Employment referencing: best practice tips for employers

In a recent survey by Reed Screening, 78% of employers stated that reference checks were the slowest part of the hiring process. In this article, Keith Rosser, Director of Reed Screening, shares useful guidance on how to make referencing efficient.

6 mins read
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20 Nov, 2023

According to a recent survey conducted by Reed Screening, reference checks were identified by 78% of employers as the most time-consuming part of the recruitment process. In this article, Keith Rosser, the Director of Reed Screening, shares valuable advice on how to streamline the referencing process.

In today's competitive job market, employers need to make well-informed hiring decisions to strengthen their teams. Employment referencing plays a crucial role in recruitment, providing employers with a straightforward and efficient way to verify a candidate's qualifications and experience.

By contacting previous employers, recruiters can authenticate resumes, assess the reliability of potential hires, and ensure the effectiveness of the recruitment process. While referencing may seem mundane, it offers deep insights into an applicant's background, work habits, and suitability for a role. However, it's important to consider the legal and ethical implications involved.

Understand referencing

When conducting an employment reference check, companies typically consider two main components: employment verification, which confirms dates and roles from a previous employer, and substantive referencing, which provides detailed feedback on an individual's behavior and proficiency. While there is no legal requirement, many companies opt for basic checks. However, it is advisable to be aware of both options. When requesting references from applicants, it can be highly beneficial to go beyond simply verifying employment history and job positions. In certain situations, posing open-ended questions to the reference can provide a deeper insight into the applicant's strengths, weaknesses, work habits, collaboration skills, and overall job performance.

This approach allows for a more comprehensive understanding of a candidate's personality and skills, enabling a more informed hiring decision. Nonetheless, a simple reference check can suffice and can be conducted digitally to expedite the recruitment process.

A study conducted by Reed Screening examined 100,000 job references and uncovered notable issues in the reference process. These problems include:

  • Quantity - Out of the 100,000 references requested, only 61% were actually received.

  • Accuracy - Among the received references, 31% displayed inconsistencies when compared to the information provided by the candidate.

  • Relevance - A significant 81% of the received references only contained the employment dates, lacking additional valuable information.

  • Verification - 65% of the referee data provided by the candidate was found to be incorrect.

Verify authenticity

It is essential to thoroughly examine a candidate's employment history in order to verify the accuracy of the information they have provided. If a candidate is intentionally hiding information from a potential employer, it can have serious consequences. This can raise doubts about the candidate's honesty and integrity, potentially causing delays in the hiring process and requiring certain stages of recruitment to be restarted, which can be both time-consuming and costly.

To ensure the authenticity of references, it is important to request references from official company email addresses or phone numbers to verify the identity of the referee. Alternatively, you can utilize instant referencing, a method that utilizes payroll and open banking data to confirm employment dates and salary details. This can help prevent fraudulent references.

In recent times, there has been an increase in recruitment scams and "reference houses" - websites that appear legitimate and provide counterfeit references for a fee. To combat this issue, companies should enhance their strategies by conducting IP address verifications of online references, automatically searching for recognized reference houses, and verifying legitimate business addresses.

Traditional reference systems that simply streamline the reference process are unlikely to detect systematic fake references that are used to hide information from a candidate's employment history.

Make security a priority

Email-based traditional procedures often carry the risk of personal information being sent to the wrong recipient or being compromised. Despite the implementation of protective measures, the exchange of data through emails and documents makes it susceptible to fraudulent activities and data leaks.

Employers must be aware of and comply with data protection and privacy regulations, such as GDPR. They should seek permission from applicants before contacting their references and handling their information. It is essential to clearly communicate the purpose of reference verification.

Respect confidentiality and be objective

Former employers may not always be willing to share information about a candidate's performance due to privacy agreements, which should be respected. In these cases, you may need to ask the candidate for an alternative professional reference or decide if you are comfortable taking a risk and proceeding without a reference.

Avoid making assumptions or forming personal opinions solely based on reference feedback. Remember that references may have their own biases or motivations. Use this information as part of the decision-making process, considering it alongside other factors such as work history, qualifications, and training.

Ask for recent references

To obtain an accurate evaluation of a candidate's current skills and work style, it is recommended to request references from their most recent employers.

It is important to verify the authenticity of the reference provider to ensure the reliability of the information provided. Additionally, confirming the details of the candidate's employment helps to eliminate any misleading data, reducing the likelihood of errors.

Cross-check the information

When reference verifications are not in place, fraudsters can easily conceal accurate information. To address this, it is recommended to adopt a thorough evaluation process that includes cross-checking the provided data and closely examining any suspicious inconsistencies or warning signs.

"Remember to look for inconsistencies and discrepancies, as this can provide valuable insight into a candidate's honesty and integrity."

Keith Rosser, Director, Reed Screening

Remember to thoroughly check for any inconsistencies and contradictions, as these can provide valuable insights into a candidate's honesty and integrity. Even though there is a digital process in place, it is still considered a best practice to verify the information.

Develop a reference policy

To ensure fairness and consistency, it is important to establish a clear policy for verifying references. This policy should outline the procedures and criteria for conducting checks, and it should be applied consistently to all applicants, regardless of whether the verification process is manual or digital.

It is essential to thoroughly review the employment history, address any gaps in employment, and verify references provided in resumes. This includes carefully examining the dates provided and seeking clarification for any suspicious information. By doing so, we can maintain and promote a safe and secure work environment for all.

Instant referencing

Employment referencing plays a vital role in helping employers make well-informed hiring choices. Neglecting to carry out thorough checks can expose you to potential financial or reputational harm.

By utilizing instant referencing platforms, the process of gathering and validating employment references becomes automated, resulting in a faster and more efficient approach compared to traditional methods. These platforms offer reliable data directly from your candidate's previous employers, empowering you to make superior hiring decisions.

To learn more about how our instant referencing technology can accelerate and streamline your hiring process, get in touch with one of our experts.

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