Internal Recruitment in North America - Example

Internal Recruiting Table of Contents Table of Contents 2 Executive Summary 3 Introduction 4 Internal Recruiting 5 Advantages of Internal Recruiting 5 Disadvantages of Internal Recruiting 8 Internal Recruitment in North America 10 Legal Issues 11 Affirmative Action Programme Regulation 11 Seniority Systems 12 The Glass Ceiling 12 Conclusion 13 Executive Summary Recruitment is a crucial process in human resource management. There are generally two types of recruitment methods; internal recruitment and external recruitment. This paper focuses on primarily on internal recruitment and gives the reasons for and against it as recruitment method. Internal recruitment offers better financial implication as compared to outsourcing. In addition, it saves on time and improves employees’ morale and loyalty to the firm. However, internal recruitment may create a destructive competition and may lead organizations into settling for under qualified employees. Introduction It is inevitable that another organization will at one time or another have a vacant position present. This can be because the employee who once filled the position has quit, has been laid off, has been promoted, demoted or has been transferred. There are other factors that influence the internal staffing decisions that are made in an organization. The factors include growth and expansion of the organization and therefore creation of the vacant position. An organization can also undergo restructuring and this might lead to the creation of new positions in the organization, (Anyim, et Al., 2011). An organization will seek to have this position filled as soon as they can and this falls under the Human Resource managerial role. An individual with the qualifications that are desired for this position is then to be gotten. In the past, a company budget would be set aside for advertising this position and for recruitment. Companies have always been interested in building its employee resource. They would hire an individual from outside who was qualified and successful in another company. This was like stealing the talent away from their competition, (Schwabel, 2012). Many companies would spend as much money as they could in order to hire talent that was considered top of the cream, this was more common for the executive positions. This step is bound to give the company a competitive edge in the market. Hiring someone from outside ensured that the company had an array of available perspective and the new employees brought with them experience that would be of benefit to the company. However, with times there were challenges that faced the economies. A reduction in budgets was a necessary step that most companies made, (Mariones & Angel, 2012). The companies had to survive with the few resources that were available to them. Vacant positions were still presenting themselves occasionally. Companies therefore opted to save on the money they would spend by recruiting new employees externally and instead recruit internally. Internal recruiting is simply when a company decides to fill its vacant positions with the current employees of the organization. It aims at identification of individuals that already exist and hold jobs within the organization in order to have them fill the positions that are lying vacant in the company. Internal recruiting is more cost effective and poses other advantages the company such as there is no need of a new employee trying to fit the already existing corporate culture of the organization and it also boosts the morale of the employees. Internal recruitment consists of five major steps. There is the planning stage. Planning helps in identifying and addressing organizational and administrative issues. Organizational issues basically are about the mobility paths and their policies. The administrative issues are basically the budget available, the requirement and the guide to be used for recruitment. The next stage in internal recruitment is development of a strategy. This is about when one needs to look for an internal applicant who is qualified, where to look and how to look for this individual. The third step is notifying the people on the job vacancy. This is the process of looking for an internal candidate. The message can target a few select individuals or made public to all. Notification is done by a job posting, an official written document or by word of mouth to supervisors and peers. The fourth step is the development of a system that facilitates the transition of the applicants. Finally one is required to consider and address the legal issues that surround internal recruiting. Internal Recruiting Advantages of Internal Recruiting Cisco Systems Inc. has over the past few years developed and adopted an internal career initiative dubbed the Talent Connection that aims to pin point qualified personnel internally. The system brings together recruiters and candidates already working for the company. Since the year 2010, approximately half of Cisco’s 65,000 workforces have set up profiles on the system to assist them in identifying and applying for job opportunities within the company. As a result of the initiative, the company has been able to eliminate recruitment-firm fees and other recruitment costs amounting to millions of dollars. In addition to this, the company’s officials had conducted a survey in worker’s satisfaction had risen by about 20% (Silverman & Weber, 2012). Apart from the case mentioned above, internal recruitment is popular due to its efficiency in terms of costs. Fewer resources are utilized as a result of internal recruitment. This is mainly attributed to the fact that expenses arising from advertising for posts and training are not incurred. Publicizing the availability of an employment opportunity within an organization can easily be done through an internal memo whereas in external recruitment, advertising has to be done through the media or other more costly channels. Considering that the recruitment process can sometimes involve several phases, the financial implications are very much in favour of internal recruitment as opposed to outsourcing. Similarly, internal recruitment eliminates the need of an induction training process since in most cases, existing employees are familiar with the ropes that come with a particular responsibility. As such, expenses incurred for training new employees can be avoided by the organization. In addition to saving the organization some money, internal recruitment also saves on time. Once a position is publicized as vacant within an organization, evaluation and selection of potential staff can begin as soon as possible. Selected employees can assume their new responsibilities as soon as they are confirmed. The knowledge and experience gained from working within an organization for a long time would allow the selected employee to fit right in and assume his duties without the necessity of further training. The same cannot be said for external recruitment. Usually, external recruitment takes longer periods due to the complexities involved in the process. Advertising and evaluation for instance take a relatively longer period in external recruitment than they do in internal recruitment. This is especially so for the evaluation process due to the unfamiliarity of candidates to the organization’s management. In depth scrutiny is necessary during the evaluation process since applicants documents have to be verified to be true (Richardson, 2010). Internal recruitment makes the selection process a bit easier. This is because the ability of recruits within an organization is already known from their evaluations during their time with the organization. Therefore, the knowledge of an applicant’s abilities is known from first hand sources which the organization can deem to be more reliable than listed references. With external recruitment, ability of applicants can be obtained and assessed from less reliable sources such as references, recommendation letters and brief encounters through interviews. Internal recruitment also promotes morale within an organization’s staff. This from of recruitment acts as a good incentive for employees to work hard towards the attainment of an organization’s goals. Organizations need to nurture an environment where there exists a chance for employees to further better themselves. By doing so, organizations give employees adequate motivation to optimize their input towards the development and growth of the organization. Internal recruitment provides such an incentive (Bjurgert & Karlsson, 2010). By practicing internal recruitment, an organization also promotes a sense of constructive competition among its employees and this contributes positively towards the long-term growth of the organization and its image. Internal recruitment enhances employees’ loyalty to an organization. Where employees know that they can grow and develop their careers within an organization, employees tend to invest most of their time and effort towards delivering for the organization. This benefits a company greatly since it is able to retain its more prized and experience employees. In addition to retaining vital staff, a company will be able to retain the skills, knowledge and innovation possessed by such staff. To organizations operating in competitive markets, the preservation of skilled and professional staff is a crucial tool in warding off competition within a market. External recruitment can hurt employees’ loyalty. As a result of this, existing employees may resist new methods and ideas brought forward by outsourced employees. This will negatively impact the new staff’s adjustment process and could also hurt the organization’s growth or image (Shammot, 2014). “Insiders” are familiar with the organization, its culture, challenges it has experienced and overcome, the staff, the company’s strengths and weaknesses and the overall direction towards which the firm is headed. Therefore, less the time taken by internally recruited employees to settle and deliver on their outputs. In stark contrast, outsourced employees take a longer period to familiarize themselves with the existing systems and culture within an organization. Disadvantages of Internal Recruiting Most of the American companies that opt for external recruitment often do so as part of their overall growth strategy. Internal recruitment offers limited options for companies intending to make a drastic turn around. As a result of this, as many as 90% of American companies consider external recruitment to be a vital as a growth strategy since it is considered one of few business strategies that can help transform a company significantly to ensure that new targets and ideas are implemented. As such, companies such as International Business Machines Corporation (IBM), ARAMARK Corporation and United Parcel Service of America, Inc. (UPS) still opt for it as a recruitment method (Corbett, 2004). In some cases, internal recruitment may not offer the best solution for an organization seeking to fill a vacant position amongst its ranks. One reason attributed to this is the ‘inbreeding’ of existing methods and ideologies among the employees. Where employees are drawn from within to fill other vacant positions, less innovation could be observed. This is where outsourcing trumps internal recruitment because outsourced workers bring with them new ideas and methodologies which could be used to either replace or build up on existing ones within an organization. Internal recruitment harbors a sense of narrowed thinking and therefore retains stale ideas. This may inhibit the growth of the organization. One of internal recruitment’s strong points could also be considered to be a major deterrent towards it. Whereas internal recruitment is intended at promoting a sense of constructive competition among workers, too much competition may lead to political infighting of staff for promotion positions. In addition to this, discontent of rejected applicants may also contribute to internal strife between workers within an organization. Subordinates may also disregard the knowledge and methods of their new superiors or they could expect special treatment. Claims of favoritism and special considerations would likely promote a hostile working environment and would also cast a bad light on the organization’s image (Singh, 2011). Where organizations seek to gain rapid growth or drastic turn around, internal recruitment would only inhibit such measures. The attainment of affirmative action goals would be harder to achieve in the case where organizations rely heavily on internal recruitment. This may be attributed to the narrowed thinking brought about by internal recruitment as well as the likelihood of application of previously existing systems of thought and delivery. In some cases as well, especially those involving more complex titles, internal recruitment may place a heavy burden on development and training. Staff may require additional training to ‘fit into the shoes’ left behind by their predecessors. This may stall the delivery process within an organization. On the other hand, external recruitment sidesteps this dilemma by allowing organizations to find new staff with the necessary qualifications to fill the required position. However, some level of training would be necessary to induct the new staff on the organization’s culture and systems. Internal recruitment may lead to an organization settling for less qualified personnel to fill a certain position. This is because the recruitment process takes place within smaller pool of applicants as compared to those available from external recruitment. In addition to this, vacancies arising from sudden expansion of organizations may be available to an insufficient supply of appropriate personnel above the entry level. This in turn may lead to premature promotions or a failure of staff to learn how to fill these positions appropriately. Internal Recruitment in North America In leading North American companies, internal recruitment is on the rise in recent years. Initially, outsourcing had always been the ideal recruitment method. The competitive nature of markets in North America has necessitated the need for employee retention. To do this, internal recruitment has become crucial as a major tool in employee retention to ensure that companies are able to retain the skills, information and prowess contributed by their key employees. This is done strategically to ensure that competitors cannot benefit from these resources and a s such the companies can keep their advantages in their field of operation. Drake International is an American organization that provides valuable insight to reasons that lead to undesirable turnover. The company specializes in outsourcing job applications internally within firms in order to assist them in filling up vacancies arising from relocation and transfer. In executing staff retention strategies, the firm promotes internal recruitment within many companies. Vacancies within organizations are communicated through an interactive “speaking memorandum” disseminated through the email addresses of the employing agency’s staff informing them on current and future vacancies (Drake International, 2013). Legal Issues Affirmative Action Programme Regulation Organizations are required to take affirmative action that ensures all individuals within an organization are exposed to equal opportunities. The organization is to be able to prevent barriers to promotion that exist based on one’s skin colour, gender, religion, race, age, sexual orientation, disability, nation of origin or creed, (COHR, 2008). These barriers create a division in most workplaces with some individuals tagged as the majority and others as the minority group. Organizations are to therefore have promotion placement goals in area where these divisions exist to ensure that there is a feeling of equality that is observed. The areas in which the discrepancies exist are to be identified and this should be corrected by formulation of action-oriented programs that are directed toward this achievement. When a job position is vacant in a firm, it is important that during the recruitment process such action programs are applied. These programs are basically supposed to ensure that equality is observed and therefore to eliminate these divisions that exists due to any of the factors that are listed above. This can be achieved as follows: Posts and announcements on vacant positions that are available to ensure everyone in an organization is aware of this. An inventorization of the present minority group in any organization should be taken in order to familiarize with their skills, level of academic qualifications and experience. Training and work programs should be initiated. Evaluations should be carried out for employees regularly to update existing inventories. Ensure that the work specification is equal to all despite the difference in gender. Ensure that all seniority practices and clauses that are in place in an organization are free of any angle of discrimination. Set up career counseling programs at work to touch on attitude development, job rotation and education aids. In a case where a member falling in the minority group is passed over yet possesses the qualification that is required, then a justification should be provided. Such a case where non-compliance to the Affirmative Action Programme Regulations was observed was Equal Employment Opportunity Commission, the plaintiff, versus United Airlines, the defendant. The case revolved around the reassignment of staff to “a vacant position” on their basis of their disability. The case was settled outside of court and was therefore dismissed by the presiding judge (Leagle, 2012) Seniority Systems A seniority system refers to an established system that a company uses to determine a priority individual when making management decisions and in this case promotion. This can be an element such as the length of time that one has stayed and worked with the company, (Macleod, 2013). This system can only apply when t does not result into discrimination. However, in the past, females did shy away from the working environment and therefore if one uses the length of time as a priority when promotions are being made, then the female would be discriminated against as the male would have a priority. Also the minorities might be affected. However if the system does not have a discriminatory intent then it is termed as bona fide. The Glass Ceiling It has been observed over time that there is a lack of women who occupy the corporate positions in an organization. It is normal that a large percentage of the workforce is composed of males and in addition they are white males. Women are seen to be located in the lower parts on the organizational structure pyramid. Artificial and invisible barriers that have been cited as the cause of this trend are referred to as the glass ceiling. These barriers include factors that were due to the society, the government, the internal business and the business structure. When one is internally recruiting, these factors need to be addressed. An organization should aim at having women and the minorities represented even in the top managerial positions despite the industry. Changes that help an organization to remove the glass ceiling should be evaluated and embarked on in order to make the internal recruitment fair to all. In 1997, such case involving Home Depot and Publix Super Markets were witnessed where the companies had to pay to female workers sums amounting to $104 million and $81.5 million respectively as sex discrimination law suits (Trumbull, 2007). Conclusion Ideally, the type or recruitment method selected depends largely on the organization’s policies and needs. Internal recruitment, as seen, can be both beneficial and detrimental towards the growth and image of a firm. Therefore, due consideration should be paid in choosing the type of recruitment method chose. Where organizations opt for internal recruitment, standard qualification requirements should be set to provide a level field for all applicants and ensure that no favoritism affects the selection process. Assumptions towards the abilities of internally recruited employees to appropriately deliver should not be justifiable cause to deny them any training necessary for the applied position. References Richardson A. Margaret (2010). Recruitment Strategies: Managing/Effecting the Recruitment Process, pp.8-9 (Online) http://unpan1.un.org/intradoc/groups/public/documents/UN/UNPAN021814.pdf Bjurgert Jakob & Johan Karlsson (2010). Internal Recruitment in the Hotel Industry- A case Study of How Internal Recruitment Affect Employees’ Motivation, p. 13 (Online) https://gupea.ub.gu.se/bitstream/2077/23898/1/gupea_2077_23898_1.pdf Shammot M. Marwan (2014). The Role of Human Resources Management Practices Represented by Employee’s Recruitment and Training and Motivation for Realization of Competitive Advantage, pp. 6-7 (Online) http://www.academicjournals.org/article/article1391417915_Shammot%20%20pdf.docx Singh Rohit Kumar (2011). Recruitment and Selection of Work Associates for the ‘Easy day’ Supermarket and Hypermarket Stores At Bharti-Retail, p. 17 (Online) http://www.scribd.com/doc/43326700/22/Advantages-and-Disadvantages-of-Internal-Sources-Of-Recruitment Drake International (2013), Employee Retention, Volume II Nari Mani Publishers, p. 8 Commission on Human Rights and Opportunities, 2008. Affirmative Action Regulations. Affirmative Action Regulations, Sections 46a-68-31 through 74 inclusive. Online. http://www.ct.gov/chro/cwp/view.asp?a=2526&Q=315916 Schawbel, D. (2012). The Power Within: Why Internal Recrutiting & Hiring Are on The Rise. Retrieved Online http://business.time.com/2012/08/15/the-power-within-why-internal-recruiting-hiring-are-on-the-rise/ Moriones, B. A. & Angel O. P., (2012). Internal Promotion versus External Recruitment: Evidence in Industrial Plants. Departament deconomia de lempresa. Spain. (Online) http://www.recercat.net/bitstream/handle/2072/152/uabdt03-3.pdf?sequence=1 Anyim, F. A., Ikemefuna, O. C. & Shadare, O. A. (2011). Internal Versus External Staffing in Nigeria: Cost-Benefit Implications. Journal of Management and Strategy. Vol. 2, No. 4; December 2011. MacLeod, K. (2013). The Seniority Principle: Is it Discriminatory? (Online) http://irc.queensu.ca/sites/default/files/articles/RE-macleod-the-seniority-principle-is-it-discriminatory.pdf Silverman Rachel Emma and Lauren Weber (2012), An Inside Job: More Firms Opt to Recruit From Within. Available at: http://online.wsj.com/news/articles/SB10001424052702303395604577434563715828218 (Accessed 15 April 2014) Corbett Michael F. (2004), The Outsourcing Revolution: Why It Makes Sense and How to Do It Right, p.3 (Online) http://www.economist.com/media/globalexecutive/outsourcing_revolution_e_02.pdf Trumbull mark (2007), Wal-Mart suit shows glass ceiling still an issue, available at: http://www.csmonitor.com/2007/0208/p01s02-ussc.html (Accessed 15 April 2014) Leagle (2012) Equal Employment Opportunity Commission, Plaintiff vs. United Airlines, Inc., Defendant, available at: http://www.leagle.com/decision/In%20FCO%2020120907112 (Accessed 15 April 2014) Read More