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Episode 107 - Is it ethical to have candidate blacklists?
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Is it ethical to have candidate blacklists?
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Transcript
AI's Role in Recruitment
00:00:08
Speaker
Hey, Ross, did you know Bullhorn can help you grow your business without growing your workforce? I did, Adele. I think they're called AI agents.
00:00:20
Speaker
Recruitment AI agents. They can do everything your workforce does today, source, screen and qualify candidates to get new job orders, chase timesheets or approvals and even answer payroll questions.
00:00:31
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These AI agents and assistants elevate your recruiters to focus on what they do best at every step of the recruitment process and so your agency can fill placements faster. Contact Bullhorn today about AI everywhere.
Impact of US Tariffs on Global Economy
00:00:46
Speaker
This is the news for the 29th of April 2025. I'm Adele Last. The International Monetary Fund has slashed its global economic outlook amid a highly unpredictable environment created by US President Donald Trump's tariffs.
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The um IMF's Global Economic Growth Forecast April update released last Wednesday has been downgraded. with GDP expected to decline from 3.3% to 2.8% this year.
00:01:13
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The um IMF said we expect that the sharp increase on 2 April in both tariffs and uncertainty will lead to a significant slowdown in global growth in the near term. Its forecasts show that every major economy will be hit, with the US's GDP growth rate to drop by a third from 2.7% to 1.8%.
00:01:32
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The IMF stated that the probability of a recession in the US has increased to nearly 40%, higher than its previous forecast of 25% made in October, a month before Trump's election victory.
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Australia's growth outlook has also taken a severe cut, with annual output forecasts to be $13 billion dollars lower in 2025. Australia's economic growth projection for 2025 was downgraded to 1.6% from the projected 2.1% in January, a drop one quarter.
00:01:58
Speaker
from the projected two point one per percent in january a drop of nearly one quarter Australian GDP growth is expected to pick up to 2.1% in 2026, with inflation projected to come in at 0.8 percentage points lower this year than previously forecast at 2.5%, before accelerating to 3.5% in 2026.
00:02:19
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However, in a contrary report released last Thursday, Deloitte Access Economics assesses that the short-term economic effects of US tariff policies on the Australian economy will be relatively modest.
00:02:30
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Only around 4% of Australia's goods exports by value go to the United States, meaning the direct impact of the 10% tariff applied to Australia is largely immaterial in the context of overall economic growth.
Regional Revenue Trends in Staffing
00:02:45
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Randstad, the world's largest staffing firm, reported first quarter revenue declined by 4.7% to €5.65 billion, euros while organic revenue per working day was down 4.2% when compared to the same quarter last year.
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EBITDA rose 10% €149 million, euros while net profit was down 10% to €70 million. euros In North America, revenue was down 4% year on year.
00:03:14
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Total revenue in Randstad, Asia Pacific was down 1% organically. In Japan, revenue was up 4%. Revenue in Australia New Zealand was down 7%, while India was up 8%.
00:03:26
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eight percent Robert Half reported first quarter revenue fell 8.4% year over year to $1.35 billion. dollars When adjusted for trading days and exchange rates, revenue was down 6.2%.
00:03:41
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US revenue fell 5.7% the first quarter when adjusted for billing days compared to the same quarter last year. International revenue fell 9.4% when adjusted for both billing days and exchange rates.
00:03:55
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Robert Half Contractor and Temp net margin dropped 14% and perm placement fees were down 10.2%. Global gross profit declined 11.3% and operating profit plummeted 73% to $17.35 million. dollars SEEK reported job ad volumes dropped for a second month, down 3% in March from February.
00:04:21
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Applications per ad rose 2% month-on-month, have only been this high since the height of the pandemic. Queensland job ad volumes dropped 6.9% month-on-month, the sharpest monthly decline in the state since 2020, most likely due to the disruption in hiring caused by cyclone Alfred.
00:04:40
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Ad volumes in every state and territory declined month-on-month. By sector, a 4.2% drop in healthcare and medical job ads was the largest contributor to the overall decline. Insurance and superannuation at 3.8% and call centre and customer service at 3.2% were among the few industries where job ads rose month on month.
00:05:01
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Taking a quarterly view, many more industries have recorded growth, demonstrating that the recent two months of decline were not broad-based and have not completely outweighed the growth recorded in January. There was notable job ad growth in mining resources and energy, 4% quarter on quarter, manufacturing, transport and logistics at 3%,
00:05:19
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and call centre and customer service at 3% quarter-on-quarter, among other industries.
00:05:27
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Victoria's performance is the biggest surprise in Comsec's latest State of the States report, released yesterday, jumping from fourth to second spot, while Western Australia remains the best performer.
00:05:38
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Solid retail spending and inbound overseas migration propelled Victoria above South Australia and Queensland as the pace of home price rises slowed in those states following a strong post-pandemic upswing.
00:05:51
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said Comsec Chief Economist Ryan Felsman. Overall, the economic performance of Australia's states and territories is being supported by a strong job market, robust government spending and solid population growth at a time of higher cost of living pressures, he said.
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The report attempts to determine which state is Australia's economic leader based on eight key indicators, economic growth, retail spending, equipment, investment, unemployment, construction work completed, population growth, housing finance and dwelling commencements.
00:06:23
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The report evaluates the performance of each state and territory's economy in relation to its long-term average. WA remained at the top of the rankings for the third straight quarter due to retail spending, relative unemployment, relative population growth, housing finance and dwelling starts.
00:06:38
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New South Wales, up from sixth to equal fifth alongside Tasmania, was the top performer for economic growth. Victoria's top rankings for construction were completed, helped its rise, however it was bottom of the table on relative unemployment.
Ethics of AI in Broadcasting
00:06:55
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Australian radio network ARN, the media company behind KISS, home of Australia's most expensive, complained about and censored radio show Kyle and Jackie has been outed for using an AI-generated female Asian host without disclosing it.
00:07:11
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The fake presenter, Tai, was reportedly generated using someone in the finance department at ARN. The show broadcasts on Kader, Australia's home of hip-hop and R&B, 11am to 3pm weekdays.
00:07:23
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While Spotify users are familiar with the platform's AI DJ, which kicked off in early 2023, it's clearly disclosed. Ty has been on air for around six months without any disclosure that it's an AI-generated presenter.
00:07:37
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The issue was first flagged last week when journalist Stephanie Coombs had a tip-off and after some digging declared she was unable to find any other digital presence or backstory for Ty.
00:07:48
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In audio, you can't make an exceptional cup of tea in the office kitchenette without a press release going to trade publications like Media Week and Radio Today, Coombs wrote. It seems very odd that Cater hired a new ethnically diverse woman to their youth station and then just forgot to tell anyone.
00:08:04
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As Coombs noted, I looked through the host lineups for Kiss, Gold and Cater, ARN's three major radio brands. Across nine stations, it seems that there's only one person who outwardly presents as diverse.
00:08:16
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She goes on to ask if they invented an Asian woman rather than hiring one. The story was picked up by the Financial Review, which confirmed with ARN that Thai was an AI generation creation.
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Among those concerned that AI was used to create an Asian presenter was Australian Association of Voice Actors Vice President Teresa Lim, who said on LinkedIn that listeners deserved honesty and upfront disclosure instead of a lack of transparency.
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calling the decision to create an AI Asian presenter exploitive.
AI vs Human Debt Collection
00:08:47
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Human debt collectors remain more effective than generative AI, for the time being at least.
00:08:54
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James Choi from Yale University and his three collaborators studied the differences in effectiveness between human and AI debt collectors. They concluded, we study calls made to get delinquent consumer borrowers to repay, regression discontinuity, and a randomized experiment to reveal that AI is substantially less effective than human callers.
00:09:19
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Replacing AI with humans six days into delinquency closes much of the gap. But borrowers initially contacted by AI have repaid 1% less of the initial late payment one year later and are more likely to miss subsequent payments than borrowers who humans always called.
00:09:39
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AI's lesser ability to extract promises that feel binding may contribute to the performance gap, the researchers concluded. Staffing industry analysts' research has found that 14% of large staffing buyers have replaced temporary workers with automation.
00:09:58
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Larger buyers and those primarily using industrial contingents were more likely to do so. Automation is greater among larger buyers with 21% of those with 100,000 or more directly employed workers saying they have replaced contingents with automation.
00:10:14
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No firm with less than 10,000 employees reported replacing contingents with automation according to the Workforce Solutions Buyer Survey 2025 America's results. The report also found that buyers, primarily using industrial staffing, were more likely to replace contingents with automation at 33%.
00:10:32
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Less likely were those primarily using IT staffing at 9%. Examples of roles being replaced by automation include manufacturing, administrative roles, and repetitive tasks that bots can perform, according to the survey.
Legacy of William Bill H. Stoller
00:10:46
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Express Employment International's founder, CEO and chairman, William Bill H. Stoller, passed away at age 74, the company announced last Thursday.
00:10:57
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Stoller began his staffing career in 1973 and in 1983 co-founded Express Employment Professionals, the flagship brand of Express Employment International.
00:11:08
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Express Employment International, a staffing franchisor, ranks as the fourth largest staffing firm in the United States. The company entered the Australian market in early 2020 when it purchased the assets of Franchisor Frontline Recruitment Group, covering 31 franchisees in Australia and three in New Zealand.
00:11:27
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Express also has operations in Canada and South Africa. And that's the news for the 29th of April 2025. I'm Ross Klenit. Stay tuned for Question of the Week.
The Ethics of Blacklisting Candidates
00:11:49
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but
00:11:53
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Question of the week. Is it appropriate for an agency to have a candidate blacklist? oh this is a really interesting one, Ross. Where does it come from?
00:12:04
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Well, it came from an article that I read last month and it was posted on Business Insider. So let me just read to you it says. Earlier this month, Business Insider revealed that Meta, that's the parent company of Facebook,
00:12:22
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maintain secret block lists, preventing some former employees from being rehired. Since then, a flood of emails and messages to Business Insider, as well as discussions across Reddit and LinkedIn, suggest that this practice, while not illegal, is far more widespread than many job seekers realise.
00:12:42
Speaker
So this got you thinking, does this happen in our industry? We know it does actually. Absolutely. is It absolutely happens. So I thought this would be a good one to toss around because it's not a topic that's typically discussed in our industry. So why don't we discuss it?
00:13:00
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So firstly, Adele, let's fess up. Did you in any of your agency jobs operate with candidate blacklists? I think you would be lying to yourself. You'd be lying to the industry if you didn't admit this. You know, we used to call them DNU, do not use, um block list, black list. Yeah, there was lots of different, you know, names for it. But I think if you're really honest as a recruiter, you have to admit that you have conducted this practice where you have essentially black blacklisted candidates that you're not going to work with any anymore for a number of reasons.
00:13:36
Speaker
Yes, I agree. um In my experience across four agencies, DNU was the term, do not use. And personally, I think it's entirely defensible and appropriate.
00:13:51
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What about you? Well, this is an interesting one. And I agree that, as i said, I admit it, I've used them before. And and I did have change of approach to this about halfway through my career, though, because I started initially in white-collar and business support type recruitment and IT. And then I moved into industrial recruitment, blue collar recruitment halfway through my career.
00:14:12
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And it was interesting for me to note the much softer approach, let's say, that the blue collar recruiters had as to candidate bad behaviour, let's say.
00:14:22
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they they wouldn't put candidates on the blacklist quite as easily as I would have. You know, they would be, really they would do something wrong and I would straight away strike them out and say, right, that's it. You know, I'm not using that candidate anymore. But these blue collar recruiters seem to have a higher tolerance. They kind of had almost three strikes and you're out sort of mentality.
00:14:42
Speaker
And I wonder if it was to do with the fact that they couldn't afford to you know, get rid of candidates that have no candidates left, essentially, if they blacklisted all the candidates that behaved badly. They had to have some level of tolerance, giving them a few chances before they finally said, okay, this is not a candidate we can represent.
00:15:00
Speaker
Okay. All right. Well, um maybe I'll tell you the reasons why I used to put candidates on the DNU list, and then you can perhaps describe some of the differences in behaviour across white and blue collar that might have meant different things depending upon where you're working.
00:15:19
Speaker
So for me, so I recruited predominantly in accounting. And the things that would have a candidate go on the DNU list for me would be, firstly, ah a substantial material lie.
00:15:35
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So if a candidate had excluded ah whole job from their resume and I found out about it, then unless the candidate had some extraordinaly extraordinarily defensible reason for that, then I'm straight away, i can't trust you.
00:15:55
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So you're gone. ah Secondly, if the candidate had let me down, not once, but typically two or maybe three times, in other words, ghosted,
00:16:07
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the client who I'd set up an interview with them for or had just dropped out of a job, a temporary job without any notice and then either didn't contact me or i had some flimsy reason.
00:16:22
Speaker
I wasn't prepared to accept that. ah bad behaviour at the job. not Not necessarily poor performance. I mean, it would would depend, but certainly inappropriate or bad behaviour. That rarely happened, I've got to say, with the type of people that I that i placed.
00:16:42
Speaker
um Being rude or inappropriate to any of the staff, certainly in terms of the people, you know, say the payroll department in our in our agency, that that certainly would get them a big D&U. And don't know.
00:17:01
Speaker
and ah i don't know the pests. I think that's just the best way to describe them. People who you might have rejected them for one job and they keep applying and keep calling you.
00:17:16
Speaker
And there's just something about this weird, obsessive, stalking type behavior that just makes you think, there's no way I'm going to represent this candidate to a client of mine because they're just their behavior is too weird.
00:17:31
Speaker
It's not that they did eat anything illegal, but it was just weird behaviour. And look, it was pretty infrequent. Maybe I'd get one of those a year, but that type of behaviour would definitely put someone on my D&U list. So what about for you? Yeah, I think you're right. I think it's about, you know, um brand reputation. You know, I think as recruiters, we're looking at people as an extension of ourselves and our brand in terms of representing um that to our clients. So
00:18:02
Speaker
The candidates we don't want to work with are the ones that we feel are a risk to that, are going to cause us to have, you know, a reputational um impact for us by their own behaviour the way that they, you know, do or don't do things. So i think that's the where it sort of stems from.
00:18:22
Speaker
But I think you're right. There would be a whole host of reasons why different recruiters would put people on a blacklist and and that's the issue with this. You know, this is the grey area of it because I think what you're saying is there's some really clear, obvious reasons why a recruitment agency may not choose to represent a candidate or work with a candidate and obviously if they border on that um discriminatory, illegal, you know, very bad behaviour, you know, it's pretty easy to justify that. But I think the grey area comes in where it comes down to a recruiter who just doesn't like the candidate, you know, or
00:18:58
Speaker
you know, finds them unpalatable in in dealing with them or whatever it might be. And that that's a really interesting dynamic, I think, that recruiters need to have a think about, you know. Are you willing to blacklist people because you don't like them? That doesn't necessarily mean your client won't.
00:19:14
Speaker
Oh, I certainly don't support that. I mean, to me, you have to have a clearly defensible reason for not representing a person because as a recruiter, we're not obligated to represent everyone or anyone.
00:19:33
Speaker
that That is not an obligation. Our job is to discriminate, but to discriminate legally. And so, therefore, if we are discriminating by excluding candidates or or a candidate, then we need to be are careful that what we have documented is a legally defensible reason because excluding a candidate for a job is one form of exclusion.
00:20:01
Speaker
But if you're putting them on a DNU list, you're effectively excluding them from all jobs that you're considering. So therefore, the reasons must be more substantial and defensible.
00:20:13
Speaker
Yeah, I think you're right. You know, we would have people on there that, yeah, didn't show up, um you know, for interviews or ah didn't behave, um yeah, appropriately to staff, those reasons that you mentioned there as well.
00:20:26
Speaker
um We had people that um that would have, you know, been really difficult to work with at times as well. I mean, as I said, in that blue collar space, sometimes there were some really interesting characters and so we had to really work out um, whether we wanted to work with some candidates or not. So i think there's lots of reasons why recruiters would use one and have one.
00:20:49
Speaker
I do think you have to be really careful though, because you could be excluding candidates who you might need later. And I do recall actually recently on LinkedIn, um, a similar conversation with a UK recruiter who, um, outed a candidate. They didn't name the candidate, but they basically said, I've just had this candidate, um,
00:21:06
Speaker
He's, ah you know, tried to undermine me at the client side. He's tried to go, you know, backdoor, tried to talk to the client direct without a fee. I've tried to call him. He won't take my call. I'm never dealing with this person again. And then six months later, this candidate called him and said, have you got any more jobs? You know, I'm interested in working with you again. And the recruiter publicly was saying, I'll never work with this candidate again.
00:21:28
Speaker
This is the kind of stuff that, you know, drives me crazy. I've kind of blacklisted the candidate. And the commentary and responses to it was really interesting. Well, I'm fully supportive of that recruiter because as you rightly said, it's about your reputation. And if someone has done something effectively behind your back to in some ways undermine the commercial relationship you have with the client, in other words, effectively get the client to hire them directly without paying a fee, then I'm sorry.
00:22:03
Speaker
It's all over Red Rover for me with that candidate. I am not representing that candidate again under any circumstances. They have demonstrated a complete disrespect for me and I'm just not going to tolerate that.
00:22:18
Speaker
And I think you're right. You know, that one's obviously a clear one. Most of us would feel that way. I just think it's really interesting in this with this question and that, you know, there is a lot of that grey area. what what Your opinion your opinion of disrespect might be different to someone else's. So, you know, from a candidate's perspective, they may not see that as disrespectful. I don't think it's the case, but, you know, perhaps they just thought that was, you know, their only way they were going to get a job when they were desperate and they needed to put food on the table and they didn't really care that the recruiter had their nose at a joint. So, yeah, I don't know. It's it's an interesting question for sure.
00:22:51
Speaker
Well, I think Overall, all agency leaders and owners should be proactive about it. In other words, you if you are an owner or leader, you should be very clear and explicit about the reasons for candidates being a DNU.
00:23:10
Speaker
and not to ensure that you're not um unintentionally creating exposure for yourself because candidates are being blacklisted or DNU'd based on just personal opinion rather than something that's legally defensible.
00:23:30
Speaker
um