ASSESSING THE VIABILITY OF RECRUITMENT AGENCIES IN GHANA: THE CASE OF GHANA CLUB 100 COMPANIES

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Abstract

There has been an increase in the number of recruitment agencies in Ghana over the years. The aim of these recruitment agencies is to create the perfect fit between companies and individuals looking for job opportunities. This service is how ever rendered by Human Resource Management (HRM) department in the companies.

The company has the option of choosing between the two methods when recruiting: using the services of recruitment agencies or maintain their recruitment activities in-house.

The research investigates the viability of recruitment agencies in Ghana to establish how efficient and effective their services rendered are. Through exploratory research, the recruitment requirements of companies in Ghana Club 100 (2011) and the factors that influence the choice of method adopted were established.

The research discovered that, majority of companies in the sample use the in-house recruitment method mainly because it satisfies the recruitment requirement of the companies.

It is recommended that the recruitment agencies concentrate on the factors that mostly influence the decision made by companies when choosing a recruitment method to adopt. The companies in Ghana Club 100 (2011) were advised to try the services of the recruitment agencies and determine the gap they could fill in their company to contribute to its success.

Table of Contents

DECLARATION…………………………………………………………………………… i

Abstract………………………………………………………………………………….. iii

Table of Contents……………………………………………………………………… iv

Chapter 1………………………………………………………………………………… 1

Introduction to Research…………………………………………………………….. 1

1.2.1 Recruitment in Contest…………………………………………………. 3

Chapter 2………………………………………………………………………………… 8

Literature Review………………………………………………………………………. 8

Chapter 3……………………………………………………………………………….. 17

Research Methodology and Methods………………………………………………………………….. 17

Chapter 4……………………………………………………………………………….. 23

Primary Data Collected and Analysis……………………………………………. 23

Chapter 5……………………………………………………………………………….. 35

Recommendations and conclusions……………………………………………… 35

5.1 Introduction……………………………………………………………………. 35

Bibliography……………………………………………………………………………. 41

Appendix………………………………………………………………………………… 44

Appendix 1: Questionnaire for companies………………………………….. 44

Appendix 2: In- House Method: Recruitment Requirement for In-house

…………………………………………………………………………………………………………………………… 48

Appendix 3: Both Methods: Recruitment Requirement…………………. 48

Chapter 1

Introduction to Research

           Chapter Overview

Unemployment in Ghana has increased from 6.5% in 2008 to 8.5% in 2010 (Appiah-Kubi, 2011). The government has found it necessary to find solutions to this problem. This is because, the country has lost some of its most important components of growth such as consumer spending, which is the portion of household spending used to purchase basic necessities (Duly, 2003). An increase in unemployment means a decrease in taxes received by the government through consumer spending which will also affect the individuals. Individuals want to satisfy their desire for their basic needs as stated in Maslow‟s Hierarchy of needs. This natural drive in my view forces them to indulge in social vices such as armed robbery and theft which will make the economy unattractive in the long run.

In accordance to Section 5 of the Labor Act, “Every person has the right to work under satisfactory, safe and healthy conditions, and shall receive equal pay for equal work without distinction of any kind”. For this reason, the government has initiated activities such as the Aviation training school which is to provide the necessary skills and training for individuals to increase their opportunity to gain access to employment opportunities Awolukutu (2012). The government also introduced the National Youth Employment Program (NYEP) now known as the Ghana

Youth Employment and Entrepreneurial Development Agency (GYEEDA) during Kuffour‟s administration in its quest to reduce unemployment among the youth and also increase youth development to increase the ability of the youth to have access to the job market (Zaney, 2012).

Private individuals have also pioneered the establishment of recruitment agencies to solve this unemployment issues. These agencies attempt to create a „perfect‟ mapping of jobs to individuals in the country. They act as a link between individuals and the firms with vacant positions. Recruitment agencies are perceived to satisfy the requirement in Section 3 sub section 1 of the Labor Act 651, by helping individuals to find work under satisfactory, safe, healthy conditions and also to receive a salary for it. This research however seeks to identify whether recruitment agencies are able to satisfy the need for the „perfect‟ mapping, or whether companies are better of performing this activity?

           Background

Recruitment is defined by the Business Dictionary (2012) as the process of identifying and hiring the best-qualified candidate (from within or outside of an organization) for a job vacancy in a most timely and cost effective manner. Every company has to undergo the process of recruitment at one time or another in order to fill its vacant positions. The Human Resource (HR) department of a company takes up this activity but recruitment agencies also have the mandate to take up the activity in accordance with Section 3 subsection 1 of the Labor Act 651.

                The Evolution of Recruitment Agencies

Stroud (2012) reported that recruitment agencies sprung up from the Western World during the Second World War because of the void created by the military service in other employment sectors. The employment agencies advertised for other individuals to take up positions in other sectors to increase employment in the country. By the end of the war, recruitment agencies had become more popular because they were able to accomplish their aim of increasing the workforce in other sectors of the country‟s economy.

                Recruitment in Contest

Recruitment agencies in Ghana however became popular in the early 1990‟s. Under Section 7 of the Labor Act, 651, a recruitment agency must be a corporate body which has been granted the license to operate by the Minister. The Act outlines the functions of these employment agencies in ensuring that they are able to satisfy their customers:

  1. The agencies are meant to assist unemployed and employed persons to find a
    1. The agency is to assist employers to find suitable workers from among such available persons.
      1. They also have a responsibility to facilitate occupational mobility in order to adjust the supply of labor to employment opportunities in the various occupations.
    suitable job.
  • The agencies are also responsible for the temporary transfer of individuals from one work place to another in order to satisfy the demand of unemployed persons in the country.

However, the activities outlined above may also be undertaken by the HR team in a company. The challenge for companies is which method to adopt to carry out the recruitment activity.

           Problem Statement

According to Ghana Web (2012), there are 99 recruitment agencies in the country. The number of recruitment agencies in the country has been increasing over the past years and is expected to continue to increase. Under Section 5 of the Labor Act 651, companies are not obligated to employ the services of recruitment agencies even though some companies do so. Since both methods provide the same service, it is important for companies to know which source provides the best service in order to determine the method to employ during the process of recruitment.