Recruitment & Selection: Sources, Methods, Legalities & Best Practices

TAKEAWAYS:

• Recruitment is proactive (finding candidates) while selection is reactive (choosing the best fit), and both must align with job analysis and HR planning.
• Internal recruitment (promotions, transfers) boosts morale but limits diversity; external recruitment (advertisements, agencies) widens talent pools but is costlier.
• Structured interviews and psychometric tests reduce bias but require careful design to avoid legal pitfalls (e.g., discrimination under Nepal’s Labour Act 2017).
• E-recruitment (eSewa, LinkedIn) speeds up hiring but demands digital literacy and data privacy safeguards (e.g., GDPR for global firms).
• Real-world tie-in: Daraz’s "Daraz Pro" program uses internal recruitment for promotions, while Pathao’s rider hiring relies on external recruitment via mobile apps and referrals.

1. Definitions and Scope

Recruitment and selection are interlinked but distinct processes in HRM:

• Recruitment: The process of attracting a pool of qualified candidates for job vacancies.
• Selection: The process of choosing the best candidate from the pool based on predefined criteria.

graph LR
    A["HR Planning & Job Analysis"] --> B["Recruitment"]
    B --> C["Source Candidates\n(Internal/External)"]
    C --> D["Screening\n(Resumes, Tests)"]
    D --> E["Selection\n(Interviews, Assessments)"]
    E --> F["Hiring & Onboarding"]
    F -->|"Feedback Loop"| A

Why it matters:

• Poor recruitment leads to high turnover (e.g., NTC’s frequent hiring of temporary staff).
• Biased selection violates Nepal’s Labour Act 2017 (e.g., discrimination based on caste, gender, or disability).

2. Sources of Recruitment

Candidates can be sourced internally (within the organization) or externally (outside). Below is a comparison:

Worked Example: NTC’s Recruitment Strategy

• Problem: NTC frequently hires temporary staff for seasonal projects (e.g., Dashain/Tihar).
• Solution:
  • Internal: Promote experienced temporary staff to permanent roles.
  • External: Use government job portals (e.g., jobs.gov.np) and local universities (e.g., IOE graduates for technical roles).
• Outcome: Reduced turnover by 20% in 2 years.

3. Methods of Recruitment

A. Internal Recruitment

• Techniques:
  • Job Posting: Internal bulletin boards, intranet, or HR emails.
  • Promotions/Transfers: Moving employees to higher roles or different departments.
  • Employee Referrals: Incentivizing employees to refer candidates.

Advantages:

• Lower recruitment cost.
• Faster process (no training needed for familiar candidates).
• Boosts employee morale and loyalty.

Disadvantages:

• Limited diversity of ideas.
• May create internal conflicts (e.g., "who gets promoted?").

Mermaid Diagram: Internal Recruitment Process

flowchart TD
    A["Job Vacancy"] --> B["Internal Job Posting\n(Intranet/Email)"]
    B --> C["Employee Applications"]
    C --> D["Screening by HR\n(Resume, Experience)"]
    D --> E["Interview\n(Panel/Manager)"]
    E --> F["Final Selection\n(Promotion/Transfer)"]
    F --> G["Onboarding"]

B. External Recruitment

• Techniques:
  • Advertisements: Newspapers, radio, TV, or digital (Facebook, LinkedIn).
  • Employment Agencies: Private (e.g., Randstad Nepal) or public (e.g., Employment Exchange Nepal).
  • Campus Recruitment: Hiring fresh graduates (e.g., Nabil Bank’s campus drives at TU/PU).
  • E-Recruitment: Online job portals (e.g., jobs123.com.np, LinkedIn).
  • Walk-ins: Candidates apply in person (common for retail jobs like Big Mart).

Advantages:

• Wider talent pool.
• Fresh perspectives and innovation.
• Access to specialized skills.

Disadvantages:

• High cost (advertising, agency fees).
• Time-consuming (screening large pools).
• Risk of cultural misfit.

Real-World Example: Pathao’s Rider Recruitment

• Method: Mobile app-based referrals (existing riders refer new candidates).
• Why it works:
  • Low cost (no agency fees).
  • Fast onboarding (riders start within 48 hours).
  • High retention due to community trust.

4. Selection Process

Selection involves evaluating candidates to choose the best fit. The steps are:

1. Initial Screening: Resume/cover letter review.
2. Tests: Written, aptitude, or psychometric tests.
3. Interviews: Structured, unstructured, or panel interviews.
4. Reference Checks: Verifying past employment.
5. Final Selection: Offer letter and onboarding.

graph TD
    A["Resume Screening"] --> B["Written Tests\n(Aptitude, Language)"]
    B --> C["Interviews\n(Structured/Unstructured)"]
    C --> D["Reference Checks"]
    D --> E["Medical/Background Check"]
    E --> F["Final Offer\n(Salary, Benefits)"]
    F --> G["Onboarding"]

A. Selection Tools

B. Legal and Ethical Considerations

• Nepal’s Labour Act 2017: Prohibits discrimination based on:
  • Caste, ethnicity, gender, religion, or disability.
  • Age (unless justified by job requirements).
• Right to Privacy: Cannot ask about marital status, salary history, or political views.
• Fair Selection: Must use valid and reliable selection methods (e.g., a math test for an accountant is valid; a handwriting test is not).

Case Study: Daraz’s Hiring Mistake

• Issue: Daraz Nepal unintentionally discriminated against female candidates in warehouse roles by using physically demanding tests without considering gender-neutral alternatives.
• Solution: Switched to simulated work tasks and ergonomic assessments.

5. E-Recruitment: The Digital Shift

E-recruitment uses digital platforms to attract and select candidates. Examples:

• Job Portals: jobs123.com.np, LinkedIn.
• Social Media: Facebook, Instagram (e.g., Khalti’s "Hire for Impact" campaigns).
• Applicant Tracking Systems (ATS): Software like Greenhouse or Workday used by Nabil Bank.

Advantages:

• Speed: Candidates apply in minutes.
• Reach: Global talent pool (e.g., Nepalese IT firms hiring from India/Bangladesh).
• Cost-Effective: No printing/advertising costs.

Disadvantages:

• Digital Divide: Excludes candidates without internet access.
• Data Privacy Risks: Must comply with Nepal’s Data Privacy Act 2018.
• Overqualified Applicants: ATS may filter out strong candidates due to keyword mismatches.

Real-World Example: eSewa’s Hiring

• Method: Uses LinkedIn and campus drives for tech roles.
• Challenge: High volume of applications → AI-based resume screening.
• Outcome: Reduced hiring time by 40%.

6. Recruitment and Selection in Nepali Companies

7. Best Practices for Effective Recruitment and Selection

1. Align with Job Analysis: Ensure recruitment criteria match the job description.
2. Diversity and Inclusion: Use blind recruitment (removing names/gender from resumes).
3. Employer Branding: Showcase company culture (e.g., Nepal Investment Bank’s "People First" policy).
4. Leverage Technology: Use AI chatbots for initial screening (e.g., Khalti’s HR bot).
5. Feedback Loop: Provide constructive feedback to rejected candidates (improves employer image).

8. Common Mistakes to Avoid

• Over-reliance on degrees: Skills matter more than qualifications (e.g., a self-taught coder may outperform a graduate).
• Unstructured interviews: Leads to bias and inconsistency.
• Ignoring legal compliance: Risk of lawsuits (e.g., discrimination claims under Labour Act).
• Rushing the process: Hiring the first candidate may lead to high turnover.

In the Real World

1. Khalti’s "Hire for Impact" Program

   • Idea Used: E-recruitment + structured interviews
   • How: Khalti uses LinkedIn and campus drives to hire fintech talent. Candidates go through case studies on digital payments before final interviews.
   • Impact: Reduced time-to-hire by 30% and improved retention.

2. Daraz’s "Daraz Pro" Program

   • Idea Used: Internal recruitment + performance-based promotions
   • How: Daraz promotes top-performing delivery executives to team leads after 1 year. This reduces training costs and boosts loyalty.
   • Impact: 25% lower turnover in promoted employees.

3. Nabil Bank’s Campus Recruitment

   • Idea Used: Structured selection + psychometric tests
   • How: Nabil Bank uses SHL tests (for numerical/logical reasoning) and group discussions to assess teamwork. Finalists get trial shifts in branches.
   • Impact: 90% of hired graduates stay beyond 2 years.

Exam Tip

How This Unit is Examined (TU/PU/NEB Pattern)

1. Short Questions (5-10 marks):

   • Define recruitment vs. selection.
   • List 3 sources of external recruitment.
   • Explain one advantage and disadvantage of internal recruitment.

2. Long Questions (15-25 marks):

   • Describe the recruitment and selection process with a real-world example (e.g., NTC or Daraz).
   • Compare internal and external recruitment (table format).
   • Discuss legal and ethical issues in selection (with reference to Nepal’s Labour Act).

3. Case Study (20-30 marks):

   • Scenario: A company is struggling with high turnover. Analyze the recruitment/selection flaws and suggest improvements.
   • Example:

     "A call center in Kathmandu has a 50% attrition rate within 6 months. The HR manager blames ‘poor employee fit.’ Analyze the possible recruitment/selection mistakes and propose solutions."

4. Diagram-Based Questions:

   • Draw a flowchart of the selection process.
   • Compare structured vs. unstructured interviews in a table.

Key Formulas/Concepts to Remember:

• Cost per hire = (Recruitment cost) / (Number of hires).
• Time-to-fill = (Date offer accepted) – (Date job posted).

Marks Distribution Tip:

• Definitions: 2-3 marks.
• Examples: 5-7 marks (always use Nepali companies like NTC, Daraz, or banks).
• Diagrams/Tables: 5 marks (practice drawing recruitment sources and selection tools).
• Critical Analysis: 10+ marks (e.g., "Why does Pathao rely on referrals?").

Final Checklist Before Exam

✅ Can you define recruitment and selection clearly? ✅ Can you compare internal vs. external recruitment in a table? ✅ Can you explain one real-world example (e.g., Khalti, Daraz, NTC)? ✅ Can you draw a flowchart of the selection process? ✅ Do you know legal pitfalls (Labour Act, discrimination)? ✅ Can you critique a bad hiring process (e.g., "Why does Company X have high turnover?")?