What Is A Black Hat Staffing Agency?



Do you know some of the ways “black hat” staffing agencies try to get a leg up on the competition by violating the ASA’s “Code of Ethics?” You should. Because it happens more often than you think, and impacts you and the industry.

A prominent page on the American Staffing Association’s website lists a “Code of Ethics” which agencies, as a condition of their ASA membership, pledge to support and adhere to.

This code not only covers our relationships with our clients and employees, but to some degree, with each other as well.

What makes a “black hat?”

It’s a “common sense” list, one that any normal business person might read over and consider quite reasonable, if not obvious.

Yet, the adherence or non-adherence to these principles are what differentiates the “black hat” agencies, the ones whose practices give all of us a bad name, from those of us who are trying to do the best possible job for our clients and our job seekers.

Regardless of whether you are in staffing as an internal office person or a contract employee, you should take a minute to read the list.

That way you’ll know if the agency you work for is operating within ethical, and especially legal, parameters.

As an internal employee of an agency that has always worked to go above and beyond even what is considered moral and ethical, some of the things I’ve heard over the years about a small percentage of competitors have always made it really hard not to want to become a total and complete “snitch.”

To be honest, if we hadn’t long ago made the decision that taking such actions just makes us look bad to would-be clients, we might have gone “full tattle-tale” long ago.

But that doesn’t mean I can’t do it on Staffing Talk (and our blog!), does it?

Here now are some of the prominent ways “black hat” agencies violate the ASA’s “Code of Ethics.”

They hire illegals

These days, it’s tougher and tougher to find qualified, willing labor to fill our job positions, particularly if those positions are entry-level and don’t pay a whole lot.

What if there existed a labor force that has a reputation for working long hours at tough jobs for low pay without complaining?

What if the only thing you had to do to take advantage of such a labor force was pretend a document didn’t look fake (after all, we can’t possibly be expected to be “experts,” right?) or “forget” to complete the E-Verify you told the clients you would complete for all applicants?

Sure, the temptation is there. Even so, that doesn’t give any agency (or any other employer, for that matter) an excuse for violating the law.

They unlawfully discriminate

A client you’ve been after for years finally agrees to a meeting, walks you through their plant, then begins the process of negotiations.

You’re looking at the prospect of providing dozens of temps, enough to keep your agency rolling for months.

The conversation is going great – they like you and you like them – until the hiring manager lowers his brow, leans close, and begins to awkwardly explain how certain minorities “aren’t really a good fit here.”

You know, because the client wouldn’t want them to feel singled out or uncomfortable. It is, after all, really for their own good. Wouldn’t they rather be somewhere where they are more welcome?

Do you do business with that client under those conditions? Or do you risk all those profits by trying to educate them, while at the same time showing a willingness to walk away based on your principles? Your answer to that question truly determines what color “hat” you wear.

They don’t pay their taxes

You’d think this one would be a no-brainer, but some people never seem to learn. Perhaps a few years in the clink will help!

They aren’t all that concerned about safety  

OSHA has made it clear that they fully expect temporary agencies to do their due diligence when it comes to workplace safety.

That doesn’t mean we have to put our workers’ hard hats on for them, but we do need to, at the very least, perform an occasional safety walk-through.

Agencies may think they are getting a “leg up” by letting safety slide, but they are really shooting themselves IN the leg.

Screening out some clients because of this may cost a few bucks in the short-term, but it will be far more profitable over the long haul NOT to have that gigantic comp claim or OSHA investigation to deal with.

They lie

Every company has heard it…“We’ve got a dozen MIG welders on hand, just waiting to come work at your facility for $9 an hour.”

Lying will ALWAYS catch up with you, in business as well as life. Tell the truth. Set reasonable expectations, and your clients won’t expect the moon when you never had it to deliver.

They don’t verify references

OK, maybe this is more of a “gray hat” area, but since it’s in the “Code of Ethics” I’m going to include it.

Agencies (and ANY employer, for that matter) that refuse to verify references are doing a disservice to fellow businesses, their employees, and themselves.

It’s the equivalent of a petulant child taking their ball and going home because they don’t like the way the game is going.

It’s just one more thing wrong with corporate America.

Get real. Nobody is going to sue you for giving out someone’s dates of employment.

Not only that, but nobody is going to win a lawsuit against you for giving out TRUE information, as long as you can prove it.

So stop the ridiculous, paranoid, mind-numbing refusals to give references to other would-be employers.

Yes, we live in a litigious society. Yes, people can sue you for looking at them the wrong way. But it doesn’t mean we should pander to the lowest common denominator.

The odds of Johnny suing you for telling the next agency he’s trying to con that he has the attendance of a nomadic sheep herder, assuming Johnny even finds out you told them, are about the same as a meteor striking your warehouse. The odds of him actually winning said lawsuit are slimmer than that.

No wonder so many employees feel like they can do anything, then walk away from a job with no consequences beyond the inconvenience of suckering the next one.

I don’t want your last “problem child,” and you don’t want mine, so how about we start working together to bring the best possible people to our clients (which, incidentally, also means giving folks GOOD references when they deserve them!)?

As reputable staffing firms know, you don’t have to be a “black hat” to run a successful staffing agency. But, sadly, those agencies that do business this way give us all a black eye!


This post first appeared on Staffing Talk.