Looks like the corporate world is spinning anti-clockwise. People usually headhunt for top talent, but in the recent context, they’ve been shifting gears and focusing mostly on searching for underperforming employees. Raising your eyebrows? Well, this statement is true for most organisations that want to cut back on costs and avoid expensive payouts. This unconventional strategy presents moral dilemmas and concerns regarding its long-term effects on companies and workers.
The motivation behind headhunting underperforming employees
When it comes to managing failing staff, businesses frequently encounter financial difficulties. “Reverse hiring” is the process by which a manager requests that an outside recruiter “headhunt” an employee and place them in a different position elsewhere.
Dismissing these workers may result in large severance benefits, litigation costs, and reputational harm to the business. To avoid dealing with these problems, some firms have started using headhunters to entice underachievers to work for other companies.
British law prohibits employers from terminating employees without cause. A worker is now limited to filing a claim for wrongful dismissal after two years of service. According to their statement, the Labour Party wants to reduce this to a single day. One recruiter in the area, Evan Jowers, a partner at Lateral Link, stated that “reverse hiring” was being used by legal firms as a downsizing strategy.
According to him, certain major companies have accelerated their employee termination policies due to a decline in business since the beginning of the year and overhiring during the epidemic.
“Reverse hiring has increased in major law firms as a result of industry layoffs since the third quarter of 2022 until now,” Mr. Jowers stated. The financial services, media, real estate, and energy sectors are also known to be major hubs for this behaviour.
Unravelling the ethics of headhunting underperforming staff
Reverse hiring is another method for removing unproductive employees without following any official internal procedures. The employee will most likely be unaware of the procedure, which usually means the employer will save thousands in severance compensation while the recruiter will profit handsomely.
This is where it starts to get a little messy. It is difficult to overlook the moral implications of headhunting ineffective employees. Imagine yourself working tirelessly at your job when suddenly a recruiter calls and says you could be better off somewhere else. It’s like a professional breakup, and nobody wants that.
“It’s quite a cunning way of getting people out the door if they’ve already passed probation,” stated a recruiter at a professional services-focused agency. A few companies we collaborate with would want to cover the cost of a hiring agency rather than a severance benefit.
The emotional cost is more important to the employees than the possible job change. Loyalty disappears and trust is damaged. The morale of the entire team may be negatively impacted by this type of drama at work, in addition to the offending individual. Nobody likes to work in a place where their boss is making overt attempts to force them to leave right?
An alternative for transition, when settlements can be a hefty cost
A legally enforceable contract between you and your employer is called a Settlement Agreement (formerly known as a Compromise Agreement). This usually entails an agreement from you not to bring any claims before a tribunal or court in exchange for a severance payment from the employer.
However, as this method could be costlier than recruiters hiring matchmakers to connect companies with underperforming employees, companies don’t usually go ahead with settlements but rather transfer underperforming employees to other organisations where they might perform better.
“That’s quite a cunning way of getting people out the door if they’ve already passed probation,” stated a recruiter at a professional services-focused agency. “Some of the companies we partner with would prefer to pay for a recruiting agency rather than a severance benefit.”
According to a different recruitment specialist, it can also be a smart move for companies that need to lay off employees but don’t want to hurt their stock price or generate bad news. Employers are cautioned about the legal implications, though.
According to Jeremy Coy, a senior associate employed at Russell-Cooke, the employer’s primary legal risk is being judged to have violated the concept of “trust and confidence.”
“They could claim constructive dismissal, but their case won’t be strong if it happened less than two years after they joined,” he stated.
Company culture on the rocks
The ripple effect is a major outcome as well, that some companies fail to consider. Imagine the following scenario: everyone becomes tense when your cubicle neighbour receives a call from a recruiter. Anxiety becomes the new workplace culture, and job stability begins to feel like a transient luxury. How safe are you if your coworkers are being targeted?
Uncertainty of any kind is bad for the culture of the company. A workplace where instability and dread are the norm is like a ticking time bomb. More turnover, strained teamwork, and a general decline in production are some ways it might blow out. Who wants to give it their all when they’re always wondering if they’re going to be the next to be courted away?
What can companies do to steer clear of these implications in the long run?
There are those employees who perform well enough that you don’t have to fire them, therefore leaving a company with a settlement would probably involve paying hundreds of thousands of pounds in costs, according to a senior executive at an energy consulting firm. Sending a recruiter their information in an attempt to advance them is simpler.
He went on, “If someone is not performing up to the standard, you need to implement an improvement plan, hold frequent meetings, and offer them extra help.” People want to speed up the process since if you follow the policies, it will take months before anything happens.
Encouraging struggling coworkers to thrive requires candid comments and open communication. Together, establish attainable objectives and give them the assistance they require. Promote an optimistic atmosphere, acknowledge little victories, and provide tools for development. Frequent check-ins demonstrate your commitment to their achievement. Growth is the goal, not punishment.
So, is hiring unproductive staff members a wise way to save costs or a ticking time bomb of ethical, cultural, and legal pitfalls? Both, I would assume to some extent. Although businesses may be eager to avoid financial difficulties, the long-term effects on staff morale, corporate culture, and legal positions may outweigh the immediate benefits.
(Tashia Bernardus)