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When We Connect the ‘Global Integration’ Dots, Recruiters Risk Being Defined Here by Their Practices There

by Jan 8, 2014, 12:44 am ET

Screen Shot 2014-01-07 at 2.42.37 PMThe hiring process has no minimum acceptable (or unacceptable) standard of practice. Anything goes and many recruiters prefer it that way. Perhaps intuitively we know that people who think of themselves as recruiters (or enjoy being seen as successful recruiters by others), are highly individualistic and, if occasionally a line is crossed, it’s easy enough to distance the professionals on the right side from those who fall outside that broad norm.

That “norm” however is typically a U.S.-centric perspective at a time when we are moving increasingly toward a global community. Internationally, the practice of recruiting isn’t nearly as individualistic and its many forms are often deeply embedded in the culture of the country.

It is here, at the edge, that some forms of recruiting include practices so egregious (when considering the desperation of those seeking work) — practices we could never imagine being associated with what we love doing.

In the past, it’s been easy to ignore them. Out of sight, out of mind. In the future, as our business leaders ask us to participate in “globally integrating” our recruiting platforms, maybe it’s not so easy to dismiss.

A recent investigative article published by Bloomberg’s BusinessWeek in November is a prime example of challenges that may be in store for HR and recruiting leaders and suggests why we need a global recruiting standard for what should and what should not be minimally acceptable practices.

The article is an important read on many levels and, not at all specific to Apple, which figures in it centrally.

Here are the bare facts of this story that keep me thinking about how far we’ve come … and how far we need to go as a profession that claims both a body of knowledge (content) and its relationship with the values and mission businesses aspire to (standards).

  • In 2012 Apple successfully launched the iPhone5 and demand suggested a speedy ramp-up was needed for assemblers and testers.
  • Apple subcontracted with Flextronics, another multinational, and one of its top 10 suppliers, to add 1,500 workers quickly to a factory near Kuala Lumpur, Malaysia.
  • Flextronics contacted independent “recruiter” organizations (brokers) including four in Nepal (there is a reason that workers were sought outside Malaysia, as this country’s employment laws, such as minimum wage, only cover its own citizens, not temporary workers of neighboring countries).
  • The four recruiting subcontractors of Flextronics subcontracted to dozens of independent “recruiters” who fanned out to villages throughout Nepal.
  • They found and engaged hundreds of prospects like Bibek Dhong Bibek, who like all the other candidates, was charged a fee … by each subcontractor in the chain- totaling nearly $1,000 (plus interest since most candidates must take out a loan to pay). Bibek agreed to go into debt and the job was his. (This, by the way, violates Apple’s ban on the practice — but, in some mysterious way, Apple insists that these fees should not exceed one month’s net pay! We would like to meet the person who determined this amount…and wonder if he has his GPHR certification).
  • Apparently all involved (Flextronics and other global outsource vendors) know the practice of selling jobs exists but cannot seem to alter the local “custom.” The article speculates that more than 150,000 workers involved in manufacturing and service of multinational firms obtain their jobs through this practice in Malaysia alone.
  • Bibek and his newly “hired” peers are flown to Kuala Lumpur on a 30-day visa. He is driven to a block of apartments (arranged by Flextronics). His passport is surrendered to the factory manager.
  • Bibek is paid $5.80 per day. (Approximately what Mr. Ford paid his workers to assemble cars … in 1914.) Calculating how much Bibek will be able to keep after paying his debt is worth the exercise. Alternatively, calculate how long it will take him to pay off $1,000 plus interest if he gives the recruiters half his pay.
  • Epilogue: within two months (visas were never renewed by Flextronics) the 1,500 are let go (given two month’s severance) and stranded (illegally) in Malaysia for many more months until they paid their debts to the recruiters. (Some of which was handled when these practices came to light.)

One small concern (but a keen source of embarrassment) is that these modern-day slavers are called “recruiters” … over and over again. That has to stop. Let’s call them what they are.

A larger concern is that recruiting and HR leaders in large, multinational firms are conveniently one, two, and three degrees of separation removed from the actual hiring. They may hold the title of global head of HR or staffing, but are insulated by layers of subcontractors who are, up until now, seldom audited. Try as hard as they might, companies that attempt to shift their responsibility by subbing hiring and managing to third parties will certainly fail under a public spotlight

Fortunately, as more and more quality HR and staffing leaders get involved and learn what is happening at the trench level, they are pushing their firms to resolve the problems and not hide them away. We should all support their extraordinary efforts to change these practices and encourage them to share their stories as a model for others.

A related concern is that multinationals, in the absence of any acceptable international standards, are left to determine on their own what “fair” and “acceptable” minimum recruiting practices are — and how far they should go in changing the customary sale of jobs. There should be an independent take on these issues. There is, for the first time, an initiative under the umbrella of the International Standards Organization begun in 2013 with U.S. participation (ANSI/SHRM) to establish a minimum global standard for recruiting. While compliance with such standards is voluntary, it’s also public knowledge whether companies comply. If the right questions are asked, we can all be responsible in how we spend our money with those who choose not to comply.

Think global, act local is a cliché with valuable but limited ability to guide our actions. In this case, there is no reason why multinationals should ever accept local customs that so obviously violate their stated values.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Gareth Cooper

    Connecting the dots in this case reveals a web of craziness. All that subcontracting creates a web of problems at the grassroots (local) level and removes the bulk of responsibility from the big players. Similar to the poor homeowner filing for bankruptcy to keep a house for an extra week after the subprime mortgage fiasco. Sad stuff.

  • http://community.ere.net/blogs/the-careerxroads-annex/ Gerry Crispin

    Agreed Gareth and, closer to home, we are adding more and more technology and outsourcing layers of contracted and subcontracted support to find and engage candidates- with almost no auditing around the quality of their process.

    Even in the US there are some interesting potentials for abuse in the chain of referrals. Outside the US, in some developing countries, it may be that crossing lines we’ve drawn here over the last 20 years is the norm. Every stakeholder loses.

  • Gareth Cooper

    Exactly Gerry! Then my questions turns to: Who is qualified as an independent party to audit the quality of a global hiring process and establish a set global standard for the profession or even an industrial supply chain when it appears that we as a collective profession don’t even have a clue where we are going and running around in circles in the first place?

    At first glance I would use a regional cluster development supply chain type of strategy to improve the quality of hiring. At least that would eliminate the lack of responsibility at the top and accountability towards the bottom.

    The OEM should be setting similar quality standards for hiring as they do for regular supply chain standards.

  • http://theundercoverrecruiter.com/author/jeffrey-newman/ Jeffrey Newman

    As horrific as the work of those “slavers” how come nothing in the media discusses H1 Visa workers in the US? Because these individuals often have more high level talents, education and skills, so many of them are “owned” by the firms that bring them and it is happening right here? Have you ever been to a guest house in Edison, NJ? Ever speak with a candidate who is to frightened to begin a visa transfer process— or is trapped because of the Green Card Path? It happens right here, in a similar way….

  • Keith Halperin

    Optimistically, I think a concerted international effort carefully applying the proper mixture of incentives and threats, might considerably reduce this problem, similar to the efforts to limit some of the more blatant abuses of offshore tax havens or the sales of “blood diamonds”.

    Pessimistically, I don’t think much meaningful will happen. There are likely too many highly-placed vested interests who stand to lose too much money and/or influence if things change.
    Hope I’m wrong….

    Keith

  • http://www.viletinternational.com Jacque Vilet

    The whole issue of global ethics in recruiting is more complex than people think. Labor/employment laws are different in every country. So what do U.S. companies do when:

    1) Legal and commonplace to advertize for “women only,under age 30″?
    2) It is customary/normal business to “pay” for getting things done like the best placement of your company’s table in recruiting fairs? If you don’t pay you don’t get. Most global companies now state that they will “pay” for getting normal everyday requirements. Purposefully left vague.
    3)Pay contractors to arrange and manage living quarters for very young village girls to come to the “big” city and work in factories? These are like dormitories.
    4) Hire children under 16 to work? Many countries have laws that say hiring kids as young as 14 is legal. What does a U.S. company do? It’s legal — but what will shareholders say?

    Lots of issues here and many are not clear-cut.

  • http://community.ere.net/blogs/the-careerxroads-annex/ Gerry Crispin

    All excellent bullets Jacque but not at all complex.

    For example, a US multinational that espouses to value diversity (gender included) and advertises for women under 30…with a request that a picture be sent w CV will, eventually, in our increasingly transparent world, be ‘outed’ to every woman of every age who uses that firm’s products and services. It has nothing to do with the country’s laws or customary way of handling women, children, race, caste, handicap or what have you.

    When the world outside the US is mysterious and what goes on is cloaked, it is easy to divorce yourself but when you know everything in the supply chain of what you buy, you will make choices.

  • http://www.viletinternational.com Jacque Vilet

    Don’t understand what you are saying Gerry. Would you explain more clearly? Are you saying we should follow our laws, customary practices in the U.S. only? I’ve been in international HR for 20 years so I am well aware of the country by country differences.

    In the U.S. we are well aware that we can’t advertise for “females under 30 please apply”. If we say we can’t do this in Malaysia for instance we would be at a real disadvantage.

    So are you saying we shouldn’t run ads like this in other countries where it is customary — just because it is illegal and goes against the grain in the U.S???

  • http://www.viletinternational.com Jacque Vilet

    And the issue of #4 I mentioned is complex. If a U.S. company doesn’t hire people at 14 the locals feel you are depriving them of income they need to help their families. If Suzy age 14 works for a local company in Bangladesh and her friend next door Annie age 14 is refused employment at a U.S. company this does not sit well. U.S. companies are locally upset because they don’t think they are contributing/trying to help the local community.

    I don’t these kinds of things are as clear-cut as you think.

  • http://www.viletinternational.com Jacque Vilet

    We don’t live in just a U.S. community anymore. We are a global community. That’s why some U.S. companies now allow their managers in other countries (such as India) to pay “bribes” to locals in order to be able to operate on a day-to-day basis. I’m not talking about Walmart that bribed Mexico officials to change zoning so they could build a store and now are being sued by the U.S. government under FCPA. I’m talking about getting electricity on so you can function in the office.

  • Keith Halperin

    @ Gerry: Would you be in favor of legislation requiring that U.S. CEOs sign off that their companies do not engage in nor allow any of their subcontractors to engage in practices which would violate U.S. labor law, analogous to Sarbanes-Oxley for financial reporting?

    -kh

  • http://community.ere.net/blogs/the-careerxroads-annex/ Gerry Crispin

    Gareth: w regard to ‘who is qualified as an independent…’ is a debate that will never find agreement but, meanwhile, the ISO (International Standards Organization) is in fact authorizing the development of HR and specifically recruiting standards. An international committee that involves interested academics, HR industry practitioners, consultants, corporations was formed several years ago in the US and joined under ISO rules with mirror groups in several countries late last year to specifically work on defining recruiting globally. (full disclosure: I’m a member)
    Keith: Nah. While I can imagine holding people and corps accountable via laws, my experience is that it just doesn’t work that way. Public pressure, transparency and the concerted actions of consumers make the difference. South Africa’s apartheid, in the 70′s would never have been impacted by laws but when the world realized the depth of the problem no one bought product from companies there.
    Jacque: We’ll have to talk offline as I’m sure you can’t be suggesting that we should accept business behavior (bribes) that we consider unethical and illegal. I get that it happens, I don’t accept that we allow it and when we shine a bright light on it…it will change.