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(Note to Student: This chapter is about how businesses find, choose, and prepare the people who work for them. People are the most valuable resource, so getting this process right is vital for business success!) ***

Introduction: The People Power Process

Welcome to the "People in Business" section! Imagine building a championship sports team. You can’t just grab anyone; you need scouts (Recruitment), tryouts (Selection), and practice sessions (Training). Businesses do the same thing!

What you will learn:

  • How a business finds potential employees (Recruitment).
  • How a business chooses the best person (Selection).
  • How employees learn new skills to do their job better (Training).

Key Takeaway: Effective Human Resources Management (HRM) ensures the business has the right people, with the right skills, at the right time.

1. Recruitment: Finding the Right Candidates

Recruitment is the process of identifying that the business needs a new employee and then attracting suitable candidates to apply for the job.

The Recruitment Process (Step-by-Step)

  1. Identify the Need: A manager recognises a vacancy (perhaps someone left or the business is expanding).
  2. Job Analysis: Detailed study of the job tasks and requirements. What exactly does this role involve?
  3. Prepare Documentation:
    • Job Description: A document outlining the duties and responsibilities of the job role (e.g., "Manage social media accounts," "Handle customer complaints").
    • Person Specification: A document outlining the skills, qualifications, and characteristics required by the successful candidate (e.g., "Degree in Marketing," "Excellent communication skills," "5 years experience").
  4. Advertise: The business must choose how and where to tell people the job is available.

Don't worry if these terms seem tricky! Think of the Job Description as the list of things you have to DO, and the Person Specification as the list of things you need to BE.

1.2 Sources of Recruitment

Businesses have two main options for filling a vacancy: looking inside the business or looking outside.

A. Internal Recruitment

This means filling the vacancy with someone who already works for the business, usually through a promotion or transfer.

Example: Promoting a cashier to Shift Supervisor.

Advantages of Internal Recruitment:

  • Cheaper and Faster: No need for expensive advertising or long selection processes.
  • Known Skills: The business already knows the employee's strengths and weaknesses.
  • Motivates Employees: Existing staff see opportunities for promotion, boosting morale and productivity.
  • Familiarity: The employee already knows the company culture and processes.

Disadvantages of Internal Recruitment:

  • Limited Pool: Only existing staff are considered, potentially missing better external talent.
  • New Vacancy: The business now has to fill the old job of the promoted employee.
  • Rivalry: Can cause jealousy or conflict among colleagues who were not chosen.
B. External Recruitment

This means filling the vacancy with someone who does not currently work for the business.

Methods of External Recruitment:

  • Newspapers/Magazines: Good for local or specialised roles.
  • Recruitment Agencies: Expensive, but they do all the initial screening and finding of candidates for specialist jobs (e.g., IT manager).
  • Job Centres/Online Platforms (e.g., LinkedIn): Wide reach and often lower cost than print media.
  • Word of Mouth: Asking existing employees to recommend suitable people.

Advantages of External Recruitment:

  • New Ideas: Brings fresh perspectives, skills, and experience into the business.
  • Wider Choice: A much larger pool of candidates to choose from.
  • No Prior Bad Habits: New employees learn the processes from scratch.

Disadvantages of External Recruitment:

  • Costly: Advertising and agency fees can be high.
  • Time-Consuming: The whole process (advertising, shortlisting, interviewing) takes a long time.
  • Uncertainty: The candidate’s true capabilities are unknown until they start working.
Quick Review: Recruitment

The goal is to generate a large number of suitable applications. Internal is fast and cheap; External brings new talent but is costly and slow.

2. Selection: Choosing the Best Candidate

Selection is the process of choosing the most suitable candidate for the job from the applicants generated during recruitment.

2.1 Methods of Selection

The selection process involves several stages to narrow down the pool of candidates.

1. Reviewing Application Forms and CVs

This is the first screening process. Application forms or Curriculum Vitae (CVs) allow the employer to quickly check if the candidate meets the basic requirements listed in the Person Specification (e.g., Do they have the required degree? Do they live close enough?).

  • Advantage: Quick way to eliminate unsuitable candidates.
  • Disadvantage: It only shows qualifications on paper, not personality or work ethic.
2. Interviews

The most common selection method. This involves a face-to-face conversation (or video call) with the candidate. Interviews are vital for assessing:

  • Soft Skills: Communication, confidence, and personality.
  • Motivation: Why they want the job.
  • Body Language (Non-Verbal Communication): Is the candidate professional and engaged?

Did you know? Panel interviews (with multiple managers) are often used to reduce bias, as several people assess the candidate at once.

3. Testing

Testing provides objective evidence of a candidate's abilities, unlike the subjective opinions formed in an interview.

  • Skill/Aptitude Tests: Checks if the candidate can actually perform the job tasks (e.g., a typing test for an office job, or a coding test for a programmer).
  • Personality Tests: Used for jobs where specific character traits are crucial (e.g., checking if a sales person is outgoing and resilient).
4. Checking References

Employers contact the candidate’s previous employers or teachers to verify the information provided and check their work history, reliability, and character.

Common Mistake to Avoid!

Do not confuse Recruitment (finding people) with Selection (choosing the best person). Recruitment is the larger net; selection is the detailed filtering process.

Key Takeaway: The final selection decision should be based on weighing up all the evidence—paper qualifications, interview performance, and test results—against the Person Specification.

3. Training Employees

Once an employee is hired, they need to be taught how to do their job properly. Training is the process of increasing the skills, knowledge, and efficiency of employees.

3.1 Why Training is Important

Training is not just an expense; it is an investment in the business’s human resources.

  • Increases Productivity: Skilled workers complete tasks faster and more efficiently.
  • Improves Quality: Well-trained staff make fewer mistakes (less waste/returns).
  • Increases Motivation: Employees feel valued and confident in their abilities.
  • Aids Adaptability: Employees can learn new technologies or new ways of working when the market changes.
  • Reduces Accidents: Staff are taught safe procedures, particularly important in production industries.

3.2 Types of Training

1. Induction Training

This is essential training given to new employees immediately after they are hired.

  • Purpose: To introduce the new employee to the workplace, colleagues, company rules, health and safety procedures, and the layout of the business.
  • Benefit: Helps the new employee settle in quickly and feel comfortable.
2. On-the-Job Training

This involves teaching an employee new skills while they are carrying out their normal work activities. This often involves shadowing an experienced colleague or manager.

Analogy: Learning to drive a car while sitting next to your instructor on a real road.

Advantages of On-the-Job Training:

  • Cost-Effective: No external course fees or travel costs.
  • Relevant: Training is highly specific to the actual equipment and processes used by the business.
  • Productive: The worker is producing goods/services while they learn (even if slowly at first).

Disadvantages of On-the-Job Training:

  • Bad Habits: The trainer might pass on poor working habits to the trainee.
  • Slower Pace: Training can be distracted by customer demands or immediate work tasks.
  • Lower Quality Output: Mistakes are made using real materials, leading to waste.
3. Off-the-Job Training

This involves training employees away from their normal workplace, often provided by specialist trainers or institutions (like colleges).

Analogy: Attending a specialised, focused workshop or lecture about advanced car mechanics in a quiet classroom.

Advantages of Off-the-Job Training:

  • High Expertise: Training is provided by professional specialists, often using advanced techniques.
  • Focus: The employee can focus entirely on learning without distractions or pressure to meet deadlines.
  • Certification: Often leads to formal qualifications recognised by the industry.

Disadvantages of Off-the-Job Training:

  • Expensive: Fees for courses, transport, and accommodation are high.
  • Less Relevant: The general skills learned may not perfectly match the business's specific needs.
  • No Output: The employee is not contributing to production while away.
Memory Aid: Training Types (I-O-O)

Induction (Welcome!), On-the-job (Learn by doing), Off-the-job (Learn outside the workplace).

Key Takeaway: Businesses must carefully choose the type of training based on the job requirements, the cost, and the time available. Both On-the-job and Off-the-job training have trade-offs.


Congratulations! You now understand the key stages in building a strong workforce—finding them, choosing them, and equipping them with the right skills. This whole process is central to the success of any enterprise!


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