Business Studies Part I
Business Studies Part II

Recruitment and Its Sources

‘ Recruitment refers to the process of finding possible candidates for a job or a function. It has been defined as ‘the process of searching for prospective employees and stimulating them to apply for jobs in an organisation’.

Advertising is commonly part of  the recruitment process, and can occur through several means, through newspapers, using newspaper dedicated to job advertisement, through professional publication, using advertisements placed in windows, through a job center, through campus interviews, etc.

The object of recruitment is to attract potential employees with the necessary characteristics or qualification, in the adequate number for the jobs available. It locates available people for the job and invites them to apply for the job in the organisation. The process of requirement precedes the process of selection of a right candidate for the given positions in the organisation. Recruitment seeks to attract suitable applicants to apply for available jobs.

Sources of Recruitment:

The various activities involved with the process of recruitment includes:

  • Identification of the different sources of labour supply
  • Assessment of their validity
  • Choosing the most suitable source or sources
  • Inviting applications from the prospective candidates, for the vacancies.

The requisite positions may be filled up from within the organisation or from outside. Thus, there are two sources of recruitment: Internal and External.

Internal Sources:

There are two important sources of internal recruitment, namely, transfers and promotions, which are discussed below:

  • Transfers: It involves shifting of an employee from one job to another, one department to another or from one shift to another, without a substantive change in the responsibilities and status of the employee. It may lead to changes in duties and responsibilities, working condition etc., but not necessarily salary. Transfer is a good source of filling the vacancies with employees from over-staffed departments. It is practically a horizontal movement of employees. Shortage of suitable personnel in one branch may be filled through transfer from other branch or department. Job transfers are also helpful in avoiding termination and in removing individual problems and grievances. At the time of transfer, it should be ensured that the employee to be transferred to another job is capable of performing it. Transfers can also be used for training of employees for learning different jobs.
  • Promotions: Business enterprises generally follow the practice of filling higher jobs by promoting employees from lower jobs. Promotion leads to shifting an employee to a higher position, carrying higher responsibilities, facilities, status and pay. Promotion is a vertical shifting of employees. This practice helps to improve the motivation, loyalty and satisfaction level of employees. It has a great psychological impact over the employees because a promotion at the higher level may lead to a chain of promotions at lower levels in the organisation.

Merits of Internal Sources:

Filling vacancies in higher jobs from within the organisation or through internal transfers has the following merits:

  • Employees are motivated to improve their performance. A promotion at a higher level may lead to a chain of promotion at lower levels in the organisation. This motivates the employees to improve their performance through learning and practice. Employees work their commitment and loyalty and remain satisfied withthin jobs. Also peace prevails in the enterprise because of promotional avenues.
  • Internal recruitment also simplifies the process of selection and placement. The candidates that are already working in the enterprise can be evaluated more accurately and economically. This is a more reliable way of recruitment since the candidates are already known to the organisation.
  • Transfer is a tool of training the employees to prepare them for higher jobs. Also people recruited from within the organisation do not need induction training.
  • Transfer has the benefit of shifting workforce from the surplus departments to those where there is shortage of staff.
  • Filling of jobs internally is cheaper as compared to getting candidates from external sources.

Limitations of Internal  Sources:

The limitations of using internal sources of recruitment are as follows: 

  • When vacancies are filled through internal promotions, the scope for induction of fresh talent is reduced. Hence, complete reliance on internal recruitment involves danger of ‘inbreeding’ by stopping ‘infusion of new blood’ into the organisaiton.
  • The employees may become lethargic if they are sure of timebound promotions.
  • A new enterprise cannot use internal sources of recruitment. No organisation can fill all its vacancies from internal sources.
  • The spirit of competition among the employees may be hampered.
  • Frequent transfers of employees may often reduce the productivity of the organisation.

External Sources:

An enterprise has to tap external sources for various positions because all the vacancies cannot be filled through internal recruitment. The existing staff may be insufficient or they may not fulfill the eligibility criteria of the jobs to be filled. External recruitment provides wide choice and brings new blood in the organisation. The commonly used external sources of recruitment are discussed below:

  • Direct Recruitment: Under the direct recruitment, a notice is placed on the notice-board of the enterprise specifying the details of the jobs available. Jobseekers assemble outside the premises of the organisation on the specified date and selection is done on the spot. The practice of direct recruitment is followed usually for casual vacancies of unskilled or semi-skilled jobs. Such workers are known as casual or ‘badli’ workers and they are paid remuneration on daily wage basis. This method of recruitment is very inexpensive as it does not involve any cost of advertising the vacancies. It is suitable for filling casual vacancies when there is a rush of work or when some permanent workers are absent.
  • Casual Callers: Many reputed business organisations keep a database of unsolicited applicants in their offices. Such job-seekers can be a valuable source of manpower. A list of such job-seekers can be prepared and can be screened to fill the vacancies as they arise. The major merit of this source of recruitment is that it reduces the cost of recruiting workforce in comparison to other sources.
  • Advertisement: Advertisement in newspapers or trade and professional journals is generally used when a wider choice is required. Most of the senior positions of industry as well as commerce are filled by this method. The advantage of advertising vacancies is that more information about the organisation and job can be given in the advertisement. Advertisement gives the management a wider range of candidates from which to choose. Advertisements may be placed in leading newspapers. Its disadvantage is that it may bring in a flood of response, and many times, from quite unsuitable candidates.
  • Employment Exchange: Employment exchanges run by the Government are regarded as a good source of recruitment for unskilled and skilled operative jobs. In some cases, compulsory notification of vacancies to employment exchange is required by law. Thus, employment exchanges help to match personnel demand and supply by serving as link between job-seekers and employers. Unfortunately, the records of employment exchange are often not up-to-date and many of the candidates referred by them may not be found suitable.
  • Placement Agencies and Management Consultants: In technical and professional areas, private agencies and professional bodies appear to be doing substantive work. Placement agencies provide a nationwide service in matching personnel demand and supply.
  • Recommendations of Employees: Applicants introduced by present employees, or their friends and relatives may prove to be a good source of recruitment. Such applicants are likely to be good employees because their background is sufficiently known. A type of preliminary screening takes place because the present employees know both the company and the candidates and they would try to satisfy both.
  • Labour Contractors: Labour contractors maintain close contacts with labourers and they can provide the required number of unskilled workers at short notice. Workers are recruited through labour contractors who are themselves employees of the organisation. The disadvantages of this system are that if the contractor himself decides to leave the organisation, all the workers employed through him will follow suit.
  • Advertising on Television: The practice of telecasting of vacant posts over Television is gaining importance these days. The detailed requirements of the job and the qualities required to do it are publicised along with the profile of the organisation where vacancy exists.
  • Web Publishing: Internet is becoming a common source of recruitment these days. There are certain websites specifically designed and dedicated for the purpose of providing information about both job seekers and job opening. In fact, websites such as, etc; are very commonly visited both by the prospective employees and the organisations searching for suitable people.
  • Campus placement: Campus placement or campus interview is the program conducted within educational institutes or in a common place to provide jobs to students pursuing or in the stage of completing the programme. In this programme, industries visit the colleges to select students depending on their ability to work, capability, focus and aim.