Keep in mind, I come from a compliance background. I represent(ed) the organization hired, in part, to eliminate corruption and fraud in the contingent staffing world. Many of my clients had heard of this rampant practice – or possibly suspected of its pervasiveness in their own organization – in considering a VMS program in the first place. So, suffice it to say, I have no firsthand experience with this practice.
“What practice?” you ask. Payola. Bribery. Under-the-table-payments. Managers and directors at large enterprises who are in some way paid cash for each resource they bring on board. The contingent worker or his agency pays the manager some amount of money, per hour or per deal.
“They” say it is rampant in Silicon Valley. “They” have told us that it’s why we can’t break in to certain companies (but – they’d be happy to find us a willing manager who will change all of that for us.) They are part of the ecosystem, or have friends who are. A company that pays $150 and a worker who makes $50, with an agency’s mark up, and two to three managers, all sharing the delta. These purchasing agents are buying staffing services from their buddies at inflated prices and receiving a kickback for their trouble. So what’s the harm? The company pays more than it should, the worker makes less than he should, and I can’t get a foot in the door to do business where this fraud exists.
How long has this been going on in the Valley? It appears to have started a decade ago following the .com massacre. What may have started as a prospect accepting a dinner or gift basket from a sales rep is a far cry from the practice of secretly receiving a lucrative financial payout. The former exists where compliance is required with company policies and actual laws. The latter is just plain Soprano-style bribery and it occurs as remuneration for the performance of an act – one that is inconsistent with what that manager (given some vendor-selection discretion) is supposed to be doing. This is the crooked stuff where a lot of money changes hands behind the scenes and nothing prevents it if you have two willing players. A lot of recruiters have been “enticed” by internal hiring managers who want a piece of the action. It starts out with some sly remark about “Wow, I have made you a lot of money this month. Seems you owe me a champagne dinner and some 49ers tickets (nudge, nudge).” From there, who knows? I can only guess at the various ways in which these payouts occur. But purposefully steering a contractor hire through one “friendly” agency and getting a cash payout for undermining the interests of one’s own employer is as shady as outright embezzlement.
Can we curtail this unethical behavior? Sure, there’s always termination of the hiring manager by his company and the filing of theft and fraud charges. It is for this reason that many companies and governmental agencies have come up with rules to guide employees in the treacherous terrain of accepting gifts and amenities. For those that prefer the payoff rather than adhere to the rules, how many get caught? What can I do about it? No one wants to name names.
If you’re a hiring manager, play fair. If you’re a company policy decision maker, document the rules and punish those who break them by making greedy deals that cost the company. If you’re a staffing agency soliciting bribes, I hope it catches up with you. You wouldn’t be the first to get slammed for it upon discovery, and you won’t be the last.