[5].Internal VS External Recruitment: Benefits and Drawbacks
Source:( iadms.in, 2021)
Benefits of Internal Recruitment
Because
the employee is already familiar with the company's policies, processes, and
culture, procedure training is considerably minimized (Taylor, 2005). As a result, he or she will require
less time to adjust to the surroundings than a new employee who has recently
joined the organization. As a result, the company's training costs are reduced.
Furthermore, the organization has more flexibility with its personnel because
it understands the candidate's talents and has a better sense of how they will
perform in the new capacity (Gupta and Kumar, 2014). Internal recruitment also
enhances employee morale by ensuring that they will always have the option to
advance their careers in their chosen professions. Internal applicants who are
matched to roles that are a good fit for their personality and skills stay
longer at the company, which promotes employee retention.Employees will be more
motivated to work harder as they will see that their efforts are being
recognized. As a result, improved performance is achieved (Shammot, 2014).
One
of the most significant disadvantages of recruiting internally, as Meara & Petzall, (2013)
points out, is the small pool of candidates from which to choose. The only way
to find the ideal applicant is to look within the company. As a result, there's
always the possibility that the existing employee isn't the best fit.
Furthermore, it leads to inbreeding, in which current employees' undesirable
habits and cultures are passed down to the top as they are promoted or
transferred to other departments during a job transfer, affecting the business
culture (Shammot,2014). It takes time and money to do this (Anyim, Ikemefuna,
and Shadare, 2011).
Advantages of external recruitment
Because it is a more open procedure, 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). Furthermore, as contrast to internal recruitment, where favoritism may play a role in selection, there will be less involvement of internal politics and bias judgment from within the organization. Another advantage of hiring externally, as Aswathappa (2010) points out, is the increased level 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.
Disadvantages of external recruitment
While external recruiting provides a lot of advantages, it also has a lot of disadvantages. One of the most significant disadvantages is the amount of time and money that the organization will have to spend, particularly the additional advertising cost Kauhanen and Napari (2012. Furthermore, 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). The graph below depicts the success rate of various recruitment methods. The large organization like HCL , is an excellent example of a corporation that recruits from both internal and external sources. Small businesses and start-ups, on the other hand, frequently have no choice but to recruit externally because their internal options are severely constrained.
Figure 1- Effectiveness of using different sources of recruitment on selected businesses
Source: (Gupta and Kumar, 2014)
Below video 1 explains the difference between internal and external recruitment and pros and cons of internal and external recruitment.
Video 1: Internal VS External Recruitment
Source:( Two Teachers, 2020)
Summary:
Internal
and external recruitment both have advantages, but in the end, it comes down to
what works best for employer. Various recruitment strategies work for
alternative firms, so it's a good idea to explore a few different approaches
before deciding to put all of the eggs in one basket.
In
conclusion, this blog has discussed the advantages and disadvantages of
employing internal and external recruitment strategies. 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.
Reference
- Anyim, F., Ikemefuna, C. and Shadare, A. (2011). Internal Versus External Staffing in Nigeria: Cost-Benefit Implications. Journal of Management and Strategy, [online] 2(4). Available at: http://www.sciedu.ca/journal/index.php/jms/article/viewFile/643/309 [Accessed 5 Aug. 2021].
- 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].
- Gupta, A. and Kumar, S. (2014). A Study on Recruitment & Selection Process with Reference. ResearchGate. [online] Available at: https://www.researchgate.net/publication/268210664 [Accessed 15 Aug. 2021].
- 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].
- O´Meara, B., Petzall, S. 2013. The Handbook of Strategic Recruitment and Selection: A Systems Approach. Bingley : Emerald Group Publishing Limited, 2013. 435 p. ISBN 978-1-78052-810-6 [Accessed 5 Aug. 2021].
- 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]
- Shammot, M. (2014). The role of human resources management practices represented by employee recruitment and training and motivation for realization of competitive advantage. African Journal of Business Management, [online] 8(1)Available · at: http://www.ccsenet.org/journal/index.php/ibr/article/view/35379 [Accessed 22 Aug. 2021].
- Two Teachers, 2020.Retrieved August 26, 2021 Available at https://www.youtube.com/watch?v=FuKQf5JQIXg [Accessed 21 Aug. 2021].
- Taylor,
S. 2005. People Resourcing. Chartered Institute of Personnel & Development,
2005. 512 p. ISBN 978-1-84398-077-3.
As per the DeVaro, J. (2020) we can list internal recruitment advantages are Internal hiring encourage works and low risk for company and disadvantages are unable to get new ideas and knowledge from outside, restrict the size of applicant pool.
ReplyDeleteThank you Sumeera. Internal recruitment has the following disadvantages: There are no fresh ideas or energy flowing into the company; promoting from inside may create a "Dead Man's Shoes" environment, in which people believe they can only be promoted when a more senior person leaves their position. It reduces the number of candidates you have to pick from, creates a new vacancy when your candidate takes on the new post, and may cause resentment among employees who feel they were passed over for the promotion.
DeleteAgreed. In order to obtain the right employee for the new job, the Human Resource Department will go through their recruitment and selection processes. It might be that the right individual already works for the business and just needs to be informed that the new job is available. (Frater, 2003)
ReplyDeleteThank you Diyananda.Employee recruitment and selection are typically handled by the Human Resources departments of large companies, enterprises, government agencies, and multilateral organizations. Armstrong and Taylor (Armstrong and Taylor, 2014).
DeleteThe recruitment of human resources in the organization is considered a key element of human resource management as the main method of ensuring labor organization. The main purpose of the recruitment is to attract a sufficient number of candidates that meet the job requirements,
ReplyDeletethe employer can select the best person for a particular job. Recruitment of human resources is the process of searching, acking, identifying and attracting potential candidates from which to be chosen candidates able to, finally, the characteristics (Viorel Lefter et al (coordonatori), Managementul resurselor umane, (Bucureúti: Pro Universitaria, 2012), 91.
Thank you Chandana. The company's HR department must choose the source of applicants when choosing the suitable person for the job (Harky, 2018). Internal and external recruitment are the two most common methods for recruiting and choosing candidates (Shammot, 2014
DeleteHi Menupa, Agreed with your arguments. Neither one source of recruitment is better than others and basically it depends on the human resource practices and policies of the organization, culture and its people (Jacobson, 2020).
ReplyDeleteThank you Iresha.Employers choose only one or two selection methods, and not all selection methods to assess a wide variety of employee talents, due to the increased expenses connected with the selection processes. This will often overlook some of the job's requirements and result in the hiring of an incompatible person (Caers & Castelyns, 2011). As a result, businesses should employ a variety of selection processes to find the best candidate for the job.
DeleteAgreed with your points Menupa. As Kelly( 2019) explained, internal recruitment may stagnate the company culture. When the employees get too comfortable with company process & procedures. They will spot operational inefficiencies and they will innovate new strategies.
ReplyDeleteThank you Menaka.Internal recruitment strategies include promoting a current employee to a higher position, converting a temporary employee to a permanent employee, hiring a retired employee to work part-time or as a freelancer, and advertising a free position within the company (Schultz & Schultz, 2015). As a result, firms looking to increase employee trust, familiarity, and experience should adopt this strategy to reduce problems. If the right individual isn't accessible within the business, however, they should look outside (O'Meara & Petzall, 2013).
DeleteThank you Nimna. I'd like to highlight a few more advantages of hiring from outside sources. For one thing, as compared to internal recruitment, where favoritism may play a role, there will be less interference from internal politics and bias judgement throughout the hiring process. Furthermore, according to Harky (2018), there is an added degree of competition brought in by outside recruiters, as current employees will feel compelled to boost their game. Employee productivity will be boosted as a result of the positive competitive environment established (Saviour et al., 2016).
ReplyDeleteThe pros and cons of external and internal recruitments has been discussed well in your article. Lepak and Snell (2002) has argued such decision on recruitment strategy to recruit whether internally or externally would solely on the level of human capital such vacancy requires. Jobs requiring high skills and knowledge which are critical to the organization in his opinion should be considered to be recruited internally through promotions and transfers which will in return increase the commitment of the existing workforce.
ReplyDeleteThank you Shanil.If the right individual isn't accessible within the business, however, they should look outside (O'Meara & Petzall, 2013).
DeleteHi Menupa, agree with your opinion. Adding to the context, external recruitment brings fresh ideas to an organization and less susceptible to fruitless influences by peers and subordinates are two other advantages (Devaro, 2016).
ReplyDeleteThank you Lasanthi.Although a large number of individuals are accessible for management through external recruitment, the candidate's personal and attitudinal background is not known, making finding the perfect match for the organization's culture and system difficult (Omolo, et al., 2012)
DeleteAgreed. It is a question whether an organization is to build their internal human capital assets or to buy outside human assets (Groysberg, 2010).
ReplyDeleteThank you Chathuri.Alternatively, if the correct person isn't available within the company, they should look outside (O'Meara & Petzall, 2013).
DeleteAgree with your views. In addition, a study has also highlighted the applicability of methods such as self-Evaluation, group selection, and work sampling for enhancing the selection process to suit the unique requirements of present-day organizations (Torrington, Hall, & Taylor, 2005).
ReplyDeleteThank you Gajendran.Personality and ability tests can also be used to determine an individual's appropriateness for a specific role by measuring specific parts of their behaviour (Bratton & Gold, 2007). These typically focus on mental abilities (e.g., verbal reasoning and numeracy), but more physical tests (e.g., keyboard/typing speeds for administrative workers) can be used if appropriate (Leatherbarrow and Fletcher, 2015).
DeleteAgree and as per Schuler and Jackson (2003) promoting from within policy can serve as an effective reward, they also points out Schuler and Jackson (2003), it also commits a firm to providing training and career development opportunities if the promoted employees are to perform well, and are truly competitive for positions and do not perceive internal recruitment for higher level positions as – ‘mere talk’ on the part of the management.
ReplyDelete