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Lecture Notes

I Encourage you to look at exhibit 3.2 in your book for more information on internal versus external staffing and kind of the advantages and disadvantages of both. So you know, I have a question here- what are the advantages and disadvantages? You might pause this for a moment and try to write some down so you can remember them and then restart this. So to review some advantages of internal staffing would be that it's relatively quick and cheap compared to external hiring. So you have information on employees, they're already in the organization. Lot of the on boarding requirements have already been taken care of these employees. And so it's a lot quicker too kind of get them shifted into a new job. Employees often react well to internal staffing because they see it as that the internal job ladders that are available to them, the opportunities for advancement within their organization. Now disadvantages are that you not really getting new knowledge, skills, ability, other when you keep the same people in your organization. So if you already have highly skilled individuals, that's great, but even in the case of highly skilled individual, sometimes want new perspectives and you're not going to necessarily obtain that if you choose to hire internally and promote internally. There's also a relatively small labor market right? Even for a large organization if you're only looking inside, you're just looking at a fraction of the possible workforce you could hire for getting the job. And then finally you can perpetuate under representation. So if diversity goals are not being met and you find that you're under-representing protected classes in your organization, then you might want to think about, alright we need to look outside our microcosm of the organization. When it comes external staffing, some of these advantages and disadvantages are direct trade-offs from internal staffing and so advantages include that you have a much larger labor market now and this is both for diverse candidates as well as knowledge, skills, abilities, other, right? You have the opportunity at least to hire highly skilled individuals and individuals with unique skills and perspectives from what is inside your organization. Disadvantages, that is more time consuming, it can be expensive and it could also be more risky. So as a general rule external hires are going to be more likely to exit then internal hires. By definition, if internal hires have persisted for a while, we are you know they're not going to be quick to exit and to some degree the longer someone stays with the firm the more likely they'll continue to stay with a firm. So the external labor market is a bit more risky, right you might pull in someone who is it a great fit and very skilled but never the less they find this isn't where I want to be and they leave your organization.