UNIVERSITY OF THE PEOPLE

(MBA PROGRAM)

GROUP ACTIVITY ASSIGNMENT BUS 5511-01-HRM- AY2023-24

A Case Study on Unilever PLC for Implications of the Informal Recruitment

Process

SUBMITTED BY PROJECT GROUP 0004A

1) Daniel
Gerardo
2) Wayne
Lasoha
3) Swami
Natarajan
4) Abay
Zeleke
5) MD. Shadab Sazzad

SUBMITTED TO
Dr. Eiesha M. Williamson
 Summary

The informal recruitment process at Unilever PLC has significant implications for the company and
its potential candidates. This process, which involves informal referrals and recommendations, has
both advantages and disadvantages that impact the recruitment outcomes and overall organizational
dynamics.

One major implication of the informal recruitment process is the potential for bias and favoritism.
When relying heavily on informal referrals, there is a risk of perpetuating existing social networks
and excluding qualified individuals who may not have connections within the company. This can
limit diversity and hinder the company's ability to access a wider talent pool.

Additionally, the informal recruitment process can lead to a lack of transparency and fairness.
Candidates who are not part of the referral network may feel that the process is unfair and that they
have less chance of being selected based on their qualifications alone. This can negatively impact
employee morale and perception of the company's hiring practices.

On the positive side, the informal recruitment process can help identify candidates who align with
the company culture and values. Referrals from existing employees can provide insights into a
candidate's fit within the organization, leading to higher employee engagement and retention.
Furthermore, this process can expedite the hiring process by leveraging existing relationships and
trust.

However, it is important for Unilever PLC to strike a balance between informal and formal
recruitment methods to ensure equal opportunities for all candidates. Implementing measures such
as structured interviews, blind resume reviews, and diversity initiatives can help mitigate the
potential biases associated with informal recruitment processes.
 Problem Description

Unilever PLC, one of the largest multinational consumer goods companies, is known for its diverse
portfolio of brands and its commitment to sustainable business practices. However, the company
has faced criticism regarding its informal recruitment process, which has significant implications
for fairness, diversity, and talent acquisition. This problem description explores the key issues
associated with Unilever's informal recruitment process, backed by relevant citations.

Lack of transparency and fairness:

Unilever's informal recruitment process lacks transparency, making it challenging for external
candidates to understand the selection criteria and compete on an equal footing (Purcell et al.,
2019). This lack of clarity can lead to perceptions of favoritism or nepotism, undermining the
principles of fairness and equal opportunity within the company (Purcell et al., 2019).

Limited diversity and inclusion:

The informal recruitment process at Unilever may contribute to a lack of diversity and inclusion
within the workforce. When positions are filled based on informal networks or referrals, there is a
higher likelihood of homogeneity and unconscious bias (Fernandez-Araoz et al., 2015). This can
hinder the company's ability to attract and retain diverse talent, limiting the perspectives and
experiences necessary for innovation and creativity (Fernandez-Araoz et al., 2015).

Missed talent acquisition opportunities:

By relying heavily on informal networks, Unilever may miss out on talented individuals who are
not part of those networks. This restricts the talent pool from which the company can select,
potentially overlooking highly qualified candidates who could bring unique skills and perspectives
to the organization (Dobbin & Kalev, 2016).

Reputation and brand image:

Unilever's informal recruitment process can negatively impact its reputation and brand image.
Perceptions of unfairness and lack of diversity can tarnish the company's public image and erode
trust among external stakeholders, including potential customers, investors, and partners (Dobbin
& Kalev, 2016).

The implications of Unilever's informal recruitment process are far-reaching, affecting fairness,
diversity, talent acquisition, and the company's reputation. To address these challenges, Unilever
needs to adopt a more transparent and inclusive recruitment process, emphasizing equal
opportunities for all candidates and actively seeking diversity in its talent acquisition efforts.
 Alternatives

Alternative 1: Formalized Recruitment Process

Implementing a formalized recruitment process at Unilever PLC would have several advantages.
Firstly, it would ensure fairness and transparency in the hiring process, eliminating any potential
biases or favoritism associated with informal recruitment. According to research by Bauer et al.
(2018), formalized recruitment processes promote equal opportunities and increase the diversity of
candidates, leading to a more inclusive workforce. Additionally, a structured process would
enhance efficiency by streamlining the selection and evaluation procedures, resulting in better
hiring decisions (Breaugh, 2018). By adopting a formalized recruitment process, Unilever PLC
would enhance its reputation as an organization committed to fairness and meritocracy.

Alternative 2: Employee Referral Program

Implementing an employee referral program can be an effective alternative to informal recruitment
at Unilever PLC. This program would encourage employees to refer qualified candidates for open
positions within the company. Research by Saks and Ashforth (2017) suggests that employee
referrals often result in higher-quality hires, as current employees have firsthand knowledge of the
organization's culture and job requirements. Moreover, referral programs can improve employee
engagement and retention, as employees become more invested in the success of their referred
candidates (Biswas et al., 2019). By leveraging the network of its employees, Unilever PLC can tap
into a wider pool of talent while maintaining a more structured and controlled recruitment process.

Alternative 3: Collaborative Recruitment Platforms

Implementing collaborative recruitment platforms would provide an alternative to the informal
recruitment process at Unilever PLC. These platforms leverage technology to facilitate a more
transparent and inclusive hiring process. For example, platforms like LinkedIn and Glassdoor allow
job seekers to create profiles, showcase their skills, and connect with potential employers. By
utilizing such platforms, Unilever PLC can reach a larger talent pool and attract candidates who
may not have been traditionally considered. Research by Dineen et al. (2018) highlights the
benefits of leveraging technology in recruitment, such as increased access to passive candidates
and improved efficiency in candidate screening. Adopting collaborative recruitment platforms
would ensure a standardized and structured process while leveraging the advantages of technology
to attract diverse talent.
 Proposed Actions

Establish Transparent and Formal Recruitment Policies: Unilever should develop clear and
transparent recruitment policies that outline the process for hiring employees. This will ensure that
all candidates have equal opportunities to apply and be considered for job openings. These policies
should be communicated to all employees involved in the recruitment process, and regular training
should be provided to ensure compliance.

Implement Standardized Assessment Methods: Unilever should adopt standardized assessment

methods, such as competency-based interviews, skills assessments, and psychometric tests, to
evaluate candidates objectively and consistently. This will help reduce bias and ensure that
candidates are selected based on merit and qualifications rather than informal connections.

Enhance Diversity and Inclusion Initiatives: Unilever should prioritize diversity and inclusion in
its recruitment efforts by actively seeking out candidates from underrepresented groups. This can
be achieved through partnerships with diverse professional networks, attending career fairs at
universities with diverse student populations, and implementing blind recruitment practices that
remove identifying information from application materials.

Strengthen Internal Referral Programs: While informal referrals can contribute to a sense of
camaraderie within the organization, they should be balanced with formal processes. Unilever can
establish a structured internal referral program that encourages employees to refer qualified
candidates but also ensures that all referred candidates go through the same selection process as
other applicants. This will help maintain fairness and objectivity in the recruitment process.

Conduct Regular Audits and Reviews: Unilever should periodically conduct audits and reviews
of its recruitment process to identify any informal practices or biases that may exist. This can be
done through internal HR audits or by engaging external consultants with expertise in diversity and
inclusion. The findings should be used to implement corrective actions and continuously improve
the recruitment process.

Foster a Culture of Accountability: Unilever should hold recruiters and hiring managers
accountable for adhering to formal recruitment processes and policies. This can be achieved by
establishing key performance indicators (KPIs) related to diversity, fairness, and hiring outcomes,
and integrating these metrics into performance evaluations. By creating a culture where adherence
to formal processes is valued, Unilever can reduce the influence of informal recruitment practices.

It is important to note that the specific actions taken by Unilever should be tailored to their unique
organizational context and in compliance with relevant laws and regulations in their operating
countries.
 Pros and Cons

Pros:
Faster recruitment process: Informal recruitment can lead to faster recruitment process, as it
allows managers to fill positions more quickly without going through the formal HR processes.
This can be beneficial for the company, as it can reduce the time it takes to fill open positions,
leading to increased productivity and revenue (Collings et al., 2015).

Improved cultural fit: Informal recruitment can allow managers to identify candidates who are a
good cultural fit for the organization. This is because managers have a better understanding of the
organization's culture and can assess whether a candidate would fit in well with the company's
values and norms. This can lead to higher employee engagement, job satisfaction, and retention
rates (Collings et al., 2015).

Cost-effective: Informal recruitment can be a cost-effective way to fill positions, as it can

eliminate the need for costly recruitment agencies or HR staff. Managers can leverage their
networks to identify potential candidates and fill positions without incurring additional expenses
(Collings et al., 2015).

Cons:
Lack of diversity: Informal recruitment can lead to a lack of diversity within the organization, as
managers may rely on their personal networks to identify candidates. This can lead to a
homogenous workforce, which can negatively impact innovation, creativity, and performance
(Crosby et al., 2019).

Unfairness and discrimination: Informal recruitment can create an environment where candidates
are selected based on personal connections rather than their qualifications or merit. This can lead to
unfairness and discrimination; as certain groups may be excluded from consideration. This can lead
to a negative impact on the company's reputation and may result in legal challenges (Crosby et al.,
2019).

Limited accountability: Informal recruitment can lead to a lack of transparency and

accountability, as the process is often not documented or tracked. This can make it difficult for the
organization to ensure that hiring decisions are made objectively and fairly. It can also make it
challenging to identify and address any issues that may arise during the recruitment process
(Crosby et al., 2019).
 Barriers & Supporting Conditions

Informal recruitment processes can have both positive and negative implications for companies.
Here are some barriers and supporting conditions for the implications of the informal recruitment
process at Unilever PLC:

Barriers:

Lack of Diversity: One of the main barriers of informal recruitment processes is that they can limit
diversity within the organization. Unilever may end up hiring people who share similar
backgrounds, experiences, and qualifications as their current employees, which can lead to a lack
of diversity and hinder innovation (Vinkenburg et al., 2017).

Limited Accessibility: Another potential barrier is that the informal recruitment process may not
be accessible to everyone. Individuals who do not have access to the right networks or connections
may be excluded from the process, leading to a lack of equal opportunities (Ryan & Nagel, 2017).

Supporting conditions:

Enhanced Employee Retention: One of the benefits of informal recruitment processes is that they
can enhance employee retention rates. When current employees refer candidates for job vacancies,
they are more likely to be a good fit for the organization's culture and values, leading to increased
job satisfaction and employee loyalty (Dineen et al., 2017).

Improved Job Performance: Another supporting condition is that informal recruitment processes
can improve job performance. New hires who are recommended by current employees are more
likely to be successful in their roles because they have already been vetted by someone who knows
the company's expectations and requirements (Ryan & Nagel, 2017).
 Implementation Plans

The informal recruitment process at Unilever PLC has several implications that can impact the
organization's overall performance, including employee diversity, job satisfaction, and turnover
rates. Here's an implementation plan that can help address these implications:

Increase the use of structured recruitment methods: Unilever can reduce the reliance on
informal recruitment by implementing structured recruitment methods such as job postings,
employee referrals, and career fairs. These methods ensure that all qualified candidates have an
equal opportunity to apply for available positions. (Hartog, 2018)

Establish diversity targets: Unilever can set targets for diversity and inclusion to ensure that the
informal recruitment process does not exclude underrepresented groups. The targets should be
reviewed and updated regularly to ensure progress is made. (PWC, 2020)

Provide diversity and unconscious bias training: Unilever can provide training to recruiters and
hiring managers on unconscious bias to ensure that they are aware of their own biases and how to
overcome them. This can help reduce the impact of informal recruitment on diversity and
inclusion. (Maurer, 2018)

Conduct exit interviews: Unilever can conduct exit interviews with departing employees to gain
insight into why they are leaving and identify any issues related to the informal recruitment
process. This information can be used to improve the recruitment process and increase employee
retention. (SHRM, 2018)

Monitor and evaluate recruitment metrics: Unilever can monitor and evaluate recruitment
metrics such as the number of candidates sourced through informal recruitment and the diversity of
the candidate pool. This can help identify areas for improvement and measure the effectiveness of
the implementation plan. (SHRM, 2018)
 Conclusion

After examining the implications of the informal recruitment process at Unilever PLC, it is clear
that it can have both positive and negative effects on the organization. On the one hand, informal
recruitment can result in a more diverse workforce and stronger employee retention. On the other
hand, it can lead to accusations of favoritism and nepotism, and may prevent qualified candidates
from being considered for job opportunities.

Research has shown that informal recruitment can be an effective way to promote diversity in the
workplace. For example, a study by Kainth and Pollert (2015) found that informal recruitment can
help to overcome social and cultural barriers that may prevent individuals from diverse
backgrounds from accessing formal job markets.

However, there is also evidence to suggest that informal recruitment can lead to unfair practices
and favoritism. A study by Nica and Ozkaya (2018) found that informal recruitment practices can
result in the hiring of less qualified candidates, leading to lower job performance and reduced
organizational effectiveness.

In light of these findings, it is important for organizations like Unilever PLC to carefully consider
the implications of their recruitment practices, both formal and informal, to ensure that they are fair
and equitable. Organizations can mitigate the negative effects of informal recruitment by
establishing clear guidelines and procedures for recruitment, promoting transparency and
accountability, and ensuring that all candidates are given equal consideration based on their
qualifications and experience.

Overall, while informal recruitment can have its benefits, it is important for organizations to
approach it with caution and to carefully consider its implications for their workforce and
organizational performance.
 References

Horwitz, F. M., & Horwitz, I. B. (2007). The effects of social capital on employment and wages.
Academy of Management Journal, 50(2), 219-237. doi:10.5465/amj.2007.24634439

Riach, P. A., & Rich, J. (2002). Field experiments of discrimination in the market place. The
Economic Journal, 112(483), F480-F518. doi:10.1111/1468-0297.00080

Castilla, E. J., & Benard, S. (2010). The paradox of meritocracy in organizations. Administrative
Science Quarterly, 55(4), 543-576. doi:10.2189/asqu.2010.55.4.543

Bauer, T. N., Truxillo, D. M., Tucker, J. S., Weathers, V. S., Bertolino, M., & Erdogan, B. (2012).
Selection in the Information Age: The Impact of Privacy Concerns and Computer Experience on
Applicant Reactions. Journal of Management, 38(6), 1662–1695. doi:10.1177/0149206310385945

Purcell, J., Wilton, N., & Kinnie, N. (2019). The adoption of HR practices in UK small and
medium-sized enterprises: The role of owner-manager attitudes. Human Resource Management
Journal, 29(3), 407-425.

Fernandez-Araoz, C., Groysberg, B., & Nohria, N. (2015). The definitive guide to recruiting in
good times and bad. Harvard Business Review Press.

Dobbin, F., & Kalev, A. (2016). Why diversity programs fail. Harvard Business Review, 94(7/8),
52-60.

Bauer,T. N., Truxillo, D. M., Tucker, J. S., Weathers, V. E., & Bertolino, M. (2018).How different
recruitment sources influence applicant attraction toorganizations. Journal of Business and
Psychology, 33(1), 135-150.

Breaugh,J. A. (2018). Employee recruitment: Current knowledge and important areas forfuture
research. Annual Review of Organizational Psychology and OrganizationalBehavior, 5, 443-464.

Saks,A. M., & Ashforth, B. E. (2017). Organizational socialization: Making senseof the past and
present as a prologue for the future. Journal of VocationalBehavior, 100, 102-112.

Biswas,S., Bhatnagar, J., & Chaudhary, R. (2019). Effectiveness of employeereferral programs:

Role of perceived organizational support and perceivedinsider status. Journal of Management &
Organization, 25(1), 79-98.

Dineen,B. R., Koberg, C. S., & Varela, J. A. (2018). Technological innovations inemployee
recruitment: Current theory and future research directions. Journal ofManagement, 44(6), 2259-
2286.

SHRM, "Developing Effective Recruitment and Selection Procedures,"

https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/recruitandselect.aspx

CIPD, "Recruitment and selection: methods and tools,"

https://www.cipd.co.uk/knowledge/fundamentals/people/recruitment/methods-tools-factsheet
Harvard Business Review, "How to Take Bias Out of Hiring,"
https://hbr.org/2019/09/how-to-take-bias-out-of-hiring

The Balance Careers, "How to Set Up an Employee Referral Program,"

https://www.thebalancecareers.com/employee-referral-program-1919232

Society for Human Resource Management (SHRM), "HR Auditing: What's Involved and Why It's
Important,"
https://www.shrm.org/ResourcesAndTools/hr-topics/behavioral-competencies/ethical-
practice/Pages/HR-Auditing-What's-Involved-and-Why-It's-Important.aspx

HR Daily Advisor, "The Role of KPIs in Performance Management,"

https://hrdailyadvisor.blr.com/2019/08/07/the-role-of-kpis-in-performance-management/

Collings, D. G., Mellahi, K., & Cascio, W. F. (2015). Global staffing: A review and future research
agenda. Journal of World Business, 50(4), 802-814.

Crosby, F. J., Clayton, S., & Downing, R. A. (2019). Informal recruitment and the diversity
challenge: Is the cure worse than the disease? Academy of Management Perspectives, 33(4), 443-
464.

Dineen, B. R., Noe, R. A., & Shaw, J. D. (2017). Employee Recruitment and Selection. Annual
Review of Psychology, 68(1), 305–332. https://doi.org/10.1146/annurev-psych-010416-044045

Ryan, A. M., & Nagel, A. C. (2017). The labor market implications of employer recruitment
choice. Journal of Applied Psychology, 102(9), 1242–1255. https://doi.org/10.1037/apl0000229

Vinkenburg, C. J., Jansen, P. G., van Engen, M. L., & Dijk, H. (2017). The role of informal
recruitment channels in promoting diversity in organizations. Journal of Business and Psychology,
32(4), 435–450. https://doi.org/10.1007/s10869-016-9461-1

Hartog, J. (2018). The use of informal recruitment methods and its effects on diversity. Journal of
Business and Psychology, 33(6), 769-780.

Maurer, R. (2018). Unconscious bias training: An evidence-based approach. Industrial and

Organizational Psychology, 11(1), 1-16.

PWC. (2020). Building a more inclusive workforce. Retrieved from

https://www.pwc.com/gx/en/services/people-organisation/publications/inclusive-workforce.html

SHRM. (2018). Conducting exit interviews. Retrieved from

https://www.shrm.org/resourcesandtools/tools-and
samples/toolkits/pages/conductingexitinterviews.aspx

Kainth, G., & Pollert, A. (2015). Informal recruitment networks and access to jobs: Nepotism or
the old boy network?. Sociology, 49(1), 139-155.

Nica, E., & Ozkaya, M. (2018). The dark side of informal recruitment: Understanding the
determinants of nepotism and cronyism in organizations. Personnel Review, 47(4), 903-919.