Ola’s Alleged HR Fraud and Shenanigans of Recruiting
Ola, the taxi-cab aggregator company is investigating allegations that one of its senior executives has been involved in corrupt practices. According to a report by FactorDaily, it has ordered an investigation into the alleged fraudulent practices, which is estimated to be running into millions of dollars. The executive involved is being investigated for favouring vendors and in return allegedly receiving kickbacks.
 
Now, to be clear, there is no mitigating factor being implied in this article for engaging in fraudulent activity or taking kickbacks. That said, Human Resources (HR), and especially recruiting, is a field especially rife with the opportunity for shenanigans. Why? HR is a huge business, and becoming a preferred recruiter is not easy. Let me explain.
 
Human Resources and recruiting in particular is a critical part of all companies, especially high growth ones. There are several large public and private companies (Workday, Success Factors, Monster, Jobvite and Trinet) who are dedicated to helping companies with HR, some of them just concentrating solely on recruiting. In fact, recruiting is so important that companies employ paid recruiters and compensate them up to 20% of the yearly compensation for recruiting a single employee. It adds up. A company with one thousand employees growing employees 10% a year with an industry average attrition of 15% - 20% needs to hire 250 - 300 employees a year. 
 
For a technology company, where the average fully loaded yearly salary for a good engineer is $150K in Silicon Valley, CA and Rs20 lakh in Bangalore, recruiting expenses can end up being substantial. In this case, just for outsourced recruiters for the Indian company, the costs will be just under Rs8 crore, assuming 50% of the recruiting is handled by an outside recruiting firm. That is not a small sum. For a large company like Ola, with somewhere between 5,000 and 10,000 employees, just the attrition will require 1,000 to 2,000 hires a year. At an average of Rs5 lakh salary, that is between Rs6 crore and Rs12 crore being spent on recruiting. Just recruiting. 
 
Because this is such a large business, and there are low startup costs - anyone with a rolodex and has the ability to source resumes can become a recruiter - the number of recruiters vying for the paid recruiting business from Ola or any other large name is enormous. The HR departments of high profile companies who place adverts in newspapers or online on their website or through social networking channels will receive resumes from dozens if not hundreds of recruiters. This has to be pared to a reasonable number in order to handle the load. What we did at our company was ignore all recruiters, unless and until we found a compelling reason proving that they actually helped recruit candidates that fit our filters rather than forward blind resumes and expect payment. As an example, this could be a reference from someone who is known, or an especially good resume. Finding a good recruiter is not easy, and once a company finds one, it's like many other things, they stick with them and often-times show a little partiality to them, all other things equal.
 
The amount of money involved, and the difficulty to become a preferred recruiter - or staying a preferred recruiter makes this business ripe for irregular activity of many kinds, including preferential treatment in the form of kickbacks. It is not at all surprising that the head of HR at a high growth, highly visible unicorn had the opportunity to engage in some illegal activity. We will have to wait for the investigation to conclude to see if he actually did.
 
 (Jayant Kadambi is entrepreneur, technologist, and business leader who led his most recent company, YuMe, to an IPO as a global leader in digital media technology.  Jayant is based in Silicon Valley and is spending his time as an advisor, board member, and angel investor.) 
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    COMMENTS

    Leslie Menezes

    2 years ago

    You perhaps forget to mention the kickbacks routinely received by the HR staff from these agencies. One particular industry is learnt to receive kickback in terms of sexual favours. One airline was probably notorious for it . I have heard some UN agencies also indulge in this however transparent they claim to be.

    India 7th most targeted nation for Web Application Attacks: Report
    Nearly 40 per cent of over 53,000 cyber attacks in India occurred in the financial services sector during 2017, placing it at the seventh spot in the list of targeted countries for Web Application Attacks (WAA), a new report said on Wednesday.
     
    Security incidents like phishing, website intrusions and defacements, virus and ransomware targeted the rapidly growing of the Banking, Financial services and Insurance (BFSI) sector in India, warranting a robust infrastructure and planned roadmap for cybersecurity, said the report from content delivery network services Akamai Technologies. 
     
    "A key motive of attackers has always been financial profit. In the past few years, we have seen adversaries move to more direct methods to achieve that goal such as ransomware," noted Martin McKeay, Senior Security Advocate at Akamai.
     
    "Crypto-mining offers attackers the most direct avenue to monetise efforts by putting money immediately into their cryptowallets," McKeay added.
     
    The report, titled "Akamai State of the Internet Security Q4 2017," also stated that the Distributed Denial of Service (DDoS) attack frequency in the BFSI sector increased by 50 per cent in the fourth quarter of 2017 over the last quarter.
     
    It also placed India seventh in the list of the top source countries for WAA. 
     
    "While India maintained the same position in the third quarter last year, it is interesting to note that the attacks sourced have seen a drop of approximately four million in number as compared to last quarter," the report said. 
     
    The newly-released data that analysed more than 7.3 trillion bot requests per month found a sharp increase in the threat of credential abuse, with more than 40 per cent of login attempts being malicious. 
     
    This indicates that DDoS attacks remain a consistent threat and the Mirai botnet is still capable of strong bursts of activity.
     
    Akamai's findings also confirmed that the total number of DDoS attacks last quarter increased 14 per cent from the same time last year.
     
    "The hospitality industry suffered as the biggest target of fraudulent credential attacks, with 82 per cent of their login attempts being from malicious botnets, the report said.
     
    The financial industry saw a sharp increase in the number of DDoS attacks, experiencing 298 DDoS attacks against 37 distinct organisations last quarter.
     
    There was a 31 per cent increase in DDoS attacks sourcing from the US last quarter compared to the same timeframe in 2017, the report said.
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

     

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