External sources lie outside an organization. Here the organization can have the services of: (1) Employees working in other organizations; (2) Job aspirants registered with employment exchange; (3) Students from reputed educational institutions (4) Candidates referred by unions, friends, relatives and existing employees, (5) Candidates forwarded by search firms and contractors (7) Candidates responding to the advertisements issued by the organizations and (8) Unsolicited application walk ins.
The merits and de merits of recruiting candidates from outside an organization may be stated thus:
Merits and de merits of External sources:
1) Wide choice: The organization has the freedom to select candidates from a large pool. Persons with requisite qualifications could be picked up.
2) Injection of fresh Blood: People with special skills and knowledge could be hired to stir up the existing employees and pave the way of innovative ways of working.
3) Motivational forces: It helps in motivating internal employees to work hard and compete with external candidates while seeking career growth. Such a competitive atmosphere would help an employee to work to the best of his abilities.
4) Long term benefits: talented people could join the ranks, new ideas could find meaningful expression, a competitive atmosphere would compel people to give off their best and earn rewards etc.
1) Expensive: Hiring costs could go up substantially. Tapping multifarious sources of recruitment is not an easy task either.
2) Time consuming: It takes time to advertise, screen, to test and to select suitable employees. Where suitable ones are not available, the process has to be repeated
De motivating: Existing employees who have put in considerable services may resist the process of filling up vacancies form outside . The feeling that their services have not been recognized by the organization forces them to work with less enthusiasm and motivation.
Uncertainty: There is no guarantee that the organizations ultimately will be able to hire the services of suitable candidates. It may end up hiring someone who does not fit and who may not be able to adjust in the new world.
Methods of recruitment:
Promotions and transfers:
Many organizations prefer to fill vacancies through promotions or transfers from within wherever possible. Promotion involves movement of an employee from a lower level position to a higher level position accompanied by (usually) changes in duties, responsibilities, status and value. The Tatas, the Birlas and most multinationals (e.g. HLL’s Lister program tracking star performers at an early stage and offering stimulating opportunities to grow vertically) have fast track promotion systems in place. The Credo now is reward performance but promote competency. In the recent past, the AV Birla group has placed over 200 people through the fast tracker system, (promoting star performers quickly). A transfer on the other hand, involves lateral movement within the same guard from one to another. It may lead to changes in duties and responsibilities working conditions, etc. but not necessarily salary. Internal promotions and transfers certainly allow people greater scope to experiment with their careers kindling ambitions and motivating them to take a shot at something they might otherwise never have considered. The system of course works best for young executives who are wiling to take risks.
Job costing is another way of hiring people from within. In this method, the organization publicizes job opening on bulletin boards electronic media and similar outlets. Hindustan Lever introduced its version of open postings in early 2002 and over 40 positions have since been filled through the process, HLL even allows its employees to undertaken career shifts , for example from technical positions to non technical jobs such as marketing, market research etc. through the open job posting system. The AV Birla group allows its employees an opportunity to apply not just for jobs within their own companies but for jobs in any company in the Birla group both India and abroad.