Navigating Employer Disclosures: Part 2 in a Series of Transparency in TA

Welcome to the second installment in our series on Transparency in Talent Acquisition. This post focuses on the impact of disclosures between employers and their employees and potential candidates. Conflicts of Interest (COI) in talent acquisition can damage an organization's reputation and affect overall performance. However, with the right strategies and an understanding of potential pitfalls, organizations can avoid these challenges and ensure fair and transparent hiring processes.

Here we’re sharing key insights from this week's conversations with dozens of industry leaders and experts alongside hundreds of our CareerXroads community members. A full report and additional details will be produced when this 4-week panel concludes but the conversations will undoubtedly continue within the community.

Internal Disclosure Policies

Conflicts of interest can significantly impact the candidate journey in various ways. During our discussions, several specific scenarios were highlighted where transparency is essential to ensure fairness:

• Expectations around joining a "talent community": Candidates may feel obligated to join talent communities when applying for jobs.
• Programs that prioritize certain candidates: This includes referrals from diversity recruiters or internal candidates being given preference over external ones.
• Recruiter incentives: Incentives might cause recruiters to prioritize external candidates over internal ones to create backfill positions.
• Restrictions on internal mobility: Such restrictions can drive employees to seek external opportunities for better pay or treatment.

Overall, it is crucial for employers to be transparent about their recruitment practices—both internally and externally—and to ensure fairness throughout the candidate journey to avoid any conflicts of interest that may arise.

Conflicts of Interest in Referral Programs

The importance of transparency and fairness in referral programs isn’t a position taken lightly by many organizations. Opportunistic referrals unsurprisingly can lead to the pursuit of income—through referral bonuses—over fit, affecting the overall quality of the recruitment process and potentially harming company culture. Setting clear guidelines for referral bonuses is crucial. Gerry Crispin , co-founder of CareerXroads, emphasized that referrals should be audited for diversity to ensure fair hiring practices.

Our panelists seemed to agree with the stance that individuals directly involved in the hiring process, such as hiring managers and interviewers, should not be eligible for referral bonuses. While they may submit referrals, they should not receive any referral compensation. This recommendation, highlighted in our discussions by Marc Mapes, MBA , of M Squared Advisors LLC , emphasizes the importance of unbiased hiring practices.

By excluding those who make hiring decisions from receiving referral bonuses, organizations can ensure all candidates are evaluated solely on their merits, rather than potential financial incentives. This practice helps maintain the integrity of the hiring process, fostering a more equitable and transparent recruitment environment. It also reinforces the commitment to fair hiring practices, enhancing the company’s reputation and attracting top talent.

How Transparency is Handled Matters 

Another common COI issue arises in the disclosure process. Alex Murphy , CEO of JobSync , suggests three best practices for disclosure: 

1. Include disclosures on the job posting. If you have a lot to say, put your disclosures on a different page and link to it from your job postings.
2. Reinforce the disclosures in your auto-apply email. Again, linking to them on a separate page if necessary.
3. Include a reference to the disclosures or make them on the main careers page of your corporate site.

Transparency is a key factor in building trust between employers and employees. As Joe Shaker Jr , President of Shaker Recruitment Marketing , points out, “Having clear policies, objective criteria, and third-party oversight can significantly enhance transparency and create a fair, transparent, and trustworthy candidate journey. This not only enhances organizational integrity but also makes the company more attractive to top talent in the long run.”

Despite the best efforts to mitigate COI, pitfalls are inevitable. As Neil Kelly , Founder and CEO of Vector, notes, “Conflicts of interest can occur anywhere and from some of the most unlikely places.” Our conversations revealed that conflicts of interest in the hiring process can lead to potential risks and reputational damage. As Maury Hanigan , CEO of SparcStart , points out, "Candidate sentiment from The Candidate Experience Awards research shows feelings of unfair treatment due to internal candidate bias, quota filling, and unethical hiring practices."

Addressing COI in talent acquisition requires a comprehensive approach that emphasizes transparency, fairness, and inclusivity. Stay tuned for our final report that will include key recommendations every organization should consider in being more transparent and fairer.

What’s next

This collaborative effort, supported by the industry experience and insight of CXR Community member JobSync, aims to further explore relationships such as those between an employer and their employees as well as the ties between industry event organizers, speakers and attendees. The greater TA community is invited to participate in our weekly polls for this research at https://cxr.works

It is worth noting that the full CXR Community, now consisting of over 5,000 leaders, practitioners, and experts in the recruiting industry, are also weighing in on these topics during the course of the research panel. It is just one example of the conversations happening regularly in our Community. Follow along, and express your interest for participating in future panels, at https://cxr.works/research

Our Own Disclosure: As co-facilitators of this panel, I, along with Alex Murphy of JobSync, guide discussions, shape questions, construct polls, and offer feedback on responses and the resulting publications. Please note that Alex has sponsored this role and we aim to provide an open and transparent environment for all participants.