Between 2019 and 2021, top Indian IT companies faced allegations of HR malpractices such as discriminatory hiring, denying job opportunities to candidates based on their caste, religion, and other protected characteristics.
There have been numerous instances of corrupt HR practices such as nepotism in hiring, accepting bribes for job offers, favouring certain employees over others, and failing to address complaints of harassment or discrimination in Indian companies.
Globally too there have been enough HR corruption issues.
The nexus between companies and headhunters is an issue that hardly gets a mention. HR officials of IT companies often collude with recruitment agencies to take kickbacks for placing their candidates.
Corruption takes many forms in the relationship between headhunters and HR departments: bribing for favourable treatment in the selection process, paying kickbacks to HR in exchange for contracts or business deals, providing false or misleading information about candidates to secure a placement, and offering incentives such as gifts, vacations or other forms of compensation to secure favourite treatment. In India these instances can be treated only as cheating under law.
Whatever be the practice, they are illegal and unethical, and it is the responsibility of all stakeholders to maintain the highest standards of integrity and transparency in all their dealings.
Normally, reputed companies adhere to the best practices while working with headhunters. They would define the job requirements, qualifications, and indicative compensation for the open position to ensure that headhunters are searching for the right candidates.
Protecting confidentiality and monitoring compliance are two critical parts of the process of working together, which could be the reason for the eerie silence on corruption.
Time to clean up? A multi-faceted approach will be needed to break-up the unholy nexus:
Legal framework: Industry body NHRD should lobby with policymakers to establish and enforce laws that prohibit corrupt practices in HR.
Transparency: Transparency in recruiting, selection, and appointment, including clear job descriptions, open advertisements, and objective selection criteria is the need of the hour.
Internal controls: Put in place internal controls to monitor HR processes and reduce opportunities for corruption. Audit the HR processes regularly just as it is done in supply chain.
Ethical guidelines: Develop ethical guidelines for HR professionals, recruitment agencies, and headhunters.
Training and awareness: Provide training and awareness programmes to prevent corrupt practices from occurring.
Whistle-blower protection: Establish a whistle-blowing mechanism to allow individuals to report corrupt practices in confidence and with protection from retaliation.
Sanctions and penalties: Impose severe sanctions and penalties on individuals and organisations involved.
Continuous monitoring and evaluation: Regularly monitor and evaluate the HR processes and practices of recruitment agencies to ensure that they are in compliance with laws and ethical guidelines.
Positive culture: Foster a positive company culture that values and rewards employees and reduces the temptation for HR to collaborate with headhunters.
Diversity and inclusion: Make it a routine process to include one or two smaller agencies as part of the vendor selection and nurture them.
Artificial Intelligence: Make use of advanced AI-based humanoids for recruitment. Evueme, an Indian start-up platform can build transparency and employer brand. It simultaneously interviews tens of thousands of applicants, at the time they prefer, verifies, ranks and gives a shortlist to HR for personal interviews. And it works on much lower costs and gives faster closures.
The writer is a Fortune 500 consultant, start-up investor and co-founder of the non-profit Medici Institute