Distinction between Internal and External Hiring - Essay Example

Internal versus external hiring by Course: Introduction to Human Resource Management Tutor: University: Department: 10th January 2011 Introduction The first section of the essay is a discussion giving a distinction between internal and external hiring. This will be followed by a discussion on merits of internal hiring relative to external hiring. It will entail comparison and contrast between internal and external hiring. Business strategies and other factors that influence a choice between internal and external hiring will be highlighted and discussed. Internal and external hiring In a research by Sims (2002), internal hiring mainly looks at the inside of an organization for qualified individuals who might be recruited for a higher position. Existing employees are often candidates for potential promotions, transfers, and rotation hence can participate in internal recruitment if they express an interest. After submitting their letters of applications, internal candidates go through similar process as external candidates. On the other hand, external hiring concerns sourcing candidates from outside an organization. O'Meara (2013) is convinced that choice between external or internal recruitment varies with business strategies. As an example, external recruitment is often applicable in organizations that are growing very fast and would like to focus on organizational goals. Relative merits of internal versus external hiring One of the merits of internal recruiting is that an organization has to keep a profile of employees’ strengths and weaknesses. This will then be used as a starting point when conducting internal recruitment. At the same time, a recruiter can access performance evaluation of employees thus; suitability for a particular position is easily noted. Concisely, internal hiring means that a hiring manager have access to more accurate data in relation to a candidate consequently reducing the possibility of making the wrong decision. Conversely, a recruiter under external hiring has to operate with data that he or she might not verify easily. In this case, a recruiter does not have control over candidate’s prior performance unless previous employer is contacted. The second merit of internal hiring is motivation that employees have with respect to moving up the organizational ladder. At the same time, employees are motivated to register good performance with a view of succeeding in an internal recruitment drive. If employees know that recruitment will be conducted in order to progress up the organizational ladder, then such an employee would work very hard to register excellent performance. It is therefore apparent that organizations that have developed a culture of regularly promoting its employees through an internal recruitment would have committed and motivated workforce at its disposal. This is however not the case with external recruitment since existing internal employees would feel that they have been denied a chance to progress up the ladder yet they have requisite experience compared. Internal recruitment further implies that employees who are familiar with organizational culture, policies, and procedures are promoted to a higher level and maintained within the organization. Compared with external recruitment, internal candidates who receive promotion after an internal recruitment process express easy transition process. Judge and Ferris (2003) asserted that fit was critical in determining the possibility of a candidate getting a job offer. Aware that internal candidate has a better fit compared with external candidate, an organization can therefore remain confident that internal hiring sustains organizational strategies, culture, and procedures. However, internal recruitment limits the pool of talent that an organization can choose. External recruitment now comes in to present a recruiter with expansive pool of talent that will bring in new ideas, energy, and ways of doing business. Time spent in training and socializing employees are reduced when recruitment is conducted internally. The rationale behind this assertion is that existing employees have less to gather about the organization and its procedures compared with external candidate. Furthermore, internal recruitment is faster and is accompanied with minimum expenses compared with external recruitment. It can be noted also that internal recruitment conducted after a retrenchment excise guarantees job security for existing employees. Considering the fact that employers invests time and finances in training its employees, conducting an internal recruitment ensure that these kinds of assets are maintained and used to earn returns to the organization. On the contrary, there is an aspect of overusing existing workforce. Given this observation, external recruitment would play a pivotal role in bringing in workforce that would ensure that status quo is not maintained and that things are done in a different way to meet demanding organizational needs in times of rapid change (Conley-Tyler, 2005). Business strategies supported by externally hiring A fast-paced company that would want to employ 10 employees on a monthly basis can assume external recruitment in order to have a wide selection. According to Swanson (1999), external recruitment is often employed when organizations cannot find competent internal candidate to fill the position. At the same time, an organization would opt for external recruitment when a new direction or vision has been put in place. Bearing this in mind, an organization is obliged to look outside an organization for candidates with fresh skills and ideas that will steer the organization towards the new vision and direction. Secondly, external recruitment is employed when an organization is considering marketing itself. Essentially, external recruitment is a marketing tool since a job advertisement implies that an organization is promoting itself and opportunities that are available in the organization. The net effect of external recruitment is that an organization would becomes known as a potential employer hence more competent and highly qualified individuals would apply for vacancies. Through external recruitment, an employer would ultimately attract potential candidates who may not be looking for another job that moment. Business strategies that might call for internal hiring Internal recruitment favors mature and stable organizations given that the foundation is strong. Organizations that are keen at cost reduction strategies and are sensitive to time spent on hiring are better off with internal recruitment. Furthermore, an organization whose strategy is to motivate its employees while ensuring that the way of doing business is sustained would go for internal hiring. Other factors influencing organizational choice between internal and external hiring One of the additional factors that influence organizational choice of hiring process is quality of hire. External recruitment has the capacity to realize high caliber of employees because a recruiter is exposed to various applicants. Secondly, time required to fill a vacancy is essential when considering a choice between internal and external recruitment. A vacancy is easily filled through internal hiring as compared with external hiring. Cultural fit is additionally considered during recruitment. As noted earlier, candidate sourced from within is already part of the organization hence capable of fitting well within the institution. Bearing in mind that internal recruitment is cheaper, organizations would be looking at their budgets and time before choosing a recruitment method. Williamson and Cable (2003) notes that organizational social environment influences the choice of hiring decisions. Social networks and institutional orientation can therefore be employed by human resource personnel to make decisions in hiring. Bayo-Moriones (2006) reiterates that specific human capital needs, private information, and adverse selection particularly motivates firms to choose internal promotions over external hiring. Conclusion A clear distinction was drawn between internal and external hiring. While internal hiring revolved around promoting and rotating employees, external recruitment entailed sourcing employees from outside an organization. It was clear from the paper that employees are more motivated under internal recruitment compared with external recruitment. Variables such as time, cost, quality, culture, and other elements play a vital role in choosing a hiring method. Reference List Bayo-Moriones, A 2006, “Internal Promotion Versus External Recruitment: Industrial Plants in Spain”, Industrial and Labor Relations Review, vol. 59, no. 3, pp. 451-470. Conley-Tyler, MA 2005, “Fundamental choice: internal or external evaluation?”, Evaluation Journal of Australasia, vol. 4, no. 1& 2, pp. 3-11. Judge, TA & Ferris, G. R 1992, “The elusive criterion of fit in human resources staffing decisions”, Human Resource Planning, vol. 15, no. 4, pp. 47-68. O'Meara, B 2013, The Handbook of Strategic Recruitment and Selection: A Systems Approach, Emerald Group Publishing, London. Sims, RR 2002, Organizational Success through Effective Human Resources Management. Greenwood Publishing Group, Westport. Swanson, DI 1999, “Toward an integrative theory of business and society: a research strategy for corporate social performance”, Academy of Management Review, 1999, vol. 24, no. 3, pp. 506-521. Williamson, IO & Cable, DM 2003, “Organizational hiring patterns, interfirm network ties, and interorganizational imitation”, Academy of Management Journal, vol. 46, no. 3, pp. 349- 358. Read More