Published 30 July, 2020

The Dilemma of Productivity, Internal Resourcing and External Hiring (3 minutes read)

One debate that triggers various opinions and arguments in organizations is whether to hire new employees, or to increase the productivity of current employees. While the latter seems to be the trend, the former requires deep analysis and evaluation of a company’s performance. The decision of hiring or not hiring shouldn’t be like an arrow without an aim.  For example, randomly conducting drives and hiring in bulk may not prove to be beneficial when a company has too many employees to do a single job, as the saying goes “too many cooks can spoil a broth”. This can be further explained by the law of diminishing marginal utility (DMU) in Economics, which states that utility derived from every additional unit diminishes after it reaches its maximum utility.


In simpler words, efficiency declines as more people are employed.


However, this isn’t true for every scenario, and that’s why a company should customize the process of hiring to its own needs.


But to get a creamy layer, the base has to be solid, meaning that the existing options have to be completely exhausted before moving on to the external ones.


This is where productivity & internal resourcing sweeps in. Recognizing the talent of the existing pool and utilizing them for the organisation’s maximum benefit is the key aspect for attaining productivity.


There are many ways through which this can be achieved:

  • Productivity improvement projects - Six Sigma and Lean are well proven methodologies for this.
  • Automation - Robotic Process Automation has been the buzzword in the last couple of years. While there is a lot of enthusiasm around this but actual value delivered through robotics automation till now leaves a lot to be desired.
  • Internal Hiring - When it has been validated that the task can’t be automated or addressed through productivity improvement initiatives then a smart organization would look around and see if it can find the required talent within the company itself. This can be a double whammy for the employer as it goes a long way in providing solid engagement opportunities for passionate and driven employees along with suitably addressing the business needs. It paves the way for company loyalty. A sense of belongingness prevails in a company, as employees feel valued, and thus produces better results.


Even if the organization decides to hire new talent, a new talent pool has been fast emerging which is known as “Gig Workers”. A gig worker is an employee who is not a part of the traditional “employer-employee” relationship. A gig worker may also be called “a part time consultant”, and hence a perfect solution for those who are unclear about hiring a permanent employee. If the requirement is time bound and short term it makes perfect sense for organizations to engage Gig Workers rather than hiring a full time person and get plagued with the challenge of engaging the employee once the current business need gets addressed.


Both established companies, and start-ups are warming up to the idea of hiring gig workers.  Although it comes with its own set of challenges, the prime problem of hiring can be resolved through it.


The traditional model of resourcing purely through hiring of full time resource for business expansion is being challenged today through technology interventions as well as the changing landscape and preferences of the talent pool itself.


The Covid 19 crisis has ushered in the long awaited model of effective work without having to be in office. With more and more organizations and professionals being open to remote engagements which have been proved to be effective, we might see more innovative resourcing models being deployed by organizations in the next 12-24 months.


While we are right now in the midst of a crisis, what is apparent is that it is forcing everyone to become more innovative. This augurs well for business in general once things settle down.

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