Abstract

The study aims at determining the effects of an internal recruitment system in an organization. Most organizations avoid external recruitment for fear of hiring costs, time is taken to cope with a new environment, lack of employee engagement, and slow adoption of organizational culture. Therefore, they consider internal recruitment because they believe internal employees will help them reduce hiring costs, easily cope with new systems and organizational culture, and achieve employee engagement. Generally, the study will introduce various concepts of staffing the organization, highlight their backgrounds, discuss findings, and give implications and recommendations. Therefore, the paper will focus on internal recruitment and its effects on the organization.

Table of Contents

Abstract 2

Staffing the Organization. 4

Background and Significance. 5

Discussions. 9

Table: Effects of Internal Recruitment Methods. 10

Hiring Cost 10

Employee Engagement 11

Coping time. 12

Organizational Culture. 13

Conceptual Framework. 13

Figure: Conceptual framework. 14

Implications and Recommendations. 14

References. 16

Staffing the Organization

Recruitment of the right personnel for a specific assignment in an organization has always been the headache of most organizations. In some instances, internal recruitment is the best option, while sometimes, organizations are forced to source new employees externally (DeVaro, 2020). Staffing is the hallmark of operational excellence in any organization. Without the right staff, achieving the business’s overall objectives is challenging. Staffing an organization requires a deliberate process to ensure that the organization work with the right pool of staff. In most cases, organizations find it appropriate to have internal recruitment as the best option for getting the right employees (Karim et al., 2021). They consider various factors such as training costs, time, flexibility, and talents. Generally, internal recruitment affects the organization by reducing hiring costs, shortening coping time, preserving the organization’s culture, and promoting employee engagement.

Organizations consider internal staffing strategies under various circumstances. For example, internal recruitment is the best option when they have to reduce hiring costs. Getting employees from within the organization saves them the advertisement and training costs associated with external recruitment (Anwar & Abdullah, 2021). Internal recruitment is used by most organizations that have invested in developing the talents of their employees. The management can handpick specific employees when a new role emerges that their services will be appropriate (DeVaro, 2020). When there is a need to shorten onboarding time, organizations prefer to recruit staff from within. New employees from outside might take a considerable time before coping with the organization’s internal systems. In addition, organizations prefer employees that are privy to their culture and values. Internal recruitment provides the employees with an edge over new staff from outside as far as organizational culture is concerned.

Moreover, when the organization requires employees loyal to the organization, they prefer internal promotions. This is because organizations find it easier to work with their usual employee than with new staff from outside (DeVaro, 2020). In addition, internal promotion motivates employees to be committed to the organization, knowing that their services are valued. Employee engagement is the major challenge most organizations face as their employees work while looking for better opportunities in other companies (Hamza et al., 2021). However, when employees feel a sense of belonging to the organization, they get obliged to be loyal and perform their duties diligently. Therefore, a broad understanding of the effects of internal recruitment is necessary for managers and staff of various organizations.

Background and Significance

Technical-oriented organizations require employees with better knowledge of how their systems operate. In most cases, the recruitment of new staff to handle a specific task has been challenging since the organization must take time to train them. Employing even new staff with years of experience from other organizations might not also solve the staffing issue (Van Doormalen, Wesselink & Dentoni, 2021). A new employee can have five years of experience in a technical job, but since every organization differs in operating its systems, it will be challenging for them to cope with their new role. Therefore, organizations should conduct staffing analysis to determine whether they should go for internal or external recruitment. The organization will way various factors such as the nature of the job, hiring costs, the urgency of the task, and resources available before settling on the recruitment method.

Most organizations might find it challenging to do internal recruitment in employee shortages. They need to feel an open position in the organization would push them to recruit new staff externally (Karim et al., 2021). When the available team in the organization lacks the needed capacity to handle the new role, the staffing department will also opt for external recruitment. For example, when a new system has been introduced in the company, it will be costly to train the existing staff, such that the staffing department will prefer to hire someone with relevant experience (DeVaro, 2020). It might take the organization a lot of time and resources to train its existing employees about the new system’s operation. When there is a need to start working with a new plan immediately, external recruitment is the best option.

There are circumstances where an organization needs to perform a short assignment on its business premises, such as painting. The staffing department will go for external sourcing to get temporary employees for the job (Anwar & Abdullah, 2021). In most cases, short assignments are considered contractual jobs where a tender is awarded to an outside company to perform the task by following the due procurement process. In addition, jobs requiring expertise services will be subjected to external sourcing to get the right people. The company can make employees for temporary time or on a long-term basis, depending on the job scope (Karim et al., 2021). Therefore, in most situations where internal recruitment is not ideal for the company, it would prefer external recruitment. The management will weigh various options before deciding whether to conduct internal or external recruitment.

Organizations that value efficiency prefers to build their employees’ capacities to prepare them for any task in their departments. They establish training programs that ensure every employee sharpens their skills and adapt to changes in their departments as far as operations are concerned (Coy, 2019). Internal recruitment is mainly used by organizations with equal staff distribution in various departments. It is easier to pick employees from a department and promote them to a new position if they are qualified. The essence of internal recruitment is to retain the best talents in the organization. Some people feel frustrated in their jobs and feel the urge to quit if their services are not rewarded. In most companies, employees invest in their career development, intending to get promotions or increase their remuneration. However, when they realize no one seems to recognize their effort, they quit and look for greener pasture.

Internal staffing could solve the challenge of job dissatisfaction among employees of an organization. Managers are responsible for identifying deserving employees and offering them promotions whenever a new role emerges in the organization (DeVaro, 2020). Employees’ loyalty to the organization can easily be gained when their efforts are appreciated through management’s structured career growth initiative. Most organizations that record a high level of employee turnover could be associated with a lack of employee retention strategies by the administration (Karim et al., 2021). In most organizations, employees get valued only when their services are needed, but no one is concerned with their welfare once they are done. As a result, they get dissatisfied and leave to look for other opportunities. Therefore, internal recruitment and structures help the organization ensure employee job satisfaction and engagement.

Hiring costs for most organizations are the reason for internal recruitment programs when new vacancies emerge. Placing advertisements for jobs in the mainstream media might prove costly to the organization, especially when it has to be done repeatedly (DeVaro, 2020). The staffing department will go for that option when it is possible to use the existing employees for the vacant position. Some organizations have a lot of staff that perform almost similar roles. Therefore, internal recruitment will help them balance the roles. Hiring costs can also be considered in terms of staff training (Anwar & Abdullah, 2021). The organization is likely to incur many expenses training new employees recruited externally compared to their internal staff. They must be undertaken through system operations, company values and beliefs, and operations structures. However, internal staff will only be trained about a few precepts of their new role, and they are good to go.

Coping in a new environment is always a challenge for new employees. Almost everyone who has found themselves in new jobs in new organizations takes some time to familiarize themselves with the organization’s systems (Van Doormalen et al., 2021). However, internal staffs of the organization are already aware of their systems such that they only need to shift from one workstation to the other one. Internal recruitment saves employees the stress of adapting to the organization’s systems (DeVaro, 2020). The employees are already used to that particular work environment to continue their new assignment peacefully. Most organizations require someone that will automatically fit in their system and start performing their duties immediately. Therefore, internal recruitment positively affects onboarding time for employees compared to external recruitment.

Some organizations prefer to preserve their culture exclusively within their internal staff. Internal recruitment is a blessing to an organization since it will get employees already familiar with their culture (DeVaro, 2020). Most organizations have nurtured their employees to specific values and beliefs that guide their interaction within the organization and also with customers and other stakeholders. When an organization fears that a new employee from outside will not cope with its culture, they prefer internal recruitment. Organizational culture, in most cases, instills some sense of discipline among employees and determines how they behave towards their colleagues and other people (Hamza et al., 2021). Therefore, internal recruitment helps an organization uphold its culture through its employees compared to working with employees from outside.

Generally, staffing is among the essential aspect of operations management of any organization. Getting a suitable cradle of staff is crucial in getting the job done effectively. Organizations weigh their options between internal and external recruitment and settle for one that works best for them (Anwar & Abdullah, 2021). Internal staffing practice is considered adequate for organizations that want to save on hiring costs compared to external recruitment. When there is a need to empower internal staff, an organization will choose internal recruitment. Therefore, an organization can use internal recruitment to achieve a high level of employee engagement. Coping time is another factor organizations consider when deciding on internal recruitment (DeVaro, 2020). Internal staff will take a short time to cope in the organization compared to external recruits. In addition, internal recruitment helps an organization preserve its culture since internal employees do not need to learn the culture.

Discussions

Human resource management practice has been designed to suit the specific needs of every organization. Staffing is mainly done to ensure operational efficiency and eliminate various challenges organizations face in their HR management. Getting the right people that will drive the mission and vision of the organization is the main focus of staffing (Karim et al., 2021). Organizations consider staffing through either internal or external recruitment. Organizations’ internal recruitment methods are promotions, transfers, absorbing freelancers, and enlisting retirees. The study sought to establish the effects of internal recruitment in an organization. Studies found that reducing hiring costs, onboarding time, preservation of organization culture, and employee engagement were significant effects of internal recruitment. The table below provides a summary of the impact of various internal recruitment methods on the organization. A scale of 1-4 is used to rank the effect level, with one showing that a method has the most effective while 4 has the least effect.

Table: Effects of Internal Recruitment Methods

Source: Karim et al., (2021)

Hiring Cost

Organizations that seek to establish efficient structures focus on reducing their operational costs. Hiring new employees involves costs such as advertising vacant positions and training. Internal staffing aims to reduce hiring costs by selecting employees that already have the needed skills and competence for specific jobs. Most external hire costs companies up to $4000 per hire across industries. Internal recruitment can reduce this cost significantly (DeVaro, 2020). Although external hires can give an organization the best quality employee, the price may be unbearable. Some recruitment agencies charge their clients for every candidate they interview, yet the company may only require one staff member. An organization can develop selection metrics that will enable it to get the best candidate among a pool of candidates.

Selection of the best employee for promotion in an organization also requires monitoring the job performance of various employees within a department. Employees that show outstanding performance in their jobs stand the chance of promotion to another level (Hamza et al., 2021). Therefore, an organization can reduce hiring costs by monitoring the activities of various employees over time and selecting the best. In addition, internal employees only require little training to be familiarized with their new roles compared to external recruits (Van Doormalen et al., 2021). Therefore, the organization can reduce training costs by ensuring all its employees are under on-the-job training for various roles. When the staffing department does not establish training policies, the organization will incur hiring expenses to get experienced employees. Therefore, reducing hiring costs is the priority for internal recruitment.

Employee Engagement

Internal recruitment aims to get employees that will be dedicated to their jobs. Employee engagement is among the effects of internal recruitment established in the study. Most companies lose their best talents due to a lack of employee engagement. The employees feel not valued, and they decide to quit their jobs (Anwar & Abdullah, 2021). Organizations that practice internal recruitment record a lower employee turnover rate than others. Internal recruitment can motivate employee engagement since staff feels they are part and parcel of the organization (Hamza et al., 2021). Employees get encouraged to work hard for possible promotion and growth in the future. On the contrary, organizations that practice external recruitment record low employee engagement rates.

The employees lack the motivation since they know they might stay in their position for as long they keep working with the organization. Therefore, internal recruitment results in employee engagement which develop a strong organizational culture. Organizations with highly engaged employees have lower rates of employee turnover. Some companies have employees that have worked there for more than 30 years due to internal motivation they receive from the management (DeVaro, 2020). In addition, companies ensure employee engagement through promotions, shifts, enlisting of retired employees, transfers, and referral schemes. Therefore, employee engagement is among the effects of internal recruitment.

Coping time

Onboarding of new employees has been a challenge faced by most organizations. External recruitment brings onboard employees who have no idea about the company’s operations. The management must give them time to cope with the systems of the organizations. In most cases, new employees recruited externally take more time to manage in the company than internal staff (Van Doormalen et al., 2021). Internal recruitment solves the challenge of onboarding time experienced by new employees. Internal employees are readily equipped with systems and structures of the organization that they do not require extra time to learn. The staffing department considers time taken by new staff employed through external recruitment and settles on the internal team if the job is urgent. 

Organizations with internal recruitment structures keep their operations going effectively without interruption due to long coping times. Long coping time can influence the production process since the new staff needs to be given time to understand their new role and environment (Karim et al., 2021). However, organizations that focus on internal recruitment hardly face a long onboarding time by employees promoted to the new roles. Moreover, internal employees have a history of interacting with one another from various departments. For example, a junior accountant gets exposed to the procurement systems of the organization since their activities interrelate. Therefore, internal staffing help in reducing onboarding time among employees.

Organizational Culture

Every organization wishes to have employees who uphold its values and beliefs and reflect the same in their assignments. However, external recruitment affects the new employee’s adoption of a new culture. Employees take along to cope with the new culture they have found themselves in (Anwar & Abdullah, 2021). Some new employees recruited externally go to the extent of misrepresenting the company because they are not assimilated into its culture. Customers often complain when dealing with new employees because they feel the person is different from those they are used to (DeVaro, 2020). It might take longer than expected for employees from outside to learn the organization’s culture.

On the other hand, employees that have been selected through internal staffing have a little problem representing the organization’s culture. They are aware of the Dos and Don’ts that their organization practice. Internal recruitment saves the employees time to cope with the organizational culture since they are used to it (Hamza et al., 2021). Managers will not struggle to remind employees elevated to new roles of the need to maintain and practice their organization’s culture. Therefore, internal recruitment has been established to influence the adoption of organizational culture compared to external recruitment. Internal employees are the best fit for promotions or transfers because they can hardly let down the management when representing the organization’s culture.

Conceptual Framework

The conceptual framework is a graphic illustration of the relationship between dependent and independent variables of the study. The study’s independent variables include hiring costs, coping time, employee engagement, and organizational culture. They have been identified as the effects of internal recruitment in an organization. On the other hand, the study’s dependent variable is internal recruitment. The conceptual framework is illustrated in the following figure;

Figure: Conceptual framework

Independent Variables                                                                     Dependent Variables

Implications and Recommendations

The study identified various effects of internal recruitment on an organization. They include reducing hiring costs and coping time, employee engagement, and dealing with organizational culture (DeVaro, 2020). The study will influence the decision of staffing departments and HR practitioners on the need to consider internal recruitment over external sourcing of employees. Organizations will also learn about the factors to consider when making recruitment decisions. For example, organizations that consider reducing their hiring costs would prefer internal recruitment. In addition, organizations will learn about the impacts of external recruitment on their staffing compared to internal recruitment. Generally, the study implicates recruitment decisions based on different circumstances.

Therefore, the following recommendations are suitable for most organizations practicing internal recruitment. First, they need to consider the staffing needs of their organization. The HR manager should assess the staffing situation of the company to determine whether internal recruitment is worthwhile (Anwar & Abdullah, 2021). When there is an upcoming project requiring expertise, the management needs to select a few staff and start training them for the next project. Secondly, the staffing department should assess the capacity of their employees to determine if they are suitable to be promoted to new roles or if there is a need to hire someone from outside. Staff competency and capacity assessment must be undertaken for two to three months (Karim et al., 2021). In addition, the staffing department of various organizations should establish a framework for selecting appropriate staff for new roles without incurring hiring costs in the internal arrangement. Finally, the strategy should include monitoring teams’ performance patterns in their jobs over time.

References

Anwar, G., & Abdullah, N. N. (2021). The impact of Human resource management practice on Organizational performance. International Journal of Engineering, Business and Management (IJEBM), 5.

Coy, M. J. (2019). Research methodologies: Increasing understanding of the world. International Journal of Scientific and Research Publications, 9(1), 71-77.

DeVaro, J. (2020). Internal hiring or external recruitment? IZA World of Labor. 1-11

Hamza, P. A., Othman, B. J., Gardi, B., Sorguli, S., Aziz, H. M., Ahmed, S. A., ... & Anwar, G. (2021). Recruitment and Selection: The Relationship between Recruitment and Selection with Organizational Performance. International Journal of Engineering, Business and Management, 5(3), 1-13.

Karim, M. M., Bhuiyan, M. Y. A., Nath, S. K. D., & Latif, W. B. (2021). Conceptual Framework of Recruitment and Selection Process. International Journal of Business and Social Research, 11(02), 18-25.

Van Doormalen, E., Wesselink, R., & Dentoni, D. Recruitment strategies in small growing businesses. https://edepot.wur.nl/469589