Link Between Recruitment and Selection Practices and Business Success

¶ … Recruitment and Selection Techniques contribute to the Success of an Organization

Recruitment is a form of business contest and it is fiercely competitive. Organizations have to be strategic in order to attract and retain top talent to positions in the company. Competition between companies have become even more fierce and companies are doing all that they can to get the best talent for their organizations. Hence, it is important to have a well-defined recruitment policy in place, which can be executed effectively to get the best fits for the vacant positions. Selecting the wrong candidate or rejecting the right candidate could turn out to be costly mistakes for the organization. Companies understand that having the right people will definitely be difference between success and failure. Recruitment and selection is an ongoing process (Wilson, 2013). Businesses determine the present and future requirement of the organization and increase the success rate of the process by reducing the number of unqualified candidates.

Regardless of the size of a firm or what industry it is in, recruitment and selection of people with strategically relevant abilities is more important than ever. Companies are trying to recruit top talent while keeping the costs of recruiting at a minimum. Recruiting techniques have evolved over the years with social media being one of top methods of attracting talent. A diversifying enterprise necessitates recruiting and selecting right kind of candidates for employment (Dwoskin, Squire, & Patullo, 2014). Recruitment and Selection are often used interchangeably, however, recruitment refers to the process of identifying prospective candidates for the job, while selection refers to picking the right candidate for the job.

Recruitment and selection is an important process in every company or organization. It provides the crucial human resources for every company. It allows the company to attract and retain the best talent for them to gain competitive advantage. The process of scrutinizing candidates to choose the best candidate, commonly referred to as the selection process, is of extreme important to the company (Buse, 2009). If the company does not choose the right candidate, they lose competitive edge as a result of a weakness in their human resources. Recruitment, which involves identifying the right talent, attracting the right talent and providing them with the best global opportunities, is also essential for the company since they are able to analyze the talent market and take the right steps towards ensuring they attract the best talent and are able to retain employees.

For many companies, the human resources are of extreme important in ensuring the success of the organization (Sawa & Swift, 2013). This has been widely studied. This review aims at presenting the literature of how recruitment and selection processes help companies to succeed. Their contribution of essential skills, values, and other attributes will be looked into at great depth to understand the important of accurate and effective recruitment and selection processes to the company's success.

Many scholars have studied the factors that bring business success. These have majorly focused on functional business areas such as finance, marketing, and production where it is easiest to institute these measures. Though human resource has been long embraced as critical to business success, there has been little focus on how human resources are important in business success (Iles, 2007). It is important to examine the link or relationship between human resource recruiting and selection and the key success factors of companies.

Literature review

Link between human resources and company success

Bowen, Ledford, and Nathan (1991) defined the essential function of human resources as the factor that makes businesses tangible. Human resources enable the company to find the best facilities, equipment, financial support, and legal framework to operate successfully. They also enable the company to manage other resources effectively and efficiently. In terms of advice and support, human resources enable the company develop and refine their business plan towards business success.

Buse (2009) studied the role of the company's entrepreneur and other managers in the success of the company and found that the goals of the management, founding process that includes crucial decisions made, and firm characteristics including their risk taking nature are most important for business success. Other scholars also looked at the link between the company's management to key strategic factors. They found that where the manager or owner gave high levels of commitment including financial support, new ventures were more likely to succeed (Sawa & Swift, 2013). The people who the company hires from the onset also influence the success of the company greatly since they are the most important in selling the product or service and ensuring the venture is successful. The human resources of a company, according to Holehonnur and Pollock (2012), are essential in ensuring the practicality and feasibility of the business venture, providing competitive advantage, influencing pricing, marketing, and production strategies towards efficiency of the company. Staffing decisions also influence the financing of the company since some financiers provide finance based on the ability of the management team to succeed. Therefore, the right mix of employees is important to ensure the company succeeds (Makraiova, Woolliscroft, Caganova, & Cambal, 2013).

Studies that have focused on reasons why companies or organizations fail have also cited poor human resources as a major reason. Holehonnur and Pollock (2012) found that the lack of objective evaluation of employees when recruiting them would eventually lead to lack of financial soundness of the company's plan, ignorance of legal issues surrounding the business, lack of competitive advantage and business uniqueness, and poor understanding of the technical requirement of the company.

Other factors that lead to failure of companies as a result of having poor human resources is poor timing, problems in the design of their products and services, inappropriate strategies for distributing their products and services, having unclear business objectives and goals, assuming too much debt or assuming debt too early, and failure to collaborate as an effective team. Bowen et al. (1991) also supports this and states that where the company's human resources are ineffective, there is often lack of management skills, poor management direction, lack of a sound direction or plan for the company, and lack of capitalization. These often lead to failure of the business.

Johnson and Guetal (2013) also argue for the extreme importance in the human resource of a company as a factor for its future success or failure. The authors state that human resources are extremely important for business survival since the management practices are important in defining the company's products and services and offering competitive advantage that helps the company succeed. From the onset of recruiting and selection, it is important for the company to use effective strategies to ensure they pick the right talent for their growth vision, and that the persons hired are in line with the business direction.

Fathi, Wilson, and Cheokas (2011) argues that there is a significant difference between how large companies and small companies use their human resources towards business success. The authors argue that small firms are more reliant on the vision of their employees and their ability to attract and retain employees at all levels. Large organizations, on the other hand, consider the managerial levels of employees as most important. The management, in this case, are the most important in focusing the business direction, while in small organizations, with much fewer number of employees, attracting retaining employees is important at all levels since they give the picture of the organization and often define their growth.

However, Dwoskin et al. (2014) states that there is little difference between large and small companies. Independent on size of the company, they all benefit from attracting and increasing employees skills and their motivation. The capability of employees at all levels in both large and small organizations determines the organization's success.

Wilson (2013) states that several human resource studies show the cost of hiring a replacement employee is almost 1.5 times to twice the cost of the employee's salary. In this competitive business environment where companies are striving to achieve cost leadership through cost-cutting strategies, hiring replacements is an unpopular choice. The author also points at the damage to goodwill that the company's engagement of a new employee may bring. When companies hire replacements, gaining the trust of customers has to start afresh, a situation that growth-oriented companies should try to avoid since it slows down growth.

Research also provides evidence of the importance of effective hiring practices in ensuring the company remains competitive in this highly dynamic technology environment (Walker et al., 2013). Since the first technology waves, companies that have failed to ride the wave have failed. Therefore, there is a direct link between the company's IT investment and its success. Comprehensive studies show that there are greater links between the use of IT in hiring and the inclination of the employees hired towards better IT growth of the business. Revels and Morris (2012) also presents a strong case for the inclusion of IT in hiring practices in ensuring the company's human resource needs are met.

Link between corporate strategy and human resources strategy

Fathi et al. (2011) states that in defining the corporate strategy of an organization, there is need to align this with the company's human resource strategy. In defining the diversity of the company's portfolio, making crucial decisions regarding the business ventures of the company, and corporate direction, human resources are of extreme important. Bowen et al. (1991) state that human resources bring sustainable competitive advantage to the company since they provide ways for the company to change their corporate strategy to reflect changes in the business environment.

Human resources of a company help it to achieve the drivers of success, which are superior quality, efficiency, innovation, and customer service. These drivers of company success are built through human resources, as a tangible resource that creates capabilities of the company (Robbins, 2005). By having the best human resources, the company is able to create complex interactions for the company to trace a successful path.

For the continuous improvement of the company, human resources through self-reliant, motivated, and goal-oriented individuals helps companies to institute the best practices and be innovative (Jankovic, 2014). They also help to encourage competition and teamwork that encourage the company to create capabilities towards their success. To achieve this, companies must ensure they hire individuals who are self-motivated, high-performance, and able to meet and exceed their expectations in the company.

When a company chooses a corporate strategy of cost leadership, its human resources are the most important in making sure this strategy helps them succeed. The company should ensure they hire employees who are able to deliver in a cost-efficient way such as not expecting to fly business class, that accept an incentives system that rewards cost-effective performance, and align other interests of the business to the individual interests.

In a company that chooses the strategy of differentiation, it is important for the human resources hired to create value for the company's products and services by being innovation, and making sure this value is portrayed effectively to the customer. In this company, the individuals should accept the challenge of value creation and accept performance measures that require them to ensure the products and services of the business are differentiated (Ho, Lee, & Wu, 2009).

Influence of changes in business strategy to human resource strategies

When a company changes their business strategy, it means that several other components also need to change in order to be in line with this new business strategy. With the need for companies to increase value for their customers, and ensure they gain competitive advantage, they face challenges in aligning other business processes (Odom, 2013). The hiring practices also need to change and employees need to be re-oriented to this new direction in order to retain them. The major driving force for this change is the human resources (Johnson & Guetal, 2013). As described by Revels and Morris (2012), an organization that empowers its employees towards improved productivity to meet this new strategy. The company must thus ensure its recruitment and selection strategies reflect the business strategy towards achieving these goals. The company's senior management and other employees need to have the same direction in their decision-making process towards achieving this goal.

According to Johnson and Guetal (2013), there are questions about the value of the business' human resources to the business strategy. They argue that for companies that have strong and embedded human resource strategies, the new dimension of the corporate strategy creates huge change that is hard for the companies to bear. It may be a significant factor in low employee retention rates and make it difficult for the company to find the right talent. The authors also state that the company may spend more time trying to refocus its human resources strategies towards the organizational strategy. However, this argument is countered by the fact that human resources of a company are essential in its success. For a company to be prepared to meet its goal, the employees must have a good understanding of the business strategy (Blizzard, 2013). The company thus needs to change its hiring processes in this way.

Elements of proper selection

In order for a company to select the right employee, it is necessary for them to ensure that the job is advertised as widely as possible and the job specifications posted on the job advertisement are correct. The jobs are often placed on the company website since it is often seen as the easiest source of jobs in the company. Graduate recruitment through colleges and universities and social recruiting where jobs are posted on social networks are also increasing in popularity. This starts from conducting a job analysis where the company gets to understand the detailed job requirements and the necessary skills and experience needed to fulfill the role. It is also important for the company to use the right interview technique. The interview techniques should focus on getting the verbal and nonverbal behaviors of the candidates and should match the job requirements to make sure the selection process is effective in getting the right candidate. The screening interview helps to shortlist candidates, for example, when there are many applicants while the structured interview provides in depth information regarding the candidate's goals, qualifications, and aspirations. The non-directive style of interview where the candidate is asked only one broad question such as 'tell me about yourself' is important to get as much information about the candidate as they are willing to reveal. The behavioral interview, which requires the candidates to use the STAR (situation, task, action, result) technique to answer questions, helps the company assess work behaviors by asking the candidates to discuss in detail how they have handled different situations in the past. During the interview, no matter the chosen technique, it is important for the questions to be focused on getting as much verbal and nonverbal detail about the candidates (Jankovic, 2014). Therefore, probing is essential to elicit these details.

Human resources and high performance

As argued by Iles (2007), human resources in any organization are the champions of high performance. The human resources of the organization help and serve customers, support the business of the company, and support and encourage each other towards improvement in company performance. The human resources in any organization must harness the full human potential of the organization and channel it towards high performance in the company. The mindset of the employees enables, empowers, and engages the business stakeholders such as customers, suppliers, financiers, etc. For the success of the company. They also create a direct connection between the company and these stakeholders thus enabling them to operate in the best way possible to achieve success in the business (Wilden, Gudergan, & Lings, 2010).

The management of any organization is important in ensuring the company has the necessary resources, including human resources, to reach its goals. When there is shortage in talent, the company looks to its recruitment and selection strategies to identify and choose new talent to help them achieve their goals. The management team thus needs to ensure the recruitment and selection provides them with the talent to meet the goals in their strategic plan (Sangeetha, 2010). Despite the route or method the company uses to attract and retain talent, the recruitment and selection practices must identify the best talent for the position in order to utilize and manage their human resources.

Innovation and recruitment and selection of talent

Diversity in companies is the key component of an innovative culture. Diversity has grown from the earlier concept of gender and race inclusiveness to focusing on talent management rather than the other factors. For a company that aims at being innovative in its products and services, there is need for the management to create a heterogeneous workforce that is able to create and refine product and services to make them innovative and create competitive advantage (Iles, 2007). Especially for companies that compete on a global scale, diversity and inclusion are of extreme importance. For these companies to achieve diversity, they need to recognize the importance of their hiring practices, specifically recruiting, selection, and retention, in ensuring diversity and inclusiveness (Percy, 2014).

Brundage and Koziel (2010) states that companies that are looking to recruit the top talent also need to have the best talent in order to attract them. It is somewhat a cycle where the company that has the best talent is able to attract the best while the company that does not have the best talent finds it difficult to attract the best. However, diversifying recruitment and selection practices to attract the best talent helps companies solve these problems. Strategies such as college or university graduate recruitment, and social media recruiting help the company attract and recruit the top talent.

Brundage and Koziel (2010) also points at the strong link between recruitment and selection strategies and the diversity of talent in the company or organization in turn the innovation capability of the company. Companies that use the best recruitment and selection strategies often have high-potential candidates who in the team will be focused on innovation and will foster organizational development. For global companies, they have to hire talent that represents the region and allows them to overcome language and cultural barriers in the local community towards the overall growth of the company (Rehman, 2012). Therefore, the recruiting and selection practices must attract new and top talent.

Using social media for recruitment

Wilson (2013) argues that companies need to rev up their recruiting strategies in order to succeed. They state that on-campus hiring and experienced-hire recruiting strategies are of extreme important in identifying the right talent. They also point at the importance of social media in ensuring the right employees are attracted and hired. This is supported by Robbins (2005), in the argument that the right philosophy and attitude from potential candidates is important to identify. The authors state that though it is essential to keep costs low, it is of extreme importance for positions to be advertised as widely as possible externally. Social media, as suggested by Holehonnur and Pollock (2012), provides this opportunity since it does not utilize a lot of financial resources. It has also gained popularity over the years and has been embraced by many students, graduates, and experienced personnel as a medium for searching for jobs.

The most popular social media networks for social recruiting are LinkedIn, Twitter, and Facebook. Since late 2009, many companies have embraced social recruiting as a mode of communication. They later started using it as a method to market their job opportunities. This was received with great enthusiasm that has led to the wide adoption of social recruiting. Out of 600 employers interviewed by JobVite, 80 per cent stated that they use social media to recruit employees.

Job aggregator sites such as Simply Hired, and Indeed.com have also embraced social recruiting as an important source of jobs and provide links to jobs posted on social media. A trend that is beginning to catch on is for employers to post jobs as widely as possible on social media. Companies have also diversified their use of social media and are now providing links to their social media pages on their career page sections to increase visibility of their jobs on social media. This is in addition to posting the jobs on the company website, which is often the first place that people go to search for jobs for the company.

Makraiova et al. (2013) supports the use of social media recruiting and states that in companies recruiting students or graduates, it is the most popular source of jobs. The author refers to it as a crowdsourcing method where job seekers share openings on their social networks and rely on social connections to share the jobs between members of the community. A survey conducted by Staff.com showed at about 14.4 million people in the U.S. have used social networks to search for jobs while about 30% use social media as their primary job searching tool. The survey also showed that about 75% of companies that used social media to hire were successful in recruiting while about half of the companies report that the quality of potential candidates they attract has improved considerably as a result of using social recruiting. The companies also reported that employee referrals have also increased by at least 30% and states that it takes less time for them to hire candidates on social media. However, Alder (2011) presents a counter argument and states that though the use of social recruiting has increased considerably, the effectiveness, efficiency, and return on investment of social recruiting is difficult to judge. Therefore, the author refutes statements claiming social recruiting is effective, or cost-effective.

The other side of social recruiting is that recruiters also check the social network profiles of their candidates. 3 of 4 recruiters in the Staff.com survey stated that they check the social network profiles of candidates they are interviewing even when the candidate does not provide this information and 1 of every 3 employers rejected candidates after viewing something they did not like on their social network profiles. Posts of a sexual nature and references to using harsh or illegal drugs are the most frowned upon by recruiters and were the major reasons why candidates were rejected after checking their social network profiles. Dwoskin et al. (2014) argues that though social networks allow companies to conduct background checks on their candidates, there is need to exercise caution because candidates share this information with expectations that the only persons viewing this information are those in their circles. Using social media to conduct background checks may also amount to violation of privacy. Therefore, it is important to exercise caution in conducting background checks on social media.