IB Business Management HLTopic 2 — Motivation and DemotivationPaper 1 & 2Core skill~9 min read
How Businesses Recruit
Recruitment is attracting people to apply. Selection is choosing between them. They are two different jobs, and a business can be good at one and terrible at the other — which is how firms end up with 200 applications and still hire the wrong person.
📚 What you need to know
Recruitment creates a pool of qualified candidates. Selection picks the best one from that pool.
A job description lists the duties and responsibilities of the role. A job specification lists the qualifications, skills and qualities the person needs.
The process runs: define the role → choose the source → advertise → receive applications → select.
Internal recruitment promotes or redeploys existing staff. External recruitment hires from outside.
Candidates apply by application form, or by CV with a covering letter.
Common selection methods: interviews, testing, portfolios and references. Most firms use a combination.
The recruitment funnel
Every stage narrows the field. Understanding that is what tells a business where its process is going wrong: too few applicants at the top, or the wrong ones surviving to the bottom.
The job specification is the filter used at the screening stage. If it is vague, 120 applications become 20 random ones, and the interview stage is left doing work it was never designed for.
🧩 The five stages
Define the role. Write the job description (the duties) and the job specification (the person needed).
Choose the source. Internal, external, or a mix of both.
Advertise. Social media is cheap and wide-reaching; specialist portals and trade publications cost more but reach exactly the right people.
Receive applications. Somebody must manage the process and draw up a shortlist, usually of three to five candidates.
Select. Interview, test, review portfolios and take up references, then make the offer.
Internal or external?
That last line is the point students forget. Internal recruitment does not remove the need to hire — it moves the vacancy to a different, usually cheaper, level.
Internal recruitment: advantages
Internal recruitment: disadvantages
The candidate already knows the culture and processes, so adapts quickly and needs little induction.
Rejected internal candidates may feel resentful, damaging motivation and working relationships.
The business already knows their strengths and weaknesses, so it is less risky.
Promoting someone creates another vacancy that still has to be filled.
The chance to progress motivates existing staff and improves loyalty.
The pool of suitable internal applicants may be very small.
Cheaper and quicker than advertising externally.
No new ideas, skills or experience enter the business.
External method
What it is best for
Referrals
Current staff recommend someone they know, sometimes for a reward. Cheap, and the recommender’s reputation is on the line.
Online advertising
The firm’s own site or a specialist job board. Low cost with a wide reach.
Newspaper advertising
Local papers for local candidates, national ones for senior roles. Relatively expensive but well targeted.
Trade publications
Magazines read by professionals in one industry. Reaches exactly the right people.
Employment agencies
Agents advertise and sometimes interview on the firm’s behalf. A fee is charged on appointment.
Headhunting
Approaching highly qualified specialists directly. Effective for senior roles and expensive.
Job centres and careers fairs
Government centres for entry-level roles; university fairs for large numbers of graduates.
Applying and selecting
Document
What it does
Application form
A standard form written by the recruiter, so every candidate supplies the same information in the same order. Makes comparison much easier.
Curriculum vitae (CV)
Written by the applicant. Sets out career history, skills, qualifications, referees and contact details.
Covering letter
Explains why the applicant wants this role and why they suit it. Lets recruiters assess quickly without reading every CV in full.
Selection method
What it reveals, and what it misses
Interview
A structured meeting, in person, by phone or online. Assesses skills, experience and fit — but confident talkers can outperform better candidates.
Testing
Aptitude, skills or personality assessments. Gives objective evidence of problem-solving and thinking, though tests can be practised for.
Portfolio
A selection of the candidate’s best work. Essential for creative and artistic roles, and shows real output rather than claims about it.
References
Referees vouch for skills, work ethic and suitability. Cheap to obtain, but referees are chosen by the candidate, so they are rarely negative.
A good business uses more than one method, and for a reason: interviews test how someone talks about the job, tests and portfolios test whether they can actually do it. Those are very different things.
WORKED EXAMPLE
A growing bakery needs a new shift supervisor. It has 14 experienced bakers and no supervisor training programme. Recommend whether it should recruit internally or externally. (6 marks)
Case for internal
The 14 bakers already know the products, the equipment and the customers, so induction is minimal. Promotion also motivates the rest of the team by showing progression exists.
Case for external
None of the bakers has supervised anyone before, and there is no training programme to prepare them. An external hire brings supervisory experience the bakery currently does not have.
Recruit internally, but fund supervisor trainingProduct knowledge is hard to teach and supervision is not. Naming which gap is cheaper to close is what carries the judgement.
WORKED EXAMPLE
Explain why a business might use both an interview and a skills test rather than an interview alone. (4 marks)
Reason 1: interviews measure the wrong thing on their own
An interview mainly shows how well someone presents themselves. A confident candidate can describe skills they do not have, which leads to expensive hiring mistakes.
Reason 2: tests give objective evidence
A skills test shows whether the candidate can actually do the work, and every candidate is measured against the same standard, which reduces bias.
Add the cost limitation for a top answer: testing takes time to design and run, so it is worth it for skilled roles more than for casual ones.
💡 Exam tip
Recruitment attracts, selection chooses. Using the words precisely earns definition marks.
Match the method to the role: headhunting for senior specialists, job centres for entry-level, portfolios for creative work.
Always mention cost and time. External recruitment is more expensive and slower than internal.
Link to motivation: internal promotion meets esteem needs and reduces labour turnover.
Note the risk of external hiring: the candidate is unknown, so the chance of a mistake is higher.
Remember the knock-on vacancy created by internal promotion. Few students mention it, and it is a strong point.
⚠️ Common mix-up
Job description versus job specification. The description is the job; the specification is the person.
Recruitment versus selection. They are separate stages with different purposes.
Assuming external is always better for fresh ideas. It is also slower, dearer and riskier.
Treating a CV and an application form as the same. The form is written by the recruiter, the CV by the candidate.
Overrating references. The candidate chose the referees, so they are rarely critical.
Forgetting the cost of a bad hire. It includes wasted training, lost output and the cost of recruiting all over again.
Up next: Paying People to Perform — the financial rewards used to keep the people you worked so hard to hire.
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