Acquisition

HSC Business Studies | Free Study Notes

Acquisition is the human resource process of attracting, selecting and employing suitable staff. In HSC Business Studies, acquisition is important because businesses need the right employees with the right skills to achieve their goals and maintain strong performance.

Acquisition includes identifying staffing needs, recruiting applicants, selecting the most suitable person and finalising employment contracts. If acquisition is managed well, a business is more likely to build a productive and reliable workforce.

In this lesson

• what acquisition means in human resources

• how businesses identify staffing needs

• the difference between recruitment and selection

• the role of employment contracts

• how internal and external applicants can be used

Core notes

What is acquisition?

Acquisition is the process of attracting and choosing employees to fill job vacancies.

It is one of the key human resource processes and usually involves:

• identifying staffing needs

• preparing job descriptions and selection criteria

• attracting applicants

• assessing applicants

• selecting the most suitable person

• offering employment

• finalising an employment contract

Acquisition matters because employees affect productivity, customer service, quality and long-term business success.

This links closely with the strategic role of human resources [Strategic Role of Human Resources], because hiring the right people helps the business achieve its broader goals.

Identifying staffing needs

What are staffing needs?

Staffing needs refer to the number of employees and types of skills a business requires.

A business may need new staff because of:

• business growth

• employee resignation

• retirement

• dismissal

• increased customer demand

• new products or services

• changes in technology

• expansion into new locations

• skill shortages

Before recruiting, the business should identify what role needs to be filled and what skills are required.

Why identifying staffing needs matters

Identifying staffing needs helps a business avoid poor hiring decisions.

For example, if a business is expanding its online store, it may need employees with digital marketing, customer service or logistics skills. Hiring without clearly identifying these needs could lead to skill gaps or wasted labour costs.

This connects with interdependence of human resources with other business functions [Interdependence of Human Resources with Other Business Functions], because staffing needs often depend on operations, marketing and finance decisions.

Recruitment

What is recruitment?

Recruitment is the process of attracting suitable applicants for a job vacancy.

The aim is to encourage enough suitable people to apply so the business can choose the best candidate.

Recruitment may involve:

• writing a job advertisement

• posting the vacancy online

• using recruitment agencies

• advertising internally

• using professional networks

• encouraging employee referrals

A strong recruitment process helps the business attract applicants with the right skills, experience and attitude.

Internal recruitment

Internal recruitment means filling a vacancy from within the existing workforce.

This may involve promoting or transferring an existing employee.

Advantages of internal recruitment include:

• the employee already understands the business

• it can motivate staff by showing career pathways

• it may be faster and cheaper than external recruitment

• the business already knows the employee’s performance

Disadvantages may include:

• fewer applicants to choose from

• limited new ideas entering the business

• another vacancy may be created

• some employees may feel disappointed if they are not selected

External recruitment

What is external recruitment?

External recruitment means filling a vacancy by attracting applicants from outside the business.

This may involve job websites, recruitment agencies, social media, university programs or industry networks.

Advantages of external recruitment include:

• a wider pool of applicants

• new skills and ideas

• access to specialist experience

• useful when the business is growing or changing

Disadvantages may include:

• higher recruitment costs

• longer selection process

• applicants may not understand the business culture

• greater risk if the business does not know the candidate well

This links with outsourcing human resource functions [Outsourcing Human Resource Functions], because businesses may use recruitment agencies to support external recruitment.

Selection

What is selection?

Selection is the process of choosing the most suitable applicant for the job.

It usually happens after recruitment.

Selection methods may include:

• reviewing applications

• shortlisting candidates

• interviews

• skills tests

• reference checks

• trial tasks

• medical checks where relevant

The aim of selection is to match the best applicant to the job requirements.

Why selection matters

Selection is important because poor hiring decisions can create problems such as:

• low productivity

• poor customer service

• training difficulties

• workplace conflict

• higher staff turnover

• increased recruitment costs

For example, if a café hires an employee without checking their customer service skills, the business may experience customer complaints and lower repeat sales.

Selection should be fair, consistent and based on job-related criteria.

This connects with anti-discrimination and equal employment opportunity [Anti-Discrimination and Equal Employment Opportunity], because applicants must be assessed fairly and not discriminated against.

Employment contracts

What is the role of employment contracts in acquisition?

Once a suitable applicant is chosen, the business usually offers employment and confirms the terms of the job through an employment contract.

An employment contract may include:

• job title

• duties and responsibilities

• pay

• hours of work

• leave entitlements

• probation period

• notice requirements

• workplace policies

• confidentiality requirements

Employment contracts help create clear expectations between the employer and employee.

Why contracts matter

Employment contracts are important because they protect both the business and the employee.

For the business, they clarify what the employee is expected to do. For the employee, they clarify pay, conditions and rights.

Employment contracts must follow legal requirements, including minimum employment standards, awards or enterprise agreements where relevant.

This links with legal influences: employment contracts [Legal Influences: Employment Contracts], because employment conditions must meet legal obligations.

Internal and external applicants

Comparing internal and external applicants

Businesses often need to decide whether to recruit internally, externally or use both.

Internal applicants may be suitable when:

• the business wants to reward existing staff

• the role requires strong knowledge of the business

• the business wants a faster recruitment process

• there are skilled employees ready for promotion

External applicants may be suitable when:

• the business needs new skills

• no internal employee is suitable

• the business wants fresh ideas

• the business is expanding

• specialist knowledge is required

The best choice depends on the business’s goals, the role, the available budget and the skills needed.

Why acquisition matters for business performance

Acquisition affects business performance because the quality of employees can influence nearly every part of the business.

Effective acquisition can help a business:

• improve productivity

• reduce staff turnover

• increase employee performance

• improve customer service

• reduce training costs over time

• build a skilled workforce

• support long-term growth

Poor acquisition can lead to unsuitable employees, lower morale, higher costs and weaker business performance.

A business should therefore treat acquisition as a strategic process, not just a quick way to fill vacancies.

Worked example

Exam-style question

Explain how effective acquisition can improve business performance.

Sample answer

Effective acquisition can improve business performance by helping a business recruit and select employees with the right skills for the job. For example, if a retail business identifies that it needs staff with strong customer service skills, it can design its recruitment and selection process to attract and choose applicants who meet this need. This can improve customer satisfaction and support sales.

Effective acquisition can also reduce staff turnover. If employees are well matched to their roles and understand their employment contract, they are more likely to perform well and stay with the business. This reduces recruitment costs and supports long-term business success.

Common mistakes

• Confusing recruitment with selection.

• Forgetting that acquisition starts with identifying staffing needs.

• Writing about employment contracts without linking them to the hiring process.

• Assuming internal recruitment is always better than external recruitment.

• Ignoring legal and fairness issues during selection.

Quick quiz

1. What does acquisition mean in human resource management?

2. Why should a business identify staffing needs before recruiting?

3. What is the difference between recruitment and selection?

4. Give one advantage of internal recruitment.

5. Why are employment contracts important in acquisition?

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