Hiring procedures dictate the nature of employees taken in by business, and in turn, the performance and internal environment of the organization, and this calls for careful consideration. Through the assessment of the benefits and challenges of internal and external hiring, it is clear that each technique adds value to an organization while creating a considerable amount of risks or challenges. The literature explores the trending hiring techniques and classifies them as internal or external to highlight the sustainability of the approaches and the need for incorporation in any company. The objectives of this study are to analyze the pros and cons of the internal and external frameworks and assess the popularity of the techniques in Lebanon as well as the justifications for these preferences. Through the use of a survey, the research concludes on the intense use of external hiring in rural and urban Lebanese companies and the choice for social media recruitment and internal movement. However, the HR respondents prove to be open to new techniques to identify the benefits of filling various vacancies. Lack of adequate insights on some trending hiring approaches is limiting their use, and this calls for increased awareness as reflected in the recommendation section, to improve hiring practices, company performance, and employee welfare. Other recommendations call for the exploration of different techniques to enhance evidence-based assessments, facilitate the fusion of the models, and increase effectiveness. The constraints in the research indicating how the different hiring frameworks fit in the contemporary business, call for the heightened analysis on internal and external hiring in modern businesses using non-traditional work setups.
CHAPTER 1: Introduction
There is a high competition for opportunities in Lebanon, and every individual is looking for approaches to gain experience and grow their career in the current organization or a new one. Hiring can be done internally by asking current employees to apply for the open position, allowing subordinates to request for promotions or recruiting external candidates. Internal recruitment for a variety of reasons, and it is crucial to understand the social, economic, and psychological aspects of promoting the practice. Through the assessment of Human Resource manager responses from a variety of companies, both small enterprises and multinational corporations, results on why the businesses prefer the approach emerge. Beyond the economic aspects of reducing the timeline of assessment, job satisfaction levels, and employee engagement, it is transparent that there exist other psychological justifications for the practice. An evaluation of the responses from Human Resource managers reflects the benefits of cost and time saving, improving communication, and reducing vulnerabilities from external hiring and increasing job satisfaction.
Internal hiring references the practice of selecting employees from the existing team in a company to fill the available positions based on the qualifications and assessment conducted by the management or human resource team. According to Kumari (2012), internal recruitment is the model of acquiring employees through the identification of potential employees capable of handling the expected responsibilities and duties. On the contrary, the action of internal recruitment encompasses the linking of qualified individuals in a company with positions they are capable of handling and interested in participating. Compared to the external approach, the internal framework focuses on the connection of existing employees with new roles in the business or replacing other individuals that exit the company.
Internal recruitment occurs in various ways, including the promotion of an individual to a higher rank or position with more profound responsibilities, providing a permanent or long-term opportunity, demotion, or horizontal replacement. The approach used in the internal process determines the attitudes of the potential candidates and the strategy applied by the organization in assessing and orienting the individuals to the new roles (Anyim et al., 2011). The process of promotion has a positive impact on employee attitudes and morale, similar to increased responsibilities; however, demotion and horizontal placement are unpredictable depending on the position of the individual. In some cases, demotion is a positive aspect to the employee if a company is downsizing, and the person gets an opportunity to remain in the company.
While there is a significant development in the process of internal hiring, various issues arise concerning the skillset of employees undergoing promotions and education levels. DeVaro et al. (2017) infer that a majority of employees promoted horizontally and recruited externally possess a higher skill set, have better educational qualifications and prior work experience compared to those in the organization pool. Such aspects are discouraging the use of the approach with increased competition among different enterprises and the demand for experts due to globalization and technological advancements. Companies are keen on exploring the benefits of internal hiring but are also concerned with the comparison in the quality of employees from the domestic environment compared to the larger external pool. The idea of development is limiting to the employees being promoted in an organization compared to those coming from other companies and looking for ways to upgrade their skills for them to be marketable. For instance, an employee with the hopes of the promotion will not strive to develop their capabilities but excel in executing their duties, but a person looking for a better employment opportunity will push to upgrade their skills and educational qualifications.
One of the significant trends in Lebanon is the hiring of youths who are accessing vocational training tailored to suit the needs of contemporary employees in different sectors of the economy. The strategy is limiting the internal recruitment model as it seeks to capture innovative individuals from a larger pool of youths with varied talents and skills. UNESCO Beirut (2017) highlights that the incorporation of vocational training programs meeting recruitment demands is a strategic move in reducing skill gaps in employment. There is a higher likelihood of development of external hiring practices with the continued training of educated youths seeking new opportunities since companies are focused on accessing top talent. While the current employees are also keen on increasing their innovation levels, the time to access training resources is limited compared to young graduates where top organizations are investing.
On the contrary, the increased development opportunities for the Lebanese youth could shift the hiring practices based on the rise in skills, making companies unable to afford external recruitment. The inclusion of several tests for candidates and virtual testing approaches is a disadvantage to foreign employees with no first-hand understanding of the position, expectations, and values of the company. Parris (2019) argues that companies endorse virtual tests and several assessment frameworks during hiring to prevent wasting of time for employees without the necessary skills. Using such, however, creates a disadvantage to external employees who are not familiar with the enterprise culture and the unique aspects of the available position. Employees in the company pool can analyze the vacancy depending on the claims of the expert who previously held the job or the current interaction with the role and how it affects the business. The disadvantage may prompt human resource to imagine that internal hiring is a better approach to capturing individuals who are capable of executing the responsibilities and those who comprehend the company values.
It is vital to explore the advantages of internal hiring in Lebanon as a majority of the working population is aging, and there is a demand for more young and savvy employees in different sectors. Abdulrahim et al. (2015) argue that Lebanon has the largest population of aging persons and a significant number of youth migrating in search of new opportunities. Internal hiring frameworks in the country may be a disadvantage at the moment due to this challenge but will prove useful in the future in sustaining the talent and replacing aging management. Hence, the internal recruitment approach comes off as a suitable model for the future of Lebanon’s economy in retaining talent and encouraging skilled employees to remain in the organization.
Employee turnover is a challenge to many organizations in Lebanon, and this is promoting the dilemma between external hiring and internal promotion of employees. In a survey, 40% of employees admit to feeling the pressure to quit their current job and pursue their career in a different environment based on the limited salaries and deficiency of development opportunities (Alameddine et al., 2012). In a bid to preserve the talent, companies are exploring the alternative of filling vacancies from their employee pool to reduce the cost implications of high turnover rates based on the current labor trends. However, contradictory trends indicate that professional roles in sectors such as healthcare are heavily reliant on expatriate expertise, increasing the demand for external hiring (Al-Ahmadi, 2013). A majority of qualified professionals in the region are looking to retain their roles, and companies are finding approaches to develop the skills and maintain them as opposed to investing in the recruitment process. Hence, the predictability of hiring trends is limited depending on the sector and the turnover levels as well as the willingness of the company to invest in training new talent or developing existing talent.
External hiring involves the recruitment of employees from other organizations or the pool of qualified but unemployed persons, and this includes the use of an assessment procedure to ascertain the best employees for each role. According to Trading Economics (2019), Lebanon has a significant percentage of unemployed and qualified persons, but statistics indicate an uneven pattern for the past eight years. The consideration of a profound quota of eligible employees is essential in reducing the high number of unemployment in the region.Table 1: Source
Klementova et al. (2017) recommend the external hiring approach as a means of balancing the employment ratios in any country as it provides graduates and skilled individuals with an opportunity to build on experience. Besides, the approach is sufficient in increasing the level of experience among talented and experienced people and in the process, improving the entrepreneurship levels. Individuals learn how to behave in a formal setup and various skills involved in running an enterprise or working in a specific position, allowing them to start their ventures.
External hiring trends are increasing as Human Resource employees are more conscious of the need to standardize procedures or create new approaches in hiring that are fit for each position. An internal movement is a right approach at working with a familiar person, but the inclusion of individuals with varied backgrounds expands the talent pool and increases the creativity levels (Krell, 2015). The desire for managers to establish a standardized approach of hiring is expanding the inclusion of external hiring trends as it introduces significant benefits to the organization. On the same case, it is transparent that the choice between the internal and foreign acquisition of employees is moderated by the need to have a useful framework for hire that matches the goals of the role. Hence, the rise in the external hiring model is a consequence of the need to reduce inconsistencies in hiring and based on the success of acquiring the appropriate employees in a specific role.
The rise in the external hiring approach is reflected by the high number of employees acquired using this approach, and this comes off as an indication of the success of this model globally as well as in different industries. Bidwell (2011) highlights that enterprises are keen on taking up approaches that are beneficial and essential to the company goals, and models that can be replicated over time. Besides, the author maintains that the developments in each industry necessitate an approach that can accommodate changes in the employee needs and recruitment resources. The increased use in advanced technology considers the use of the external hiring approaches and the seamless fusion of these approaches with the developments while extending the benefits. In that case, it is transparent that the excessive use of the external hiring approach is a reflection of the success of this approach as well as the flexibility of the method in accommodating advancing technology and company needs.
Aims of the Study
- One primary objective of this study is to assess trending hiring techniques and classify them as external or internal to reflect the position of the models in the global labor market.
- The study will explore a profound volume of literature on internal and external hiring and present the benefits of each approach at a general level.
- Beyond the reflection of Human Resource responses on the advantages and the cons of internal and external hiring in Lebanon, this study seeks to comprehend the impact they have on the organization and employees.
- A different purpose of the study will be the analysis of the sustainability of current recruitment practices in Lebanon based on the responses and the existing literature on current labor trends.
- Lastly, the study will provide recommendations on how to improve the internal and external recruitment models to allow businesses to select the most appropriate choice and combinations to maximize the benefits.
CHAPTER 2: Literature Review
Trends in Hiring
1. Recruitment Marketing
As an external framework of acquiring recruits, this approach focuses on the brand image and message, which in turn attracts the right talent to the organization through different methods. Wilden et al. (2010) recommend this approach as an opportunity for the brand to market their products and services or identity as a whole and in turn, pull in the right candidates for future opportunities. The approach, through marketing, branding, word of mouth, and other advertising avenues, facilitates the business with a means of connecting with a talent for future vacancies. The model differs from the conventional approach as it does not include the advertisement for the specific role but allows the business to network and develop talent potential before the vacancies arise. Besides, the branding or marketing continues beyond the recruitment and is sustained during the interview or assessment process and after the hiring phase for the sake of the business image.
Recruitment Marketing is not a new approach, and it seeks to enhance awareness of the company image, grab the attention of potential talent and guide the professionals in deciding whether they want to be part of the business. This external hiring approach is beneficial to the market as it provides insights to the employees on the position of the company and the values and what it means to be a team member (Soulez & Guillot-Soulez, 2011). The company can create an external standby pool of candidates that align with the business culture and those intrigued by the company, and this reduces hiring timelines. The marketing approach also promotes reviews through word of mouth; this involves responses from employees within the organization participating in the branding campaigns. With the rise in marketing approaches, this method enjoys the benefits of big data, which mean the network between the company and potential recruits can extend globally to reach a more extensive, innovative market pool.
2. Talent pipeline strategies
Talent Pipeline Strategies encompass the setting up of a database of employees that have been previously assessed or vetted for different positions and pulling out names when need for the employees arises. The approach is effective as it facilitates the acquisition of qualified and talented individuals with a proven track record within the shortest amount of time without the compromise of quality. Beechler & Woodward (2009) highlight that Talent Pipeline strategies are a means of accelerating the talent war in the different industries as employers seek to find the right individual amidst the significant global competition. Having an approach that is time conscious but maintains the quality of employees by ensuring they are all qualified and talented compared to others in the search pool. The popularity of this trend is based on the use of different tactics like selecting a recruit from the list of previously interviewed persons, referrals as well as previous interns and attachés. The approach qualifies as internal and external as it consists of individuals working for the company like attaches or referrals from other branches of the organization as well as candidates from outside the company.
The call for gender balance in hiring is one of the main advantages of this approach as it allows the business to pick candidates from the existing pool of database of referrals as well as intern records. Brymer et al. (2018) infer that the inclusion of talent pipeline frameworks in a business increases the opportunities for gender balance as the company can take time and pick out their recruits from the existing record selecting both male and female. Sending out vacancy posts and calling for referrals can at times limit gender balance in both external and internal hiring since it is out of the firm’s control. However, using a record of previous applications provides the business a chance to quickly put together a list of qualified and balanced individuals from the previous applications. The provision of all genders with homogenous opportunities places the company in a position to acquire talented employees while attracting the ideas of both male and female for the vacant position. The approach provides an advantage whether the company acquired the referrals externally or is using the pool of attaches and interns already operating within the business.
Pipeline strategies also provide the business with hiring confidence as the company is certain they have access to the best individuals in the employment pool both within the company and outside the business. Besides, the idea of having candidates on standby; who are willing to be part of the business creates a comfortable environment for both the recruit and the Human Resource. Cappelli (2019) argues that a majority of the contemporary hiring approaches are not efficient in finding the right candidates and companies are worried over the high investment in the models. However, the inclusion of verified tactics such as a database or referral records for qualified and talented individuals has proved effective over time, and this gives confidence to the hiring parties. The inclusion of both internal and external hiring options is a strategic move in enhancing the user’s confidence at it enlarges the employment pool and increases the opportunities for acquisition of talented individuals under a limited investment.
3. Social Recruitment- Both external and internal
A different trend that caters to both external and internal hiring is the use of social recruitment which encompasses the posting of vacancies on online platforms and allowing users to make an application. The approach provides an opportunity for followers and all persons coming across the post to apply and this expands the talent pool accommodating both individuals in the company and others outside the organization. According to Kotch et al. (2018), the rise in social media use in different regions is increasing the use of this framework in acquiring talented employees and increasing the global outreach and attracting a variety of demographics. The opportunity allows existing company employees to identify the position and apply as well as professionals from the external environment.
While social media recruitment is an effective approach for acquiring referrals, assessing individual skills and profile as well as enhancing diversity, there is a challenge in handling the volume of work involved. Hiring through social media is fundamental in allowing extensive communication and engagement but the process of assessing profiles on Facebook, Instagram and other sites such as Linked In is hectic (Angerholm & Andersen, 2018). Besides, other professionals use social media posts as a platform for extending conversations on employment globally and this can challenge the position of the company. The effectiveness of the approach in reaching a multitude of people within a short time makes it a good external hiring trend for use in the future (Cappelli, 2019). However, companies need to streamline the approaches to accommodate the diversity of applicants from this environment while reducing the constraints for the internal employees seeking to fill this position. The trends in allowing employees to display their creativity is reflected in their use of social platforms and this provides employers an avenue for accessing applicant’s content from a formal and informal perspective. The challenge in handling the several procedures is a challenge that limits external hiring but encourages internal employees from pursuing the opportunities available by reducing the assessment and communication steps.
Social media use in Lebanon is increasing with the availability of a variety of sites and over time the options are allowing users to rise and the time spent on the sites to escalate gradually among the various demographics. Think Marketing (2018) reflects the rise in social media usage in regions such as Lebanon with the expansion of the economy and this applies to both external and internal hiring. The trends in social media and the buzz in the use of the frameworks for different functions in companies is an indicator that more human resource managers are considering the option in hiring. Statistics below reflect that there is a significant usage in social media for various purposes from 2013 to 2015. While the number of users on Facebook and Twitter reduced, the spike in Instagram usage is a reflection of the popularity of online platforms for various formal and informal uses.
4. Internal Movement
Internal Movement is a sustainable hiring trend that has been used in traditional companies and is also effective in contemporary businesses looking to retain talent within the organization and diminish the training as well as development costs. DeVaro & Morita (2009) infer that the increase in the use of the approach is justified by the provision of less training by the company and the escalation in the profitability based on the promotion of employees who comprehend the operations and culture of the company. In that case, the internal approach is surviving through decades as human resource executives are looking for avenues of decreasing training and development expenses. DeVaro et al. (2016) also maintain that the internal movement approach is fundamental in reducing turnover of talented employees, which preserves creative individuals and allows the experienced persons to be the fuel of the company. The synergy realized from internal movement is higher compared to external approaches as the familiar and talented teams who have learned to cooperate can produce better results.
On the contrary, the trends in the internal movement are supported by the deep job satisfaction levels among employees operating within the company independent of the form of movement experienced. The different kinds of internal change like advertising, promotions, branch transfers, and incorporation of friends of the company all reflect a positive effect on the job satisfaction levels (Alrhaimi & Alhumshry, 2015). The positive influence on job satisfaction is supporting the incorporation of internal hiring models over the external frameworks depending on the familiarity of the Human Resource towards these approaches. Besides, the integration of recruitment tactics such as rotation expands the innovation and creativity levels within the different roles affected (Sullivan, 2018). On the same case, the development and experience involved with job rotation exceed the training and skills acquired by individuals working on a specific role.
5. Boomerang Hires- External
Boomerang Hires are also referenced as alumni networks and involve the recruitment of individuals who have worked for the company in the past and have been tested and proven to be efficient in various roles or a specified position. Companies endure different phases, including lay-offs when struggling; in the process, good employees are lost, but boomerang hiring provides the business with an opportunity to recruit the candidate again (Kumavat, 2012). The re-hiring of talented and innovative persons is a critical trend in expanding organizations looking for the right candidates to fill up their new and developing roles. For instance, a candidate can leave a business for a higher paying opportunity but be hired by the previous employees once the company is capable of providing similar or better benefits and remuneration.
Boomerang hiring is an external recruitment trend that is favorable to multinational corporations as well as small enterprises looking to bring back experts with higher training for expansion. Harris & Gardner (2017) maintain that alumni networks enhance the capacity of the organization to acquire a vetted and highly skilled worker who comprehends the company culture and has gained further experience beyond the organization. The employee is in a position to shift from the company and resume working for a former business depending on the terms of operation and the environment. The performance of boomerang hires is higher compared to internal workers as they are confident of better opportunities and rewards based on the proven track record and the new experiences in a different company or industry. According to Kumavat (2012), alumni networks at times prove handy when working for competing firms as the business can pluck the talent from the rivals and provide the company with an opportunity to succeed. Re-hiring persons working for competitors is a contemporary strategy for building competitive pressure and success as the professional is in a position to combine the know-how from the rivals and the understanding of the former company to accelerate their progress.
Trends in boomerang hire as an external approach of acquiring employees are rising with the change in attitude among the workers and the human resource team, with an increase in alumni applications. Maurer (2015) points out that employees move to different companies to facilitate growth then request to resume working with their previous employer, relocation, and company talent retention are some of the advantages of the approaches. Maurer (2015) also notes that the hiring strategy is quick and efficient in recruiting the right candidates compared to other external and internal vetting procedures. The rise in advantages and the increased alumni applications are enhancing the trend and expanding the adoption of the approach among different companies despite the expansion of varying recruitment models.
The uncertainties involved in using the boomerang approach are less compared to taking up external hires without any knowledge of the company culture and operations, and many firms are avoiding such vulnerabilities. A majority of human resource executives have the objective of reducing employment vulnerabilities, and this involves the consideration of applicants familiar with enterprise operations (Apy & Rickman, 2014). Boomerang hires have more knowledge of a business from a practical angle compared to other externally acquired professionals, and this reduces the risks of recruiting an individual not aligned with the company culture. Kumavat (2012) echoes that hiring boomerang employees have saved a multinational corporation over $3.8million over one year by reducing the assessment and overhead expenses. Besides, the approach allows the business to take up employees at a fast pace and with as minimal hurdles as possible, which affect the cost aspect. Alumni networks are an indicator that all external hiring frameworks are not as expensive as human resource managers suggest as some of the procedures are favorable to the cost aspects.
Advantages and Disadvantages of Internal Hiring
Effect of Internal Hiring on Orientation
Internal hiring has significant advantages that encourage different companies to embrace the process like the reduction of paperwork and procedures passed on to other staff in getting the recruits comfortable. DeVaro (2016) highlights that the internal hiring process hinders the management and Human Resource department from processing a series of paperwork on the individual’s details. On another level, the company is in a better position to deal with the employee through the setting up of new passwords and access codes which eases the work involved. Human Resource managers have a better relationship with internal employees due to the less amount of work required compared to the additional processing they have to conduct when getting employees from outside the company.
A different approach reveals that employee predominance is a crucial factor in affecting the quality of orientation in a company and turn, the performance levels of the individuals. Ndayisaba (2017) maintains that orientation among employees is most effective when the individuals have high predominance effect, and this affects their communication and performance as well. Individuals working with an organization are familiar with the underlying values, and hence, orientation for a new role includes familiar strategies. Hence, internal hiring provides the employees with a higher predominance level making the orientation process more successful compared to recruits from outside the firm. In that case, the success of the orientation process culminates in the improved levels of employee engagement.
The recruitment process in vetting new candidates takes a significant amount of effort from the candidates and the Human Resource, and this can motivate or discourage employee engagement depending on the perceptions. The attendance of interviews, going through the vetting process and the calling of referees can be a tiring and discouraging factor for the employees; hence, internal hiring allows the reduction of the issue and lowers the vulnerability of the employees to demotivation (Anyim et al. 2011 ). Internal recruitment eliminates these disadvantages by allowing the Human Resource to make a judgment on the applicant based on the evaluation from the company and get reviews from the supervisors as opposed to reaching out to the referees. The interview process is also shorter for the internal candidate as they qualify for some tests automatically for being part of the company culture; this increases the morale to be part of the business and work harder for further promotions.
Effect on Costs
There are various ways in which internal hiring influences the costs, and this includes a reduction of the finances involved in the promotion or posting of the vacancy and the assessment of the employees. Shafique (2012) maintains that the financial benefits of internal hiring outweigh the cons since a company can acquire employees quickly and get the right candidates whose decision making process can be verified. When an individual is working for a business, the executives can determine if the candidate has a good decision-making structure compared to learning a new individual from a different environment. Shafique (2012) also notes that internal hiring puts less pressure on the cost as it reduces the communication breakdown and resources used in learning the new employee. In that case, companies prefer the approach based on the effectiveness in reducing the finances involved in understanding the recruits and the ability to get an employee with the right decision-making approach for the position based on previous internal assessments.
Molding the worker’s attitude and behavior is dependent on the approach enforced in recruiting the individuals or selecting them for the specified role; this makes it crucial for the company to choose a strategy that enhances performance value. Performance value from internal recruitment improves job satisfaction as employees are confident of their growth or recognition, and this increases job satisfaction, which eventually reduces costs involved in management (Ekwoaba et al., 2015). Hence, the inclusion of internal hiring techniques comes off as a chance of selecting individuals who add value to the business and motivating the persons to perform better based on their better pay, benefits, rewards or appreciation.
Internal hiring enhances success planning as a tactic for sustainability and cost reduction as it allows business continuity, seamless handover, improved engagement, and better overall outcomes. Donner et al. (2017) maintain that succession planning is a strategic move for companies to enhance participation in the company and escalate the performance levels by reducing the risks in handing over. The approach reduces the cost of sustainability in the company and the finances involved in training new individuals on the operations of the business as well as increasing engagement, which are all factors that lower costs. Furthermore, Gulzar & Durrani (2014) infer that seamless communication is guaranteed through succession planning and support of existing teams compared to creating new groups in the organization. The process of establishing new teams and facilitating coordination and maximizing interaction involves team building investments which are expensive for any business. Hence, internal hiring has positive long-term cost implications due to the advantages introduced by succession planning, and this calls for the use of the approach in companies seeking to enforce sustainable solutions.
One of the cost constraints of internal recruitment is the lack of well-outlined policies for employee nominations and promotions, which lead to bias, which has several disadvantages on the financial position of the business. SHRM (2019) reflects on the bias in judgment when management or Human Resource executives are given the privilege to nominate a candidate for promotion or better position. Discrimination is unlawful, and a big motivation killer for the company staff and this affects performance, which reduces the profitability, competitive pressure and can end up in legal battles. A series of companies have employed gatekeepers to eliminate bias as they comprehend the negative cost implications in the legal realm as well as on the employee output (Vikenburg, 2017). In that case, internal hiring should be enforced with care, and promotional policies should be strict to avoid legal battles that are expensive and damage a company’s reputation, negatively affecting the financial position.
A different negative aspect of internal recruitment is the high labor costs in promoting the different employees involved in the process and the increase in the benefits such as pension and gratuity. Anyim et al. (2011) infer that the pros and cons of hiring procedures are not all directly related to the cost robust some are affected by the value of the service or the long-term implications of the approach. Gratuity and pension payments, among other benefits, escalate with the timeline to which an employee stays in business, and this translates to higher overall costs for internal recruitment. The higher prices of retaining employees for a long time are a disadvantage to business competition and growth, even though the benefits of reduced turnover cannot be overlooked (Shammot, 2014). Hence, the short-term financial implications of internal hiring are not the only consideration when applying the model in the human resource functions of hiring or promoting. Other factors, such as the long-term liabilities of having an employee for a more extended period, are vital beyond the process of recruitment and the processing time, which affect the cost.
Effect on Employee relationship and Motivation
One of the disadvantages of the approach in the worker’s relation is the inclusion of management nomination of employees to fill the open position, which may induce discrimination or favoritism. SHRM (2019) argues that the effects of prejudice or bias in promotion or management nominations, which are part of the internal recruitment approach erase the benefits in employee engagement. Many individuals in a company, whether small or large, are looking for opportunities to grow and access promotions, but hindrances from bias and management discrimination can induce profound vulnerabilities. Performance errors or prejudice culminate in reduced confidence in the company, management, and appraisal procedures, lowering the morale in being part of a team player (Javidmehr & Ebrahimpour, 2015). The lack of motivation to be part of a team that does not recognize effort or is biased towards employees reduces the effort exerted by the team members in the various tasks.
The approach has a significant advantage on the employee perceptions as it allows the retention and promotion of persons with a positive attitude and in turn, high motivation levels based on the development opportunity. HetalJani & Balyan (2016) conclude on the significant impact of hiring practices on employee satisfaction and morale and highlight that appropriate processes that positively shape the employee attitudes have a positive influence on the recruit’s beliefs. It is transparent that the weight of HR practices such as promotions or rotation has a positive impact on the motivation as individuals with a right attitude towards the company culture and practices are given management roles. On a different scale, rewards, and recognition from the management and shareholders enhance the positive mindset of the recruits and existing employees (Osborne & Hammoud, 2016). Increased positivity from promotions and attitudes towards management increases the morale of the business as they can share in the culture and feel valued. Such benefits are crucial in promoting internal hiring as a means of encouraging positivity and allowing employees to be proud of the company culture, values, and hiring policies which favor the existing staff.
Employee engagement comes off as one of the main advantages of getting the right individuals for the business and managing the human resources in the best way possible; internal hiring encourages interaction. Anitha (2014) concludes that a majority of the companies using the internal recruitment approach benefit from a high level of employee engagement based on the in-depth understanding of company objectives and the continued collaboration of the individuals to meet the goals. New employees necessitate orientation in comprehending organization goals and a significant amount of time before building a strong rapport with the existing staff; hence, promotions and job rotations enhance the engagement levels. A different perspective to employee engagement and internal hiring is the role of HR in bridging the interaction gap among employees, which is encouraged through a healthy promotion system (Phelan & Lin, 2000). Human Resource professionals can enhance engagement by bridging the communication and confidence gap through promotions, rotations, and other rewards and recognition that involve recruitment.
One of the main disadvantages of internal hiring is giving employees more responsibilities with no additional benefits or pay as well as limited remuneration compared to previous duties and salaries. Rishipal (2014) maintains that the trends in vertical promotions are an internal hiring approach that is formulated to lower costs but enhance employee motivation and engagement; however, the author highlights that the procedure is discouraging as sometimes employees have to take up new positions with greater responsibilities with minimal additional benefits. Phelan & Lin (2000) add that the lack of promotions that affect decision making discourages employees in a company as they are condemned to a similar position or status quo despite the growth in the business and the addition of employees. New staff or recruits are placed in the same hierarchy in a flat organization, and this impedes decision making authority despite the rise in responsibilities, discouraging the individuals involved in the process.
Effect on Diversity
A primary disadvantage of the internal recruitment framework is the deficiency of diversity as the same employees with a similar skill-set, talent, gender, age, and ethnicity are retained in the organization. MacQuerrey (2019) highlights that growing businesses necessitate diversity concerning age, ethnicity, gender, and other demographic characteristics, but internal promotions and hiring policies fail to promote this aspect. Hence, the process has a significant disadvantage that discourages a majority of the large corporations in sustaining the practice for their hiring needs or incorporating it fully for specified roles. Knouse (2009) maintains that hiring diversity is more present in external hiring due to the high number of locations, the selection of areas with a balance of gender and increasing the pool of potential employees suitable for the role.
Advantages and Disadvantages of External Hiring
One of the primary benefits of using external hiring is the diversification of the employee pool and acquiring professionals from a vast pool of talented individuals as opposed to the ones in the company. Munnoz-Bullon et al. (2018), in the study of family-owned businesses, highlighted that promotions and in-house rotations fail to support the diversification approach, and this can challenge the creativity in the enterprise. However, consideration of consultants and employees beyond the organization allows the company to expand its innovation pool and increases the opportunities for development. DeVaro et al. (2017) argue that the global desire for talent acquisition is pushing businesses to use the external hiring approach which is more favorable for large corporations or small companies looking for experts with a variety of experience. Individuals within the same firm are familiar to the local culture, attitude, and thinking patterns, which may limit creativity in some roles.
The great use of external approaches of hiring is a strategic framework for reaching a wider audience, and this calls for the incorporation of a variety of selection criteria suitable for the broad target audience. The external hiring approach according to Wade and Roth (2015) supports the use of traditional methods such as word of mouth and advanced practices like social media and other technologically advanced platforms in reaching out to the talented candidates. The presence of an approach that supports both traditional hiring and contemporary recruitment is efficient in allowing sustainability and reducing the vulnerabilities involved in changing the hiring policies. On the contrary, the impact of HR strategies on the company policies and frameworks is challenging to conclude using few studies available as highlighted by Peck (2000). The statement infers that some benefits on the sustainability of external hiring as well as the positive influence of the approach are overlooked based on the complexity of the strategy and flexibility in supporting different methods.
On the contrary, the use of a recruitment model that supports various HR tactics is beneficial in improving employee morale in meeting the job requirements; this is achieved through the incorporation of external hiring. Ybema et al. (2017) reflect on the essence of a variety of HR strategies in escalating the health, motivation, and competencies of the employees in the organization. Hence, the use of the external hiring tactic is a means of accommodating a range of practices that are advantageous to the business in terms of morale-boosting and skill development. While training is a useful framework for staff development, competition from new employees increases the morale of the existing individuals in an organization by increasing competitive pressure and providing new avenues for learning during orientation (Panagiotakopoulos, 2013). External recruitment brings together individuals from different environments with a variety of insights on decision making and job efficiency, and existing staff can learn from the recruits during orientation and when working in teams.
Organization politics is one of the significant risks that can paralyze the business activities and reduce the profitability and effective functioning of, and it is essential to dilute the challenge by bringing in new workers with an unbiased opinion. Schneider (2016) recommends vigilance among human resource executives to counter toxic office politics, and one of the approaches of dealing with the challenge is through external hiring to diversify the attitudes and thinking process. External recruitment has the advantage of lowering the pressure from office politics as it allows a variety of employees from different backgrounds to come together and create an unbiased perception of the existing and future policies. Teleworkers come off as a more satisfied group of workers compared to office employees as they are shielded from office politics and are exposed to a variety of ideas and insights. Using the concepts introduced by Fonner & Roloff (2014) on reducing political toxicity through higher external exposure; it is transparent that hiring from the outside environment broadens the thinking patterns. Hence, external recruitment has the advantage of eliminating office politics vulnerabilities by bringing together professionals with parallel exposure and ideas.
One of the primary disadvantages of external hiring is the difficulties in picking out the best candidate for the role and ensuring that the individual also matches the company values and culture. Anosh et al. (2014) realize that external hiring is likely to attract a significant quota of qualified professionals, and a company can experience profound difficulties in the selection of the right individual for the role. Hence, while the advantage of having a large pool of professionals to choose from exists in the model, the drawbacks of picking out the best candidate can at times overwrite the benefits. Farndale et al. (2010) maintain that global hiring or acquiring employees from different locations and backgrounds are challenges as some are not willing to exercise mobility and flexibility. A company Human Resource function may drop other experts and pick one who is uncomfortable with some of the company terms, leading to loss of adequate time and higher overhead costs.
A significant drawback of using the external hiring approach, which discourages a majority of HR executives and shareholders is the aspect of high costs involved in the assessment process as well as the time consumed. Bidwell (2012) references this approach of hiring as a gimmick for companies to spend more but get less value compared to internal promotions that are less complicated, have a reduced time consumption and involve less consulting of other firms. Wisestep (2019) points out the expenses and risks involved in trusting agencies to asses and recruit candidates and the costs involved in managing these professionals; besides, having internal HR workers does not ease the costs of evaluating a multitude of applicants for a single or few roles. Filtering through resumes, interviewing, shortlisting, and other tests involved in getting the right candidate is expensive to administer in large scale and consume a profound amount of time which is not beneficial to any business objectives. From a varied perspective, Smith (2012) considers the expenses in the training of the new hires who are not familiar with the internal operations of the company. In that case, a business should be able to come up with reasonable comparisons between the expenses involved in taking up new employees and the value of the individuals to the business profitability on both a short-term and long-term basis.
CHAPTER 3: Methodology
Selecting a research design is based on the objectives of the study and the nature of the deliverables as well as scope, and this assessment considers these aspects as well as the available resources. Study designs are classified as analytical or observational depending on the approach and instances that involve the interpretation of information in one or another call for the use of the latter approach (Saxena et al., 2013). This study will include the analysis of results based on the objectives of the research and provide an in-depth comprehension of the HR responses towards internal and external hiring practices.
The best approach in the study is the use of qualitative research, which is applicable in acquiring insights on various aspects involving the hiring technique applied by the Human Resource Executives and the attitudes towards the methods. The qualitative choice is efficient in meeting the research aims based on the benefits of providing in-depth information, as highlighted by Rahman (2017). Besides, the option is essential in the research process as it supports the use of a survey, which is the research strategy as well as the inductive approach that will allow the creation of a distinct theory on the hiring techniques. The qualitative choice is also befitting for this study as it incorporates the human experiences and observations among the professionals over the years of experience. Collecting data and simply analyzing it through quantitative frameworks may limit the inferences from the richness of engaging the human instinct, which can process more information (Ayres, 2019). Hence, the selection of the qualitative framework of research proves to be fundamental in accessing the ideas, attitudes, and perceptions of the respondents towards internal and external hiring techniques.
The study considers the incorporation of a survey in ascertaining the ideas of the HR and stakeholders in providing information that responds to the goals of the paper and produces a new perspective on internal and external hiring practices in Lebanon. One of the benefits of this approach is the reduced cost of information collection and reporting through different methods like online platforms and mobile frameworks (Ponto, 2015). On the contrary, the extent to which a single survey can be distributed within a short period is profound compared to other physical strategies such as questionnaires. A different advantage is the flexibility of distribution through hard-copy, online platforms, social media sites and telephone surveys, which allows the collection of a significant amount of insights within a limited time-frame (Jones et al., 2013). Other recommendations for using this approach include the dependability of the procedure as respondents can provide accurate responses while maintaining their anonymity or freedom to disclose their identity. On the same case, the taking of the survey is voluntary for any professional, but there is a challenge in controlling the accuracy of the responses as there is no way to verify the truthfulness of the information.
Administration of the Survey
To limit the extent to which the survey is accessed, the study used emails in the distribution of the study to Human Resource professionals in different companies in Lebanon, with a focus in capturing both rural and urban-based businesses. Through the use of company websites and Linked In networks and referrals, the collection of emails on the recruitment parties proved to be easy. On the contrary, the email contained a temporary link to access the survey and fill in the responses as opposed to replying via email, which can discourage the respondents; who are busy executives in this scenario.
Based on the findings from the Linked In networks, websites and referrals, the survey was distributed to 112 Human Resource professionals and hiring parties, and out of this number, only 80 managed to access the link and fill in the survey. Furthermore, 3 of the reviews were excluded from the study as the respondents admitted to holding different positions as opposed to the intended recipient. The exclusion of the surveys happened automatically through the site, in a bid to increase the credibility of the information and avoid opinions from employees who are not familiar or highly experienced in the recruitment process. The link to the survey was temporary to reduce costs involved in maintaining it on the host website and avoiding the HR respondents to access the study after the data collection window is closed.
CHAPTER 4: Analysis
The survey indicates that the Human Resource executives are familiar with both external and internal hiring as well as the key benefits and drawbacks of each model for the specified organizations. The respondents highlighted the use of both techniques in a majority of the companies and the desire to explore the benefits of the dormant model in the future, either in combination to the existing one or as a mono approach for a specified role and timeline. From the survey, a majority of the respondents indicated that they are familiar with the cost implications of both strategies for the enterprise. Furthermore, they leaned strongly towards the timeline, company culture, and steps involved in using both techniques as primary criteria for selecting the approach. Few experts mentioned the aspects of orientation and training, communication, teamwork, turnover, and staff motivation despite highlighting their awareness of these critical aspects.
One of the trending techniques highly depicted in the responses is social media recruitment for both internal and external attraction and selection of candidates, followed by talent pipeline strategies and internal movement. A majority of the respondents proved hesitant in embracing boomerang hires and proved ignorant of recruitment marketing but did not provide adequate justification. Boomerang hires proved challenging for the business as the executives argue that some employees use this strategy to request for higher pay and benefits compared to their previous role despite the provision of similar skills and creativity levels. The Human Resource respondents highlight that the shift from the company to greener pastures involves better pay for more Lebanese workers and little room for further development. Hence, the return of the employees does not add benefits to the company beyond the experience in a different environment.
Executives with different responses display hesitation to incorporate talent pipeline strategies with suggestions that the approach limits access to new creative hires who are up-to-date with the latest technologies and market trends. Eighteen respondents highlighted on the awareness of the cost implications of this approach in maintaining proper records and finding ways of filtering the database each time a position falls vacant. A different justification for rejecting the procedure is the consistent disappointment by previous candidates who consider the hiring technique a desperate approach by the company. Human Resource executives argue that a majority of the talented and skilled employees called for vacancies after a long while are engaged with other commitments and are not willing to compromise their position and join a new company, unless under limited circumstances.
The respondents also mention that the internal or external approaches affect the company’s profitability, brand-identity, and consistency, and this determines the quality of hires and the ease in recruitment. According to the respondents, the current hiring models, either internal or external, maintain the consistency of the HR policies and retain the organization culture, which provides the shareholders and applicants with confidence in the process. Besides, some of the respondents note that their organizations are benefiting from the use of an approach that is well understood by the company and one that promotes the goals of the firm and the employee welfare. However, some respondents point out on the constraints imposed by the internal or external hiring frameworks endorsed by the company for the different vacant positions; the majority of the HR professionals admit to using the external recruitment strategies.
The literature indicates the presence of considerable benefits and challenges for both internal and external approaches on employee orientation costs, training time, turnover, motivation, output, diversity, and hiring procedures. Each technique brings about a series of drawbacks calling for careful consideration of the role in selecting the hiring model and formulation of a sustainable approach. Merging the responses and the literature, internal hiring studies are more compared to external based research, and this limits the direct comparison of the strategies using the documentation. However, the inclination of professionals toward the external framework is a reflection of the profound benefits of the approach in contemporary businesses in Lebanon.
It is transparent that social media hiring, internal movement, and talent pipeline strategies are the most popular trending, hiring techniques in the Lebanese labor market based on the responses. The outcomes are consistent with the claims of Cappelli (2019) on the increased use of social networks in reaching a diverse group of employees concerning skills, demographics, and decision making structures. Besides, the responses affirm the increase in social media uptake in the formal Lebanese environment and the expanding faith in the effectiveness of the technique in external hiring. The respondents show primary concern in the use of trending techniques that are well understood, effective, flexible, and ones that match the company culture as well as introduce a ton of benefits to the business.
The bias against boomerang hires and recruitment marketing reflect the lack of sufficient comprehension on the benefits or value of the employees in the long-term compared to the short-range challenge of higher remuneration and benefits demands. Contrary to the highlights of Apy & Rickman (2014), HR professionals argue that boomerang hires have less added value to the firm compared to the time of departure in the business. Besides, the responses counter the idea that costs saved from boomerang hires outweigh the expenses involved in compensating the individuals after gaining experience in a different setup. Referencing the ideas of Kumavat (2012), that boomerang hires have saved local and multinational corporations billions of dollars within a short period, it is transparent that the HR experts are not aware of this perspective.
The responses align with the idea that external hiring has a positive impact on the organization performance; hence, the preference of the model by the different companies in local and urban Lebanese environments. Munnoz-Bullon et al. (2018), highlights the need for diverse employees from external frameworks of hiring to increase the creativity and ideas in the organization and encourage better outcomes. The survey responses affirm that HR in Lebanon are keen on using this approach to improve the efficiency of the output in the company based on the captivation of a variety of talent and better quality candidates, with distinctive thinking patterns. Consequently, the results enrich the ideas of DeVaro (2017) that external recruitment techniques are beneficial in maintaining the company culture by picking out individuals who align with the business environment.
The respondents make it clear that the Lebanese market necessitates more stable hiring approaches for the different companies that are both sustainable and meet the goals of the company. The profound responses indicating the willingness to try new techniques are an indication of the suitability of various approaches in the organizations and the need for changes in the hiring policies. In that case, it is prudent to conclude on the need for enhanced experimentation in the industry and result-based learning among the professionals to increase contentment in the hiring strategies. The limitations in the sustainability of the current practices are accelerated by the lack of in-depth understanding of how trending techniques are capable of affecting the business and the employee attitudes, perceptions, and behavior.
CHAPTER 5: Conclusion
- One of the main recommendations is for the Human Resource managers, other recruiting parties, and shareholders to explore the benefits of social media recruitment and the flexibility of combining the practice with different techniques. Kotch et al. (2018) argue that the strategy is not only beneficial due to the growing use of online platforms but an opportunity to reach diverse populations and support other hiring practices such as internal movement. The recommendation is for the concerned parties to explore the benefits of the approach fully and find ways of integrating the technique in analysis, testing, and recruitment marketing for better results. The call for combinational tactics through a deep understanding of the most popular trending method is an avenue for improving hiring policies and reducing the vulnerabilities created through the use of one technique at a time.
- The second recommendation calls for the increased awareness on the benefits of each approach and the enthusiasm for learning the trending techniques like recruitment marketing; which a majority of the experts are not familiar with the structure and implementation. Ulrich (2016) implies that the crossroads created in the hiring sector is as a result of the lack of understanding of various emerging concepts and the lack of flexibility in redefining HR policies to accommodate the new techniques. Besides the lack of knowledge of the benefits of boomerang hires and the focus on the cost disadvantages is an indication of the need for more information on the trends.
- A third recommendation is a call for more studies on the benefits and disadvantages of external and internal hiring techniques on the business and role sustainability in the contemporary environment. The further assessment of the models will reveal the opportunities and challenges that apply to the modern business environment and the countermeasures in place to deal with these issues. New research will clarify on the sustainability of each approach to recurrent roles in various organizations and the support of the technique to modern working arrangements such as telecommuting. The current studies, as well as this study, focuses on the traditional office setup and ignores the current work-life balance opportunities that allow individuals to work in their preferred environment. The understanding of these differences in comparison to existing information will provide an in-depth comprehension of the necessary changes in hiring techniques and the best trends to consider for a contemporary environment.
Internal and external hiring is practiced profoundly in Lebanon depending on the business, objectives of the firm, the culture of the enterprise and the preferences of the human resource executives and other parties involved in the hiring process. Literature reveals the consideration of internal hiring based on the growth of businesses prompting rotations and promotions. Besides, the use of the approach is fuelled by the openness to lateral developments, social media use, desire to curb turnover challenges, and the strategy to retain top talent in the organization. The incorporation of the external model is motivated by the desire to accelerate diversity, attract new talent, increase ideas within the organization, promote boomerang hires, and market the brand. Trends in recruitment that support both techniques include recruitment, talent pipeline strategies, social media hiring, boomerang hires, and internal movement. Internal hiring has significant advantages in reducing costs, assessment time, eliminating or lowering orientation overheads, maintaining individuals who understand the business, increasing team engagement, and motivation through promotions. However, the approach is limited in the diversification of skills and demographics, ideas, decision making structures, creativity, motivation for some lateral developments, and discrimination or bias. External hiring presents the benefits of diversification, the attraction of global talent, increased motivation from the competition, the introduction of new ideas, and growing opportunities for getting the right culture fit for the company. Drawbacks consist of high costs in an analysis of candidates, orientation, and training as well as profound resource and time use.
Results from the survey indicate the preference of external hiring among many Lebanese HR experts and firms and the incorporation of social media recruiting, talent pipeline strategies, and internal movement among the major trends. The results also display an in-depth comprehension of the benefits of the technique in use in the company and the desire for a majority of the HR to diversify the approach. Recruitment marketing lacks popularity as a majority of the professionals are not aware of the structure and implementation. Besides, the professionals have a misconception on boomerang hires and their value to the enterprises compared to the costs involved in taking them back into the company. Recommendations call for more awareness on the processes, experimentation, and increased research on the techniques relating to their application in contemporary businesses.
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