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Incestuous Hiring

By Henry
Friday, September, 9 2016

Contract hiring has become highly incestuous and the biggest losers are the companies or their stock holders. The hiring managers orchestrate these hires very often by strong arming their team so the burden of hire can be shared in case of conflict of interest question comes to the fore.

Although companies make their staffing vendors and hiring managers include clauses in their agreements related to ethics, loyalty etc., there still exists many loop holes in the process to prove any wrong doing. These managers have their favorites and while they do not generally control the interview outcome, they control the rate information, upper management approvals, On-boarding, their own team mates (interviewers), timesheet approvals and eventually contract renewal.

Managers do this obviously in exchange for cash or non-cash benefits which may include variety of entertainment or a better job etc. Bottom line though is companies lose a lot of money which can be saved by just making sure they pay the most optimal rates on their resources. If the rates approval part of the process is controlled by a non-biased internal/external group, companies can end up saving minimum 25% of their contractual budget which could run in millions of dollars.

With big data analytics, establishing a rate card that can get frequently updated and is reliable. Companies can use that as a benchmark and have agencies really work hard to meet those rate standards. Knowledgeable, honest and ethical agencies will be able to meet them and if they don’t it simply means they are not good enough or are not willing to work hard to get companies the best rates.

Most companies realize they have been duped when it is too late. At that point, the only remedial action is to cut rates and that may have an adverse effect on the projects or a long term loss. However, it is something that companies can do to get some relief from the situation they are in if they do it smartly. The timing has to be right to such an action done with calculated risks. The last thing companies want is to be strong armed by the agencies or its consultants.