THE KEY IMPORTANCE OF RECRUITMENT AND SELECTION FOR INSURANCE COMPANIES IN SRI LANKA

According to Costello, (2006) “Recruitment and selection, as a human resource management function. It is one of the human resource management activities that make the impact on organization performance to achieve target goal” (Costello, 2006). Gold, (2007) defines that “Recruitment is the process of making a pool of capable candidates applying to an organization for employment” (Gold, 2007) and According to Eze (2002), “Recruitment is the process of finding and attempting to attract job candidates who are suitably qualified and therefore capable of filling vacancies in job positions effectively” Eze (2002).

Effective recruitment and selection provides benefits for an organization to perform the duties effectively. Recruitment and selection is important aspect for every organization in getting the right employee for the right job (Noe, 2012). According to (Stewart and Carson 1997) the goal of recruitment and selection process should get suitable employees with minimum cost.

Benefit of Effective Recruitment and Selection

• Accurate selection from a strong pool of applicants-

Having a proper recruitment process provides with a strong pool of applicants from which you can select the most suitable for the current vacancy. In applying the selection process various techniques such as interviews, tests and other techniques can be used in evaluating the candidate’s qualification and traits (Trevor, 1997).

• Reducing cost of recruitment, training by retaining the employees-

Proper selection and recruitment process enables aligning the abilities of the new employees to the demands of the job. Selection of the correct candidate to the correct job creates the job satisfaction and thus reduces the employee turnover (Trevor, 1997). Retention of employees will reduce the cost of repetitive recruitment for the same position and the training cost of the selected vacancy (Shar, 2011)

• Complementing the business strategy

The strategic human resource management is a proactive method where company identify and maps out the positions required and the timing of such recruitments according to the strategic plans of the company. According to Forbes (Shar, 2011), Strategic human resource is a proactive approach to talent management when compared to traditional reactive or transactional HR systems.

• Reduces potential legal issues

When you have a proper recruitment process, the selection is unbiased and there is a scientific method used for recruitment. This reduces the business in recruitment and wrong selection which can lead to subsequent action being taken. The said scenarios can lead to legal issues which can be very expensive and time consuming (Compton, 2010).

Methods of Recruitment and Selection

There are two methods of recruitment and selection. Armstrong (2000) suggested that first consideration should be given to internal candidates, though some organizations with powerful equal opportunity policies (often local authorities) insist that all internal candidates should apply for vacancies on the same footing as external candidates, and second being entered recruitment and selection. According to (Beardwell, 2007; Cober & Brown, 2006), the external recruitment mentions that getting the applicants from outside of the organization.  The vast ranges of methods are used for the external recruitment when compare to internal recruitment. Due to the external sources, the organization should require to consider that what positions need to be filled. Sources of external recruitment contain e-recruitment, advertisement, labour office, education and training.

Due to the selection criteria, the organization focuses on planned workers’ “hard” specialized abilities and their ‘soft” behavioral skills. In any case, it was debated that frequently organization processes and determination forms emphasize prospective employees “hard” skills and concentrate less on their “soft” skills (Ahmad and Schroeder, 2002). During the selection process of Ceylinco Insurance, HR managers reveal the fact that various factors such as ability, personality, motivation, and attitude are some other personal attributes covering both “hard” skills and “soft” skills necessary for the job.

Further, when comparing listed and non-listed companies in Sri Lanka, interview is rated as the most often used method followed by written examination and psychometric tests by both listed and non-listed companies. AIA Insurance company uses the psychometric test of the employee selection other than interview and written test. AIA, further examines the effectiveness of Psychometric test to understand of the traits of selected employees.

Many organizations the selection process involves obtaining information on every job applicant for application forms, background checks, performance simulations, and interviews (Noe, 2012). The interview is a critical factor of the selection process. To identify this concern in Assetline Leasing Company conducts the recruitment and selection as follows. They initially publish the advertisement via online and the newspapers and they conduct the preliminary interview at the initial stage. When the candidates successfully completed the successful preliminary interview, there is a second interview conduct by the company and finally, they select the candidate for the employment, based on market references on the individual candidate. Assetline Leasing company is a leading organization in the equipment leasing market in Sri Lanka.

Finally according the researchers’ definition, recruitment and selection is an important function for the organization and it gives the organization to attract – competent – employees to meet organization objectives.

References

Armstrong M. (2005), A Handbook of Human Resources Management Practices, 9th edition, London: Kogan Page

Costello, D. (2006), Leveraging the Employee Life Cycle, CRM Magazine, 10 (12), pp.48-48.

Compton, R. L. (2010), Effective Recruitment and Selection Practices 5^th ed. McPherson’s  Printing Group<https://books.google.lk/books?hl=en&lr=&id=ndwp9W6TYi4C&oi=fnd&pg=PA1&dq=benefits+of+effective+recruitment+and+selection+process&ots=Ic2OtPBT3B&sig=PEFCLVqaAVYYG81Ar5bLZMMuIDs&redir_esc=y#v=onepage&q=benefits%20of%20effective%20recruitment%20and%20selection%20process&f=false> .(Accessed on 23^rd May 2018)

Dessler G. (1991), Personnel/Human Resources Management, 5th ed, New Jersey: Prentice Hall

Dessler, G. (2013). Human resource management. (16th ed.). New York, NY: McGrawHill

Implementing recruitment & retention strategies that enhance employee commitment, performance and financial payoff, < http://www.lawson-intl.com/strategicstaffing2.html> (Accessed on 24^th May 2018)

Noe, R. A. (2012). Human resource management: Gaining a competitive advantage (7thed.). New York, NY: McGraw-Hill.

Price A. (2004), Human Resource Management in a Business Context, 2nd edition, Florence; Thomson Learning

Robbins, S. P., & Judge, T. A. (2013). Organizational behavior (14th ed.). Upper Saddle River, NJ: Prentice Hall.

Stewart, C. J. (2011). Interviewing: Principles and practices. New York, NY: McGrawHill.

Shar R, Shifting HR From A Reactive Process to a Proactive Business Service, <https://www.forbes.com/sites/rawnshah/2011/10/31/shifting-hr-from-a-reactive-process-to-a-proactive-business-service/#7aaaf32a1040> (Accessed on 24^th May 2018).

Trevor, C. et. al., Voluntary Turnover and Job Performance. Journal of Applied Psychology, 1997, Vol. 82, No. 1, pp. 44-61.