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Why Have A Reference Checking Process?

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3 reasons why you should always reference check your candidates

Reference checks for potential new hires can be hugely time-consuming and often return very little insightful data. However, irrespective of whether you run a small business or a multinational, few decisions carry the same weight as recruitment and as such executing prudent reference checks are paramount for sustained hiring success.

Importance of a reference checking process

Here are our top 3 reasons why you should always reference check your candidates.

1. Risk Management

People can be your organisation’s biggest asset but get key hiring decisions wrong and they can quickly become your biggest liability. It has been said that one key ingredient for sustained business success is minimising your exposure to risk and this includes conducting secure, insightful reference checks on new hires. Reference checking is an often-overlooked, highly-effective way to limit your risk by thoroughly verifying your candidate's past performance, skills, qualifications and experiences.

To keep up with the security demands of companies, online reference checking providers need to ensure that they maintain the highest global standards. Xref ensures that it meets the global compliance and regulations requirements (GDPR, Australian Privacy Act & Personal Information and Electronic Documents Act in Canada).

2. Quality Control

A good recruitment process should be built around consistent, quality controlled recruitment practices. Accurate and methodical hiring processes are essential to maintain a high performing workforce and reference checking can provide stability in your recruitment method. Reference checking is regularly left to the least experienced recruitment team member and this can result in insufficient data collection and inconsistent references, leading you to misinformed hiring decisions.

Conversations around the usefulness of data in HR aren’t new, but organisations are at different maturity levels in adopting data-driven approaches to hiring. When it comes to online reference checking, some use data only for reporting while others have dug deeper into data-driven insights to make better people decisions.

3. Legality

Reference checking can be extremely sensitive. Riddled with anti-discrimination, equal-opportunity and privacy laws, reference checking can land you and your organisation in hot water if you aren’t careful. It is important to practice stringent reporting and document all recruitment processes to ensure you can prove that your hiring decisions were based on merit and without prejudice. Consistent, recorded, audit-proof, digital processes are most ideal.

Having strong privacy policies creates trust and significant reputational benefits for an organisation. A privacy-compliant company assures candidates and referees that their data is safe from unauthorised access. An HR department needs to ensure that its data sharing has a strict set of controls and policies.

Secure, consistent, digital processes should be embraced when approaching reference checks. Reference checking should be seen as a value add process rather than a burden on your recruitment team. When done correctly and systematically, reference checks can save you time, improve recruitment decisions and protect your organisation.

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