Conflict of Interest in Recruiting - Post your examples..

After listening to all this debt debate and credit rating agencies, one has to wonder the Conflict of Interest issues with these agencies and how they rate countries AAA rating. Lets face it, its these same credit rating agencies that rated "Packaged Mortgages or CDO" as AAA a few years ago. Banks were sending their "Packaged Mortgages" to Agencies that would give them the best rating, and agencies made money along the way.

We have all seen similar conflicts and its amazing how such conflict are passed over as something insignificant.

Here is the question, what examples of Conflict of Interest have you experienced in Recruiting ? I am sure there are a bunch..

Comment by Tim Spagnola on August 2, 2011 at 4:27pm: Well under a loose definition- as an physician recruiter that for years worked in the specialty of OB/GYN I had over 80% of my clients ask me for women only candidates. I would of course inform them that I have to provide all qualified candidates, but was amazed at times of just how brazen some would be in making this request.

Comment by Chuck Hudgins on August 3, 2011 at 11:36am: This might be a somewhat controversial claim, but I am not sure COI's are that common in recruiting, but this is more a matter of semantics so let me explain. First, one of the necessary conditions for a COI to exist is an assumption of impartiality by a minimum of one of the other parties involved. It is assumed, at least regarding agency recruiters, that they are "advocates of the deal" so to speak. They are trying to motivate candidates to apply, and hiring managers to move quickly and make strong offers. Neither the candidate nor the hiring manager is assuming impartiality in the strict sense. This should not be confused however, with the assumption that recruiters should act ethically and professionally. A COI is a special/particularly defined case of (un)ethical behavior. Recruiters are expected to produce high quality candidates, provide a reasonably accurate account of what the client has to offer to the candidate (but let's face it, it's still a sales pitch) and manage the process professionally. So I think it is important not to conflate a moral requirement in this case (such as being honest with both parties) with an actual COI wherein the assumption of impartiality is traditionally understood, in part at least, as not seeking personal gain or profit.

Comment by Suresh on August 3, 2011 at 12:03pm: Thanks for your comments. I agree COI comes in various forms, sometimes tough to define. Here are couple of examples (not recruiting related) that would be COI or just plain unethical.

- Company A spins off the supply portion of its business Company B and appoints a CEO. The CEO is a major shareholder of Company A. Company B finds out that their contracts with Company A are actually losing money. Employees of Company B eventually lose trust in the CEO (whose interests are clearly more with Company A). This was a publicly traded company, by the way. Eventually CEO steps down.

- Numerous studies that are funded by interest groups, invariably show results that are favorable to their interest. Very rarely they are unbiased. Most often the owness is on the consumer to be smart and determine the funding source. Most media outlets don't dig that deep and just broadcast the results. I guess this applies to Recruiting Industry as well.