MGT3045 WK 3 Discussion

External Recruiting and Outsourcing

Companies can recruit externally by advertising vacant positions. There are bene�ts and drawbacks of

external recruiting:

Bene�ts:

Generates new ideas.

Increases diversity since new hires bring diverse experiences from other �rms, maybe even

competitors, and new ways of operating.

Drawbacks:

Performance is an unknown. He/she may not �t into the �rm.

New hire may be motivated to change jobs for higher pay or bene�ts, which reduces the

retention rate.

Costs of advertising and other selection tools are typically greater than internal recruiting.

HRM generally uses a combination of internal and external recruitment efforts to maximize the

bene�ts of the hiring techniques.

The Cost of Recruiting

Different formulas are used to evaluate recruiting costs. The calculation most often used divides total

recruiting expenses for the year by the number of hires for the year:

Total recruiting expenses

Number of recruits hired

The problem with this approach is accurately identifying items that should be included in recruiting expenses. Should expenses for testing, background checks, relocations, or signing bonuses be included,

or excluded?

Once such questions are answered, the costs can be allocated to various sources to determine how

much each hire from each source costs. It is logical for employers to evaluate recruiting costs as a

primary metric. Recruiting costs might include employment agencies, advertising, internal sources, and

external means. The costs can also be sorted by type of job—costs for hiring managers, administrative assistants, bookkeepers, and sales personnel are all different.

Certainly cost is an issue and some employers are quite concerned about cost per hire, but quality

might be the trade-off. If an organization rushes the hiring process, less-quali�ed candidates may be

hired.  Thus, time will be spent dealing with mismatched or underperforming employees, and the

organization will incur more costs hiring a replacement. (Mathis et al., 2017, p. 229).

One way in which HRM can entirely avoid recruiting is to outsource the job instead. Outsourcing

refers to the strategy where a �rm hires another �rm to provide required services. The workers who

provide the service are employees of the external �rm.

 

Additional Materials

Outsourcing (media/week3/SUO_MGT3045_W3%20L2.pdf?

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