International Journal of Entrepreneurship (Print ISSN: 1099-9264; Online ISSN: 1939-4675)

Research Article: 2021 Vol: 25 Issue: 1S

Impact of Recruitment, Selection and Staffing on Competitive Advantages and Organizational Performance in the UAE Manufacturing Industry.

Abdelrahman Hassan Mohamed Abdulla Almansoori, UUM COLGIS

Muhammad Fuad bin Othman, UUM COLGIS

Mohammed R A Siam, UUM COLGIS

Keywords

Employee Recruitment, Employee Selection, Employee Staffing, Competitive Advantage, Organization Performance, Manufacturing Industry, UAE.

Abstract

The aim of the study is to examine the impact of employee recruitment, employee selection, and employee staffing on competitive advantages and organization performance in the UAE manufacturing industry. The research framework illustrates the relationships between the exogenous variables (employee recruitment, employee selection, and employee staffing) and the endogenous variables, competitive advantage and organizational performance. The study is quantitative method research based on the original data collected for the UAE manufacturing industry's target population based on a well-structured survey. The study is an empirical investigation by surveying employees from specific management levels based on predefined hypotheses. The target or study population chosen for this research work equates to the total number of employees working in any firm in the UAE manufacturing industries and willing to respond to the questionnaire during data collection. The actual sample size is 382 employees. The distributed survey is 524, which is distributed by using face-to-face data collection methods in a conventional sample selection technique in 2019. Overall, the model is successful because it can predict 44.2% of the organization's performance and the direct relationships for the three predictors of HRM practices are significant. The precedence for the relations based on the path coefficient value is employee recruitment (0.334), employee selection (0.297), and employee staffing (0.278). The three variables can explain more than 33.4% of the Competitive Advantages (CA) variance. The precedence for the relations based on the path coefficient value is employee selection (0.356), employee recruitment (0.294), and employee staffing (0.254). Competitive advantage has a significant impact on organizational performance (0.567) and has a successful mediation in the relationships between the three variables and organizational performance.

Introduction

In a competitive business environment nowadays, the concept of competitive advantage has been discussed intensively in business strategy (Delery & Roumpi, 2017). Many scholars have defined the concept of competitive advantage, stated that competitive advantage is the capacity of an organization to create and maintain a defensible position over its competitors (Liao et al., 2017). It also suggested that the firm's competitive advantage when its actions in an industry or market created economic value and few competing firms are engaging in similar actions (Papadas et al., 2019).

Organizations in recent times are on the mission to recruit, train and retain the best brain, which has the innovativeness and creativity skills in them. Locating such employees had remained an unsolved organizational mystery, while those located have a higher turnover rate. According to Sir Richard Branson of Virgin Atlantic, "firms' clients do not come. First, the employee does; hence, a happy employee makes clients' happy," which translates to an objective or subjective view of organizational performance. With this view, employees are regarded as the heart of firms/organizations contributing to their performance. According to Sir Richard Branson, the process lies in the hands of Human Resource (HR) or the HR practices employed by such an organization to transform employees' happiness. With this, ample scholars have empirically and conceptually argue a direct link between HR practices and organization performance (Delaney & Huselid, 1996; Lai & Lin, 2017; Xie & Zhang, 2012) with a few studies arguing otherwise. Although the ongoing debates pertaining to the contribution of HR practices and organizational performance, one of the challenges faced by the HR department in executing HR practices is the ability to find the best employee to carry out the needed task (Lussier & Hendon, 2019; Miles & Snow, 1984; Nehles et al., 2006), HR had since ancient days rely on the resume or curriculum vitae submitted by the potential employees. The issue with this is that most of these employees are either not suitable for the job or overrate themselves to secure the available positions.

To survive and successfully compete in such a challenging and turbulent working environment, organizations must select, recruit, and staff their employees to be highly motivated and be willing to work effectively and efficiently. In today's extremely aggressive environment, conventional sources of organizations' competitive advantage, such as technology and economies of scale, have been weakened by globalization and other environmental changes. Nevertheless, changes in global trends such as access to advanced technology had created both healthy and unhealthy competition from related and unrelated industries.

To solve the issue of recruiting in HR practices, companies resort to Recruitment Process Outsourcing (RPO) which is a strategy of outsourcing the recruitment exercise to a recruiting firm (Slaughter & Ang, 1996). This practice seems beneficial; hence, it is argued to be a competitive advantage source (Click & Duening, 2004). Several firms and organizations rely on this method to recruit their employees. Nevertheless, this strategy of HR practices in recruitment has been met with heavy criticism (Nadda et al., 2017; Zinyemba, 2014). Some of the issues identified by earlier scholars include lack of transparency in the recruiting process, favoritism with internal and external HR practices, and biased information from the employees' side to look best for the advertised job (Nadda et al., 2017). On account of Chan & Kuok (2011), the issues faced by HR managers make HR practices a complex and expensive activity that is constantly sustained through work necessity and its organization importance. While in most recent time, the use of artificial intelligence had been employed to select, hire and staff the best employee as a source of competitive advantage (Asma, 2018; Grace et al., 2018; Lemley et al., 2017). The aim of the study is to examine the impact of employee recruitment, employee selection, and employee staffing on competitive advantages and organization performance in the UAE manufacturing industry.

Literature Review

Employee Recruitment

The act of employment involves obtaining and evaluating resumes to fill up an empty position in the company. The term recruitment indicates the act of finding and reviewing candidates to fill up a position at your company (Shammot, 2014). Recruiting includes continuous analysis to locate the finest employees for your business. It's all about constructing your firm's recognition amongst talented professionals and enticing all of them that your organization is actually the ideal fit for their goals and capability set (Gberevbie, 2010; Shammot, 2014). Moreover, a company can inform the public of an open position by advertising on platforms such as LinkedIn or other websites.

The recruitment process's main goal is to find the most suitable candidates with the knowledge and expertise that best match the open position in the company and, as a result, reach the company's objectives. As the standard oppressively systems continuously become less relevant, and the more associations use multidisciplinary teams to remain in the competitive market, the necessity for calculated and transparent systems become vital. Nowadays, more companies are moving away for the traditional concept of jobs that focus only on tasks to jobs that are self-directed and are supportive of team-work and that hire individuals who in addition to being knowledgeable, they are also independent and belong to the diverse background. Thus, companies need employees who are more capable of adjusting, depending on the business market's change and the customer's needs (Ashraf, 2017). The competitive advantage of a company can be easily enhanced if the company adapted an effective hiring system that consists of hiring employees in a quick and cost-effective way (Delery & Roumpi, 2017). Among the damaging effects of bad employment is the issue of employees' turnover of employees who are working at the top-level in the company. Enticing and selecting competent, skilled, and expert people is crucial for companies to guarantee that their market values and strategy are actually obtained (Centre for Development and Enterprise, 2007).

Kaufman, et al., (2021) highlighted that it is important to make sure that the recruitment strategy is in line with the company's objectives. Crane & Hartwell (2019) mentioned that before any company can utilize their talented employees, they need to recruit them first; therefore, companies need to employ people with comparatively important knowledge, capabilities, and perspectives. This is considering that wrong employment selection is a lot more costly because it means that the company will go through the process more than once. Moreover, Singh & Finn (2003) indicated that a company's ability to attract and maintain competent employees is one of the essential components of organizational effectiveness. The reason for that is because recruitment is an important factor in improving organizational survival and effectiveness in a stable or unstable working environment.

Employee Selection

Selection is commonly described as the techniques focused on choosing from a list of applicants that have ideal understanding, skill-sets, and capability to perform the work properly (Campion et al., 2019). It is the procedure that assists in separating the candidates' depending on their qualifications and then choosing those that are more likely to be suitable to complete the task. Basak & Khanna (2017) highlighted that the process of choosing the best candidate from a list of possible candidates to work in a certain position is called selection. Moreover, Noe, et al., (2017) considered selection as the method through which firms make a decision on an individual that is going to be permitted to be part of the company or not. Michael (2019) explained that selection is actually the process of gathering and assessing details regarding the individual to expand the employment offer, they added that the process is executed under legal restrictions, and generally, it clearly shows the interest of the association and of the individual. Bako & Aladelusi (2017) showed that the process of selection of employees is not only to replace employees who left or to increase the number of employees in a company but also to upgrade to employees with better knowledge and skills and who has a higher level of commitment towards the company.

Acikgoz (2019) commented that the selection procedure is concerned along with selecting trained applicants to fill up current vacant positions in the company. Villeda, et al., (2019) explained that selection is a method of choosing applicants with pertinent credentials to work in the company; that it is actually the method of deciding on the individual(s) from a group/list of possible applicants that comply with the need of the opportunities determined in the organization Van Esch, et al., (2019) asserted that the objective of the selection process is to choose the best candidates that meet the task and organizations' requirements effectively. They also highlighted the importance of increasing the use of technology in the recruitment and selection process. Pain & Lu (2018) mentioned that a good employee selection system could easily include efficiency in the company's total performance. Makarius (2017) emphasized the value of selecting methods by highlighting that when an employee does not match correctly with the requirements needed for the position, this will negatively impact the company. Eva (2018) highlighted that by choosing the required employees to fill in the empty positions in particular departments, the supervisors can easily help accomplish a far better fit among the task and the job.

Employee Staffing

Staffing is considered part of the employee recruitment, evaluation, and selection process conducted within an organization to occupy a job position opening. The staffing department in an organization handles tasks such as retention, termination, and training (Pahos & Galanaki, 2019). This function is occasionally handled outside of an organization by utilizing additional servicers; Small institutions might handle staffing one case at a time, while bigger organizations may have multiple staffing processes in the year. Organizations of any kind of dimension can use staffing in order to gain temporary or permanent employees (Choi et al., 2021; Pahos & Galanaki, 2019).

According to Ployhart (2006: 868), "staffing is broadly described as the procedure of attracting, deciding on, and maintaining proficient people to accomplish organizational objectives." In addition, Parnes (1984) explains that "the most effective way for an organization to improve their employees is by whom they hire in the first place." Dyck & Neubert (2009) describe staffing as "the HRM procedure of determining, recruitment and retaining individuals with the needed knowledge, skill-sets, and abilities to fulfill the accountabilities of potential and present jobs in the organization." Staffing is actually the way where companies sponsor and select candidates along with better and general human resources (Pahos & Galanaki, 2019). In this particular option, recruitment and selection can be considered as part of the staffing process.

The previous literary works have revealed that implementing an effective staffing process is positively correlated with organizational performance (Delery & Doty, 1996). An organized selection system examines a candidate's potential for a specific position and decreases the organization's amount of uncertainty when it comes to hiring external employees (Lado & Wilson, 1994). A strict recruitment and selection system likewise gives those chosen employees a feeling of elitism, imparts stronger desires of efficiency, and conveys information of the significance of individuals to the organization (Pfeffer, 1998). Having employees who are incompatible with the institution can restrain them from achieving a certain level of performance (Lado & Wilson, 1994). Moreover, implementing a good staffing process can offer the institution employees that match the current organization employees' abilities and fit into the existing social framework, all with reducing the training expenses.

Competitive Advantages

The principle of competitive advantage in the business strategy has been researched thoroughly within companies' competitive environment today (Eldor, 2020). A lot of intellectuals have specified the principle of competitive advantage and explained it as the capability of an association to generate and successfully maintain their place of being better and advancing more than their rivals in the market business (Maingi et al., 2019). A company can gain a competitive advantage in the market among other companies when its activities create economic value (Priem et al., 2019). Moreover, competitive advantage consists of distinctive proficiencies that set an institution apart from competitors, therefore providing an upper hand in the market (Manuela, 2019).

Generally, competitive advantage in the business market consists of a company competing based on clearly defined rules using the attributes of cost and product performance (Priem et al., 2019). Furthermore, a firm's success depends heavily on good management of every HRM practice (Singh et al., 2020), which is why companies need to treat employees as an important asset for gaining competitive advantage and strengthening efficiency (Wamba & Queiroz, 2019). Most of the previous studies emphasize the importance of employment and choosing suitable employees to work in the company (Ni & Sun, 2019). Organizations with the appropriate employees are going to have consistency and integrated power of all capabilities that cause high performance and competitive advantage (Birasnav & Bienstock, 2019).

Organizational Performance

IGI Global (2019) described that firm performance exceeds operating in effective and efficient manners, which might involve financial and non-financial performance. It encompasses recognition in the market in which they operate. Similarly, Taouab & Issor (2019) described an organization's performance as the ability to do things faster, better, and with the needed quality than the competitors, adapt and overcome the foreseen and emergency turbulent within the business environment. Meanwhile, the study of Verboncu & Zalman (2005) described organization performance as the ability of the firm to compete in the market and operate efficiently and effectively to secure a competitive edge. From the various definitions given above, it can easily be argued that any firm's performance can be measured through its competitive strategies and how effectively and efficiently they were able to use their available resources to create values and dominate the market they serve. Concerning this, scholars had identified numerous factors that contribute to organizational performance. These are not limited to the strategic plan, organizational leadership, and commitment to achieve quality influences organization performance (Sergio et al., 2017).

Meanwhile, an earlier study by Joiner (2007) argues a strong relationship between total quality management and organizational performance, which is strongly influenced and executed by human factors. On a similar note, the study of Ericksen & Dyer (2005) concludes the critical influence of human relation in executing the organizational strategic plan in a bid to ensure values that translate to performance. Still, on identifying the factors or determinants of firm performance, using a subjective model, Selvam, et al., (2016) conclude the significance of firms' profitability performance, market-share value, employee and customer satisfaction, growth (expansion), corporate governance, environmental audit, and social performance. Contrary to the recent arguments, and an earlier study by Nkomo (1987) argues no difference in organization performance between firms that formally engage human resources and those that do not. Considering some of the significant firm strategic decisions, product diversification (that is, enhancing product offering portfolio), Forrester & Drexler (1999) argued that high product diversification that relates to expansion has a significant negative contribution to firm performance. However, further findings by these authors support the role of human resource practices arguing that collectivist human resource practices that are human resource practices that involve all employees and society rather than designated functions contribute to organizational performance. Insight to earlier investigations, on the other hand, presents mixed evidence of human resource practices and organizational performance with scholars such as Selvam, et al., (2016); Sergio, et al., (2017); Singh & Finn (2003); Sun & Pan (2011) argues a significant effect in the context of India and China. However, Sun & Pan (2011) made this remark considering the moderating effect of employees' commitment. At the same time, studies such as Forrester & Drexler (1999); Nkomo (1987) are of a different opinion. Considering these studies, it is clearly evident that there are extensive investigations on the link between human resources and organization or firm performance. However, from these works of literature, there is no mention employee selection process. To fill up the identified literature lapses, the researcher thus employs the use of technology in employee selection as a moderator between human resource practices and organizational performance.

Conceptual Framework

The research framework in Figure 1 illustrates the relationships between the exogenous variables (employee recruitment, employee selection, and employee staffing) and the endogenous variables, competitive advantage, and organization performance. The proposed hypotheses are the following:

H1 Employee recruitment has a significant positive relationship to organizational performance in the UAE manufacturing industry.

H2 Employee selection has a significant positive relationship to organizational performance in the UAE manufacturing industry.

H3 Employee staffing has a significant positive relationship to organizational performance in the UAE manufacturing industry.

H4 Competitive advantage has a significant positive relationship to organizational performance in the UAE manufacturing industry.

H5 Employee recruitment has a significant positive relationship to the competitive advantage in the UAE manufacturing industry.

H6 Employee selection has a significant positive relationship to the competitive advantage in the UAE manufacturing industry.

H7 Employee staffing has a significant positive relationship to the competitive advantage in the UAE manufacturing industry.

H8 Competitive advantage has a significant mediating impact on the relationship between employee recruitment and organizational performance in the UAE manufacturing industry.

H9 Competitive advantage has a significant mediating impact on the relationship between employee selection and organizational performance in the UAE manufacturing industry.

H10 Competitive advantage has a significant mediating impact on the relationship between employee staffing and organizational performance in the UAE manufacturing industry.

Figure 1: Conceptual Framework

Methodology

The study is quantitative method research based on the original data collected for the UAE manufacturing industry's target population based on a well-structured survey. The study is an empirical investigation by surveying employees from specific management levels based on a predefined hypothesis. The target or study population chosen for this research work equates to the total number of employees working in any firm in the UAE manufacturing industries and willing to respond to the questionnaire during data collection. The actual sample size is 382 employees. The distributed survey is 524, which is distributed by using face-to-face data collection methods in a conventional sample selection technique in 2019. The tool used for data collection is a well-structured survey that is adapted from previous. The survey was organized to ask questions in Likert-5 format. Likert 5 questionnaire style has been used in social science studies for a long time and proved to be a suitable style for measuring human perceptions. Structural Equation Modeling (SEM) techniques are used for statistical data analysis (the Smart PLS software package, which is used in management and social science studies such as (Salem & Alanadoly, 2020; Salem & Salem, 2018).

Findings

The distributed questionnaires were 524; the collected samples were 414; uncompleted cases were 18, initial cases for analysis were 396, unengaged screening was 7, univariate screening was 5, multivariate screening was 2, and the cleaned cases for analysis 382 cases.

Descriptive Statistics.

As seen in Table 1, Employee Recruitment (ER) shows a positive satisfying level with a mean value of 3.55, which reflects a positive perception by respondents. Employee staffing (EST) shows a positive satisfying level with a mean value of 3.48, which reflects a positive perception by respondents. Employee Selection (ESE) shows a positive satisfying level with a mean value of 3.34, which also reflects a positive perception by respondents. Completive Advantage (CA) shows a positive satisfying level with a mean value of 3.67, which also reflects a positive perception by respondents. Organizational Performance (OP) shows a positive satisfying level with a mean value of 3.57, which also reflects a positive perception by respondents. Table 1 shows the details of the constructs.

Table 1
Descriptive Statistics of Research Constructs
  Min Max Mean Std. D
Employee Recruitment (ER) 1.00 5.00 3.55 .799
Employee Selection (ESE) 1.00 5.00 3.34 .862
Employee Staffing (EST) 1.30 5.00 3.48 1.12
Competitive Advantage (CA) 2.0 5.0 3.67 0.981
Organization Performance (EP) 1.76 5.00 3.57 .876

Validity and Reliability of Constructs

Table 2 shows the findings of two main tests of reliability and validity. Cronbach's Alpha measures composite reliability and all values are above the cut-off value of 0.70. Results of the four constructs have valued above 0.7; therefore, the reliability of the measurement model is achieved. The Average Variance Extracted (AVE) values are above 0.5. Therefore convergent validity is achieved. All other test shows the adequate level of validity and reliability. Several measures have been conducted, such as composite reliability, outer loading, convergent validity, and discriminant validity, to ensure the measurement model's reliability and validity (Hair et al., 2016; Sekaran & Bougie, 2016).

Table 2
Constructs Reliability and Validity
Construct AVE Cronbach's Alpha
Employee Recruitment (ER) 0.701 0.901
Employee Selection (ESE) 0.533 0.844
Employee Staffing (EST) 0.621 0.832
Competitive Advantage (CA) 0.678 0.899
Organization Performance (EP) 0.561 0.787

Relationships Examinations and Discussions

For the purpose of assessing the power of the model construct in predicting the outcome variables, predictive power R2 and predictive relevance were used (Hair et al., 2016). As seen in Table 3, the main dependent variable, Organization Performance (OP), illustrates a satisfactory predictive power and a medium predictive relevance. As seen in the table, the related R square value is 0.442 (power of 44.2%), and the related Q square is 0.336 (relevance of 33.6%). Employee Recruitment (ER), Employee Staffing (EST), and Employee Selection (ESE) can explain more than 44.2% of the Organization's Performance (OP) variance. Table 4 shows the path coefficient assessment with T Statistics' values and Beta values for the end result variable Organization Performance (OP). The three antecedents have significant relation, in which the p-value scores are above 0.05, and the t statistics scores are above 1.65. The precedence for the relations based on the path coefficient value is ER (0.334), ESE (0.297), and EST (0.278). As seen in Table 3, results of the mediating variable, Competitive Advantages (CA), illustrate a satisfactory predictive power and a medium predictive relevance; the table the related R square value is 0.334 (power of 33.4%), and the related Q square is 0.298 (relevance of 29.8%). The three variables can explain more than 33.4% of the Competitive Advantages (CA) variance. Table 4 shows the path coefficient assessment with T Statistics' values and Beta values for the end result variable Organization Performance (OP). The three antecedents have significant relation, in which the p-value scores are above 0.05, and the t statistics scores are above 1.65. The precedence for the relations based on the path coefficient value is ESE (0.356), ER (0.294), and EST (0.254). In addition, the relationship between Competitive Advantage (CA) and Organizational Performance (OP) is significant, with a path coefficient score of 0.567.

Table 3
Predictive Power and Predictive Relevance of Proposed Model
  Predictive Power Predictive Relevance
R Square Status Q Square Status
Organization performance 0.442 Satisfactory 0.336 Medium
Competitive Advantages 0.334 Satisfactory 0.298 Medium
Table 4
Direct Path Coefficient Assessment
Hypothesis   Path Coefficient Standard Deviation T Statistics P Value (one tailed) Status
H1 ER à OP 0.334 0.038 9.820 0.000 Significant
H2 ESE à OP 0.297 0.040 8.300 0.000 Significant
H3 EST à OP 0.278 0.056 7.901 0.000 Significant
H4 CAà OP 0.567 0.0643 22.098 0.000 Significant
H5 ER à CA 0.294 0.044 7.833 0.000 Significant
H6 ESE à CA 0.356 0.052 10.310 0.000 Significant
H7 EST à CA 0.254 0.049 3.529 0.001 Significant

Table 5 shows the findings of the mediating effects of competitive advantages. For Employee Recruitment (ER), the direct effect and indirect effect are significant with a total path coefficient of 0.501, which revealed a partly mediation impact. For Employee Selection (ESE), the direct effect and indirect effect are significant with a total path coefficient of 0.499, which revealed a partly mediation impact. For Employee Staffing (ES), the direct effect and indirect effect are significant with a total path coefficient of 0.422, which revealed a partly mediation impact. Therefore, competitive advantage is a successful mediation in the relationships between the three variables and organizational performance.

Table 5
Indirect Path Coefficient Assessment
Hypothesis   Direct Path Coefficient Indirect Path Coefficient Total Path Coefficient Status
H8 ER à CA à OP 0.334 0.167 0.501 Partly Mediation
H9 ESE à CA à OP 0.297 0.202 0.499 Partly Mediation
H10 EST à CA à OP 0.278 0.144 0.422 Partly Mediation

Conclusion

Overall, the model is successful because it can predict 44.2% of the organization's performance and the direct relationships for the three predictors of HRM practices are significant. The precedence for the relations based on the path coefficient value is employee recruitment (0.334), employee selection (0.297), and employee staffing (0.278). The three variables can explain more than 33.4% of the competitive advantages (CA) variance. The precedence for the relations based on the path coefficient value is employee selection (0.356), employee recruitment (0.294), and employee staffing (0.254). Competitive advantage has a significant impact on organizational performance (0.567) and has a successful mediation in the relationships between the three variables and organizational performance. The study is empirical research in the UAE manufacturing industry; to provide a better generation of the research relationships, it is advised to replicate this study in other organizations, other environments, and other countries to have a better generalization. The model can also explain up to 44.2% of the organization performance variance; scholars are welcome to investigate more causes, especially from the HRM, to increase the model power and propose a more comprehensive model.

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