Step 3. Screening & Evaluating Labor Recruiters

Fairing Hiring Toolkit for Suppliers

For Governments
 
This section provides a tailored introduction to the materials for governments and public policy actors, including an overview of the most relevant tools and guidance with an explanation of how these tools can support the work of governments and other public policy actors. These tools complement national and international regulatory efforts to promote fair hiring, reign in abusive labor recruiter practices, and establish rigorous protections for migrant workers.
For Advocates
 
This section of Verité’s Fair Hiring Toolkit provides a tailored introduction to the materials for labor rights advocates and labor unionists. An overview of the most relevant tools and guidance is provided, with an explanation of how these tools can support their work. The tools provided here are broad and multi-faceted, providing guidance on a range of issues linked to forced labor and human trafficking. You are encouraged to explore the material provided here and discover how you can put it to use in your own work.
For Investors
 
This section provides a tailored introduction to the materials for investors. An overview of the most relevant tools and guidance is provided, with an explanation of how these tools can support the work of investors. These tools can support investor campaigns, corporate advocacy and dialogue, and investment analysis of risks of forced labor and human trafficking in company operations and supply chains.
For Auditors
 
This section of Verité’s Fair Hiring Toolkit provides a tailored introduction to the materials for social auditors and certifiers. An overview of the most relevant tools and guidance is provided, with an explanation of how these tools can support their work. The Toolkit is extensive and multi-faceted; it provides guidance on a range of issues. Auditors are encouraged to explore the complete set of materials provided.
For Multi-Stakeholders
 
This section provides a tailored introduction to the materials for multi-stakeholder and multi-brand initiatives. An overview of the most relevant tools and guidance is provided, with an explanation of how these tools can support the work of multi-stakeholder and multi-brand initiatives.

Step 3. Screening & Evaluating Labor Recruiters

If your company is outsourcing the recruitment, hiring, or management of migrant workers to a labor recruiter, there are a number of proactive measures you can take to make sure that things proceed smoothly, safely, and legally.

The most important step in this process is to select the right recruiter at the outset. There are many ethical, efficient, and legal labor recruiters that can meet your business needs operating in the market. The challenge is in finding and engaging them, while avoiding engagement with unethical agencies or individuals.

To help with this process, companies seeking to hire labor recruiters should conduct a pre-selection review in both the sending and receiving countries. Such a review will help to prioritize and select labor recruiters that are able to demonstrate that they:

  • operate in compliance with the law;
  • identify, screen out, and manage risks of forced labor (and other legal and social compliance violations) in their business processes; and
  • observe the “employers pay” principle of not charging any fee or cost for recruitment to workers, directly or indirectly, in whole or in part.

Tool 1 offers some sample questions and a rating system to assist companies in designing a screening process for labor recruiter candidates, and deciding which labor recruiter to hire. Tool 2 provides more detail on key areas of concern in the screening process.

There are also other measures that companies can take to proactively address these issues. For example, companies can work with other stakeholders such as governments, non-profit organizations, or labor unions to support the development of a robust system of regulation and enforcement of recruiter activity.

Companies should also seek to support voluntary accreditation programs, where such programs set standards for labor recruiters that encourage them to adopt good practice.

Once a labor recruiter is hired, companies should put in place clear procedures to manage and monitor the labor recruiter’s operations. See the following section, on Managing Labor Brokers and Monitoring for Ethical Recruitment and Hiring, for more information.

TOOL 1: Establishing Criteria for Screening and Evaluating Labor Recruiter Candidates

When developing a system for screening labor recruiters, a supplier or brand should ensure that the following key elements are included:

  • The criteria for screening labor recruiters are clearly defined, and incorporate:
    • All legal requirements in the country of operation; and
    • All social responsibility requirements of the supplier and its brand clients.
  • A methodology for evaluating labor recruiters against the screening criteria is established.
  • The approval process for new recruiters is defined, and includes:
    • A process for rating labor recruiters , and the conditions for passing/failing; and
    • An indication of who will make the final decision on selecting a recruiter and concluding a contract.

In this due diligence process, the company needs to obtain enough information to have reasonable confidence that the labor recruiter will be compliant with its standards for ethical performance. Such a process entails looking for the “presence or absence” of policies and procedures that relate to issues of ethical performance.

Assessing the recruiter’s performance itself will happen later, as part of the management and monitoring process. (For more information, see Managing Labor Recruiters and Monitoring for Ethical Recruitment and Hiring.)

DEFINING THE EVALUATION CRITERIA
In order to evaluate labor recruiters, Verité recommends defining a set of social responsibility requirements that complement your company’s legal requirements (compliance to law, license to operate) and technical requirements (ability to source workers within a timeframe and budget). For example, your company will want to know about the labor recruiter’s policies or approach to preventing forced labor, its approach to manpower pooling, etc.

Each company will have its own specific criteria in this area. To determine criteria, a company can undertake a careful review of the legal requirements in the sending country and country of operation. You should also review your company’s code of conduct or other high-level policy language, and any such requirements of your clients.

Once the screening criteria have been defined, each criterion should be paired with indicator(s) that serve to measure whether the criterion is being met. For example:

SAMPLE CRITERIA SAMPLE INDICATORS
Compliance with legal standards
  • The recruiter is fully licensed.
  • The recruiter has no record of legal sanctions in the past three years.
Compliance with broad social responsibility standards
  • The recruiter formally expresses a commitment to uphold the company’s social (labor and ethics) standards.
  • The recruiter has written policy and commitment statements that address social (labor and ethics) standards.
Compliance with standards on recruitment fees and expenses
  • The recruiter has a policy stating that workers are not charged recruitment fees.
  • The recruiter has a procedure for verifying that workers are not charged fees by sending country agents (e.g., worker interviews, a plan for periodic worker surveys, receipt review, etc.).
Compliance with standards on employment contracts
  • The recruiter has a policy to ensure that workers’ contracts meet legal and company requirements.

CONDUCTING A SCREENING INTERVIEW
When conducting a screening interview, the labor recruiter should be asked to describe how they are able to meet this set of selection criteria. In the table below, Verité offers some examples of questions that could be asked in this regard.

SAMPLE CRITERIA SAMPLE INDICATORS

Compliance with legal standards

  • The recruiter is fully licensed.
  • The recruiter has no record of legal sanctions in the past three years.
  • Does the labor recruiter have a valid license to operate?
  • Has the labor recruiter been subject to any labor and ethics regulatory actions where monetary penalties were assessed?
    • Where formal corrective actions were mandated by the issuing government agency, can the recruiter provide documentation to show that violations have been corrected or are on-track for correction?
  • Does the labor recruiter agree to adhere to the legal requirements of the sending and receiving countries, and to register its agreement by signing a contract or memorandum-of-agreement with the hiring company to this effect?

Compliance with broad social responsibility standards

  • The recruiter expresses a commitment to uphold the company’s social (labor and ethics) standards.
  • The recruiter has written policy and commitment statements that address social (labor and ethics) standards.
  • What is the scope and coverage of the labor recruiter’s labor and ethics policy?
  • Does the labor recruiter’s labor and ethics policy have executive management endorsement?

Compliance with standards on recruitment fees and expenses

  • The recruiter has a policy stating that workers are not charged recruitment fees.
  • The recruiter has a procedure for verifying that workers are not charged fees by sending country agents (e.g., worker interviews, a plan for periodic worker surveys, receipt review, etc.).
  • Does the labor recruiter have a no-fee policy on recruitment fees and expenses?
  • Does the labor recruiter’s policy on recruitment fees and expenses have executive management endorsement?
  • Where in your recruitment, selection and hiring process do you think the risk of noncompliance to the no-fee policy is highest?
  • What operational controls have you put in place to minimize these identified risks and to ensure that workers are not charged fees? Following are some examples of controls:
    • Policies and procedures are in place to implement the no-fee statement in the code of conduct.
    • Evidence of a safe procedure for workers to report violations by internal staff or subagents of the no-fee policy. Such a procedure should include an investigation and response to reports of violations.
    • A policy and implementing procedures that prevent the use of illegal subagents/subcontractors.
    • If the recruiter/agency uses subagents/subcontractors, a procedure to ensure these subagents are paid by the agency for their services and that they sign and comply with the agency’s no-fee policy.
    • If workers are being recruited from remote or interior regions, the recruiter has staff (under the recruiter’s payroll) in these areas.

Compliance with standards on employment contracts

  • The recruiter has a policy to ensure that workers’ contracts meet legal and company requirements.
  • Are the terms of the workers’ contracts and the contracting process itself consistent with sending and receiving country laws?
  • Does the employment contract include terms and conditions that are consistent or aligned with the hiring company’s ethical standards?

EVALUATING THE RESULTS AND MAKING A FINAL DECISION
After labor recruiter candidates have been screened, the responses must be analyzed. Verité recommends the use of a transparent methodology for evaluating labor recruiters against screening criteria. Such a methodology should define how candidates will be evaluated, by whom, and the process by which a final decision will be made and a contract issued.

One approach is to use a rating system that assigns each criterion a weight and performance score. This allows you to score each recruiter candidate’s performance on each criteria, while also giving appropriate emphasis to the areas of compliance that are most important to your company.

The results of such a rating process allows for the performance of all candidates to be cross-analyzed and compared with ease, which will then allow you to rank and compare candidates.

Example of a Rating System
Criteria Weight (%) Sample Score (%) Performance Rating
Compliance with legal standards 30    
Compliance with social responsibility standards 40    
Compliance with standards on recruitment fees and expenses 30    
Compliance with standards on employment contracts      
Total 100    
Note: Weights given to the above criterion are provided as an example. Companies should determine their own weighting systems based on their policies and (where relevant) those of their clients.

Once the successful labor recruiter candidate has been selected and hired, suppliers and brands can use the information from this due-diligence selection process as baseline data for managing and monitoring the performance of the recruiter.

Tool 2: Key Issues of Concern in Screening and Evaluating Labor Recruiter Candidates

This tool introduces some key issues that should be included in the screening of labor recruiter candidates, including:

  • Business profile;
  • Organizational/management culture and values;
  • Managing the supply chain;
  • Processes for recruitment, selection and hiring; and
  • Recruitment fees

For each topic area, the need and context for screening is explained, followed by a list of information to gather, and an articulation of key red flags and risks to look out for.

The goal for this tool is not only to provide some instructions for the screening process, but also to indicate how companies can later use the information from the screening to determine and manage social responsibility risk in the supply chain.


SCREENING AREA: BUSINESS PROFILE

Why are you screening the labor recruiter’s business profile?
You are entering into a partnership with an external agent that will be undertaking vital functions on your behalf, the performance of which will influence the competency and quality of your workforce. There is also a potential risk of forced labor and trafficking if things go wrong.

Therefore you will want to know as much as possible about the labor recruiter’s track record and experience in different locations and for different services, and its capacity to provide the particular services that you require. You will also want to confirm that the labor recruiter is operating legally in all countries where it offers services.

Finally, obtaining a list of the labor recruiter’s other clients will allow you to seek references regarding the labor recruiter’s performance and ways of working.

What information do you need to get?

  • Business History and Background
  • Two List Item
    • Length of operations
    • Business size and volume
    • Geographical reach
    • Expansions/changes in size, volume, reach
    • Existing or past regulatory actions or civil and/or criminal legal cases and their outcomes
  • Ownership
    • Ownership structure (e.g., public, private, family-owned)
    • License to operate, registrations, certifications
    • Names and nationalities of owners
  • Nature of Services
    • Description of all services provided to companies
    • Description of all services provided to workers (e.g., provision of vocational or language/cultural training)
    • Countries of operation
  • Client Engagement
    • Name and number of clients
    • Relationship history
    • Volume of business
    • Services provided to each client
  • Government Relations
    • Describe any engagement with governments, including government accreditation programs, etc.

What are some common risks and red flags?

  • The ownership structure circumvents or is not in compliance with law (e.g., the presence of foreign owners in countries where foreign ownership is not allowed by law).
  • The labor recruitment is not legally registered in all countries of operation.
  • The labor recruitment or its owners have been subject to existing or past regulatory actions or civil and/or criminal legal cases.
  • The ownership of other businesses (e.g., a money-lending agency or a medical clinic) that jobseekers are required to use in order to get the job. This becomes an issue especially if the cost of these services is excessive when compared to prevailing market rates.
  • The marketing of free services to employers, or the charging of unusually low fees. This could be a red flag that the labor recruiter is earning the bulk of its revenue through charges to jobseekers.
  • Companies listed as clients cannot be contacted, and/or other vague or conflicting information. This is a red flag for transparency issues in terms of engagement.

SCREENING AREA: ORGANIZATIONAL/MANAGEMENT CULTURE AND VALUES

Why are you screening the labor recruiter’s organizational structure and management culture/values?
As an employer you will want to know whether the labor recruiter has the capacity to deliver effective and efficient services that meet both your business requirements (e.g., quality of workers, timely turn-arounds) and your social responsibility requirements (e.g., no fees, transparency in contracts). You will want to understand whether the labor recruiter’s organizational culture and values mirror your own, especially in terms of their commitment to address forced labor, debt bondage, and trafficking; and whether these values are communicated to all staff, and embedded in staff recruitment, development and performance management systems. You will also want to obtain assurance that the labor recruiter will be willing and able to commit to transparency and continuous improvement for the duration of your partnership.

What information do you need to get?

  • Organizational Structure
    • How work is organized (by functional area, by industry, by geographic area)
    • The reporting structure and accountabilities for different functional areas
    • Staff sizes per functional area/geographic location; staff recruitment and retention; staff development and training, etc.
    • How business partners/agents/subcontractors are selected
  • Management Culture
    • Guiding principles and values of the labor recruiter, and the mechanisms for integrating these principles into business processes
    • Reporting mechanisms and procedures for corrective action
    • Code of Conduct awareness and implementation
      • What has the labor recruiter done to implement the Code requirements of its clients?
      • Who is accountable for code performance?
      • Are there examples of changes in the way the labor recruiter has managed the business to better meet clients’ Code requirements? What are they?

What are some common risks and red flags?

  • The labor recruiter does not have full-time staff, or is understaffed, or staff do not have the appropriate competencies for undertaking core processes (e.g., worker recruitment, selection). Any of these scenarios is a red flag that subcontractors may be involved.
  • Staff, when interviewed, have no knowledge of processes for ensuring the avoidance of forced labor in the performance of their functions.
  • Responsibilities to implement code standards (e.g., employers pay policy) are not clearly communicated agency-wide or indicated in job descriptions.
  • There are no sanctions or rewards related to staff performance on social responsibility standards.
  • There are no mechanisms to report violations by staff of clients’ Code of Conduct
  • Other clients reported an inability of the labor recruiter to meet code-of-conduct standards
  • There is a preponderance of vague or conflicting information that could be reasonably construed as indicating a transparency issue.

 


SCREENING AREA: MANAGING THE SUPPLY CHAIN

Why are you screening how the labor recruiter manages its supply chain?
The more subcontractors a labor recruiter employs, the higher the risk of forced labor and debt bondage in the recruitment, selection and hiring chain. From a business perspective, multiple layers can also lead to inefficiency and confusion in fulfilling the requirements of your job order. This, in turn, can result in the deployment of workers to your facility who do not have the necessary job qualifications. A long chain of subcontractors can also be a red flag for worker indebtedness, since subcontractors could be charging jobseekers for their services.

You can mitigate these risks by making sure that the labor recruiter, if it must use subcontractors, does so judiciously and selectively. The labor recruiter should also be able to demonstrate that it has full visibility into the processes managed by subcontractors, as well as mechanisms for monitoring their performance.

You will want to understand the nature of the labor recruiter’s business relationships with its subcontractors, including such details as who is accountable for each piece of the recruitment, selection and hiring process; and whether there are controls (and incentives) in place to ensure that subcontractors do not introduce any vulnerability to forced labor and trafficking into these processes.

What information do you need to get?

  • A list and profile of subcontractors or business partners in both receiving and sending countries
  • The nature and length of relationships with subcontractors and partners, including functions, roles and accountabilities
  • The screening and selection process for subcontractors and partners, including any consideration of legal and ethical standards
  • Contractual requirements for subcontractors and partners, including any legal and ethical requirements
  • The performance management mechanisms in place to manage/oversee the functions of subcontractors

What are some common risks and red flags?

  • Jobseekers go through multiple layers of subcontractors before being selected and deployed.
  • The labor recruiter has no contractual agreement with its subcontractors.
  • Where the labor recruiter does have contractual agreements with subcontractors, such agreements do not specify accountability for implementing legal or ethical standards.
  • The labor recruiter is unable to demonstrate that it pays its subcontractors for their services, or the subcontractors work on a commission basis.
  • The labor recruiter does not provide its subcontractors with a schedule of fees that can and cannot be charged to workers, and/or does not have a mechanism for enforcing its fees policy.
  • The labor recruiter does not regularly review its subcontractors’ performance on business and social responsibility standards.
  • Where a system of performance review is in place, this system has obvious gaps (e.g., no capacity or resources to conduct on-site evaluation at the point of recruitment).
  • There is no mechanism for jobseekers to safely report complaints regarding subcontractors; or, where such mechanisms are in place, jobseekers report that they are not useful or effective.

SCREENING AREA: PROCESSES FOR RECRUITMENT, SELECTION AND HIRING

Why are you screening the labor recruiter’s processes for recruitment, selection and hiring?
Selection, recruitment and hiring are core human resource functions that help you to hire the right worker for the job at the right time. When you outsource these functions to a labor recruiter, you place yourself at a risk of poor skills matching. Outsourcing these functions also carries risk of forced labor and human trafficking.

To mitigate these risks, you will want to have a full understanding of the ways in which the labor recruiter goes about its recruitment, selection and hiring processes. Beyond that, you will want to make sure that the labor recruiter has effective controls to ensure that jobseekers are not exploited or placed in vulnerable situations.

What information do you need to get?
You will want the recruiter to describe a typical recruitment, selection, hiring and deployment cycle. For each step in the process, the recruiter should indicate who is responsible for the various functions, the time each step typically entails, the documentary requirements involved, and any constraints or challenges that are faced. The recruiter’s description should include the following elements:

  • Process for securing government permits and requirements (internally and/or on behalf of the supplier company)
  • Manpower requisition/job order
  • Manpower pooling
  • Recruitment
  • Screening and selection (tests, interviews)
  • Hiring and contracting
  • Processing of travel documents
  • Schedule of all fees charged
  • Pre-departure orientation and training
  • Deployment
  • Documentation requirements upon arrival in receiving country

What are some common risks and red flags?

  • An absence of standardized recruitment and selection procedures.
  • Job descriptions that are not well defined, which could lead to the hiring of workers not well-suited to the job.
  • The manpower pooling process begins even before the job order has been approved. This entails several risks: the skills of the applicants may not meet the requirements of the eventual job order; jobseekers will be made to wait for a job that is as-yet non-existent; and jobseekers who are from out-of-town will then incur unanticipated living expenses while waiting for the job order that could force them into debt.
  • Pre-departure training and orientation that does not include an explanation of the terms and conditions of the work, or the employers pay policy or other legal or ethical standards.
  • Contract substitution or supplemental contract agreements that add terms and conditions to the job that are inconsistent and less favorable than those described to workers at the time of recruitment.
  • Confiscation of passports and other travel documents, which would prevent a jobseeker from seeking the services of another labor recruiter if s/he so desires

SCREENING AREA: RECRUITMENT FEES

Why are you screening the labor recruiter’s policy and procedures on recruitment fees?
There is always a risk that a labor recruiter charges jobseekers unauthorized or illegal fees, or forces jobseekers to pay for services at amounts or interest rates that are excessive. In such cases, workers provided by that recruiter may be entering a situation of debt bondage or forced labor even before they set foot at your facility.

It is difficult to determine a recruiter’s fee practices, or whether a recruiter routinely violates the “employers pay” standard, because such fee-charge violations rarely have a paper trail, or the paper trail is “doctored up” to hide illegal fee charges. In fact, workers are often the only source of information regarding violations of this standard so it’s important that a recruiter have a policy in place that provides workers with a safe means for reporting violations directly to you, and that there is a credible and well-communicated procedure to investigate and respond to such reports.

What information do you need to get?

  • A description of how the labor recruiter ensures compliance with the “employers pay” policy (e.g., the policy is included in work contracts, and sanctions are in place for noncompliance)
  • A list of expenses normally charged to jobseekers
  • Mechanisms for jobseekers to report violations of the “employers pay” policy on recruitment fees
  • Procedures for refunding fee overcharges

What are some common risks and red flags?

  • There is no written commitment by the labor recruiter to adhere to the employers-pay policy.
  • There is no effective and safe procedure for workers to report ethical violations by internal staff or subcontractors of the employers-pay policy (e.g., workers are coached to lie about fees and expenses).
  • Jobseekers are charged a reservation fee and/or illegal deposits.
  • Illegal fees are charged to workers for processing of deployment documentation.
  • Jobseekers are charged excessive fees for mandatory skills training.
  • Jobseekers are charged fees beyond market rates for recruiter-owned or -operated accommodations during the pre-deployment period.

Exploring the above topics with labor recruiter candidates as part of a screening process will help companies to make smart and careful choices in outsourcing recruitment and hiring. Starting conversations like these in the screening process will also signal to labor recruiter candidates that you are serious in your commitment to legal and ethical practices in recruitment and hiring, and you expect the same from your labor recruiter. This will hedge against surprises and miscommunications on such issues down the road.

 


 

Humanity United LogoVerité gratefully acknowledges Humanity United for their generous support on this research and communications initiative.