Ethical hiring: Why it matters and how to make it happen

Ethics describes our inner sense of what is right and wrong. It encompasses our moral principles that lead us to adopt certain behaviors and guides our decisions where the law fails. Ethical behavior is essential to the functioning of our society, in all areas, including business. 

Business ethics provides companies with the necessary principles to make the morally right decisions. Not letting corporate actions be determined solely by the pursuit of profit, but also considering moral aspects when making decisions, is crucial to ensuring the integrity of a company. This also applies to recruitment.  

However, in an ever more competitive job market, HR managers are increasingly confronted with ethical dilemmas, in which moral righteousness has to bow to external pressure. A good example of this is unethical employee referral which occurs when a senior-level executive refers a candidate for an open position and the HR team gives in to hiring the candidate because of fear of retribution. 

In order to avoid discrimination or favoritism in recruitment, organizations need to establish ethical hiring practices. But what exactly is ethical recruitment? Why does it matter? And how can businesses put ethical hiring into practice? 

Ethical hiring and recruiting describes a hiring and recruiting process where job applicants are assessed without discrimination and bias. It’s all about integrity, transparency, trust and merit. For instance, the Fair Labour Alliance defines ethical recruitment as “the process of engaging a worker fairly, transparently and on merit”. 

It’s only when hiring and recruiting are based on unbiased criteria and standardized processes that all candidates have a fair chance of securing the position. Ethical recruitment practices include: 

• Not discriminating against candidates because of their race, gender, ethnicity or age

• Communicating openly and transparently with applicants

• Keeping candidates in the loop about the status of their application

What’s more, hiring ethically means treating all applicants and candidates with respect and honesty and showing them that you value that they‘ve taken the time and made the effort to apply for the position.

There’s no better way to fully grasp the concept of ethical hiring than by looking at its opposite. In the beginning of this article, we’ve already mentioned unethical employee referral practices, but here are some more examples of unethical hiring practices to illustrate what companies shouldn’t do: 

• Unequal treatment of candidates. Not giving applicants the same treatment as other candidates because of their race, age, origin or gender is unethical.

• Lack of information or wrongful information in the job description. Not providing enough or wrongful information about an open position leads to poor transparency and confusion on the applicant-side. And embellishing the responsibilities that come with a position is dishonest and may lead to employees quitting a job shortly after accepting the position.

• Using social media to mine private information. Gathering information about applicants from their social media profiles and letting the findings influence the hiring decision constitutes an invasion of the candidate’s private life and is therefore unethical. 

• Collecting irrelevant information. Some organizations ask applicants for information that is not relevant to assessing whether the applicant is suitable for the job. Information such as place of birth, parents' occupation and education, or current place of residence is of no relevance to the applicant's qualifications and can lead to (unconscious) biases that then influence the hiring decision. 

The most obvious reason why an organization’s hiring and recruiting practices should be ethical is that it’s simply the morally right thing to do. Corporate ethics might vary from organization to organization since every business has its own set of rules and values it adheres to, but (nearly) all businesses have a corporate ethics program which influences the hiring and recruitment process. 

However, in most cases, it’s not the intrinsic motivation to do the right thing that pushes organizations to use ethical hiring practices. Instead, the need to hire ethically often stems from external pressure. An organization who fails to hire ethically risks a bad reputation. Especially in the digital era, stories and rumors about discrimination against job applicants can spread like wildfire and severely damage any business’s reputation. This can lead to a negative brand perception among customers and investors and, ultimately, to lost business and revenue.

If, on the other hand, an organization has an ethical recruitment policy and hires candidates solely based on skills and merit, this helps grow a better reputation. Not only with customers, investors and business partners, but also among staff members.

The LRN Ethics Study revealed that 94% of employees surveyed considered it “critical” or “important” to work for an ethical company. The study further found that 82% of employees would prefer to earn less but work for a company with ethical business practices than for one that offered higher pay but had questionable practices. 

In this sense, the positive impact of being perceived as an ethical business is two-fold. First, existing employees are less likely to quit their jobs if they think their employer acts according to business ethics. Second, knowing that an organization employs ethical hiring practices is an additional motivation for candidates to apply. Especially for diverse candidates, this can be a decisive factor to submit an application.

Interested in knowing how to not only hire ethically, but also how to hire for diversity? Then check out our related article. 

So, now we know the basics of ethical hiring and why it matters. But how can organizations actually create ethical recruitment practices? Here are four practical tips you can implement right away.

Honest and transparent communication

Honesty and transparency are two of the key principles in ethical hiring and should be taken into account throughout the entire hiring and recruiting process. This includes being honest in the job description and disclosing all the necessary information for candidates to evaluate whether they’re suitable for the position before they apply, as well as letting applicants know when they can expect to hear back from you. 

Like this, you can make sure to get the relationship with new employees off to a good start. And even if the candidate isn’t the right fit, they might apply again for a different role in the future or spread the word about the positive application experience they had at your organization.

Application anonymization

CVs often contain a lot of personal information that is not relevant to the candidate’s ability to do the job. What’s more, an applicant’s name, photo, address or date of birth can lead to unconscious bias, which then results in an unfair disadvantage compared to other candidates who, for example, don’t have a foreign name, are younger or live in a “better” neighborhood. 

All information that is not strictly necessary for assessing the candidate’s professional ability to do the job should be removed from CVs. You may even want to consider replacing CVs through skill-based assessments.

Objective criteria and standardized interviews 

Even after anonymizing CVs, hiring decisions may still be influenced by personal bias at a later point, for instance during the job interview. To avoid this, you should develop a scoring table with objective criteria which is used for all candidates and allows you to document each applicant’s score in a detailed and, more importantly, objective manner.

To make sure that candidates have the same chances to showcase their skills and obtain the best possible score during the job interview, the latter should be well-structured and follow the same questions in the same order. Also, try to focus on forward-looking questions rather than on the candidate’s past and background. 

Diverse interview panels

Instead of having a single person conduct job interviews, you should use interview panels. This allows you to minimize bias since candidates will be scored by different people. If the recruiting process consists of several interview rounds, it may even be a good idea to have different people on the interview panel for each round. Also, the more diverse the interview panel, the better. 

Ethical recruiting is based on transparency, honesty, fairness and objectivity and aims to eliminate bias and discrimination in order to give every candidate a fair chance. While discrimination is most commonly associated with gender, race, ethnicity and age, there are also instances where candidates are discriminated against based on where they live or their country of origin, also known as geographical discrimation. 

Remote work has removed geographical boundaries in employment and given businesses the opportunity to hire employees regardless of their location; however, in order not to discriminate against candidates from certain geographical regions, businesses need an appropriate legal set-up to facilitate hiring in as many countries and regions as possible. 

That’s where global employment solutions like Lano come into play. Lano’s network of experienced Employer of Record partners enables organizations to hire employees in over 170 countries worldwide without having to worry about compliance or setting up a legal entity. Book a demo with our expert team to find out more.