Human Resources - Internal Recruitment

Purpose Statement

The purpose of this research is to analyze internal staffing as part of the recruitment plan in organizations.

Introduction

Employees are the most important asset of any organization. They are the live blood of the business. This is especially true for service oriented companies such as Star Bucks where customers come into contact with the employees on a daily basis hence it is very important to keep happy,  dedicated, hardworking employees who keep happy customers. If the business does not have the right kind of employees they will not be able to reach their long term goals and will not be able to reach their long term goals.

Therefore hiring the best people to work for you in today’s competitive world has become extremely important around the globe. This process of attracting the best employees to fit into your job requirement is called recruitment that is staffing of employees in a vacant post. This could be due an employee leaving voluntarily or is fired, or an employee is promoted or transferred therefore a substitute is needed which makes recruitment necessary.

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It is due to this reason that larger companies have separate human resource departments and they are willing to spend huge amount of capital just on their staffing each year. It is difficult to choose whether to select from internal or external recruitment because staffing could be done internally as well as externally. However our focus of this research will be based on internal recruitment and its causes, processes and implications for the business and the employees in consideration (Mounce ,2007).

Review of Literature

Much has been written on this topic and one can find information related to this quite easily. There are some of the very good articles written by great authors. In his article “Hiring Employees: A Checklist for Success in Hiring Employees” by Susan M. Heath field talks about the checklist of hiring staff at your work. It guides you to go through the proper procedure In order to select an applicant so that one does not make a mistake. First find the need for the recruitment and after that you schedule a meeting with your HR heads and head of the department and develop the qualities that you are looking in an individual. Apart from the job description discussed you will also decide the salary structure of the potential employee. You may post the job vacancy on the office bulletin board, however if you fail to get an employee internally only then u look for people in the external market. According to Susan all staff members should encourage the existing talent of the work place to apply for the job. Once they apply you call them for an interview where they are accessed on their experience, learning and knowledge and if they are not selected it is always better to provide feed back to the employee so that they can improve on their work for the next time (Heathfield).

Another article by Michael Segallaa, Alfonso Sauquetb and Carlo Turati named “Symbolic vs. functional recruitment: Cultural influences on employee recruitment policy.” A survey was carried out with around 300 managers and it included 25 firms in their study. The author came to a conclusion that nationality and culture tend to play a vital role in deciding whether to promote a certain employee. Moreover it explains that during the recruitment process self interest also plays a role as managers with low level of skills are reluctant to promote an employee possessing higher skill levels. This article was written in order to indicate that human resource programs would fail in Europe because of such intended or unintended barriers pertaining to work(Segallaa , Sauquet&b Turati, 2001).

Methodology

Our research includes both primary as well as secondary methods of finding data. Since it is supposed to be a live research we made questionnaires and got it filled from employees who are currently working in the human resource departments of different organizations and also from the heads of the department in order to find out their views on staffing people internally. We visited five organizations which included two banks, two multinational and one fast food chain. We interviewed the employees who have been internally recruited or promoted at that place and got their views on the research topic. For our secondary research we got the information from the internet, library, online journals, books and articles that have been written on this topic before.

Results/ Findings

After carrying down this research we found out that larger businesses which provide opportunities to the staff to grow internally is where internal recruitment is most suitable. Whereas places where there is a lot of competition such as the banking sector. Everyday new banks are offering better employment benefits which give an incentive to all the employees to switch their jobs. We interviewed Mr.Tahir Naeem who was previously working for Citibank but came to the state bank for getting a better job offer in the last two months. This is where external recruitment is more suitable as it goes with the corporate culture. Generally we took a survey of six different companies and we found out the following ratio of people they hire by both internal and external recruitment each year and came up with the following estimate (Naeem, personal communication, 28 July 2008)

 Moreover another finding was that as firms tend to hire people internally it increases the morale of employees over the period of time, the loyalty and dedication of the employees increases which is good for the growth of the business. The trend line shows the motivation level increases as they see that there is an opportunity for them to work and get promoted in the near future.

                      Figure 1.1

                         Figure 1.2

Recruitment Planning

It is always desirable to plan things before one actually starts working on it. This could be very beneficial in terms of reducing the wastage of time and resources in the long term. Recruitment planning is a stage where successful strategies are drawn for recruitment and implemented later on because if later on any important issue is not covered it is very difficult to fix that up. In the initial stages of this process there are a lot of considerations that the businesses need to make in order to make work easier and efficient. If careful planning is not done then the company might not end up getting the candidate they want for the work. There are several issues that ought to be considered.

 I.Strategic Versus Operational Considerations

            Before this the human resource planning was more concerned for the vacancy that is available and to fill that place and in order to do that it outlined the job description and job specification. However as this planning stage moves on the organization has to look into broader long term issues and goals of the company such as

·         Whether it is desirable to increase the number of people in this work area or it should remain the same or they should reduce it.

·         The recruitment should take place in the similar position or the management should add more skills area to this job to benefit from it in the coming years.

·         This is an important decision that whether to hire sum one from the external environment or should the company go for internal recruitment by transferring the existing employee.

·         Sometimes there are some other issues that companies take notice of such as if there is any promising women or any other national of the country who could fill this vacancy (Bejou & Hartline,2004).

II.Search Issues

            This identifies the need for having a special search committee which would be responsible in looking into various areas of hiring new staff. This committee will be responsible for finding potential candidates, find people who could suggest you names of the people who are capable of doing the job or having appropriate sourcing strategies such as approaching specialist recruitment consultants who can help one in guiding the organization in getting the staff they are looking for.

            If the organization is going through this channel they need to look for appropriate people to be part of this committee. Then these members meet up in order to decide the above discussed issue moreover they ought to decide the number of people who’ll be in the selection committee. This type of committee is generally created for senior management positions however they can be used for other positions too.

            The selection committee that is chosen should not be biased in anyway. It should have male as well as female candidates on it. It is always better to involve your management and employees in the process as this will motivate them and make them feel part of the organization. However, they should be well versed and diversified so they are able to select suitable applicants for the work area.

III.Understanding Your Potential Job Seekers

            These recruiters know that where the potential employees are making an effort to find newer opportunities, internet, professional organization, newspaper or magazines therefore they tend to target these places. Apart from these people there is a passive market too. These are the people who are currently satisfied with their job and are not making an effort to find newer ones.

These organizations make sure that proper channels are used to make the applicants aware of the current job opportunities and in order to do this all kinds of media is used including the journals, colleges and universities. Also the new job vacancy is advertised within the intranet of the organization because there may be people who are interested in the new job and apply for that this would be an internal recruitment then .

IV.      Budget

There are a lot of costs that are associated with the recruitment. Organizations need to allocate a realistic budget for this. There will be advertising cost. This will include all the costs related to print media as well as electronic. The cost of hiring a specialist consultant if there is in the case. The costs of taking the aptitude tests of employees who are interested and later interviewed. Large organizations such as Unilever, P& G and even the State banks take entry test first from all the employees in order to short list the people in the initial stages only. It varies from business to business. In united stated large businesses tend to spend billions on only staffing of their employees. Therefore accurate budget allocation is very important (Schuler & Jackson, 2007).

The Process of Internal Staffing

This entire process should be made after coordinating with the candidates who are taking part in the committee and the selection procedure, their schedules, meeting and traveling plans so that the process can move on smoothly without any delay. It is very important to choose the right kind of people in the committee who have the knowledge and expertise of picking the right person for the job. Recruitment can not be done at any time of the year. The timing is vital for this whole process to move on( Bechet, 2002).

Once the recruitment planning is done the management has to start working on the plan and make strategies. The existing employees should know the status of the vacancy. it gives a positive image to the company as the employees feel motivated and they think that the organization is concerned and cares for them .If an outside employee is hired it might create a sense of jealousy among the existing employees and they might not welcome that employee or help them as one might feel that they deserved that post more than the new recruit.  The purpose of internal recruitment is to give incentive to the already hired employees who are able to meet the basic requirement of the open position and give them equal chance of being promoted if they have the ability and skills or there could be job rotation or transfer of an employee from one department to another (Schuler & Jackson, 2007).

 One should not ignore their own staff and look for alternatives outside the company.  An unsuccessful internal recruitment process can end up giving disappointed staff to the organization. The internal recruitment plan runs under strict supervision of the human resource policies because if anything goes in the wrong direction it could create a lot of problems and a very good employee can be stolen from one department to another without any reason. This in turn can hit the performance and output of the business (Bechet, 2002).

Benefits of Internal Recruitment

There are a number of reasons as to why firms prefer internal recruitment as compared to external such as

  i.      People who have already been associated with the company know the culture of the organization and they are comfortable working for such corporate culture. Hence if an individual is being promoted he wont take time to adjust and get familiar with the working environment.

ii.      The company will already have the record of the employee history and personal data so that time is saved of collecting the information and analyzing them.

iii.      The working habits of the employee will be known hence less risk

iv.      The cost of going through the recruitment process will be saved along with the orientation costs of newer employees.

v.      Shorter training period.

vi.      Helps to retain those employees who might leave for better opportunity in any other firm.

vii.      Motivate other employees to work hard

viii.      The employees will realize that management take cares of their interest and appreciates them. (Caruth& Handlogten, 1997).

Open and Closed Recruitment Systems

The next question is that how to look for the people who will be recruited internally. There are a number of ways this could be done either by open internal recruitment where the employees are made aware of a particular job and they can apply and it’s fair as everyone has an equal opportunity to apply.  Closed internal recruitment are where the employees are not told about the job opportunity and the manager would ask the HR that they need an employee for their work and they will forward the names of the employees which they think appropriate for the task then its on the manager as he can interview and select according to his requirement. It saves time and is more reliable. A combination of both the open and close recruitment systems is what makes up a target recruitment system as both the open and closed systems can be used simultaneously(Fitz-enz ,2001).

1        Job Postings

This is one way of open internal recruitment system. It is one of the most common ways of looking for your potential employees. You can place job postings on staff notice boards. Job postings give the choice to an employee to choose or not to choose to apply for an open job opportunity. It also helps the management as they are no more bound to promote some one they don’t want to. By job posting all the employees get to know and they all can apply and it makes decision making easier for the management. There are a number of things that will make your job posting successful and effective,

  i.      It should be clear and communicate the designated position clearly to the applicant

ii.      The tasks should be defined clearly in the job specification

iii.      State the date of applying and interviews clearly

iv.      The procedure of applying should be made clear along with any specific requirement from the management.

2        Employee References

This is another way of finding an employee to be internally recruited. The present employees of the company tend to give the names of the people who they think can be a suitable candidate for the job. This could be done by your seniors or head of departments who have seen you and like your work and give your name for promotion. This is a good method as these employees know each other and can help each other later on at work too if they share good working relations. The method does not require high cost or lengthy times of analyzing applications. It’s fast, easy, convenient and low on cost.

3        Intranet

Intranet is the network system through which all the employees in one organization are connected to each other. It could be advertised on the intranet to let all the members of the organization know as everyone has an access to this network.

4        Staff Meetings

There are regular staff meetings that are held in an organization. It could be proposed in any of the meeting that there is a vacancy available for a certain post and any one who is interested can apply for it and will be chosen accordingly. This can also act as a word of mouth as the employees who attended the meeting are likely to go out and discuss this with the other employees who eventually get the information.

Which Procedure to Choose

The choice that the Human resource department would make regarding the recruitment system they want to undertake depends on a couple of factors such as the number of vacancies that are available. If there is only one vacancy then it’s useless to spend huge amount on the advertising or promotion. In this case an existing employee can be promoted to that position.

Apart from this other factors include the post for which there is vacancy, the budget in hand and the legal constraints if there are any. Also while taking these decisions they need to do few analyses such as comparing the internal recruitment with the external one in terms of time, cost and effort taken by both of them. Another issue of consideration is that if there is a potential candidate from within the organization as well as outside and is capable of doing the work then who the management should choose. Some times companies tend to carry on both the procedures simultaneously in order to get the best results (Scullion, 2006).

Legal and Ethical Issues

There are legal and ethical issues that protect the rights of the people and give them justice against any kind of unfair treatment at work place. There are several laws passed against those who recruit staff on the basis of age discrimination, color (such as black and white people), gender (Male employees are given better chances of promotion compared to female employees, this is true for the third world countries where at the time of hiring men are given preference over women and men are paid more as they are considered to be the head of the family or some times bosses might just underestimate the capability of women relative to men in giving challenging tasks) or religion (Hindus and Muslims). Such as the title VII of the civil rights act. Apart from that there are laws that protect employees against minimum wages or difference of pay scale on any other issue such as gender.

Conclusion

Internal and external recruitment both are methods of choosing the best applicant for your job. If an organization has skillful employees who are highly dedicated then there is no harm in choosing one of them for internal recruitment. This would increase their morale, commitment and loyalty to the organization which will lead to better performance of the organization. This will not only save time and money but keep the best employees within your own firm only and reduce the turnover of employee. As we researched we found out that UBL car finance was having great difficulty in coping with the problem of employee turnover due to which their businesses has suffered on its sales. Hence the Human resource department of UBL had to come up with strategies in order to decrease this rate and retain employees. Considering the competition in the external environment all the firms are trying to get the best labor force today. They are offering higher pay scales with increased benefits in order to attract the competitor’s employees to their company. This has made the problem of employee turnover a serious issue for companies today. However internal recruitment will not be a suitable decision in the case where your employee lacks the skill required for the new job area and some times the existing staff can take this act of management for granted and they might not work hard because they know that the management is reluctant in hiring the people externally.

Summary

Recruitment is the process of finding applicants to apply for employment in your organization. Getting the right kind of employee at the right time and at the right job is very central to the success of any firm. Companies today have separate human resource departments in organizations that are responsible for the hiring and firing of employees along with the employee development and training. They start with the formation of a team which is responsible for recruitment planning. Large organizations spend millions on their recruitment process each year because all the firms want the best staff for their businesses. There are two main ways of hiring people. This could either be done by internal recruitment that is you hire employees who are already working for you from within the organization. External recruitment is when you hire people from outside your company from the external environment. Both of these ways have their own pros and cons. However our focus of this study was mainly internal recruitment.

Internal recruitment has its own benefits such as low costs, known employees and takes less time as compared to the external recruitment. However the committee that takes on this decision has to be vigilant that they are choosing the right candidate and not doing this in order to get away from the difficult task of external recruitment. There are several ways of letting the people in the organization know that there is a job vacancy. It could be done through job postings, newsletters, intranet, or employee references. There are laws governing employees that are hired in a firm or are promoted. Any kind of discrimination and biasness is condemned. The firm can not do injustice on the basis of caste, color, gender, race or age. Neither can any one be paid differently due to discrimination.

References

Bechet, T. P. (2002). Strategic Staffing. AMACOM.

Bejou, D. & Hartline, M.D (2004). Internal Relationship Management: Linking Human Resources To Marketing Performance (Journal of Relationship Marketing) (Journal of Relationship Marketing).1st Edn, Routledge.

Caruth, D. & Handlogten, G.D (1997). Staffing the Contemporary Organization: A Guide to Planning, Recruiting, and Selecting for Human Resource Professionals.2nd Edn Praeger Paperback.

Fitz-enz, Jac.  (2001). How to Measure Human Resource Management.3rd Edn McGraw-Hill.

Heathfield, S. M. Hiring Employees: A Checklist for Success in Hiring Employees. How to Recruit and Hire the Best. Retrieved on 1 July 2008 from http://owl.english.purdue.edu/workshops/hypertext/apa/sources/reference.html

Mounce, J. (2007). No Bad Hires: Your Guide to Great Staffing. 1st Edn ,Insight Publishing.

Schuler, R.S., & Jackson, E.S.  (2007). Strategic Human Resource Management .2nd Edn, Wiley-Blackwell.

Scullion, H. (2006). Global Staffing (Global Human Resource Management).1st Edn, Routledge.

Segallaa, M., Sauquet, A. &b Turati,C.( 2001). Symbolic vs functional recruitment: - Cultural influences on employee recruitment policy. Journal of  European Management. Volume 19 , Retrieved on 1 July 2008 from http://www.ingentaconnect.com/content/els/02632373/2001/00000019/00000001/art00069
T Naeem, personal communication, 28 July 2008