Outsourcing by multinational companies as part of global corporate strategy
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The purpose of the report is to identify the practice of recruiting young graduates straight out of college by Data Connection. In the first part of the report the key drivers based on the external environment of the organisation which promotes the particular recruitment choice and policy is analysed. Further in the report, an evaluation of the objectives attained by the company based on following the practice is understood followed by an evaluation of the feasibility of such practices in similar organisations and in other industries.
Data connection is a software organisation in the United Kingdom with a staff of around 200 employees and has clients all over the world. The company recruits for entry-level positions based on A-level standards with their rigorous interviewing and selection policy. The focus of the recruitment practice of the organisation is to evaluate the candidate’s aptitude and inherent skills along with their matching with the organisational objectives and future requirements. Although the case study provides for the details about several human resource management practices adopted by the company and the consequent success gained, the first step in this human resources management strategy for service based organisation is the recruitment and training of capable employees.
Recruitment in organisations are usually done to fill up existing positions and also to develop the potential of the organisations in the future. Service based such as software organisations develop the capability based on employee skills and capabilities (Armstrong, 2006). It is necessary for such organisations to understand evaluate the future requirements in terms of technology as well as managerial capability and develop the skills of the employees or future. Many organisations follow a policy of headhunting experienced candidates so that new ideas and practices can be brought into the organisation (Mathis and Jackson, 2011). On the contrary there are organisations which specifically recruit young graduate’s trains, nurtures and develop them in order to fulfil the futuristic requirements. One of the motivating factors for this policy is that in the software industry, which is ever-changing, with the adoption of new technology and requirements from the customers, the employees need to be adept with not only the existing but also futuristic technology. Moreover finding experienced professionals from the same industry and matching it to the particular requirements of the organisation is a very difficult process and involves huge cost in terms of attracting, identifying and selecting candidates (Jackson, Schluer and Werner, 2011). The practice of recruiting directly from the graduate school increases the ability of the organisation to reduce the cost as more number of applicants is available. However, it is also necessary to train, nurture and develop the skills of these young graduates in order to fulfil the potential requirements of the organisation in terms of objectives.
In many cases it has been identified that young, raw recruits are much more flexible and adaptive to the training and development which can be done specifically based on organisational objectives and much more effective than identifying experienced professionals which match with the requirements of the existing and future job prospects. Some of the researchers such as Scholl, (2008) and Torun, (2007) have also evaluated that young recruits when provided with positive motivation and better working conditions have significant levels of commitment and loyalty and hence reduced turnover for the organisation.
The case study indicates the several details about the recruitment of young graduates in detail and also provides the several advantages the company has received from this policy. One of the foremost factors was a futuristic need of potential and nurturing them and the fact that the company’s top executives were recruited as young graduates who were trained by the company indicates the success of the recruitment policy. Although direct evidence about cost effectiveness of recruiting young graduates versus experienced candidates is not available, industry evidence and several authors such as Kilburn and Asch, (2002) have attributed to such kind of cost effectiveness. Since Data Connection is able to recruit young graduates based on the specific identification of appropriate talent which is correlated with the present and future requirements of the company, the candidates can be trained and nurtured in a scientific manner as is done by the specific training, moulding, continuous development, appraisals and performance targets. Moreover the company makes it a point to identify the areas of skill inherent in the individuals such as technical and managerial at an early stage in order to develop their potentials.
The employee turnover and increased commitment and loyalty is influenced by the flexibility of working conditions, significantly higher remuneration package when comparing to the industry, profit sharing and other positive benefits to the employees. Moreover the recruitment policy effectiveness is also attributed to the training and development provided by the organisation. Evidence also suggest significantly higher customer satisfaction levels and since Data Connection is a service based organisation which develops software for clients, the employees capabilities and skills goes in a long way to enhance customer satisfaction.
Although the specific situation of Data Connection and the continuation of the recruiting policies have provided significant levels of success, this kind of approach cannot be this successful in all kinds of situations and even competitive organisations in the same industry. One significant advantage of recruiting experienced candidates other than inexperienced graduates is the skills and capabilities already existing in the employees and the new ideas and business practices which such a candidate can bring into the organisation (Carguth and Handlogten, 2009). Since the software industry is evolving and customer requirements are very specific, it is necessary to have employees who understand the market conditions and experienced candidate could be better in such situations. However, with respect to Data Connection, the company intends to nurture the young graduates for future requirements, since the company is having a well-trained managerial base that is incapable of understanding and evaluating customer needs and directs the new recruits to develop products and provide services. Other organisations do not have the luxury of such well-trained employees and may need to identify such skills externally.
The present economic climate has reduced the cost of recruiting experienced professionals to a significant extent but such conditions may not be always remaining constant (Jackson, Schluer and Werner, 2011). Moreover retention based on commitment and loyalty is not only because of the recruitment policy but also because of the overall working culture at Data Connection based on profit sharing, flexible working conditions and higher remuneration, which may not be the case in all organisations even though they are recruiting young graduates. There are instances where organisations recruiting young graduates and spending significant amounts to train them finds that such candidates leave the organisation to better paying jobs as soon as the training finishes (Balsco and McNish, 2009). Although young graduates are easily moulded to the specific requirements of an organisation, Kandola, (2006) have suggested that many organisations do not have a strategic human resource management plan which involves the planning for the future similar to that of Data Connection.
Along with the recruitment of young graduates, the policy of training and developing, in order to nurture the talent and shape the career is an essential factor in the success of the organisation and improving the customer satisfaction. Hence a policy of recruiting young graduates along with improving the retention and achieving the organisational objectives would be depending on the strategic human resource management policy where the futuristic requirements are identified based on expected market conditions and human resource management skills and capabilities required in future (Secorad, 2010).
The above analysis suggests that it is not only the specific recruitment policy of Data Connection about attracting talented and young graduates but also the entire human resources management policy of identifying inherent skills, mentoring and, providing training and development along with significant levels of motivation by tangible as well as intangible motivators provide to the success of the organisation. In the present conditions the company is facing some competition from cheaper destinations but the customers are returning back to the company based on the quality and the service provided by the employees which is a further indication of the substance of the human resources management strategies.
10. Torun, F., (2007), “Recruiting Quality Check – an Overview”, GRIN Verlag