Internal and external recruitment strategies

Internal External Recruitment

In the present world under dynamically developing and changing business conditions, labor market worldwide faces continuing transformations. The need in qualified personnel today can be compared to the need in essential energy resources, as only qualified and well-organized workers can guarantee high performance of organizations.

Recent researches have shown that organizations with well planned recruiting strategies and qualified HRM personnel have higher levels of annual profit, profit growth, sales growth, and overall performance.Today the selection of personnel - both internal and external recruitment is a very complicated and responsible process as businesses today coexist in high competition so that success of organization depends upon professionalism of every employee. That's why the problem of selecting right personnel for organizations and businesses is of a high significance.

If to refer to the research data conducted by Lievens F., we can conclude that employee recruitment can be divided into 3 groups: labor market shortages due to increases in qualifications demanded (A new direction in the personnel selection sphere is applying of the marketing techniques to the labor market shortage problems), technological developments (Internet recruiting with special sites for special industries), applicant perceptions of selection procedures and construct-driven approaches.

In a number of cases internal and external recruitment techniques have similar strategies, as they mostly depend on human factor. The aim of this paper is to recapitulate the widely used hiring techniques and find possible solutions to their deficiencies. The review of the researches conducted in the sphere of HRM has shown that there is no detailed study of recruitment techniques, which was made separately from other human resource management themes, and most of the researches present similar opinions. The major questions to be answered in this paper are the most effective strategies to choose right personnel, faults that are often made in selection and the ways to improve them.

Selection of recruiting sources

Selection of recruitment sources plays one of the key roles in future performance of hired personnel. It's generally agreed that there are four basic sources for choosing appropriate candidates for external recruitment: referral by an employee, referral by a business associate or contact, advertisement in local or national media or services of recruiter consultant. Ullman (1996) writes that persons recruited via employee referrals may be more capable than individuals recruited from such sources as newspapers due to the assumption that current employees would screen individuals before making job referrals because they may see their own reputation as being affected by the quality of the referrals. Today scholars suggest the following recruitment techniques, which supplement hiring actions and generate public attention of prospective candidates: (a) messages that are vivid in nature (e.g., include pictures) and include concrete language, (b) messages that convey unexpected information, - messages that provide personally relevant information and (d) messages that are conveyed in face-to-face conversations.

Recruitment business nowadays has turned into one of the most profitable non-productive consulting business services: retained search executive generating $1 million in revenues typically takes home between 50% and 55% of that amount; and recruiters surveyed by The Fordyce Letter generated average gross cash revenues of about $180,000 to $185,000 in 2003 and took home about 42% of that, or about $76,000 to $78,000, due to a number of objective factors. It allows saving confidentiality, it distinguishes by wide offerings and ability to select candidates from global network, it is objective and reliable. Recruitment firms have their own monitoring of candidates' professional performance as they care more about their reputation than HRM personnel of employer's organization, in additional they have more options to choose candidates from wider polls.

Internal Recruitment particularities

Internal recruitment may seem to be the most reliable way to recruit personnel as HRM department has a clear and objective idea about performance of candidates, their professionalism and creditability for the new tasks. The main deficiency of internal recruitment is that it cannot always produce the desired number and quality of personnel needed due to existing limitations of organization.

Posting of job offerings for internal recruitment is a quicker and less complicated process, as the feedback from employees is quicker in most of cases. Usually job posting is limited to practices of publishing job offerings on bulletin boards or in newsletters. These posts include vacancy description, its attributes such as qualification criteria, etc.

In general, specialists outline the following benefits of internal recruitment:

The ability of the recruit is known so it is easy to assess potential for the next level. By contrast, assessments of external recruits are based on less reliable sources, such as references, and relatively brief encounters, such as interviews. "Insiders" know the organization, its strengths and weaknesses, its culture and, most of all, its people. Promotions from within build motivation and a sense of commitment to the organization. Skilled and ambitious employees are more likely to become involved in developmental activities if they believe that these activities will lead to promotion.

But on the hand with obvious advantages of internal recruitment, which include time and funds saving, there are disadvantages, which should be also taken into consideration by HR stuff. In some cases it's very difficult to select an appropriate candidate for a position within organization, due to the lack of professionalism or experience. From the other side if vacancies are caused by expansion of personnel, promotion of several workers will nevertheless create vacuum on lower level, as there will exist insufficient supply in employees. From the other side, early promotion may result lower performance of promoted workers, as they did not obtain professionalism and knowledge in order to execute their functions properly in future. Such illogical promotion will have negative effects on the performance of the whole organization, when recruitment rate will be stopped. Such practices will only require addition funds and time for training, as Margaret Richardson states:

Transition activities and rapid organizational growth often mask managerial deficiencies; it is not until the growth rate slows that the deficiencies become apparent and, then, the organization finds it difficult, if not impossible, to undo the damage. The resulting cost of remedial training can prove prohibitive.

Application evaluation

Once the set of the job candidates is collected, HR manager can start evaluation process. Employee screening techniques can be differentiated according to the following criteria: validity, practicality, reliability and sensitivity. These methods are especially important in evaluation of possible performance of employees.

Validity of the most spread screening strategies is given below.

Table. Validity of employee screening techniques.

Tools

Mean Predictive Validity (1: perfect indicator)

Cognitive ability test measured such mental abilities as logic, reading comprehension, verbal or mathematical reasoning, and perceptual abilities, typically with papper-and-pencil or computer-based instruments.

Board structural interview measures a variety of skills and abilities, particularly noncognitive skills (interpersonal skills, leadership style) using a standard set of questions and behavioral response anchors to evaluate the candidate.

Assessment centers measures knowledge, skills, and abilities through a series of work samples/exercises, that reflect job content and types of problems faced on the job, cognitive ability tests, personality inventories, and/or job knowledge tests.

Reference check provide information about an applicant's past performance or measure the accuracy of an applicant's statements on the resume or in interviews by asking individuals who have previous experience with a job candidate to provide an evaluation.

Structured behavior interview is designed of questions based on behavioral performance standards identified by key performance measures and critical success activities.

As we can conclude, the validity of cognitive ability evaluation tests is the highest in the selection methods presented in the table above.

Personality Testing in employee selection process

According to literature findings cognitive tests have the highest validity for professional employee selection as they are very effective due to the following reasons: enormous improvement in the tests themselves due to mathematical breakthroughs enforced by technological development which increased their statistical power; they have been improved much conceptually; growth of computer literacy which has made such testing easier; psychological tests are the only source of reliability nowadays in the absence of other data; their significance increased with the development of human resource training and advancing corporate initiatives. Today there exist more than 200 tests of the discussed type, but they should be only administered by licensed psychologists.

Noncognitive tests define the level of the following performance factors: motivations, vocational interests, behavior type, leadership, personal values and interaction with others. These tests are also called "emotional intelligence" tests and they must be also administered by psychologists. As the seriousness of careful selection of executive employee has been stated above, it is the best strategy to use a professional psychologist to administer personality assessments as the differences in the performing results of the companies can be deduced from the distinctness in the personality profiles of the company managers.

One of the most important personnel screening methods, which also discovers a detailed picture of candidate's strengths and weaknesses, is profile testing. This method allows examining personality type and up to twenty work performance qualities. The responses are scored using a series of artificial intelligence algorithms to ensure accuracy and compute personality type and job-related trait scores.

As shown in Appendix 2 these report gives a complete and detailed picture of candidate's personality type, classifying him to one of five main types: A-director, B - socializer, motivator, people person, C - thinker, analytic, D - supporter, X which means that personality has two types synergized.

Interviewing as the most used employee screening skill

Another very effective method of prospective employee evaluation is evaluation interview. Evaluation interview was a theme of a number of researches and studies, which examine the validity of different interview types. The researches show that structured intrviews have a higher acuracy than unstructured (Huffcutt and Arthus, 1994; McDaniel et al., 1994; Wiesner and Cronshaw, 1988; Wright et al., 1989). In most cases interviews can be planned using job analyses questions or scoring procedures, which can objectively evaluate candidates creditability in prospective field.

Each interview has five common steps: planning and preparing the interview, beginning it with objectives, gathering information and documenting it (talking, listening, writing), ending an interview in a way that gains commitment, using the information gained to make decisions and take actions.

Structural interviews allow determining quite accurately whether candidate's profile matches with job's specifications. Structural interviews require more time and costs as they can be conducted only by human resource managers of a specific organization or other decision makers, and unlike tests are more accurate, especially today when validity and effectives of some tests have created a number of discrimination claims. The most widely used methods of interviewing are situational and behavioral. Situational interview includes question which model specific situations that are most typical for the job proposed and responses of candidates indicate their chances to fit job requirements. The main deficiency of this interview type is that candidates can easily fake their responses, simply being dishonest. Because in some cases interviewer can be easily biased by the charisma of candidate or other personal attributes, such interview results are often subjective, while personality tests cannot be faked easily. For example findings by Fletcher (1992) indicate that 20 per cent of candidates admitted that they were seldom completely honest in interviews. Even the well-trained interviewers can find it difficult to break through the prepared answers of the candidates as executive candidates are usually well trained to pass an employment interview.

The behavioral interviews mainly concentrate on past professional experiences of a job seeker, considering the assumption that past indicators serve as the best evidence in predicting future performance on the workplace. These interviews are constructed in such manner so that interviewer can draw an opinion of how candidate coped with his responsibilities on previous jobs. Because of a variety of questions that can be asked and inability to model them, these interviews are very difficult to be faked. For example, candidates should present evidence of the facts they provide during behavioral interview. In general, the questions can be grouped into preliminary questions, on the candidate's work history, questions to determine fit, expectations from the job to determine motivation, background and teamwork questions, stress and thoughtful prompts, money matters, questions to draw interview to a close and employee's inquiries to the interviewers. Furthermore, the well-organized structured behavioral interviews will provide decision makers with ability to find the evidence of candidates' professional qualities and abilities to cope with the work provided on proposed position. The 25 most popular behavioral questions will expect the job-hunter to tell about the time when he/she:

Worked effectively under pressure.

Handled a difficult situation with a co-worker.

Used your creativity to solve a problem.

Missed an obvious solution to a problem.

Were unable to complete a project on time.

Persuaded team members to do things your way.

Anticipated and averted potential problems.

Wrote a report that was well-received.

Had to make an important decision with limited information.

Were forced to make an unpopular decision.

Had to adapt to a difficult situation.

Tolerated opinions that were different from your own.

Felt disappointed in your own behavior.

Used your people skills to get your own way.

Had to deal with an irate customer.

Delegated an assignment or project that succeeded.

Surmounted a difficult obstacle.

Set your sights too high or too low.

Prioritized a complex project.

Won or lost an important contract.

Had to fire someone for cause.

Made a bad decision.

Hired the wrong person.

Turned down a good job.

Were terminated from a job.

Conclusion

The process of selecting a proper personnel always involves risks, that's why it should have a well-planned strategy and must be as accurate as most of corporative decisions. In many respects the selection of candidates for prospective jobs will influence the performance of organization in whole. Recent trends in recruitment methods show that in most cases this process is very complicated, so a special emphasis in big organizations should be made on providing effective human resource management. Changing situation on global labor market initiated development of the whole industry of personnel recruitment, which provides effective and the most appropriate selection of candidates for different jobs, with application of personal testing and profile screening methods that allow to evaluate professional performance and predict candidate's behavior on future workplace. The review of the evaluating techniques made in the paper has shown, that the most effective and accurate methods of candidate evolution are personal profile testing sand structural behavior interviews. Either method is chosen, specialists advise that the following stages are included in the process of candidate selection: identifying the best profile among all candidates; search for perspective candidates either using internal or external recruitment methods, such as letter bulletins, advertisements in media, etc. The hiring process should be well organized in the matter of objective decision-making, including limited number of decision makers and a careful expertise.