4.2.1 Internal and external recruitment

The need for recruitment

1. Replacing staff who leave: people retire, resign to join another business or are dismissed, and the work they were doing still has to be done.
2. Growth: a business opening another site or serving more customers needs more people, so a cafe adding a second branch has to hire a whole new team.
3. New skills: a change such as starting to sell online creates a gap current staff cannot fill, so the business recruits someone who can run the website.
4. Seasonal demand: some businesses need extra staff for a few weeks only, and take them on for that period rather than all year.

Internal recruitment

1. How it works: the post is advertised inside the business, on the intranet or a staff noticeboard, and filled by promoting an employee or moving one across from another department.
2. Cheaper and quicker: there are no adverts to pay for and no agency fees, and because the person is already on site there is no notice period to wait out.
3. Less risky: the business already knows how reliable the person is and how they treat customers, so it is less likely to appoint somebody unsuitable.
4. Motivating: seeing colleagues promoted shows staff there is a route upwards, which encourages them to work hard and stay, so fewer people leave.
5. No new ideas: an insider only knows how this business does things, so nothing is brought in from elsewhere and poor habits are carried into the new role.
6. It leaves another vacancy. Promoting somebody empties their old job, so the business still has a post to fill, and colleagues who applied and were turned down can be left resentful.

External recruitment

1. How it works: the vacancy is advertised outside the business, through job websites, the local press, a recruitment agency, a jobcentre, a shop window or word of mouth.
2. A wider pool of applicants: anyone qualified can apply, so the business has more people to choose from and a better chance of finding the strongest candidate.
3. New skills and ideas: somebody who has worked for a competitor brings methods this business has never tried, and can fill a skills gap nobody inside could fill.
4. More expensive: adverts and agency fees cost money, managers spend paid hours reading applications and interviewing, and the newcomer needs induction training before they are fully productive.
5. Slower: advertising, shortlisting, interviewing and then waiting out the successful candidate's notice period can take months, during which the work is not being done.
6. Riskier: the business only knows the person from an application, references and an interview, so it can appoint somebody who interviews well but works poorly, and existing staff may resent an outsider being brought in above them.

Choosing between internal and external

1. Internal recruitment fits a vacancy that has to be filled fast and cheaply when somebody inside can already do the job, and it rewards loyal staff.
2. External recruitment is the only real option when no employee has the skill, such as Dyson needing another design engineer, and when the business is growing and needs more staff in total rather than a reshuffle of the ones it has.
3. Many businesses advertise a post inside and outside at the same time, so an internal candidate can apply but is judged against outsiders.

4.2.1b Stages of recruitment and selection

The stages in order

1. The process runs in a set order: job analysis, job description, person specification, advertising the vacancy, shortlisting, selection, then the job offer.
2. Recruitment is the part that attracts applicants, while selection is the part where the business chooses between the people who have applied.
3. Each stage is built out of the one before it: the advert is written from the job description, and the shortlist is judged against the person specification, so an error at the first stage sends every later stage after the wrong person.

Job analysis

1. The manager works out what the job actually involves, often by watching the work being done or asking the person who is leaving, and notes the equipment, hours and training it needs.
2. Job analysis also tests whether the post is needed at all, because the tasks may be shared out among existing staff or the role may work better as two part-time jobs.

Job description and person specification

1. The job description is written first, because the business has to know what the work involves before it can describe the person capable of doing it.
2. A job description gives the job title, the main duties and responsibilities, the hours, the pay, the place of work and who the employee reports to.
3. A person specification lists the qualifications, experience, skills and personal qualities needed, usually split into essential requirements and desirable ones.
4. For a delivery driver, deliver parcels on local routes belongs in the job description, while a full clean UK driving licence and a polite manner with customers belong in the person specification.
5. Having both documents in writing keeps the process fair and consistent, because every applicant is judged against the same stated requirements rather than one manager's impression.

Advertising the vacancy

1. The advert is written from the two documents, so it states the duties, the hours, the pay and the requirements that applicants must meet.
2. Inside the business a vacancy is posted on the intranet, on a staff noticeboard or in an email to all employees.
3. Outside the business it can go on a job website, in the local paper, in a shop window, through a recruitment agency, at a jobcentre or on social media, and the choice depends on where suitable people will look: a shop window suits a Saturday assistant, a specialist website suits an engineer.

Selection methods

1. Shortlisting: every application is compared with the person specification and only the closest matches go forward, which keeps the number of interviews manageable.
2. Application form: the business designs the form, so everybody answers the same questions and the answers can be compared side by side.
3. CV: the applicant writes their own summary of education, experience and interests, which costs the business nothing to produce but is harder to compare because everyone sets it out differently.
4. Interview: questions asked face to face, by telephone or online show how a candidate communicates and whether they would fit the team, although a confident talker can interview well and then work badly.
5. Tests: a skills test shows whether somebody can already do the task, such as a trial shift in a kitchen, while an aptitude test measures potential such as numeracy or problem solving.
6. References: a statement from a former employer or a teacher checks that what the application claims is true and that the person was reliable and punctual.
7. Most businesses use two or three methods together, because no single one shows everything: an interview judges manner while a test proves ability.

4.2.1c Benefits of effective recruitment

What makes recruitment effective

1. Every benefit in this topic starts from the same cause: the person appointed can actually do the job, so the business ends up with the right person in the right role.
2. An effective process is not the cheapest one. Aldi paying for an online test and an interview spends more up front than a manager skimming a pile of CVs, but is far more likely to appoint somebody who can do the work and who stays.
3. The gains show up in three places: how much staff produce, the quality of the product or the service customers receive, and how long employees stay.

Higher productivity

1. Somebody selected because they have the skills the job needs works at full speed sooner and needs less supervision than somebody appointed only because nobody better applied.
2. More output from the same wage bill lowers the cost of producing each unit, so the business can charge a competitive price or keep a wider profit margin on the price it already charges.
3. Managers also spend less time correcting work and chasing progress, so they can get on with their own responsibilities rather than covering for a weak appointment.

Higher quality output and better customer service

1. Capable staff make fewer mistakes, so less material is scrapped and less work has to be done twice, which cuts waste and the cost that goes with it.
2. Fewer faults reaching customers means fewer returns, refunds and complaints to handle, and a reputation for quality that lets the business hold its price.
3. In a job that involves dealing with people, the right appointment shows straight away, because a patient and cheerful assistant on a Currys shop floor explains the product properly and sells more.
4. Good service brings repeat custom and positive reviews or word of mouth, so sales rise without the business spending more on advertising.

Staff retention and lower training costs

1. Somebody whose skills and personality suit the job is more satisfied in it, so fewer new starters walk out in the first few weeks and labour turnover falls.
2. Recruiting less often saves the money spent on adverts and agency fees and the paid management hours that shortlisting and interviewing take up.
3. There is less retraining to pay for, because the business is not putting a new starter through induction every few months, and it keeps the experience staff have built up.
4. Existing employees gain as well, since they are not constantly covering empty posts or training replacements, so their own work and motivation do not suffer.

4.2.2 Contracts of employment

Contracts of employment

1. The contract states the job title and duties, the hours, the rate of pay, holiday entitlement and how much notice each side must give, so both know where they stand if there is a dispute.
2. The type of contract offered decides how many hours are guaranteed, which is what separates full-time, part-time, job share and zero-hours arrangements.
3. A business uses a mix of contracts so that the number of staff on site matches the number of customers, because paying employees to stand idle wastes money.

Full-time contracts

1. What it is: the employee works the business's standard week, usually around 35 to 40 hours, and the same hours are worked every week.
2. Benefits to the business: the same person is there all week, so they learn the business thoroughly, customers deal with a familiar face, and training is worth paying for because it is spread over more hours worked.
3. Benefits to the employee: pay is predictable, which makes it possible to budget or take on a mortgage, and full-timers usually get first claim on training and promotion.
4. Drawbacks: the wage has to be paid even in a quiet week, so it is a cost the business cannot switch off, and the employee has less time left for study or family.

Part-time contracts

1. The hours are agreed in advance, so a part-timer working Thursday and Friday knows those shifts are theirs every week.
2. Benefits to the business: staffing can be pointed at the busy hours rather than spread evenly, opening hours can be extended without paying anyone overtime, and more people apply, including parents and students who cannot work full time.
3. Benefits to the employee: work fits around childcare, college or another job, and part-timers still get holiday and other rights in proportion to the hours they work.
4. Drawbacks: the employee earns less and can be passed over for promotion, while the business has more people to train and manage for the same total hours and has to hand work over between shifts.

Job share

1. One sharer might work Monday to Wednesday and the other Thursday and Friday, so the post is filled all week even though neither person works full time.
2. The business gets two sets of skills for one job, keeps the role covered when one sharer is ill or on holiday, and can hold on to an experienced employee who no longer wants full-time hours, which is why job shares are common in the NHS.
3. It only works if the two hand over properly, because anything one of them leaves half finished has to be picked up by somebody who was not there.

Zero-hours contracts

1. Benefit to the business: it pays for the hours it actually uses, so wage costs rise and fall with demand, which suits work that cannot be predicted, such as catering at a stadium or courier work for Deliveroo.
2. Drawback to the business: workers can turn shifts down, so nobody may be available on a busy night, and because they leave as soon as steadier work appears, the business is forever training replacements.
3. Benefit to the employee: hours can be refused, which suits somebody fitting work around a course or another job, and every hour worked is paid at least the national minimum wage.
4. Drawback to the employee: income swings from one week to the next with no guarantee of any, which makes it hard to budget or get a loan, so the flexibility the business gains is exactly the security the worker gives up.