Having connections is crucial for building a successful career, which is often considered an undeniable truth in Uzbekistan and other Central Asian countries.
Kursiv Uzbekistan researched how personal connections influence business efficiency, where acquaintances often determine hiring, and explored potential alternatives.
On the one hand…
A study led by Amrita Dillon and her team at the University of Warwick demonstrated that employees referred by their colleagues tend to show greater dedication to their work than those hired through other means.
Hiring through personal connections also reduces the likelihood of bringing in dishonest employees who may compromise sensitive information or engage in unethical behaviour.
Moreover, hiring individuals with whom you have a pre-existing relationship allows for a better understanding of their strengths and weaknesses, saving time typically spent on evaluating qualifications. Nonetheless, seeking an outside perspective is crucial, as our close relationships can sometimes cloud our judgment.
But on the other hand…
Pakistani researchers Shazada Azam Khan Alvi and Zobia Zaman examined the impact of favouritism on employment. They found that it can have detrimental effects, such as undermining employee motivation, reducing work quality and creating a hostile team environment, ultimately impacting financial performance.
Hiring based on personal connections can sometimes have unintended negative consequences for the employees. Some managers may even treat their favoured employees more harshly to avoid being accused of favouritism.
A study published in the Journal of Experimental Social Psychology revealed that managers tend to reward and promote employees with whom they do not have personal connections, even if they are less deserving of recognition.
Furthermore, research by Arun Chandrasekhar, Melanie Morten, and Alessandra Peter suggests that relying solely on personal networks for recruitment can hinder company growth. Small business owners might miss opportunities in the broader labour market by exclusively relying on their inner circle for hiring.
According to Jessica Methot of Rutgers University, hiring through personal connections can lead to conflicting commitments. Friendships are based on solidarity and cohesion, while work requires efficiency and effectiveness. Hiring friends and acquaintances may also increase the risk of dishonest behaviour, such as leaking information to competitors, lying, or stealing.
While hiring friends and acquaintances can familiarise you with their strengths and weaknesses, seeking an outside perspective is important for making well-rounded hiring decisions.
Gryffindor vs. Slytherin
Mark Zuckerberg, the founder of Facebook, has emphasised the importance of hiring employees whose values align with the company’s core principles, likening it to choosing a lifelong friend or partner.
Companies with a strong visionary and innovative focus often prioritise finding like-minded individuals who share their values rather than solely focusing on specific skills and abilities.
A study conducted by Sheheriyar Banuri, Katherine Eckel and Rick Wilson from the University of East Anglia discovered that students from the same college developed a strong sense of identity and shared values by living in the same dormitory, eating in the same dining hall and competing in sports together throughout their years of study.
In an experiment led by the researchers, students were asked to participate in a game simulating the relationship between a manager and an employee. The study revealed that managers tended to trust employees with shared values more. Choosing “their own” from candidates with equal abilities resulted in a 10% higher return on investment (ROI) compared to choosing “strangers.” By favouring a weaker employee from “their own,” they increased ROI by 7%.
The study concludes that hiring individuals with shared values, such as friends, can be a more successful strategy, even if they are less capable. However, this holds only if the gap between ability levels is manageable.
Culture matters
Networking for job opportunities is standard worldwide, although it is perceived differently across cultures. For example, in China, the concept of “guanxi” – leveraging personal connections for professional purposes – is widely accepted. Conversely, in the United States, such practices are often viewed as nepotism and can generate adverse reactions.
Our experts believe that Uzbekistan and other countries in the region tend to prioritise familial relationships.
“In Central Asian countries, family ties are highly valued, leading to a greater prevalence of nepotism. We live in extended families, where we feel responsible for our relatives’ well-being and career trajectories. Nepotism is deeply rooted in our culture,” explained Gulkhumor Karabayeva, head of HR Universe.
Another perspective suggests that in developing countries, the prevalence of “tanish-bilish” is a consequence of weak legal institutions, property rights, education, and professional standards.
In environments where laws are not consistently enforced, academic credentials can be obtained through bribery, and corrupt individuals quickly reclaim their positions, personal connections become essential for reliability.
The trust established through these connections reduces ethical risks for entrepreneurs in their dealings with colleagues, business partners and authorities.
An anonymous medium-sized businessman we spoke with shared that he had hired the son of a high-ranking tax officer, who happened to be his classmate, for a role in his legal department. He explained that this decision assures him that the tax authorities will not raise unnecessary inquiries. The firm’s success has now become a collaborative effort with his classmate.
Conversely, a general lack of trust in institutions further exacerbates nepotism and corruption, perpetuating a harmful cycle.
Effect of scale
The decision to hire close acquaintances or relatives may be influenced by the size of the business, according to insights from ANCOR Recruitment Director Oksana Tkachenko.
In smaller companies where the owner is content with the current operations and has no immediate plans for changes, there may be a tendency to prioritise hiring acquaintances or relatives. This preference often stems from the desire of owners and managers of small to medium-sized businesses to have familiar and trusted individuals within the company, thereby reducing the risks associated with new hires.
On the other hand, in larger companies, retaining employees who may not be highly efficient but are considered “necessary” for the company’s functions may be less disruptive. For instance, in one company, 30% of the staff comprises blood relatives, 20% are non-blood relatives, and 15% are individuals from the same neighbourhood, classmates, or friends from the community. These observations from expert Gulhumor Karabayeva shed light on the dynamics of hiring practices within different business sizes.
Siblings
“In my experience, business owners often entrust their family members, such as spouses or siblings, with responsibilities in finance, production, administration, economics and HR. However, when it comes to areas like sales and complex technical work, they seek out experienced professionals, consultants and specialised experts from outside,” Karabayeva observed.
A survey of small and medium-sized business owners conducted by Kursiv Uzbekistan found that legal department employees and accountants are highly sought after.
It is reasonable to assume that sectors with a significant informal economy, such as construction, industry and services, will have a higher demand for trustworthy individuals to handle sensitive information.
“In every case, if you submit a relative’s resume, you are expected to hire them. I’ve tried to challenge this, but it didn’t end well. Now, I’ve learned to choose positions with less responsibility where I can help my relative succeed,” explained the head of HR at Universe.
However, there are instances where a family member is motivated to excel out of fear of letting down their brother or uncle, she added.
Everything flows, everything changes. Or don’t they?
Oksana Tkachenko emphasises that Uzbekistan’s integration into the global business environment is gradually reshaping the labour market landscape.
She notes that international companies in Uzbekistan are increasingly adopting more objective and structured recruitment methods, such as referral programs, which even subject recommendations from friends to strict selection and evaluation.
As the level of professionalism and requirements for specialists rise, the influence of the ‘tanish-bilish’ principle is diminishing, particularly in recruiting highly qualified positions.
Tkachenko believes that the implementation of objective employee selection principles is impeded by the early stage of the country’s HR system. However, with a well-organised recruitment, adaptation, and retention system, she is convinced that ‘tanish-bilish’ will gradually become obsolete and be replaced by standard practices performed by HR professionals, relieving owners and top managers from the burden of recruiting independently.
On the contrary, Gulhumor Karabayeva believes that it is premature to dismiss ‘tanish-bilish.’ She highlights that government agencies strive to counteract this by enforcing laws preventing nepotism and other employment abuses. However, in commercial organisations, she observes that the practice of hiring relatives has increased due to staff shortages in the market.
