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Reference Checks in Canada: What Recruiters and Job Seekers Think

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A good hire is a reflection of an effective recruitment process and Reference checking is a crucial step in the hiring journey.

Beyond validating a candidate’s cultural suitability, reference checking  plays a critical role in ensuring recruitment compliance. Checking references isn’t a complicated task, at least it doesn’t have to be, but it is widely acknowledged that it should be done well to ensure each new hire is a positive addition to the business.  

In our most recent study (The Recruitment Risk Index: Canadian Industry Perspective) we surveyed more than 1000 job-seeking Canadians and 100 HR professionals, and uncovered a lack of consistency in the way reference checks are being conducted.

The risks of inconsistency

Are Canadian Recruiters Consistent with Reference Checking?

34% of HR and recruitment professionals admit their organisation doesn’t check references consistently for every hire.

This can be the result of the manual and conversational nature of the phone-based approach, which sees slightly different questions being asked and varied levels of information reported.  

This traditional and unreliable approach to the process can also lead to the risk of discriminatory questions slipping into the reference discussion. And this is something referees are concerned about. Our research told us that 40% of HR professionals worry about being asked questions they’re not comfortable with.

What is a standard process for checking references?

Organisations need to adopt a standard approach to reference checking.

They must ensure that:

  • The same set of questions are asked for every reference per role
  • The reference is a suitable source of information AND
  • The final report can be relied upon, regardless of the individual leading the process

There’s room for improvement

‍The hiring journey can often feel like a long one, especially when old, manual processes are adopted.

The lack of efficiency and transparency can leave candidates in the dark.

Our research also found that:

  • 44% of the jobseekers surveyed said delays in reference checking alone have caused them anxiety
  • 33% had abandoned a job application because the process took too long
  • 91% of job-seeking Canadians want to be kept up to date with the progress of their application

Candidates are now more aware of the way a business should and shouldn’t conduct itself and their expectations are higher than ever. They are also in the position of power when it comes to choosing their place of work.

The Canadian HR industry needs to react to jobseekers’ expectations, and protect businesses from losing the best talent at the final, critical stage of the hiring process.

Data privacy is a rising concern

Data privacy is also becoming an increasing concern and is carrying heightened threats. 36% of HR professionals said they’d rather not provide a reference due to threat to their personal data, and the personal data of the candidate.

Organisations need to ensure they are conducting robust approaches that everyone will feel comfortable being involved in. Keeping up to speed with, and adopting, tech solutions can be a major contributor to a secure hiring process that meets data privacy compliance.

Canadian businesses are potentially putting themselves at risk with current outdated approaches to reference checking.

There is a need for a transparent, standardised approach that can not only help streamline the hiring process but also ensure that everyone involved is comfortable with it and avoid potential legal risks.

Recruitment Risk Index 2017(RRI): A Canadian Industry Perspective

Xref commissioned research house/consumer intelligence firm Maru/Matchbox to delve into the culture of Canadian job seekers and HR professionals. 

The study explored the dynamic between the general public and the recruitment/HR industry within the context of applying for jobs, making sound hiring decisions and using reference checks as a critical cross-checking tool. In the first of two surveys, a geographically representative sample of 1,011 job seeking Canadians were polled. 

However, there are inconsistencies and inefficiencies in the way the task is currently conducted. The Xref Recruitment Risk Index: a 2017 Canadian Industry Perspective shines a spotlight on a significant industry issue that is putting Canadian organizations at risk. The report identifies how the industry is losing out by using a largely outdated approach to reference checking, as well as how flaws in the current system are impacting the industry and Canadian job seekers alike.

The Research Summary

Perhaps it can best be described as an adversarial relationship. The vast majority of HR professionals (86 per cent) say their organization strongly values the reference checking process. In contrast, close to half of Canadian job seekers surveyed (48 per cent) believe this process is a formality that doesn’t help employers to find out if someone will be a good fit for the company. 

Ninety-one per cent of the public also believe the current methodology can be improved. These opposing viewpoints are symptoms of an inefficient and arguably ineffective reference checking methodology still widely adopted within the industry. 

The RRI found reference checking was also inconsistently applied, with 34 per cent of HR professionals admitting their organization didn’t check references for every new hire across the company. 

And, while just about all Canadians claim to be fully honest in presenting their qualifications and work experience to employers (93 per cent), a full 38 per cent have been named by a friend to provide an employment reference. All the while, close to 7 in 10 (68 per cent) of the HR professionals surveyed go so far as saying they believe they’ve been lied to when conducting phone references. 

In addition, social media seems to be taking a leading role in the Canadian recruitment process, with 6 in 10 HR professionals sleuthing candidates online, searching their social footprints, more than a third of young Canadian job seekers (35 per cent) are hip to that game and intentionally restrict their social content while job hunting. 

Xref has identified a syndrome that accurately articulates what is currently happening in the industry: The Reference Checking Black Hole. 

Referee data is being collected, but without diligent and consistent implementation or follow-through. A transparent, standardized approach is missing. 

As such, candidates are blindly putting forth the same references for multiple job offers (66 per cent of respondents named the same references an average of 4.4 times) and HR professionals, when asked to be referees themselves, resent it. Fifty-eight per cent say it’s inconvenient to be contacted multiple times for one employee, while a full 41 per cent would prefer not to provide references at all. 

The industry is facing some dire consequences as a result of these inefficient and ineffective processes. What’s more alarming: these detrimental effects are currently unseen and therefore not measured or considered. 

Specifically, 44 per cent of Canadian jobseekers surveyed report feeling anxiety due to reference checking delays, and more perilously, one-third (33 per cent) have reported not taking a job or finding an alternative job because the recruitment process took too long. This figure jumps to a shocking 42 per cent among those aged 30 to 39. 

This study undoubtedly reveals a critical need for the Canadian HR industry to adopt a metrics-driven, transparent and standardized reference checking process. 

Unmeasured Talent Loss

Canada has a busy hiring marketplace. Three quarters of the study’s job seeking respondents said they applied for at least two jobs in the last two years, while 27 per cent applied for more than 7 jobs within that same timeframe. At the same time, half of the HR professionals in Canada who were surveyed (50 per cent) claimed to spend a minimum of 30 minutes and up to 2 hours checking references for each new hire they bring onboard. 

When you consider that, according to Statistics Canada, 397,000 full-time jobs were created between October 2016 and October 2017, it becomes apparent that HR professionals in Canada may be spending 200,000 to 800,000 hours solely on reference checks – in just this one category alone (newly created jobs). 

In its current form, reference checking is also actually working directly against the talent acquisition process creating a negative candidate experience: forty-four per cent of jobseekers say delays in checking references has caused them anxiety. This figure jumps to 50 per cent among women, and is even higher among younger jobseekers aged 18 to 39 (62 per cent). 

Most alarmingly, these delays also cause critical talent losses. One-third (33 per cent) of job seekers reported not taking a job or finding an alternate job because the recruitment process took too long. This figure jumped to 42 per cent among those aged 30 to 39. Traditional reference-checking is often the final spoke on the hiring wheel, and thus it appears to be a key culprit in hiring delays. 

This massive talent loss is often unseen and, consequently, goes unmeasured in organizational evaluations of recruitment processes. It is a costly crisis in the HR industry. 

Employment Referencing “Black Hole”

The RRI discovered there is an employment referencing “black hole” in Canada – where data may be collected, but is then not utilised to inform further HR decision making. And, while HR professionals value references, a consistency of approach is lacking. 

Despite the fact that 86 per cent of HR professionals surveyed said their organizations strongly value the reference checking process, more than a third (34 per cent) said their organization does not implement it consistently across the company for every new hire. 

There is also a lack of communication during the process which is leaving candidates in the dark about the progress of their application. Thirty-four per cent of job seekers said they didn’t know if their assigned reference was ever contacted. Moreover, 19 per cent knew they definitely were not. 

This lack of consideration for the process not only wastes candidate time, sourcing and liaising with references, but also indicates that employers are not doing their due diligence during the recruitment process and, as a result, are making ill-informed hiring decisions. 

This “black hole” creates a vacuum, with no transparency or clarity for candidates. Job seekers have no ability to contribute to helping drive the process and decisions are made based on pressures to fill roles rather than accurate and reliable insights. E

Reference Lie Detectors

HR professionals are feeling deceived. An overwhelming 82 per cent of HR professionals said they believe a lot of people who provide references aren’t being fully honest. Further, close to 7 in 10 HR professionals (68 per cent) reported feeling fairly confident that they were being lied to as they conducted reference checks over the phone. 

In contrast, Canadian job seekers insist a squeaky-clean reputation is being maintained. Only 7 per cent admitted to exaggerating qualifications or work experience, and even fewer admitted to misrepresenting employment dates (5 per cent) and previous job titles (4 per cent). Interestingly, the job seeking age group with the most self-professed exaggerators is 30 to 49-year-olds. 

This group was almost twice as likely to admit they have exaggerated qualifications and work experience compared to the national average (12.5 per cent versus 7 per cent). They were also three times more likely to ask a referee to pretend to be someone they are not (9 per cent versus 3 per cent) or ask a referee to exaggerate experience on their behalf (12 per cent versus 4 per cent). 

There is also a case of “ask a friend syndrome” infiltrating Canadians’ approach to selecting references. Half of all the job seeking participants surveyed (50 per cent) said they agree that it is more important to choose someone who will give them a good reference, rather than their direct manager. Seventeen per cent of respondents even admitted to going as far as asking a friend who was completely unrelated to their previous place of employment, to provide an employment reference; while 38 per cent had also been named by a friend to provide a reference on their behalf. 

Social Sleuthing

Perhaps not surprisingly, the RRI found that the social media content and online reputations of job seekers can make or break job offers. What was surprising however was the platform HR professionals admitted to resorting to for that information. 

Sixty per cent said they searched for information on prospective candidates online or on social media, but the most visited platform for such investigations was Facebook, which was used by 79 per cent of the HR professionals surveyed, easily exceeding both LinkedIn and Google which attract 66 per cent each of the respondents. 

However, young Canadian jobseekers are becoming “hip to this game,” with adaptations to social media profiles becoming commonplace during the job hunt. Canadians aged 18-24 put the most restrictions on their online profiles, i.e what they are posting on their social media accounts when job-searching – which is twice the national average (35 per cent versus 16 per cent). This group is also two times more likely than all other age groups to set their accounts to private during times of job hunting. 

Moreover, almost a third (28 per cent) of young Canadians also admitted to hiding or altogether removing certain posts from their social media accounts. Reassuringly, references still hold more weight than social media findings during hiring decision making. 

Sixty-four per cent of HR professionals said they opted not to hire someone based on a bad reference, while only 29 per cent of hiring personnel chose not to hire a candidate because of information they dug up online.

Unleveraged Data & Potential Value on Hypocrisy

The HR profession has an opportunity to leverage reference checking data in many ways beyond simply vetting candidates or measuring the recruitment process. Currently, however, a full 27 per cent of the industry’s respondents revealed they are not making full use of the data they have often painstakingly and diligently collected. 

This unleveraged data could hold valuable insights and guide employees’ future professional development, and yet, it is often being overlooked because a standardized approach has not been implemented. 

The RRI also uncovered a potentially troubling value hypocrisy in reference checking. While reference checking is considered important and is highly valued, it’s also often reported to be inconvenient when the tables are turned and HR personnel assume the role of referee. 

These findings point to a lack of standardization and consistency in traditional reference checking practices, that could otherwise give HR professionals more confidence in their routine processes. 

The Xref Effect

Undoubtedly, more transparency is needed in the current referencing checking process. Nearly all (91 per cent) job-seeking Canadians are interested in being kept up to date on what stage they are at in the hiring process for a new job. A further 90 per cent are interested in a written reference provided to them when they leave a job. 

This report underscores the critical need to standardize Canada’s reference checking process, bringing it into today’s technologically savvy era. Not only will this reduce the inefficiencies and ineffective practices uncovered in this study, it will also help to mend the seemingly adversarial relationship that currently appears to exist between many job seekers and HR personnel. 

Most importantly, it will free up hundreds of thousands of hours that HR personnel currently spend chasing references, so they can instead focus on more important top-level organizational priorities. 

The Xref Effect Xref collects 60 per cent more data than traditional methods, delivers it more quickly, verifies its authenticity and enables candidate benchmarking at a glance. The platform efficiently reduces the time taken to hire new employees and delivers metrics that support smart, data-driven hiring decisions. 

The platform’s unprecedented transparency strategically empowers job candidates, since they’re kept abreast of their reference progress throughout the process. The emphasis is on the candidate and the responsibility to provide accurate, timely references is in their hands. 

This means that with Xref, both the candidate and HR professional can work together towards the same goal. It delivers a reference checking experience that is seamless and enjoyable for all. If an unsuitable hire does make their way into a business, it’s important organizationally, to demonstrate that due diligence was undertaken during the hiring process. 

All references conducted using Xref are gathered methodically, reported consistently and stored securely – adding a layer of governance and limiting the risk to employers. The better and more accurate the data collected during the reference checking process, the easier it is to screen, select, recruit and retain the best candidates.

This study reveals a critical need for the Canadian HR Industry to adopt a transparent, standardized reference checking process. 

Download full report

4 / NOVEMBER 2017 RRI Produced by Xref Limited. ABN 34 122 404 666. Copyright 2017. www.xref.com 5 / NOVEMBER 2017 RRI Produced by Xref Limited. ABN 34 122 404 666. Copyright 2017. www.xref.com 

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