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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over 1 year ago

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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Pros and cons of universal basic income: solution to unemployment or too expensive?
5 mins read

Pros and cons of universal basic income: solution to unemployment or too expensive?

​​​What is universal basic income?

Universal basic income (UBI) is a system in which every adult receives a set amount of money on a regular basis. This payment is unconditional, meaning it does not depend on the recipient's income, employment status, or any other criterion.

Universal– to everyone

Basic– to cover everyday expenses

Income– regularly, for people to spend how they wish.

UBI has been an interesting and controversial topic of conversation over the past few years, with various trials and studies conducted to evaluate its potential impact. While we may be a long way off from this being considered in reality, let’s look at some of the pros and cons of introducing this concept.

Pros of universal basic income

Reduce poverty

One of the main arguments in favour of UBI is its potential to reduce poverty and economic inequality. A 2022 study by the University of York found that a UBI model could cut poverty by more than half. This would be achieved through tax adjustments and guaranteed weekly payments, providing a stable income for everyone. This stability could lead to a more robust economy, increased consumer spending, more job opportunities, and a healthier market overall.

Increased consumer spending

With more disposable income, people would likely spend more, stimulating demand for goods and services and benefiting businesses across various sectors. This increased spending could also lead to higher tax revenues, which could be reinvested into public services and infrastructure.

Empowering workers

UBI would offer a safety net, reducing the pressure on individuals to accept low-paying or precarious jobs. This could lead to higher job satisfaction and productivity, as people would be more likely to pursue jobs that align with their interests.

Improve workplace conditions

It would also encourage businesses to enhance their working conditions by shifting the power dynamic to the employees. With a guaranteed income, workers would no longer be compelled to stay in jobs solely for financial reasons, allowing them the freedom to leave roles with poor working conditions.

This shift in bargaining power would encourage employers to enhance job quality, offer higher wages, and create more supportive work environments to attract and retain employees. Consequently, businesses might need to implement more employee-focused policies, such as flexible working, improved benefits, and a stronger emphasis on work-life balance, to stay competitive in the labour market.

Innovation and entrepreneurship

Many people hesitate to start their own businesses due to fear of failure and financial risks. However, UBI could provide the financial stability needed to encourage entrepreneurship and innovation, potentially resulting in economic growth for the country. This could lead to the creation of new industries and job opportunities, further boosting the economy.

Foster education and societal benefits

Having a steady income would encourage more individuals to pursue further education and training, culminating in a more educated and skilled population. This increase in educational attainment can have numerous positive effects on society, including:

Higher civic engagement: an educated population is more likely to participate in civic activities such as voting, volunteering, and community involvement, fostering a stronger democratic process and community cohesion.

Enhanced critical thinking and creativity: education cultivates critical thinking and creativity, which are essential for technological innovation and economic growth.

Reduction in poverty and inequality: education is a powerful tool for breaking the cycle of poverty. By providing individuals with the skills and knowledge needed to secure better-paying jobs, UBI can help reduce income inequality and improve overall economic stability.

Improved public health: educated individuals are more likely to make informed health choices, meaning lower rates of chronic diseases and improved overall public health.

Cons of universal basic income

High cost

Implementing UBI would be extremely expensive, requiring significant tax increases and reallocation of public spending. While it's challenging to estimate the exact cost, one analysis projected a gross cost of 555 billion – which includes the UBI payments themselves as well as the cost of integrating it into the existing tax and benefits system. Therefore, many critics argue that for this reason, UBI is not sustainable or even feasible.

Decreased motivation to work

Critics argue that UBI could reduce people's incentives to work, prompting higher unemployment rates. They fear that with a guaranteed income, people might choose to work fewer hours or not at all. If this were the case, higher unemployment rates could negatively impact economic growth due to less taxable income.

Those who do continue working while receiving UBI might be less motivated to perform at their best. With their basic financial needs met by UBI, the urgency to excel and advance in their careers could diminish and we could see reduced effort and productivity.

Challenges for low-wage industries

Industries relying on low-wage labour might face increased wage demands, as workers with a financial safety net might be less willing to accept low-paying jobs. This could cause higher operational costs and potentially drive businesses to automate more processes.

Inflation

Increased disposable income could generate higher spending, driving up demand and prices, resulting in inflation. This could erode the purchasing power of the UBI payments, potentially negating some of the benefits.

Potential inequality

While UBI aims to reduce poverty and inequality, some argue that providing the same payment to everyone wouldn't solve inequality but merely shift the goalposts. Critics suggest that a more targeted approach might be necessary to address the specific needs of different groups within society.

The debate around UBI is far from settled, and its implementation would require careful consideration and robust policy design. As we move forward, it's important to engage in thoughtful discussions, consider diverse perspectives, and explore pilot programmes to better understand UBI's real-world impacts.

Ultimately, the question remains: can UBI be the transformative solution we need to fix the unstable labour market, or will it prove too costly and complex?

If you are looking for a talented professional to join your team, or seeking a new employment opportunity yourself, get in touch with a specialist consultant today.

How to fight economic inactivity
1 mins read

How to fight economic inactivity

​It was recently my turn to pick up the pen and contribute to City AM’s ‘The Note Book’.

I chose to write about the issue of economic inactivity and to focus on ways to encourage younger people into the workforce and ways to incentivise older workers to work for longer.

My thinking is that this will encourage the highly paid and highly skilled to work up until retirement age rather than choosing, as many do, to retire early.

And my estimation is that this would result in more, not less, tax being collected and collected sooner because these individuals are frequently higher rate taxpayers who will typically find ways to avoid inheritance tax in the extra spare time they have after they’ve taken early retirement.

Instead, these highly capable higher rate tax payers will be incentivised to continue to contribute to the growth of their organisations and the wider economy and consequently to the exchequer as well.

One for the Office of Budget Responsibility (OBR) to grapple with perhaps… but I’ve no idea how you’d model such an idea. Sometimes it’s just better to give things a go!

And if you do get a chance to see the play ‘A View from The Bridge’, you should go. It’s a precious thing - a brilliant play, brilliantly acted!

Click here to read the article.

Sales CV template: for Sales Executives and other sales professionals
2 mins read

Sales CV template: for Sales Executives and other sales professionals

​​Whether you are a sales executive, supplier relationship manager or field sales consultant, use our free template to build your perfect sales CV today.

[Full Name]
[Home address]
[Contact Number] • [Email Address]

Personal Statement

Use this section of your CV to highlight the skills that would be transferable in a sales environment e.g. questioning and listening, tenacity, resilience and the ability to think on your feet. It’s also a good idea to include a link to your LinkedIn profile.

Sales professionals are target driven and financially motivated, so don't forget to highlight and "sell" yourself.

Try to avoid statements such as "I work well as part of a team and on my own initiative" or "I can communicate at all levels" - the majority of CVs contain these statements. CVs that show creativity stand out in sales.

Education

A relevant degree, for example Business Studies will give you a great start, but many degrees have a sales element, e.g. Psychology - understanding people, Engineering - problem solving, Law - negotiation skills etc.

It is important to present your education in a way that identifies you as a sales person.

In some sales positions experience trumps education, so if you don’t have a glittering academic record, make sure you elaborate on your experience.

[College/School Name]
[Date M/Y– Date M/Y]

A-levels:

  • [Subject] – [Grade]

  • [Subject] – [Grade]

  • [Subject] – [Grade]

GCSEs:

  • [Number] GCSEs, grades [range], including Maths and English

Work Experience

This should be brief and, as a general rule of thumb, focus on the last five years of your career, or last three roles, in chronological order with the most recent at the top. Highlight your key achievements, and aim to use bullet points rather than lengthy descriptions.

[Job Title], [Company Name] [Location]
[Date M/Y- Date M/Y]

Achievements and responsibilities:

  • Brief role overview

  • Worked alongside [team] to produce [project]

  • Implemented [change] which resulted in [benefit]

  • Received an [award name] for [reason]

Hobbies and Interests

This section is not essential, but can be a good opportunity to reinforce your application, and show a future employer what motivates you outside of work.

Don’t just say that you ‘like to socialise’ be specific, and don’t be afraid to share your successes. If you can put a sales slant on this part of your CV too, even better.

I’ve completed a marathon for [charity]

I negotiated my away across [country] on a budget, working as I went

References

References are available upon request.

Download our full sales CV template.