Is your recruitment strategy legal?

If you are involved in your company’s HR processes or even recruiting your own EA team, you should be aware that the pressure to tick the diversity box could get your company into trouble.

Recruitment is going to be the toughest business challenge in 2020. Hiring and retaining the best talent is crucial to a company’s success, but in today’s climate filling an open position is much more complicated than just finding the best person for the job.

Businesses are under pressure to diversify their workforce by hiring more people of a particular type—not just skillset. Things like committing to a 50/50 gender balance and using recruiting to reach that target spells trouble. Australian discrimination law swings both ways, and could not only jeopardise businesses trying to do the right thing, but it could also bring them in front of a judge.

Is hiring for diversity discrimination?

Having a diverse workforce is a positive thing for business. There is plenty of research being done into how having a workforce who think and behave differently can help drive profit and help organisations adapt to changing markets.

But the political and social pressure on companies to diversify is at an all time high. Businesses are setting deadlines for their diversity targets—some of which are alarmingly short.

Reaching these targets quickly means organisations may have to actively recruit people of a different race, gender or other characteristic.

A quick Google for ‘gender balance commitment’ will result in a list of press releases from some of the world’s biggest companies (and public institutions) claiming they have put procedures in place to achieve a 50/50 gender balance in the next few years.

If their strategy is to decide who to hire based on their sex, they may be running on the wrong side of the law.

Australian discrimination law states that “It’s unlawful to disadvantage employees and job seekers in any way because of their race, colour, gender, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.”

Consider this: two applicants interview for the same job. They have the same credentials, the same experience and interview equally well, but one person meets a diversity credential based on their gender. Is it legal to hire that person in order to help fill a diversity goal?

That’s a question that isn’t clearly covered on the Australian Government’s website, in fact there are paragraphs on the page that contradict the law by listing reasons why you should hire for diversity.

But, we can draw from an example from the US—the Fisher v. University of Texas at Austin case—which went to the Supreme Court twice. In a nutshell, a student wasn’t granted a position at the University of Texas at Austin because of her race.

The court found in the University’s favour and let them discriminate who they take in based on race.

But, if the same situation were to happen between an employer and candidate, the Civil Rights Act of 1964 (which reads almost identically to the Australian law above) would make it discrimination.

Penalties for a breach of Australia’s discrimination laws are in excess of $60,000, plus there’s a potential PR disaster brewing if a state discrimination commission official comes knocking on your door.

Talented candidates are in high demand

Base level jobs are now found and listed almost exclusively online. Websites like Seek, Google Jobs and Indeed have made it easy for companies to find their own unskilled and entry level staff.

This is good news for industries like retail and hospitality, who experience high turnover rates and employ seasonal staff—they can now do their own recruitment at a much lower cost.

But, professional and skilled employees have never been more in demand. Companies are spending time, effort and money to attract the best people for their business before their competitors do.

So now the power has shifted from the companies to the candidates. With abundant job opportunities, high-value job seekers can pick and choose which company they want to work for.

Also, recruitment companies are no longer concentrating on what companies want from candidates, instead they are concentrating on what candidates want from companies.

This has sparked fierce competition between businesses, with organisations and their leaders being forced to develop an ‘employer brand’ to attract the best workers.

The competition has been called ‘the war for talent’ by leaders, including Spotify’s head of HR.

Millennials expect their employers to champion political ideas

Traditionally, employees have had simple demands of their workplaces. They wanted stability, growth opportunities and a competitive salary.

But, as the boomer generation retires, millennials are beginning to make up the majority of the talent pool. And they are starting to demand different things from their employers.

Research shows that millennials are concerned with a company’s ‘social value’ as much as their commercial value.

In an effort to attract skilled millennials, HR firms are encouraging organisations to ‘optimise their social credentials’ and champion social movements like diversity and sustainability.

While it’s not necessarily a bad thing for companies to start taking stock of their social impact—such as taking steps to reduce waste and pollution—there are also dangers to taking political movements and turning them into policy.

Aligning with a political idea might help attract millennial talent, but if that means businesses have to achieve balanced workplaces by discriminating based on race or gender—then there may be significant legal risks involved.

AI and online tools can be prejudiced

If you were born after the internet, chances are that you got your first job (and a few more after that) after scrolling down a list of entry level positions on a webpage, not picking up the phone and calling a recruitment agent.

As we covered earlier (see: Talented candidates are in high demand), online tools are fast becoming the ‘baseline’ for finding entry level work. But using these online tools can also get a company into trouble.

Big brands in the game like Seek, Jora, Indeed and Google all have massive databases of resumes—we’re talking hundreds of millions of CVs. Each of these resumes have ‘data points’ like work experience, qualifications, age, and gender.

The websites use AI to scan this endless list of data points to find candidates for jobs. They will pick up on keywords on resumes to shortlist them for relevant positions—which is all well and good. It’s a streamlined and efficient process, but there’s also room for a big problem.

The AI codes are written by an individual, with their own biases and ideas. Many HR professionals and recruitment experts have criticised the neutrality of these programs.

The code runs a risk of screening candidates based on their characteristics, not on their skillset. This has happened a number of times already. In 2015 Amazon had to can its AI recruitment program that was favouring men due to the keywords it was picking up.

If a company is trying to hire for diversity using algorithms, or if they use a tool that has certain filters, they could also be opening the doors for a discrimination case.

Whether it’s selecting the right online recruitment tool, trying to attract new millennial talent or attempting to reach a diversity target, EAs involved in HR activity or hiring new team members need to tread carefully.

There might be real legal risks involved in hiring for diversity. If companies do plan on sticking to their targets and hire based on gender or race, we may see some high profile lawsuits in the near future.

Aiming for a diverse workplace and taking stock of your companies social impact is a good thing. But jumping the gun by actively hiring for a diverse workplace may put a company at risk of a discrimination suit or a fine to the tune of $60,000. So next time you are looking to hire a new team member or going over a recruitment strategy, keep an eye out for potential discriminatory practices, even if they are well intentioned.

Check it out for yourself

If you’d like to know more about the responsibilities of an employer, and brush up on the laws that govern discrimination in Australia, visit and search for ‘equal opportunity and diversity’.