28 FebCut the obsession for written references. Cost savings for Swiss banks
The Swiss are to rules what Anastasia Steele is to Christian Grey in Fifty Shades; obedient and slavish. One national obsession in the business world is the proper written reference, the “Zeugnis”. Hours of costly time go into feeding this local fetish. Time to put it and the HR departments who perpetuate it to the sword.
General Swiss practice requires every employer to give an employee an official written reference. Either on leaving the firm, or on demand, or when there is a change of department. With this formality goes the “Dossier”; job applicants in the Alp republic are required to send not just a CV but a dossier that includes a copy of every certificate for everything, including the most minor course attended. In days past one was even expected to return the Dossier to the candidate or the search firm. There is an entire local science dedicated to writing and interpreting these things; at Credit Suisse one would tick a few boxes on a form and somebody In Poland would produce the reference.
How slavishly people simply believe in certificates is illustrated by what was a common occurrence when interviewing candidates in days at Goldman Sachs; Strong English was a must in Operations, because without it communication with our linguistically challenged colleagues in New York would be impossible. I would always start in Swiss German and then promptly change to English. Many a candidate was back out the door I a summary five minutes. “But they have a First Certificate!” was a common cry from the head hunter or agent. Ask the question, don’t assume r as a trader would tell you: “Sell the rumour, buy the fact!”
Some years ago, as part of the roll out of a new operational process, I had to recruit some “volunteers” to be trained in a new process. As a member of the Executive Committee sponsored this, there was some pressure to get some really good people assigned to this new, new thing. For my division, HR sent me a list of all the possible candidates. One name was familiar, but not in the phonebook. Curious, I phoned HR, to ask about this particular person. “New hire, ” the senior HR person told me, “starts next week”. The guy’s name was familiar, but as it was not an unusual one, I asked if it was the same person by that name who had previously worked at two specific institutions. “Yes, that’s him,” I was told enthusiastically.
I was dumbstruck. I knew this person quite well. Twice he had been unceremoniously sacked for unauthorised trading and at least in the one case, lying. Once at a bank I had worked at, albeit after my time. Now at the time, I worked in a division with maybe 70 people. As part of the HR process, we had to list previous employers, which is a task I am sure is inflicted at most other shops and in most other industries. So, I asked this person: “Just by the way, do you know why this person was let go from their last two jobs?” “No. Would you mind telling us what you know?”
When I spilled the beans, you could proverbially hear the sound of a jaw crashing on the desk.
Now at that moment, I was amongst the ten or so directors in the division and HR had the detail of my having been at the same place at the same time as this new hire. Did they bother to ask any questions? No. Now call me simple, but this tells me either some of these processes are a waste of time or the HR folk are none too clever, or both are the case.
Well, I made my point and left it with HR. Some 12 to 18 months later, there was a rogue trader incident; the trader was the guy who I had remarked on, the one with previous bad behaviour. He was found to have put on massive volumes of unauthorised trades and to have generated a loss of just under $100 million. Quelle surprise! A big carpet was needed to sweep that one under. Never did make the public eye. Recently over drinks with an old colleague, I found out this individual had managed to have somebody sign him a reference drastically different from the one this person was actually given. My colleague had seen both versions. The one this guy used was the greatest work of fiction since fidelity was included in Dominique Strauss-Kahn’s wedding vows. The HR individual has moved onwards and upwards and is now an MD in the same shop.
Lessons to be Learned: Written references are as much use as a chocolate teapot. Talk to people. And save money now by stopping all the HR processes around this and cutting the jobs that support this most wretched of processes.
There is also the more general point that over time organisations expand to do may things which at the time may appear noble and even useful. Over time, a healthy questioning is needed: “Do we really need to do this? Is it adding value?” This is as true for banks as for any other institution, as well as the government.
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