The Pros and Cons of Informal Recruitment for Small Businesses
When it comes to recruiting new talent, small businesses have to make careful decisions on how to do it right. The traditional recruitment process can be effective, but also expensive and time-consuming. Informal recruitment may seem like a more attractive option, but it has its share of pros and cons, too. In this article, we’ll delve into the advantages and disadvantages of informal recruitment for small businesses.
What is Informal Recruitment?
Informal recruitment refers to the process of hiring employees through personal connections and word-of-mouth referrals. This type of recruitment relies on people in your network who know someone or have a connection to someone who might be a good candidate for the job opening. Instead of posting a job ad on a job board or a social media site, you would rely on your personal connections to find potential hires.
Pros of Informal Recruitment
1. Saves Time and Money
One of the biggest advantages of informal recruitment is that it saves time and money. With informal recruitment, there’s no need to spend money on job ads or recruiter fees. Moreover, having someone you already know to fill the position would save plenty of time, as the interview process is likely to be streamlined.
2. Better Cultural Fit
When you hire through informal recruitment, you have the advantage of knowing the candidate on a more personal level. Therefore, it’s easier to assess whether he or she would be a good fit for the company culture and values. You can gauge the candidate’s compatibility with your organization by checking his or her personality, skills, and work ethic.
3. Lowers Risk of Hiring Mistakes
As you know the candidate personally, you can already assess the potential risks and advantages of hiring him or her. This makes it less likely to make a mistake and hire a candidate who isn’t a good match for your team, leading to a bad hire.
Cons of Informal Recruitment
1. Limited Pool of Candidates
The biggest limitation of informal recruitment is that it limits your pool of candidates. Reliance on referrals can limit diversity in terms of diversity of skills, abilities, and experience as well as background. This can potentially limit the quality of applicants to choose from, leading to a compromise between hiring the appropriate talents or taking the referred people.
2. Can Lead to Nepotism
Informal recruitment may end up allowing nepotism to take place as referred candidates can be given undue preference over more qualified candidates. This way, it is possible for the best candidates to be disqualified, and also denies qualified candidates an opportunity to compete for the job.
3. Lack of Legal Protection
When you rely heavily on referrals for hiring, diversity-related lawsuits may occur. When you rely too much on referrals, it is more challenging to ensure that all backgrounds and protected classes are given a fair chance to apply for a job opening, raising legal risks.
Conclusion
Informal Recruitment is a double-sided coin with benefits and drawbacks. The advantages of informal recruitment are that it saves time and money, increases cultural fit, and lowers the risk of hiring mistakes. Nevertheless, it also has drawbacks, including limited pool, potential for nepotism and lack of legal protection. In conclusion, businesses looking to hire new talent should weigh these pros and cons carefully before deciding to rely on informal recruitment or the traditional recruitment methods. The two strategies should complement each other to guarantee a perfect hire.
