When advertising a position, it can be tempting to exaggerate its attributes in order to attract the best possible candidates.
The danger with this is that if you attract a candidate who is over-qualified, they will not only be unhappy in the role and leave within a short time, but they may also accuse you of misrepresenting the job.
There have been numerous instances of candidates embellishing their resumes or even downright lying in order to get the job.
A recent high-profile example was former Yahoo CEO, Scott Thompson, whose CV included a fictitious Computer Science degree from a Boston college.
This bogus degree was featured in his CV through two different high-powered positions, simply because no one in either company thought to pick up the phone and check his credentials.
To protect yourself from candidate misrepresentation, you should always conduct at least two verbal reference or background checks before making any new hire.
While candidate misrepresentation usually leads to perfunctory dismissal of the employee, the repercussions of employer misrepresentation can be far more serious.
In the first instance, hiring a candidate under false pretences can have a negative impact on your entire team. A disgruntled employee will not give 100% to a job they did not think they were being hired to do.
They will also spread negativity to the employees around them and from one bad seed, a tree of dissention can grow.
Secondly, they are unlikely to want to stay in a job that was misrepresented to them, so from the moment they discover they have been misled, they will be looking for another job on your time.
Then they will leave, probably at short notice, and you will be faced with all the trouble and expense of hiring a replacement for them.
In the worst case scenario, they will accuse you of misrepresenting the job and seek legal recourse, something that is starting to happen more and more.
There have been a number of cases in the US where candidates have sued successfully for ‘negligent misrepresentation’ by an employer.
Unlike fraud, negligent misrepresentation is where an employer exaggerates the responsibilities of a position, neglects to mention conditions upon which salary or promotions may be contingent, or makes promises they simply cannot keep.
In order to sue for damages, the candidate must have suffered damages as a result of your misrepresentation. These damages could be in the form of expenses associated with relocating to a new state or losses incurred as a result of turning down another job to accept yours.
Recruiters can also be sued for negligent misrepresentation, if it can be shown that they ‘consulted’ with their client, regardless of whether they knew the job advertisement to be exaggerated or untrue.
In Australia, two provisions of the Competition and Consumer Act 2010 (formerly the Trade Practices Act 1974) have been used by employees to establish claims of misrepresentation by employers.
Cases where these provisions were used to establish claims include:
- Walker v Citigroup Local Markets Australia Pty Ltd – in which a stockbroker successfully established misleading or deceptive conduct by the prospective employer over representations about a future job that did not eventuate.
- Morton v Interpro Australia Pty Ltd and Anor – in which a sales employee established misleading conduct by the employer over a bonus structure that was promised but not delivered.
When you add up the costs of lost productivity and rehiring expenses, a bad hire, whether through candidate or employer misrepresentation, will cost you around three times the candidate’s salary. So before you promise a certain salary, promotion within a certain timeframe, a company car or an office with a view, make sure you can deliver. Because while everybody loses when a job is misrepresented, the biggest loser in most cases is likely to be you.