Summary Report

Social Network Recruiting: Managing Compliance Issues

© Taleo Business Edition. All rights reserved.

Social Networking: A Recruiting RevolutionIn just a few short years, online social networks have grown from a novelty to one of the most powerful recruiting tools available to HR professionals. Now a fact of daily life for hundreds of millions of Americans, they offer intimate – and often instant – contact with potential candidates. But every business tool has its challenges. With social networks, it’s making the most of what they have to offer while maintaining compliance with government regulatory bodies such as The Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP). This paper will explore the impact of social networking on the hiring process, with a focus on legal risks and how to avoid them.

In the last decade, social networks such as Facebook, LinkedIn, My Space, Twitter and numerous others have grown at astonishing rates. To give just two examples: In October 2007, Facebook had roughly 20 million US members. Today, it boasts over 103 million members1, and regularly surpasses Google in site visits per day2. LinkedIn has increased its number of registered users from roughly 40 million in 2009 to over 60 million in 20103. While these numbers do not as yet match the number of resumes on job boards – Monster.com boasts over 150 million4 – social networks have one very significant advantage over job boards. They are free. Furthermore, in the case of socially-oriented sites like Facebook, they offer the possibility of an uncensored peek into how job candidates act in unguarded moments.

These benefits have not gone unnoticed by HR departments. In one recent survey conducted by executive search firm ExecuNet, 77 percent of the respondents indicated they used the web for screening potential job applicants. Social networks are also seen as a highly effective recruiting tool, particularly for connecting with highly-prized passive candidate. But in the rush to take advantage of social networking, some of the risks and drawbacks have received little attention. Many experts believe the use of social networks to promote open positions or evaluate candidates exposes companies to the risk of lawsuits on grounds of discrimination. The risk, they say, hinges on whether or not the use of social networks is motivated by an intent to discriminate (“disparate treatment”) or whether the practice, although it appears neutral at face value, has an unintentional and unjustified adverse impact on members of a protected class (“disparate impact”). Furthermore, the use of social networks can also lead to disqualification from government contracts through failure to comply with regulations issued by the OFCCP.

Disparate ImpactThe risks posed by the use of social networks in the hiring process begin at the front end, with sourcing, because the labor pool available through these networks does not reflect the demographics of the general population. For example, according to the media analytics firm Quantcast, only 5 percent of LinkedIn’s members are African American (vs. 12.8 percent of the total population) and only 2 percent are Hispanic (vs. 15.4 percent of the total population)5. It is easy to argue that sourcing via LinkedIn will have a disparate impact, and a similar case can be made for all the social networks.

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1 http://www.istrategylabs.com/2010/01/facebook-demographics-and-statistics-report-2010-145-

growth-in-1-year/

2 http://weblogs.hitwise.com/heather-dough-erty/2010/03/facebook_reaches_top_ranking_i.html

3 http://press.linkedin.com/faq

4 http://www.answers.com/topic/monster-website

5 http://www.workforce.com/section/06/feature/26/68/67/

Pamela Devata, a partner at the Chicago law firm Seyfarth Shaw, states that “Sourcing from professional network sites such as LinkedIn carries a risk that the method could be challenged on discrimination grounds. It represents a hiring pool that is not open to the general population.” Jessica Roe, managing partner at the Minneapolis law firm Bernick, Lifson, Greenstein, Greene & Liszt, is more blunt. “I anticipate more race and age claims over the next two years, and a significant portion will be from sourcing through social networking sites.... We’ll see lawsuits.”6

Organizations that rely heavily on social networking sites will need to take a close look at their overall sourcing program, to ensure that all classes - regardless of age, race, gender or disability - have an opportunity for employment.

Questionable ScreeningThe extremely common practice of using of social networks to help screen candidates is also fraught with legal pitfalls. Looking at candidates’ Facebook pages or following their tweets is tempting, because these sources often give a more candid picture of their personality than could be obtained from any other source. The press is littered with stories about job candidates who seemed promising until an online search revealed posts where they bragged about drug use, tweets that contained racial slurs, and other such negative material.

There is nothing wrong with rejecting a job candidate with personal characteristics that will result in poor or unsafe job performance. That is part of any HR organization’s mandate. However, when recruiters obtain such information through a social network, they are unable to ensure that all of the information they uncover will be job-relevant. Some of this information – gender and race, for example – would normally be obtained through a conventional job application or via a structured interview. But other information related to country of origin, religious preference, pregnancy, age, disability or sexual orientation might not. What if a recruiter, searching for evidence of drug use, finds that a candidate is a fan of the Facebook Page of Gay Rights or belongs to half a dozen groups for expecting mothers?

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6 Devata and Roe quotes: http://www.workforce.com/section/06/feature/26/68/67/

If such candidates are subsequently eliminated from consideration, some of them are almost certain to conclude it was because they were gay, pregnant, disabled and so on. And of those, some will be disposed to take legal action. In other words, the mere appearance of discrimina-tion can create problems. If a business can demonstrate that a hiring decision was based on objective, job-relevant criteria, such as a uniformly administered test of word processing or Excel skills for a financial analyst position, the candidate probably won’t have a case. But if the criteria involved are softer, such as “good interpersonal skills,” it is very difficult for a business to prove that discrimination wasn’t involved. Irrespective of outcome, the amount of time and money required to deal with any lawsuit is considerable.

Todd Owens, General Manager of employment screening solutions provider Talentwise, expresses HR’s dilemma this way. “Social networking sites are in the unique position of sitting at the cross-roads of an individual’s personal and professional life. Until applicants and employees realize the importance of keeping these worlds separate, recruiters are in the precarious position of using the information on social networks cautiously and selectively. They must recognize what is and what isn’t job-relevant, as well as the inherent faults of information generated by an applicant, his friends, or his foes.”

The problems with social networks – and the Internet in general – can extend beyond recruiting, as indicated by this story, reported in the Minneapolis-St. Paul StarTribune:

A 2008 lawsuit in New Jersey showed the downside of employers viewing social media sites. In that case, employees of a restaurant created a password-protected blog to complain, sometimes crudely, about management and customers. A manager learned of the blog and persuaded one of the bloggers to log him in to the blog to read it. As a result, two of the restaurant workers were fired.

They subsequently sued and won a $17,000 judgment.

Because of these legal issues, social networks pose a difficult dilemma for HR organizations. They do have their risks. But on the other hand, they are arguably the best way to reach out to passive candidates, verify candidates’ résumé claims, gain insight into their personalities, and unearth undesirable behavior or character traits. Furthermore, they are a free resource.

For most HR organizations, these benefits have proved impossible to turn down. So the question becomes, what steps can HR take to avoid the risk of civil rights lawsuits or OFCCP violations that may arise from their use?

At this writing, there are no specific laws or guidelines from the EEOC or OFCCP covering the use social networks. However, a combination of common sense and reference to existing OFCCP guidelines will enable HR organizations to enjoy the numerous benefits of social networking sites while reducing the risk to a minimum.

When it comes to screening, they can begin by asking whether or not the use of social networks is really necessary in any particular situation, or whether an alternate approach will work just as well. For example, if drug use is a concern, there are well established approaches to screening candidates that pose no legal risk whatsoever. The same applies to verifying qualifications or other resume claims.

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On the sourcing side, it’s important to avoid using social networks as a sole means for advertising available positions. Unless a business necessity exists for this practice, it is almost certainly discriminatory. However, when social networking is combined with employee referral programs to

“amplify” their effect, the discrimination issue can likely be mitigated.

It is also extremely important to use software that ensures adequate records will be available when OFCCP auditors show up at the door or a plaintiff’s attorney produces a discovery request. Such records are crucial. According to Paul Mollica, a partner at Meites, Mulder, Mollica & Glink in Chicago, “a judge or a jury draws an inference that if you didn’t maintain records, the records must have been prejudicial.”7

Fortunately, software applications exist that can ensure OFCCP compliance. Taleo Business Edition is a premier example. It allows recruiters to tap into the power of social networks while tracking the parameters considered relevant by the OFCCP. These include:

“Social networks can give recruiters a competitive edge in locating and engaging the best candidates available, but adding these new sourcing options also brings potential legal pitfalls that recruiters need to be aware of,” noted Jason Blessing, General Manager of Taleo Business Edition. “Taleo’s Smart Sourcing solution and our Taleo Insight talent intelligence module work together to address these problems. Smart Sourcing makes it easy to take advantage of social networks, and Taleo Insight ensures compliance.”

An Essential ResourceSocial networks are here to stay, and there is little doubt that they will become even more central to the hiring process as time passes. They are therefore a resource that should be aggressively pursued. At the same time, HR organizations need to use common sense, maintain discipline, and implement appropriate record-keeping practices to avoid legal entanglements.

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7 http://www.workforce.com/section/06/feature/26/68/67/

• date the candidate applied • last candidate stage (application received, reference check, etc.)

• job title

• EEO job category • gender

• hired? (Y/N) • race/ethnicity

• hire date • source (LinkedIn, Facebook, HotJobs, etc.)

• start date • requisition-specific reason for rejection

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