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

29 Dec, 2023

A recent poll conducted by Reed Screening revealed that 78% of employers identified reference checks as the most time-consuming aspect of the recruitment process. In this piece, Keith Rosser, the Director of Reed Screening, provides valuable advice on how to streamline the referencing process.

In the current aggressive job market, it's crucial for employers to make well-informed hiring choices to strengthen their team.

Employment referencing is a vital component of recruitment; it offers employers a straightforward and efficient method to confirm a candidate's qualifications and experience. By reaching out to previous employers, recruiters can verify the authenticity of a resume, evaluate the reliability of a prospective new hire, and ensure the effectiveness of the recruitment process.

Although it might appear mundane, the act of referencing can offer profound understanding into an applicant's background, work habits, and appropriateness for a position. Nonetheless, it's crucial to bear in mind the legal and ethical implications involved.

Understand referencing

There are primarily two components that most companies consider as part of an employment reference check: employment verification or a basic check (confirmation of dates and roles from a previous employer) and substantive referencing or an enhanced check (detailed feedback on the individual's behavior and proficiency). Even though there's no legal or regulatory requirement, many companies choose to perform only basic checks, but it's advisable to be aware of both.

When requesting references from applicants, it can be extremely advantageous in certain situations to go beyond simply verifying employment history and job positions. If necessary, it might be more effective to pose open-ended questions to the reference to gain a deeper insight into the applicant's strengths and weaknesses, work habits, collaboration skills, and overall job performance.

This method can provide deeper insights into a candidate's personality and skills, enabling you to make a more educated choice when hiring. However, a simple reference check is sufficient and can be performed digitally to speed up the recruitment process.

Reed Screening carried out a study on 100,000 job references, revealing significant problems in the reference process, such as:

Volume – out of the 100,000 references requested, only 61% were received.
Veracity – among the received ones, 31% had inconsistencies compared to the information given by the candidate.
Value – 81% of the references received only included the employment dates.
Verification – 65% of the referee data provided by the candidate was incorrect.

Verify authenticity

Examining a candidate's employment history is crucial to confirm the accuracy of the details provided by the applicant. If they are hiding information from a prospective employer, it can lead to serious repercussions.

This could lead you to doubt the candidate's honesty and integrity, potentially delaying your hiring schedule and necessitating a restart of certain stages of the recruitment process, which is both time-consuming and costly.

Make sure the reference is genuine and not concocted by the applicant. Ask for references from official company email addresses or phone numbers to verify the referee's identity, or use instant referencing – a method that utilizes payroll and open banking data to confirm employment dates and salary details. This can help deter fraudulent references.

Lately, there's been a surge in recruitment scams and so-called "reference houses": websites that appear authentic with seemingly real email and phone contacts, designed to provide counterfeit references for a fee. It's crucial for companies to enhance their strategies to combat this issue by conducting IP address verifications of online references, automatic searches against recognized reference houses, and pre-validated legitimate business addresses.

Traditional reference systems that merely streamline the reference procedure are unlikely to detect systematic fake references which, in the end, are employed to conceal something from the applicant's employment history.

Make security a priority

Traditional procedures are frequently conducted through email, posing a risk of personal information being dispatched to an incorrect email address or being compromised. Numerous protective measures are implemented to prevent this, but as this data is exchanged in emails and documents, it becomes increasingly vulnerable to fraudulent activities and data leaks.

Employers need to be cognizant of and adhere to United States data protection and privacy regulations, like GDPR. They should obtain permission from the applicant to reach out to their references and manage their information. It's crucial to be clear about the reason for the reference verification.

Respect confidentiality and be objective

Ex-employers might not always be willing to disclose information about a candidate's performance due to privacy agreements, which should be honored. In such situations, you might need to request the candidate to provide a different professional reference, or you might need to determine if you're willing to take a chance and move forward.

Refrain from forming presumptions or personal opinions based solely on the feedback from references. Keep in mind that references might have their own prejudices or incentives. Use the information as a component of the decision-making process, weighing it against other elements such as work history, qualifications, and training.

Ask for recent references

For a precise assessment of a candidate's present skills and work approach, seek references from their latest employers.

The reference provider should be authenticated to ensure the reliability of the data, along with verifying the specifics of the candidate's employer - this helps to discard any misleading information, thereby minimizing the potential for mistakes.

Cross-check the information

Fraudsters may easily hide accurate information when reference verifications are not implemented. The ideal approach would be to incorporate a comprehensive evaluation of cross-checked data provided, and additional scrutiny of any suspicious inconsistencies or warning signs in the interim.

"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

Don't forget to search for inconsistencies and contradictions, as these can offer crucial understanding into a candidate's truthfulness and integrity. Despite having a digital procedure, it's still deemed as a best practice to verify the information.

Develop a reference policy

Implement a well-defined policy for reference verification that details the procedures and criteria for performing the checks. This policy should be uniformly enforced for all applicants to guarantee impartiality and adherence - whether the process is manual or digital.

For all resumes, it's crucial to scrutinize the employment history, proof of employment gaps, and references - this includes examining the provided dates and demanding clarifications for any deceptive details - as this is vital to uphold and foster a more secure work environment for everyone.

Instant referencing

Employment referencing is a crucial tool for employers to make informed hiring decisions. Failing to conduct proper checks can put you at risk of financial or reputational damage.

Instant referencing platforms automate the process of collecting and verifying employment references, which is faster and more efficient than traditional methods. These platforms provide quality data directly from your candidate’s past employers, enabling you to make better hiring choices.

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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