Hidden danger in trusted hiring strategy
March 5, 2009 by Sam NarisiPosted in: Law, Referrals, Special Report
Referrals are one of the most trusted and time-tested ways to recruit new employees. But a recent court ruling offers a warning to any companies that use them:
An African-American man applied to be a truck driver in Wal-Mart’s delivery fleet, but was rejected.
He sued the company, claiming its hiring practices for truck drivers unfairly screened out minority applicants.
Wal-Mart’s truck drivers were recruited “almost exclusively” through a referral program. All current drivers were given cards to hand out to anyone interested in getting a job. The cards listed minimum qualifications and a number to call to get an application.
In addition to finding candidates, current drivers were also heavily involved in the interview process. Applicants who passed an initial screening were interviewed by a panel of employees who chose which applicants to send to the hiring manager.
The rejected applicant claimed the mostly white workforce was only recruiting and hiring white applicants. He found some statistics to bolster his case: Though African-Americans make up 15% of all U.S. truck drivers, only 8% of Wal-Mart’s drivers were African-American.
Wal-Mart argued there was no intentional bias. But the court said it didn’t matter, citing other decisions that ruled a referral program can be the source of accidental discrimination.
The judge let the case move forward as a class action lawsuit (Cite: Nelson v. Wal-Mart Stores, Inc.).
Should you scrap referrals?
Relying too heavily on referral programs can lead to costly problems. In another case, nearly all of a company’s new hires were referred by current employees. The result: Most new hires were white.
After failing to have the case tossed, the company settled for $2.5 million (Cite: E.E.O.C. v. Carl Buddig & Co.).
Does this mean companies should stop asking employees for referrals? Of course not. When done correctly, referrals are still a legal, cost-effective way to recruit.
The EEOC recommends companies keep track of which groups a referral program brings in and scale down their reliance on that strategy if the results look biased.
Tags: disparate impact, EEOC
March 6th, 2009 at 6:11 pm
When will they figure out, nobody cares what color they are?????? If we have a job opening, it’s the qualification column that counts. In today’s world, still hanging onto the old ideas of “I’m Black. I’m Indian. I’m Muslim, or Jewish or Christian”, makes no difference to the majority of Employers & HR people!!!!
March 9th, 2009 at 10:33 am
Judith, I’m sorry, but your wrong here. The majority of employers and HR people use personal biases that qualify as discrimination constantly to hire and fire people. That is exactly why, as a good HR practitioner, you should KNOW that and follow the policies and law that are in place to prevent you and your staff from accidentally discriminating against someone. To believe the world is a Utopic love fest absolved of racism and discrimination basically eliminates the need to have an HR department in the first place. Please, go back to the 1950′s and push your simplistic archaic concepts of the world elsewhere.
March 9th, 2009 at 1:25 pm
Wake up to reality Judith, There are still people making decisions based on what color, sex, ethnic group, and religion a person is.
March 9th, 2009 at 2:13 pm
Judith
You did not seem to get the point of the court case. This was not about if anyone cared about the person’s color. This was about a referal program that exposed whites at unreasonably higher rates to an employment process than others. In fact women were adversly affected as well.
I’m a black professional. Where-as I can accept the fact that you are saying you don’t care that is not always the case. The fact is that there are cases each day that never make it to court that discriminate. Qualifications often times have the least to do with hiring.
Because you do not discriminate does not mean it is not a very real problem for all those you named above. These are ol ideas only to the degree that many have still got to fight them. Courst have still got to rule on them and people still discriminate.
People do care. . . and it hurts.
March 10th, 2009 at 9:15 am
I wish what you said Judith was true. I had a conversation in the last 4 months about being able to hire a black man. How would the customers react? My answer was they will get over it when he shines in the customer service area. He did, they did.
In a past career I was a restaurant manager and was told I had to have my staff “balanced”. I was even told I couldn’t fire a young pretty white girl (yes I’m white) and my response was “Fine, increase my labor percent because all she can do is stand around and be white because she screwed up every order she ever touched”. I did end up firing her. Many people are dreaming of the day when people are no longer judged by their color, weight or appearance at all.
March 10th, 2009 at 9:25 am
As I see it discrimination towards African-Americans in the U.S. is a non issue now. We have an African American President! How can anyone say there is discrimination anymore? It obviously just depends on who is most qualified. Now that a black man has been elected to the very highest job in our country, I just don’t see how anyone can say discrimination exists in America. The judges need to get a grip.
March 10th, 2009 at 1:11 pm
Seriously, Mike?
Some of you folks need to get out of your neighborhood every now and then. Subtle discrimination is EVERYWHERE. Are there those who are color blind and reward on the basis of merit? Thankfully, yes. But hidden bias is still rampant in this country. Holder was right – people ARE afraid to talk about it.
March 10th, 2009 at 2:49 pm
I am serious! What more needs to be done to say discrimination is dead in America? Do we need to have no white people with jobs at all? I mean come on. He’s the PRESIDENT! If we weren’t predjudiced in electing a black man to the highest office, how can we be predjudiced in not hiring one as a truck driver? It’s unbelievable! It’s 2009 for crying out loud. Get over it. That’s what everybody is afraid to talk about.
March 11th, 2009 at 8:26 am
Mike
I’ll not mince words here. You are some kind of nut. It is absolutely ludicrous for a person to make such stupid statements. Your little tiny piece of the world is not the measure of what happens in others realities. Are you an HR person? Do you keep up with any of the statistics or court cases involving discrimination? Do you think that the courts systems all over this country are simply imagining all of the actions that come before them?
So there is one African American that is now the president of a country hundreds of years old and that one event convinces you that discrimination has ended? You are so under exposed that it is laughable. But the real reason I’m so blunt with you is this. You are the reason that this problem continues. You lack basic moral judgment to understand what racism or discrimination or sexism would be even if you were standing right there looking at it. You would apply your narrow little mind in an unempathetic way and foster or exacerbate the problem. It is angering that minorities are still faced with such antiquated, backward people in control of what may happen to them if they have to seek help with a problem or sexism or discrimination of the job.
You need to get over that and stop dreaming up what other’s reality is. And no, I’m not afraid to talk about it.
March 11th, 2009 at 9:21 am
John,
Sadly, I meet people like Mike every day. I just don’t expect them to be in HR
March 11th, 2009 at 12:27 pm
Brian
Yes so do I.
Here is the extension of the problem with what he said and he does not know it. To not see instances of discrimination and racism is actually part of the definition of institutional racism and cultural incompetence. In other words there are events that are accepted as normal everyday not because they are correct but simply because that is the way minds are trained. It becomes so entrenched that behaviors that should trigger an alert do not such as the statement made above. Institutionally he speaks as if no minority or female that has lived through or is living through discriminatory events views this board. Institutionally he has become so comfortable with his inability to peer into issues that he is supposed to be trained to see, that he thinks that is normal. With that mental process he pronounces all others to be frauds if in fact their life’s course is otherwise. Then probably walks away surprised that he received such a strong response.
March 11th, 2009 at 1:05 pm
Wow, I never thought I would feel so compelled to respond but there are always firsts.
I am an HR professional with 15+ years experience and unfortunately I continue to fight “isms” (race and sex) as well as ethnicity, disability, age….well you get the point.
I’ve seen first hand how personal bias, cultural misunderstandings and bigotry continue to influence decisions and the scariest part is that some don’t even recognize it as a problem. In a previous life I was told to find computer help desk workers but was told to not even bring in a specific nationalities resumes’ as they were hard to understand. Fortunately I didn’t listen and we ended up hiring 3 employees, two of whom were the forbidden nationality. I did this by applying sound HR prinicpals and practices including removing the names from resumes’ and those that were passed along were all very qualified.
PS – my past life was in a college town with a very diverse mix so sadly, I have to say it still exists and those of us in HR must continue the fight to educate and advocate.
March 11th, 2009 at 3:00 pm
Choosing one applicant over another because of race, sex or religion is wrong.
However, choosing one applicant over another because he/she fill a required “percentage” is also wrong…or should be.
As long as we have quotas to meet, there will be predjudice.
It is not just in HR, it is everywhere.
There is a considerable buildup of resentment to anyone who gets “preferential” treatment because they are considered a “minority.”
Will our society ever eliminate predjudice? Not until our society is allowed to forget it ever existed.
March 11th, 2009 at 3:02 pm
Remarks of such nature are hurtfull to my eyes Mike. I am not sure Mike is part of this “HR” world nor that he understood a word John replied.
March 11th, 2009 at 4:10 pm
Cathy
I don’t disagree with what you are saying. However there is no such thing as quotas. There was when the 1964 Civil Rights Act was passed but specific quotas were eliminated in the 1991 Amendment to the Civil Rights Act. Also reviewing the protections under Title VII no where will your find preferential treatment as a part of Title VII. What you will find are regulations governing how not to discriminate against groups of people that historically were are affected by discrimination.
This is about a level playing field not about preferential treatment. I understand the resentment but on the other hand may I ask this question. Is the resentment that you have seen always because there is real preferential treatment or is some of it because things are not the same. Please allow a personal example.
I have been in this department for 36 years. In most of that time we did not hire women or minorities except once in a blue moon. I was told they did not qualify. I was assigned the HR position 8 years ago. I found out that the 10 years previous to me being the HR officer most of the hiring was from volunteer groups. These groups of people though fine people were mostly white male, they were friends, cousins, brothers and so on. I stopped that practice and began an open recruitment process that measured a person’s ability to be trained. Guess what we now are 14% minority and 11% female. The complaint became that I was doing things differently. Thier sons and brothers and friends now had to compete. The treatment was not preferential but it did change how the hiring process was conducted.
This is not a negative comment to you or a disregard of what you have said. It is however another view of what at times is called preferential when it really just becomes fair. Thanks for listening.
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Thanks Jan
April 9th, 2009 at 10:52 am
[...] pool of applicants can get very homogeneous, excluding members of some protected classes. In one recent case, Wal-Mart lost a court fight based on allegations that its referral process screened out [...]