August 8, 2011

What are some of the legal implications of having employees recommend people through social media sites? 

Thinking of offering a recommendation on LinkedIn? Think again. If your organization is like many others in Canada, you may be in breach of corporate policy. Legal departments are struggling to keep up with the advent of social media and the new freedom employees have to share information online. This may include competitive or sensitive information, personal sentiments, defamatory statements and, recommendations of course.

Prior to online communities, references were typically limited to the human resources department or line managers who offered tactically-worded statements that were mindful of provincial or federal laws and regulations. Typically offered in a one-to-one phone conversation or letter of recommendation, there was less potential of statements being misconstrued or broadcast to a larger audience. Online references — typically through LinkedIn — have changed the standard and many companies are concerned about the legal implications of such changes.

As with most areas of online communication and social media, there are very few legal precedents to help companies navigate the changing business and legal landscape. As organizations await legal jurisdiction in these areas, many are opting to prohibit employees from offering recommendations to past and current employees, vendors and suppliers as they are concerned that one’s personal opinions may suggest the larger perspectives of the organization.

I think that these companies are missing a larger marketing, business development, sales, human resources and recruitment opportunity. Below are 5 reasons why companies should allow employees to share their opinions freely online.

Corporate branding. Companies who embrace social media and incorporate it into all areas of their business operations are leveraging a very powerful and potentially lucrative tool. Many consumers are looking for companies who demonstrate similar values to their own and are searching online for information before deciding where they will spend their money. This means companies need to be transparent in all of their processes as it is estimated that 89% of consumers [search online] about a product or service before making their decision.

Employer branding. Companies are increasingly becoming more aware of how their company — their employer brand — is perceived to potential candidates. Job seekers are researching companies online and are looking for a great place to work. By allowing LinkedIn recommendations, you are increasing your online presence on the number one site for professional networking, exposing you to a limitless candidate pool.

Credibility. Allowing employees to post recommendations offers credibility to your talent pool, validating their abilities to potential business contacts. While especially important for your sales and business development team, it is also essential for individuals who work with external vendors, suppliers and customers.

Internal Morale. Limiting the number of rules and regulations makes employees feel like they have ownership over their role within the organization. This in turn improves employee pride and morale as individuals feel empowered to showcase their talents and good feedback.

Focus on internal processes. By allowing recommendations as well as general flexibility in all social media communications, your company will be forced to look at its internal processes and what makes it a great place to work. More attention will be given to the employee experience, including greater communication and understanding of company priorities and guidelines. Gaining employee buy-in will allow you to drive those strategies that will have the greatest impact on business growth while spending less time on activities that don’t provide a commercial benefit.

A strong advocate for social media, my priority is the value your business can derive from greater exposure to online communities. I am conscious to the necessity of following the letter of the law, particularly for large and publicly-traded organizations, as not doing so can have potentially damaging ramifications. Still, by allowing some freedom of expression and interaction, your employees will feel a stronger connection with your organization and will be more receptive to follow guidelines, provided they can see the logic and business case for them. The result is a more loyal employee base and the many benefits that accompany one.