Can you hire my child?

Here are some issues to consider before engaging in preferential hiring.

A number of banks, including J.P. Morgan, are under investigation by the US Securities and Exchange Commission for their hiring practices in China. The US Foreign Corrupt Practices Act prohibits providing anything of value to foreign officials in exchange for winning business. The allegations are that the banks hired children of prominent government officials or state-owned firms in exchange for lucrative contracts. According to news outlets, J.P. Morgan’s program, called "sons and daughters," aggressively targeted those hires in response to similar programs by their rivals. Apparently, J.P. Morgan also tracked the correlation between hires and new business won.

While the J.P. Morgan program may be more extensive, almost all companies practise some degree of hiring favours. An important client calls the CEO or another senior officer and asks if there is a job available for his or her son or daughter. The answer is usually yes. Is there anything ethically troubling about this?

It is a truism that you get a job based on who you know. All job seekers are urged to expand their networks and leverage their relationships. Having a "warm introduction" can get you an interview and possibly the job. At a more senior level, having a network of key contacts who are potential clients is a valuable asset that will enhance your prospects of getting hired.

For the company doing the hiring, granting a favour to an important client has obvious rewards. But there are other issues to consider.

Is it really good for business? The company may be giving up the opportunity to hire the best available talent and taking second best instead. Even if the new hire is in addition to rather than instead of a more qualified candidate, there is a risk of poor-quality work, diversion of management time to train the new hire and an overall lessening of the level of talent in the organization. And the message to other employees is that connections count more than results in advancing through the organization. So the benefits from the favour to the client may be outweighed by the negative business consequences.

Is it fair? Clearly, preferential access is given to the sons and daughters of parents who are in a position to ask for the favour. Children of recent immigrants or disadvantaged families have less access to the job market in proportion to the favoured access of others.

Is there a slippery slope? Before offering the position, it is useful to consider what might happen in the future if the employee hired as a favour to a valued contact is not successful. Would he or she be treated like any other employee and perhaps be dismissed? Or would the favour extend to retaining or even promoting the person for fear of offending the important client? This is now the proverbial slippery slope that comes up in ethical discussions. If you can’t imagine firing the employee, it may be easier not to hire him or her now.

Hiring employees is a subjective process. Some candidates are just more likable than others. The hiring decision is influenced by the person’s beauty, height, accent, ethnicity, gender and many other irrelevant factors. Being granted an interview as a favour to one’s parent is just one more factor, and it won’t go away.

But companies can put limits on the process. They can contain the preferential hiring to a small number of entry-level positions. They can insist that ratings and promotions be based on results and not on whom one is related to (and make this clear to the person asking for the hiring favour). They can work to have fair and unbiased hiring processes, to the extent possible, and take proactive steps to hire a diverse workforce. And they can help all their employees develop their own networks of key business contacts.

About the Author

Karen Wensley


Karen Wensley, MBA, is a lecturer in professional ethics at the University of Waterloo and a retired partner of EY.

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