Recruitment Process Outsourcing and in House Recruitment free essay sample

Recruitment is an important part of an organization’s human resource planning and their competitive strength. Competent human resources at the right positions in the organization are a vital resource and can be a core competency or a strategic advantage for it. The objective of the recruitment process is to obtain the number and quality of employees in order to help the organization to achieve its goals and objectives. With the same objective, recruitment helps to create a pool of prospective employees for the organization so that the management can select the right candidate for the right job from this pool. We will write a custom essay sample on Recruitment Process Outsourcing and in House Recruitment or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page According to Edwin B. Flippo, â€Å"Recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization†. Recruitment is the activity that links the employers and the job seekers. Recruitment of candidates is the function preceding the selection, which helps create a pool of prospective employees for the organization so that the management can select the right candidate for the right job from this pool. The main objective of the recruitment process is to expedite the selection process. Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manger initiates an employee requisition for a specific vacancy or an anticipated vacancy. Sources of Recruitment: Advantages of using Internal Sources: Filling vacancies in higher jobs within the organization or through internal transfers has various advantages such as: ? Employees are motivated to improve their performance. ?Moral of the employees is increased. ?Industrial peace prevails in the enterprise because of promotional avenues. ?Filling of jobs internally I cheaper as compared to getting candidates from external sources. ?A promotion at higher levels my led to a chain of promotion at lower levels in the organization. This motivates employees to improve their performance through learning and practice. Transfer or job rotation is a tool of training the employees to prepare them for higher jobs. ?Transfer has the benefit of shifting workforce from the surplus departments to those where there is shortage of staff. Drawbacks of Internal Sources: Internal sources of recruitment have certain drawbacks such as: ? When vacancies are filled through internal promotions, th e scope for fresh talent is reduced. ?The employees may become lethargic if they are sure of time bound promotions. ?The spirit of competition among the employees may be hampered. ?Frequent transfers of employees may reduce the overall productivity of the organization. Advantages of using External Sources: The merits of external sources of recruitment are: ?Qualified Personnel: By using external sources of recruitment, the management can make qualified and trained people to apply for vacant jobs in the organization. ?Wider Choice: When vacancies are advertised widely, a large number of applicants from outside the organization apply. The management has a wider choice while selecting the people for employment. ?Fresh Talent: The insiders may have limited talents. External Sources facilitate infusion o fresh blood with new ideas into the enterprise. This will improve the overall working of the enterprise. Competitive Spirit: If a company can tap external sources, the existing staff will have to compete with the outsiders. They will work harder to show better performance. Drawbacks of External Sources: The demerits of filling vacancies from external sources of recruitment are: ? Dissatisfaction among Existing Staff: External recruitment may lead to dis satisfaction and frustration among existing employees. They may feel that their chances of promotion are reduced. ?Lengthy Process: Recruitment from outside takes long time. The business has to notify the vacancies and wait for applications to initiate the selection process. Uncertain Response: he candidates from outside may not be suitable for the enterprise. There is no guarantee that the enterprise will be able to attract right kind of people from external sources. Recruitment process Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews. A general recruitment process is as follows: 1. Identify vacancy 2. Prepare job description and person specification 3. Advertising the vacancy 4. Managing the response 5. Short-listing 6. Arrange interviews 7. Conducting interview and decision making The recruitment process is immediately followed by the selection process i. e. the final interviews and the decision making, conveying the decision and the appointment formalities. The procedure of selection varies from organization to origination. The number of steps in the procedure and the sequence of steps also vary. Every organization designs a selection procedure that suits its requirements. However the main steps or stages that could be incorporated in the selection procedure are as under. Unfavorable personal data Unfavorable general impression Unfavorable test score Unfavorable impression Medical unfit Unfavorable previous history Recent trends in recruitment process: Outsourcing Under this arrangement company may draw the required personnel from the outsourcing firms or agencies or commission basis rather than offering them employment. This is also called leasing of human resources. The outsourcing firms develop their human resource pools by employing people for them and make available the personnel to various companies (called clients) as per their needs. Poaching or Raiding or Headhunting: Poaching or headhunting means employing a competent and experienced person already working in another reputed company, which might be a rival in the industry. A company can attract talent from another firm by offering attractive pay packages and other terms and conditions. Whatever may be the means used to raid rival firms for potential candidates, it I often seen s an unethical practice and not openly talked about. In fact, raiding has become a challenge for human resource managers of modern organization. Website or e-Recruitment Many big organizations use Internet as a source of recruitment. They advertise the job vacancies through the worldwide web (www). The job seekers send their applications or Curriculum Vitae that is, CV; through e-mail using Internet, which can be drawn by the prospective employer depending upon their requirements. Recruitment process outsourcing Business process outsourcing (BPO) is a broad term referring to outsourcing in all fields. Business Process Outsourcing (BPO) is the delegation of one or more business processes to an external provider that in turn owns administers and manages the selected process based on defined and measurable performance criteria. Few of the motivation factors as to why BPO is gaining ground are: ? Factor Cost Advantage ?Economy of Scale ?Business Risk Mitigation ?Superior Competency ?Utilization Improvement Generally outsourcing can be defined as An organization entering into a contract with another organization to operate and manage one or more of its business processes. Outsourcing the human resource (HR) processes is the latest practice being followed by middle and large sized organizations. It is being witnessed across all the industries. In India, the HR processes are being outsourced from nearly a decade now. Outsourcing industry is growing at a high rate. Human Resource Outsourcing refers to the process in which an organization uses the expert services of a third party (generally professional consultants) to take care of its HR functions while HR management can focus on the strategic dimension of their function. The functions that are typically outsourced are the functions that need expertise, relevant experience, knowledge and best methods and practices. This has given rise to outsourcing the various HR functions of an organization. Human resources business process outsourcing (HR BPO) is a major component of the worldwide BPO market. Area of Human resource for outsourcing: Recruitment Process Outsourcing (RPO) is a form of business process outsourcing (BPO) where an employer outsources or transfers all or part of its recruitment activities to an external service provider. To quote the Recruitment Process Outsourcing Association, Recruitment Process Outsourcing is when a provider acts as a companys internal recruitment function for a portion or all of its jobs. Many organizations have started outsourcing its recruitment process i. e. transferring all or some part of its recruitment process to an external consultant providing the recruitment services. The present value of the recruitment process outsourcing industry (RPO) in India is estimated to be $2. 5 billion and it is expected to grow at the annual rate of 30-40 per cent for the next couple of years. According to a recent survey, only 8-10 per cent of the Indian companies are complete recruitment processes. Outsourcing organizations strive for providing cost saving benefits to their clients. One of the major advantages to organizations, who outsource their recruitment process, is that it helps to save up to as much as 40 per cent of their recruitment costs. With the experience, expertise and the economies of scale of the third party, organizations are able to improve the quality of the recruits and the speed of the whole process. Also, outsourcing enables the human resource professionals of organizations to focus on the core and other HR and strategic issues. Outsourcing also gives a structured approach to the whole process of recruitment, with the ultimate power of decision making of recruiting with the organization itself. In India, the trend of outsourcing recruitment is also catching up fast. For example: Vodafone outsources its recruitment activities to Alexander Mann Solutions (RPO service provider). Wipro has outsourced its recruitment process to MeritTrac. Yes bank is also known to outsource 50 per cent of its recruitment processes. Advantage of Outsourcing Recruitment: Traditionally, recruitment is seen as the cost incurring process in an organization. HR outsourcing helps the HR professionals of the organisations to concentrate on the strategic functions and processes of human resource management rather than wasting their efforts, time and money on the routine work. Outsourcing the recruitment process helps to cut the recruitment costs to 20 % and also provide economies of scale to the large sized organizations. The major advantages of outsourcing performance management are: Process of recruitment outsourcing: STAGE 1 Define Objectives and Specifications Study of the clients Business Environment and work culture. Specifications from the client relating to the Job specification and description STAGE 2 Begin our comprehensive search Mine internal databases and use widespread network to reach the right candidate as per specifications. Screen and evaluate the candidates. Short list some candidate to give the client a liberty of choice. STAGE 3 Interviews and feedback. Act as a facilitator between client and candidate and help schedule interviews. Follow up with the candidate as well as the company. STAGE 4 Referral and Joining Conduct the reference checks for the selected candidates. Assisting the client in salary negotiation, if required Literature reviews: There are two schools of thought regarding the growth of an outsourcing market: (a) the market (buyers) drives demand for services, or (b) service providers create demand. As a result the narrow definition of RPO service offerings has expanded. It now includes points-of-service or on-demand types of product offerings. Rather than delivering the complete, entire recruitment process, points-of-service or on-demand product offerings are the delivery of specific components of the recruitment model such as candidate sourcing and/or candidate sourcing and candidate screening all the way through on-boarding and new-hire assimilation. Points-of-service and on-demand offerings also are offered on an event, or project-need, basis. Some drawbacks are also there in RPO market- †¢The economic climate has resulted in fewer larger RPO opportunities †¢The RPO market is going global, and there are only a few providers today that are capable of delivering a global RPO solution †¢There are too many RPO players, given the overall market size. (Kathleen Goolsby, 2008) Next in line after the Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO) boom, it is Recruitment Process Outsourcing (RPO) that is steadily gearing up for a new role. RPO- it aims at taking the burden out of the head-hunting business of the corporate sector, particularly at a time when the dearth of talents is estimated by half a million in the coming years, RPO comes with lots of prospects. New and varied opportunity like retailing etc. has opened fresh horizon for RPO to play a major role to bridge this gap between demand and supply. This will increase RPO service providers role in India. (Meghan Busse, 2008) Outsourced recruiting is changing the way employers think about finding good employees and the way employees think about their jobs and their employers. Indeed, the Internet may completely change the way companies manage human resources, says Peter Cappelli, a professor of management at the Wharton School. Recruitment plays a hugely important role in the success or failure of a business. Getting the right staff, with the right qualifications, in the right job is crucial to a company’s success. Recent research by the consulting firm Accenture found that attracting and retaining staff is now the top priority for chief executives. The RPO sector in India is currently at its infant stage. Our clients need higher quality with increased efficiency. For that reason, forecasting must be done in the market (Srinivas K, 2006) Parameters of Analysis: For this study the following parameters are taken into consideration: 1. Awareness level of job and organization’s goal 2. The degree of effectiveness in communicating the policies of the organization 3. Training and development needs 4. Cultural compatibility 5. Frequency of complains 6. Attrition rate 7. Performance of the employees 8. Job level 9. Effect of vendor management 10. Advantages of recruitment process outsourcing and in house recruitment. Data Analysis: Awareness level of job and organization’s goal In RPO candidates are always aware of their jobs and its alignment with organizations goal FrequencyPercentValid PercentCumulative Percent Validstrongly agree11. 91. 91. 9 agree611. 311. 313. 2 cant say35. 75. 718. 9 disagree2649. 149. 167. 9 strongly disagree1732. 132. 1100. 0 Total53100. 0100. 0 The above table shows that 26 respondents which is 49. 1% of the total are disagree that in recruitment process outsourcing candidates are always aware of their jobs and its alignment with organization’s goal and 17 respondents which is 32. % of total are strongly disagree with this, where as only 1 respondent is strongly agree and 6 are agree with this. Graphically we can represent as: Total 81. 2% respondents are disagreeing with the statement so we can conclude that in recruitment process outsourcing candidates are not always aware of their jobs and its alignment with organization’s goal. The degree of effectiveness in c ommunicating the policies of the organization: The organizations policies can be always effectively communicated by RPO providers FrequencyPercentValid PercentCumulative Percent Validstrongly agree35. 75. 5. 7 agree917. 017. 022. 6 cant say47. 57. 530. 2 disagree2547. 247. 277. 4 strongly disagree1222. 622. 6100. 0 Total53100. 0100. 0 The above table shows that 3 respondents are strongly agree that the organization’s policies can be effectively communicated by recruitment process outsourcing providers which is 5. 7% of the total and 17% (only 9 respondents) of the total respondents are agree with this. Whereas 25 respondents are disagree with the statement which is 47. 2% of the total and 12 respondent (22. 6% of the total) are strongly disagree with this. Graphically we can represent as: 9. 85 respondents are disagreeing and 22. 7% respondents are agreeing whereas only 4 respondents are not clear about their views. As 69. 85% respondents are disagree, we can say that recruit ment process outsourcing providers cannot always communicate the organization’s policies effectively to the candidates. Training and development needs: Training and development needs for the candidates recruited through outsourcing firms are generally high than that of in house recruitment FrequencyPercentValid PercentCumulative Percent Validstrongly agree1630. 230. 230. 2 agree2037. 737. 767. 9 ant say23. 83. 871. 7 disagree917. 017. 088. 7 strongly disagree611. 311. 3100. 0 Total53100. 0100. 0 The above table shows that 16 respondents which is 30. 2% of the total are strongly agree that training and development needs for the candidates recruited through outsourcing firms are generally high than that of in house recruitment and 20 respondents are agree with this which is 37. 7% of the total. 9 respondents said that they are disagree with this which is 17% and 6 said that they are strongly disagree which is 11. 3% of the total. 2 respondents are not clear about their views. Graphically we can represent as: 67. 9% respondents are agree and only 28. 3% are disagree with the statement so we can conclude that training and development needs are generally high for those candidate who are recruited through a outsourcing firm. Cultural compatibility: Candidates recruited through in house recruitment are more compatible to the organizations culture FrequencyPercentValid PercentCumulative Percent Validstrongly agree1630. 230. 230. 2 agree3158. 558. 588. 7 cant say23. 83. 892. 5 disagree35. 75. 798. 1 strongly disagree11. 91. 9100. 0 Total53100. 0100. 0 The above table shows that 31 respondents which is 58. 5% of total are agree that the candidates recruited through in house recruitment are more compatible to the organization’s culture and 16 respondents are strongly agree with this which is 30. 2% of the total. Only 3 respondents which is 5. 7% of the total are disagree with this and only 1 respondent is strongly disagree with the statement. Graphically we can represent as: Totally 88. 7% respondents are agreeing so we can conclude that candidates recruited through in house recruitment are more compatible to the organization’s culture. Frequency of complains: In most of the cases candidates recruited through outsourcing firms have more complains than that of in house recruitment FrequencyPercentValid PercentCumulative Percent Validstrongly agree1630. 230. 230. 2 agree3056. 656. 686. 8 cant say11. 91. 988. 7 disagree47. 57. 596. 2 strongly disagree23. 83. 8100. 0 Total53100. 0100. 0 The above table shows that 30 respondents which are 56. 6% of total are agree that in most of the cases candidates recruited through outsourcing firms have more complains than that of in house recruitment and 16 respondents are strongly agree with this which is 30. % of the total. Only 4 respondents which are 7. 5% of the total are disagree with this and only 2 respondents is strongly disagree with the statement. Graphically we can represent as: Totally86. 8% respondents are agreeing so we can conclude that in most of the cases candidates recruited through outsourcing firms have more complains than that of in house recruitment. Attrition Rate: According to you what is the attrition rate of the employees in recruitment process outsourcing FrequencyPercentValid PercentCumulative Percent Valid10%-30%1018. 918. 918. 9 30%-50%1426. 426. 445. 3 50%-80%2241. 541. 86. 8 above 80%713. 213. 2100. 0 Total53100. 0100. 0 According to the 18. 9% of the total respondents the attrition rate of the employees recruited through recruitment process outsourcing 10%-30%, 14 respondents which are 26. 4% of the total said that the attrition rate is 30%-50%, 41. 5% respondents (22 respondents) said 50%-80% and 13. 2% respondents said that it is above 80%. Graphically we can represent as: Here we see that most of the respondents are agreeing that that attrition rate is high in recruitment process outsourcing i. e. between 50%-80% or above 80%. Performance of the employees: The performance of the employees recruited through in house recruitment is always better than that of outsourcing firms FrequencyPercentValid PercentCumulative Percent Validstrongly agree1324. 524. 524. 5 agree3260. 460. 484. 9 cant say11. 91. 986. 8 disagree35. 75. 792. 5 strongly disagree47. 57. 5100. 0 Total53100. 0100. 0 The above table shows that 32 respondents which are 60. 4% of total are agree that the performance of the employees recruited through in house recruitment is always better than that of outsourcing firms and 13 respondents are strongly agree with this which is 24. 5% of the total. Only 3 respondents which are 5. 7% of the total are disagree with this and only 4 respondents is strongly disagree with the statement. Graphically we can represent as: Totally 84. 9% respondents are agreeing so we can conclude that the performance of the employees recruited through in house recruitment is always better than that of outsourcing firms. Job level: According to you recruitment process outsourcing is good for recruiting FrequencyPercentValid PercentCumulative Percent ValidTop level employees47. 57. 57. 5 middle level employees1732. 132. 139. 6 lower level employees3260. 460. 100. 0 Total53100. 0100. 0 The above table shows that according to 60. 4% respondents i. e. 32 respondents the recruitment process outsourcing is good for the lower level of employees. 17 respondents which are 32. 1% of the total said that it is good for middle level of employees and only 4 respondents which are 7. 5% of the total said that for top level of employees recruitment process outsourcing is good. Graphically we can represent as: Here we see that according to most of the respondents recruitment process outsourcing is good for lower level of employees. Effect of vendor management: Outsourcing recruitment can bear positive results only when there is a long term relationship and proper understanding of client needs by the vendor FrequencyPercentValid PercentCumulative Percent Validstrongly agree3464. 264. 264. 2 agree1324. 524. 588. 7 cant say23. 83. 892. 5 disagree35. 75. 798. 1 strongly disagree11. 91. 9100. 0 Total53100. 0100. 0 The above table shows that 34 respondents which are 64. 2% of total are strongly agree that outsourcing recruitment can bear positive results only when there is a long term relationship and proper understanding of client needs by the vendor and 13 respondents are agree with this which is 24. % of the total. Only 3 respondents which are 5. 7% of the total are disagree with this and only 1 respondent is strongly disagree with the statement. Graphically we can represent as: Totally88. 7% respondents are agreeing so we can conclude that outsourcing recruitment can bear positive results only when there is a long term relationship and prope r understanding of client needs by the vendor. Advantages of RPO: Advantage provided by Recruitment process outsourcing FrequencyPercentValid PercentCumulative Percent ValidTime saving1018. 918. 918. 9 Cost saving1324. 524. 543. 4 Focus on core process2445. 45. 388. 7 More responsible to Organizational needs11. 91. 990. 6 Resource availability59. 49. 4100. 0 Total53100. 0100. 0 The above table shows that the major advantages provided by recruitment process outsourcing are time saving (said by 18. 9% of respondents), cost saving (said by 24. 5% of respondents) and focus on core process (said by 45. 3% of respondents). Graphically we can represent as: Advantages of In House Recruitment: Advantage provided by In house recruitment FrequencyPercentValid PercentCumulative Percent ValidTime saving47. 57. 57. 5 Cost saving47. 57. 515. 1 Focus on core process11. 1. 917. 0 More responsible to Organizational needs3158. 558. 575. 5 Resource availability1324. 524. 5100. 0 Total53100. 0100. 0 The above table shows that the major advantages provided by in house recruitment are more responsible for organizational needs (said by 58. 5% of respondents) and resource availability (said by 24. 5% of respondents). Graphically we can represent as: Findings: After analyzing the data collected from the HR persons of different companies we can find certain loop holes and problems in the process of recruitment process outsourcing as compared to the in house recruitment. The findings of the present study are: †¢The awareness level of the job requirements and it’s alignment with organizational goal is more in In House recruitment as compared to the recruitment process outsourcing. HR person of companies own HR department can make a candidate more aware of the job offered and its importance towards organizational goal. †¢A HR person of the company’s own HR department can better communicate the policies of his company as compared to a outsourcing firm. When a candidate is recruited through outsourcing firm, there is more need of his training and development programs to make him fit for the organization and job as compared to the in house recruitment. The in house recruitment authority can better select a candidate who is right for the organization’s environment. †¢A candidate recruited through the in house recruitment authority can better recruit a employee compatible to the organization’s culture as he knows t he culture very well while a outsider recruitment authority is not as much aware of that. The candidates recruited through outsourcing firms have more complains as compared to those who are recruited through in house recruitment process. †¢The attrition rate is also more in recruitment process outsourcing as compared to the in house recruitment. From the previous findings of less cultural compatibility and high frequency of complains, we can better understand the reason behind high attrition rate. †¢The performance level of the employee recruited through in house recruitment is better than that of recruitment process outsourcing. The performance of a employee depends on how better he has understand his job requirements and how he feels in the organization’s environment. †¢From the data collected from the HR persons of different organizations we come to know that companies go more for recruitment process outsourcing to recruit employee of lower level as compared to middle and top level employees. †¢From the analysis of the data collected we find that if there is a good and long-term relationship between client and vendor the recruitment process outsourcing process can give positive results. The main need is to understand the clients’ needs by the vendors to make the recruitment process outsourcing process successful. †¢Although there are few loopholes in recruitment process outsourcing, the advantages like time and cost saving and more focus on the core process by the organizations make the recruitment process outsourcing a good trend in recruitment and a need for today’s competitive environment. †¢Also we find the advantages of in house recruitment like more responsible to organizational needs and resource availability. Recommendations: From the study and by analyzing the findings I can give some Recommendations to overcome the loopholes and problems faced in recruitment process outsourcing and make it as good as the in house recruitment process. The Recommendations are: †¢The outsourcing providers have to maintain a good relation with their clients in order to understand their needs more efficiently. A long term relationship between clients and outsourcing firms is must in order to select a best fitted candidate for the organization. †¢The organization should make themselves clear about the terms and condition, policies, job requirements and benefits for the particular job. The outsourcing firms should not give fake information to the candidates about job profile and benefits related to the job and only those candidates who are actually desired to take the job, should be hired. †¢The final round of the selection process should be taken by the in house recruitment authority. †¢The organization sh ould develop a work culture in which a new employee can get a good induction and also can get help from subordinates as well as the supervisors to adjust him/her self in the new environment. Conclusion Recruitment process outsourcing has some very good advantages which can give an organization a competitive edge. In this very competitive era an organization who is more focused on its core process, can have better results. Also in the time of recession there is an essentiality of saving cost. All these advantages are there in the recruitment process outsourcing. As it is said that every coin has two sides. Recruitment process outsourcing has also some cons with all these prons. But as discussed in the suggestion part there are some ways by which we can make recruitment process outsourcing more effective. These are the recommendation which must be followed by the organizations and recruitment agencies in order to recruit best fitted candidates. Bibliography https://en.wikipedia.org/wiki/Recruitment https://en.wikipedia.org/wiki/Help:Export http://www.naukrihub.com/recruitment/recruitment-process.html