When an employer filles a vacant
opportunity with one of its own workers through promotion or a lateral transfer
called as internal selection ant the vacant fills from outside resource pool
called as external recruitment. Organizations will use both these internal and
external recruitments when they are filling their vacancies. By the way there
is a bias favouring hiring internals despite of depending on externals.
Internal and external hires
differ in observable characteristics (such as skill levels), as do the
employers making each type of hiring decision. Understanding those differences
helps employers design and manage hiring policies that are appropriate for
their organizations. Following figure 1 will be described a prediction of hiring
practises by different job opportunities in Canada.
Figure 1: Predicted probability of internal promotion and external lateral hires, by job title.
According to the Devaro, Jed (2016) Opportunities and drawbacks
of internal recruiting can be categorised as follows.
Opportunities of internal recruitment
- Internal hiring has low downside risk because there is little uncertainty about productivity.
- As a smaller pool of competitors means that effort is more likely to be rewarded with promotions, internal hiring creates strong incentives for workers.
- Internal hiring encourages the development of specialized knowledge and skills because workers anticipate long careers with the firm.
- A firm can productively reallocate its workforce across job levels through internal hiring.
- Internal hiring at one job level creates new vacancies, strengthening incentives at lower levels.
Drawbacks of internal recruitment
- Internal hiring has less upside potential than external hiring because there is little uncertainty about productivity.
- A firm’s workers might grow complacent and lazy without the prospect of external hiring.
- Internal hiring limits the infusion of new knowledge and ideas into the firm.
- Internal hiring restricts the size of the applicant pool.
- The new vacancies created in a firm by internal hiring are associated with additional recruitment, screening, orientation, and training costs.
Advantages of external recruitment
- There is a larger chance and likelihood of selecting the best candidate for the job, which would otherwise be limited if internally recruited (Harky, 2018).
- A new set of skills and ideas can also improve the organization, which will be beneficial in the long run. Within the firm, new and innovative ideas can be shared, resulting in a stronger learning culture (Saviour, 2016).
- There will be less involvement of internal politics and bias judgment from within the organization compared to the internal recruitment because favouritism may play a bog roll in internal recruitment selection.
- It will be added a new value of competitiveness brought in
by the new personnel. Current employees may feel compelled to demonstrate their
abilities and improve their performance. As a result, it fosters a positive
competitive environment and a more motivated workforce, both of which benefit
the company greatly Aswathappa (2010).
Disadvantages of external recruitment
- Need additional the amount of time and money that the organization will have to spend, particularly the additional advertising cost Kauhanen and Napari (2012).
- It
will take time for new employees to
adjust to the company's procedures and cultures. This suggests that the
organization should allow for a grace period during the early phases of the
learning curve, and that the corporation cannot expect maximum employee
performance within that time frame (Kauhanen and Napari, 2012).
- Small businesses and start-ups, frequently have no choice but to recruit externally because their internal options are severely constrained.
Below video 1 explains the difference between internal and external recruitment and pros and cons of internal and external recruitment.
Conclusion
Internal and external recruitment both have advantages, but in the end,
it comes down to what works best for employer. However, it is vital for businesses to get
the recruitment process right, and most businesses should use both internal and
external recruitment at the same time to boost production and efficiency
through a motivated workforce. In addition, the quickly changing competitive
climate has caused some employers to shift their focus away from the developing
internal labour market and toward the external labour market.
Management must, however, exercise caution in deciding which strategy to
employ by carefully assessing the long-term repercussions of their approach, as
all firms strive to reduce costs.
References:
- Aswathappa,
K. 2010. Human Resource Management. Text and Cases. New Delhi: Tata Mcgraw
Hill, 2010. 687 p. ISBN 978-0-07068-213-9. [Accessed
10 Aug. 2021].
- DeVaro, Jed (2016): Internal hiring or external recruitment?, IZA World of Labor, ISSN 2054-9571, Institute for the Study of Labor (IZA).
- Harky, Y. (2018). The Significance of Recruitment and Selection on Organizational Performance: The Case of Private owned Organizations in Erbil, North of Iraq. International Journal of Contemporary Research and Review, Section: Social Science, [online] 9(02). Available at:https://www.researchgate.net/publication/323380295_The_Significance_of_Recruitment_and_Sele·
- Kauhanen,
Antti and Sami Napari. 2012. Career and Wage Dynamics: Evidence from Linked
Employer-Employee Data. In Solomon W. Polachek and Konstantinos Tatsiramos.
Research in Labor Economics, pp 35-76: Emerald Group Publishing
Limited [Accessed 7 Aug. 2021].
- Kepha, O. M. (2014). The influence of recruitment and selection on the performance of employees in research institutes in Kenya. International Journal of Science and Research, 3(5), 132-138.
- Saviour, A., Kofi, A., Yao, B. and Kafui, L. (2016). The Impact of Effective Recruitment and Selection Practice on Organisational Performance (A Case Study at University of Ghana). Global Journal of Management and Business Research: A Administration and Management, [online] 16(11). Available at:https://globaljournals.org/GJMBR_Volume16/3-The-Impact-of-Effective-Recruitment.pdf [Accessed 12 Aug. 2021]
- S. Khurram Khan Alwi, Syed Waqar ul Hasan and Sohaib Uz Zaman Internal vs. External Recruitment: The Impact of Operational and Financial Factors, KASBIT Business Journal, 15(2), 115-129, June 2022.
- TwoTeachers,2020.Retrieved August 26, 2021 Available at https://www.youtube.com/watch?v=FuKQf5JQIXg [Accessed 21 Aug. 2021].
In addition to the above. Another advantage of internal recruitment is reduction the employee turnover. However, new innovative ideas, methods and strategies will not come in to the organization with this process (Trivikram,2017).
ReplyDeleteAgreed ishamiam, in addition to that knowledge sharing will be increased with external recruitment process(Saviour, 2016).
DeleteAgreed on the article while adding, According to Gusdarf,(2008) Organization internal promotion rules and regulation are heavily affected on internal promotions. Many Organizations Use internal recruitment as a motivation factor of internal staff where it allows rewarding and recognition by promoting employees.
ReplyDeleteAgreed Masha, on employee point of view promotions can be considered as a motivatinal factor and according to the employer perspective, it is essential to consider cost when deciding on the employment strategy to apply (Dessler, 2017). The best procedure must enable a company to save not only money but also time. Even though internal promotion may require the human resource to raise the earnings of the affected staff, external hiring results in an organization drawing up a new salary for the incoming employee. Additionally, a company spends the time to establish a stable working relationship with recruits, which affects the productivity of an organization.
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