HUMANA RESOURCE MANAGEMENT
Cover Chapters 6,7,8,9,10,11,and 12
1. Discuses the advantages and disadvantages of internal vs. external recruiting?p172
internal recruitmentThis refers to the filling of job vacancies from within the business - where existing employees are selected rather than employing someone from outside.
A business might decide that it already has the right people with the right skills to do the job, particularly if its training and development programme has been effective.
Advantages of internal recruitment
- Gives existing employees greater opportunity to advance their careers in the business
- May help to retain staff who might otherwise leave
- Requires a short induction training period
- Employer should know more about the internal candidate's abilities (= a reduced risk of selecting an inappropriate candidate)
- Usually quicker and less expensive than recruiting from outside
There is nothing inherently better about either internal or external recruitment. However, there are some advantages to internal recruitment. First, internal recruitment may lead to increased morale for employees; the organization is perceived to reward good performance or loyalty. Often, one promotion leads to another vacant position and this chain effect contributes further to increased morale.
Another advantage to the firm is that Human Resource data is immediately available for any employee recruited internally. Further, the employee's work habits are known and previous performance appraisals are on record.
Similarly, an internal recruit will be familiar with the firm. This employee will be familiar with the firm's products, clients, organizational policies, and corporate culture. Therefore, the firm might be able to save money insofar as orientation sessions for such an employee may not be necessary.
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.
A succession of internal recruitments may, in fact, result in the Peter Principle ("In a hierarchy every employee tends to rise to his level of incompetence." -- The Peter Principle by Laurence Peter and Raymond Hull, 1969). This can be avoided by initially promoting internal recruits on a temporary basis. Demotions for incompetence can have a demoralizing effect on the organization. To avoid such disappointments, the temporary appointment ("acting manager") serves to give the internal employee an opportunity to show their worth. However, it also provides the employer with an opportunity to replace that employee with a more qualified individual if necessary.
Another unintended negative consequence of internal recruitment might be organizational politics. This may occur when more than one employee aspires to the job vacancy. Those not getting the promotion will be disappointed and may be unwilling to grant the new job-holder the authority required to do the job. Further, the unsuccessful applicants' coworkers may also resent the successful candidate and demonstrate that resentment through less than satisfactory work output.
EXTERNAL RECRUITMENT
The opposite of internal recruitment is external recruitment. The most obvious advantage of external recruitment is the availability of a greater pool of applicants. Thus, only those applicants who have the exact qualifications will apply and be selected. This has consequences for the organization's training budget. Whereas external recruits will require orientation upon being hired, they will not require any extra training (assuming they were selected for their capabilities).
External recruits also bring new ideas and external contacts to the firm hiring them. Also, if political infighting over a promotion might be a possibility, then external recruitment is one way of eliminating that occurrence. Finally, with external recruitment, a firm does not have to worry about the Peter Principle.
- External recruitment refers to the practice of recruiting a candidate from the talent pool outside the recruiting organization. E.g. when you apply for a job in another company (outside your own company if already employed), no matter what means you use (placement agencies, websites, jobsites, friend's referal etc.) it shall be termed as "EXTERNAL RECRUITMENT" for the company you are joining. Simply because they are hiring an individual from OUTSIDE their own pool of employees.
Internal recruitment on the other hand refers to the practice of filling in vaccancies in the organization from WITHIN the exsisting pool of employees. This is usually done through IJPs or Internal Job Postings. This essentially means that if Mr. X is working as the Purchase Manager and there is an opening for General Manager, Sales for which the company wants to recruit from WITHIN its own employees then if Mr. X is hired for the General Manager, Sales role...this would be termed as an INTERNAL RECRUITMENT.
As for the question of which is better, there is no THIS or THAT answer. Each has its own set of advantages. Following are a few of each:
Internal Recruitment (+ves):
1. Its lesser expensive as compared to recruiting a person from outside the organization because one avoids the cost of placing an ad then the whole process that follows etc.
2. The new person already knows about the company culture so takes lesser time to fit in.
3. It creates motivation in the people of the organization as they believe that important positions can be filled by them is they show the promise and potential for them. Creates loyalty in the employees.
4. Reduces boredom by effective job rotation.
External Recruitment (+ves):
1. Helps bring "fresh blood" in the organization. New ideas and approach comes with a person from outside the company.
2. Sometimes you need to acquire a particular competency / skill which is not already available in the organization so hiring an individual from outside with that competency / skill is the fastest way to get started.
3. When the company needs to develop a totally fresh thinking or wants to go for major ovehaul, it often does that by recruiting people from outside at the higher positions to drive that change throughout the company. The new guy shakes up the things and sometimes this is what the company needs.
Hence, depending on the need, the company must for either EXTERNAL or INTERNAL recruitement.