Selection of key employees and lenders and investors and funding requirement

Recruitment and Selection of key employees

Difference between Recruitment and Selection

Searching for potential employees and encouraging them to apply for positions within the firm is the recruitment process. Since its goal is to increase the selection ratio—that is, the number of candidates per position opening—it is frequently referred to as "positive." Selection-based hiring is "negative" since it aims to weed out candidates and keep only those who will fit in the company best.

Selection:

The selection process consists mostly of interviewing and shortlisting candidates to find the best match for both the needs of a newly launched company and an operational organization. Additionally, it is the process of eliminating the unstable applications to find the best candidate. The most popular method for achieving selection goals is to pick candidates who possess the knowledge, skills, and abilities required to successfully perform a range of tasks inside the business.

Major activities involved in selection are as follows:

• Creating selection guidelines
• Choosing and identifying selection criteria We can specify selection criteria to only retrieve the data we need. By defining requirements that the data must meet, selection criteria improve the query. For instance, we may request that the system only retrieves phone numbers with a specific area code rather than all of the phone numbers.
• Obtaining data on prospective employees
• Appraising applications and evaluating information
• Deciding whether to accept or reject
• Communicating the selection or rejection decision

Steps involved in the selection procedure (Employee Selection Process)

The selecting process consists of the following fundamental steps:

• Inviting applications:
  Applications are being requested from any qualified candidates, whether they are from within the organization or outside it. The job announcement includes specifics on the job description and employment requirements. This encourages a large number of applicants from various backgrounds to submit applications.
• Receiving applications:
  Candidates who offer the necessary information about their personal and professional backgrounds while applying for a position are asked to submit detailed applications. These programs make it easier to compare and evaluate the prospects.
• Scrutiny of applications:
  The applications are published in order of receipt as the time period for submission of applications to the organization approaches its conclusion. Applications that are incomplete or untrustworthy as well as those with unmatching are rejected.
• Written tests:
  The written test is held once the final list of candidates has been prepared following application review, analysis, and inquiry. This test is given to candidates to gauge their technical expertise, attitude, and level of interest. In circumstances like these, where there are numerous applications, this process is highly helpful. Most of the time, candidates are given a second chance to demonstrate their qualifications by taking another written exam.
• Psychological tests:
  They are carried out privately and aid in identifying a person's unique abilities and attributes. Psychological exams come in a variety of forms, including personality tests, aptitude tests, and synthetic tests.
• Personal interview:
  Candidates who claim success through testing are personally interviewed. The interviewees could be one person or a panel. Typically, officers from the highest level of management are involved. The candidates must respond to a number of questions on their past employment history, interests, family history, and other topics. The applicants must outline what they want to gain from the position. The interviewers' identification and notation of each candidate's strengths and flaws will determine the selection's final outcome.
• Reference check:
  Typically, the employer requests at least two references from the applicants. A reference check is when information provided by the applicant on their application form and during the interview is double checked.
• Medical examination:
  A candidate must be physically fit and strong before accepting a position. Candidates may be disqualified due to their poor health, even if they perform well on tests and in interviews.
• Final selection:
  The candidates are given a letter of appointment to join the company on a specific date at this stage in the procedure, which is almost done. The title, pay, position, and terms of employment are all mentioned in the appointment letter. The initial appointment is typically on probation, or is a trial term, and if the applicant produces the anticipated result or output, it becomes permanent after a certain amount of time.
• Placement:
  This is the last step in the hiring process. The selected candidate is given a suitable job so they can fully understand the nature of the position. The candidate may adjust to their position and then perform well using all of their skills and abilities.

Lenders and Investors

These two individuals or parties are very interested in the company enterprise. They support the company by investing in it. Lenders (commercial banks and investment firms) must keep an eye on the new business endeavor if they want to lend or fund it to the new company firm. Very closely in terms of the business's ability to pay back loans and the individuals running it (the management team).

Role of lenders and investors

• Take the initiative to determine who will be the important employee and hire them.
• Give knowledge of the field and the field in which they want to work.
• Educate the initiative by sharing your knowledge of the markets and industries it plans to enter.
• Contribute to coming up with the concept for the extra source of funding.
• Act as a sounding board for fresh concepts
• Recreate for clients
• Assist in setting up a business partnership
• Serve the project
• Serve as a director on the board.
• Think and start ideas for improving the company gradually.

Funding Requirement

While researching the finance required, the following query comes up:

• What resources are necessary for an open business?
• What costs cannot be altered?
• Which costs will be expected?
• Understanding how these expenses will be paid for?

There are three reasons that most of the entrepreneurial venture need to raise money during their early life:

• Cash Flow Challenges: A company faces a cash flow challenge or issue when it struggles to settle its debts as they fall due. It's not necessary to have a cash outflow in order to have a cash flow issue. A business typically sees a net cash outflow when, for instance, a sizable payment is made for new machinery or raw materials, or when there is a seasonal decline in demand. However, the issue becomes more serious when cash flow is consistently negative and the company exhausts its cash and bank reserves.
• Capacity Investment: Businesses that enter new markets encounter a variety of operational difficulties. The most important/critical are matters related to capacity investment. How much capacity to invest in and when should it be done are two common yet difficult issues, particularly when the size of a market is indeterminate. The trade-off is obvious when deciding how much capacity to build or reserve with a supplier: high capacity leads to underutilized facilities (if output is reduced to match market demand) or depressed prices (if output remains high but the demand is low), whereas low capacity leads to decreased sales and suboptimal profit as well as growth.
• Lengthy Product Development Cycles: Many of our goods have lengthy development and sales cycles that could incur large costs before producing any income for those items or services. Customers may need three to six months or more to use, test, and assess the product once it has been developed, tested, and built. Customers may also need a few more months to start mass producing the equipment that organizes the product. This prolonged cycle time increases the likelihood that a client would decide to change or cancel their product plans, which could result in a loss or drop in sales to that customer.

Jim, R. (2012). http://www.tutor2u.net. Retrieved from tutor2u.net: http://www.tutor2u.net/business/reference/finance-causes-of-cash-flow-problems

Swinney, R. (2011). http://people.duke.edu/. Retrieved from people.duke.edu: http://people.duke.edu/~rps23/StartupCapacity.pdf