Should the referrer be blamed for a bad hire?

Are referrals the best way to acquire talent? Who gets the blame if the hired employee turns out to be a disappointment?

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High attrition rates, large-scale resignations, and the challenges of finding the perfect cultural fit in the current talent scenario have made the acquisition of talent a difficult proposition for HR executives, across companies and industries.

Given the competitive labour market, reliance on referrals from existing employees within a company has increased.

According to a research by Dr John Sullivan, 88 per cent employers feel that referrals are the best way to acquire above average talent. However, accountability and integrity of the professionals who are taken onboard through referrals can still be suspect sometimes. The primary reason behind this could be laxity in the hiring process, owed to the referral.

Consider this example:

A tech company, primarily dealing in lead generation, decided to hire an IT professional for its data generation team. One of the senior lead developers in the team recommended a former colleague of his for the position.

After a brief recruitment process, the company hired the person. Two months post recruitment, the company discovered that some of its data was being leaked to the market. Upon investigation, they found that the new hire was the one who had caused the leak. Further probe revealed that he had been found guilty of something similar in his previous employment. Naturally, the company terminated his employment.

However, soon fingers started to be pointed at the senior developer who had recommended the bad hire. He was blamed for a bad recommendation, due to which the company lost business and also earned a bad reputation in the market.

Should the person who referred a bad hire face the repercussions of the wrongdoings of the bad referral?

If yes, what should be an adequate action against him? Prominent HR leaders opine:

Pankaj Lochan, CHRO, Jindal Steel & Power

The bad hire in this case is clearly reflective of a weak hiring process. Any hiring process comprises of five parts: sourcing of CV, the shortlisting process, the interview, onboarding— after the person has accepted the offer— and then subsequent referral checks.

In this case, the reference check process failed. It is no crime to recommend somebody for a position. People are recommended only if they are found to be an adequate match in terms of competency,for the role at hand. Therefore, the person who has recommended the bad hire can only be accountable if that person is not competent for the position.

If it is an ethical issue, where integrity of the new hire is suspect, that candidate should have been weeded out after the reference check itself.

It is best for the company to implement a more serious approach to the methods of hiring being employed. In this case, where the position being hired for requires the person to deal with confidential data, there should be a three-level referral. For Level 1, the company should speak with the people that the job seeker has mentioned in their CV. While speaking with them the company must ask for names of others whom the person had engaged during the previous employment. Level 2 should comprise of interactions with these people, which will help the company understand their perspective on the person’s character. The company can go for subsequent levels of referral checking, by contacting people who were engaged with the person without them knowing.

Viekas K Khokha, CHRO, Dhanuka Agritech

The referral needs to be only treated as the source of the CV and nothing else. The process of recruitment is more important. Here, it is clear that due diligence wasn’t given to the hiring process. Otherwise, the employee has only named a suitable talent, which is what a company could expect. Verifying that talent’s integrity is the responsibility of the HR. Employees cannot be expected to do referral checks. The organisations themselves have to gauge the person’s character, first hand. A follow-up process can help the organisation eliminate the possibility of a reoccurrence of such situations in the future. There needs to be a proper orientation of new hires, with clear do’s and don’t’s.

Emmanuel David, HR leader

It’s an ethical question. We are hiring people for skills and competence and not for their ethics and values. Hence, such situations may be witnessed regularly. One needs to understand the process of hiring and figure out where it is lacking.

However, if the senior developer who had referred the new hire was privy to his previous engagement, then it is tantamount to being a discipline issue. A deeper probe must be undertaken. The HR must interact with the senior developer and ascertain his involvement in the whole situation as well. If he was genuinely unaware at the time of hiring, then it shouldn’t be his fault and he shouldn’t be held accountable. However, if he is found to have been in the know of the character of the hire, then the HR can plan what suitable action should be taken against this person depending on the severity of the information leak and loss to the company.

(This article appeared in the HRKatha monthly magazine)

1 COMMENT

  1. 1. Reference check for people hired either through referral or otherwise is a must.
    There are instances where lot is revealed about the hired person regarding work and character. Feedback has to be used judiciously.
    In this case, a terminated employee was hired which on any account cannot be justified. It’s a system and procedure failure.
    2. An investigation is definitely needed to ascertain if the referral had prior knowledge of the candidate’s termination from previous employment.
    If yes, it’s a serious lapse and action has be taken against both the referral and the person hired.
    3. It’s a fashion among some employers to say they are progressive and don’t belive in reference checks. It’s a lesson for such employers.
    4. Imagine the cost of this wrong hire and the trauma it can create to the referral, the hired person, and other prospective referrals.

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