Employment Reference Checking: What You Need to Know

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COVID-led remote hiring has increased the complexity of finding the right candidates. Now more than ever, you need to be able to trust who you hire as working from home might just remain the new normal. But building a successful team, either in person or remotely, requires us to know more about a candidate than the list of experiences and traits on their resume.  Even if someone looks perfect on paper, it’s worth going the extra mile to check that they are the right fit for the role.


What is an employment reference check?

An employment reference check provides independent insights into a candidate’s past work performance, to learn about their strengths and weaknesses. It validates the qualifications they claim to have and the length of experience they have had in previous roles. 


Three reasons why employment reference checking is crucial

  1. It validates your impression of a candidate: You want to make sure the person you’re hiring will do the job well and has the right qualifications or experience required. Survey findings suggest that 85% of job applicants stretch the truth on their CV; usually in the areas of skills described or employment tenure. For instance, a candidate may claim they are an expert in a specific skill while they actually just have basic knowledge. Information gathered from a third party can provide valuable validation.
  2. It filters out bad hires before it’s too late: Hiring the wrong candidate can cost you, not just monetarily but also in terms of the impact it can have on the rest of the team and brand if they don’t perform the job well. A thorough employment reference check will help you gather information on a candidate’s professional performance and reasons for leaving previous roles, to ensure there are no skeletons in the closet when they join your team.
  3. Some sectors require more attention than others: Sectors providing support to vulnerable people and communities, such as Health and Aged Care providers, are complex in their requirements. It’s essential that the right people are hired for these positions of trust. Having robust recruitment processes in place to ensure candidates are who they say they are and have the experience they claim to have is critical to establishing an audit-proof hiring record that guarantees the right level of care and protection for the clients and patients of these organisations. 


Asking the right reference checking questions

A reference check is only as valuable as the questions asked.  To create the best reference questionnaire, we recommend a mix of essential, personal and role-specific questions. Here is a list to get you thinking:

Essential questions 

To create a strong foundation, we recommend that a reference template includes at least five essential questions that account for a candidate's previous employment and performance. 

For example, an essential question could include: “Please detail the nature of your working relationship (i.e. direct boss, etc).” and “What roles do you think they would be suitable for in the future?”.

Personality based questions

A great reference should also include a set of personality-based questions as an indication of whether the candidate would fit into the workplace culture and meet the demands of the work environment.

For example, a personal attribute question could include: “Can you please rate and describe their ability to use initiative when problem-solving?” and “Please rate and comment on their ability to learn”.

Role-specific Questions 

These questions point more to previous role responsibilities and skills, and how well the candidate fulfilled them.

An example of a role-specific question could include: “Please rate and comment on their computer skills and ability to adopt new software.” and “Can you comment on the level of supervision they required? How well did they work autonomously?”

And while great references include questions from these three categories, we also have a tried and tested formula for creating the best questions, we like to call it…. BACON

Ensuring your reference templates include the best mix of questions, and your questions are BACON can be tricky but our dedicated  template builder tool takes all the hassle out of creating the perfect, tailored template - try it for yourself.

What is the difference between personal and professional references?

A personal reference is someone the candidate hasn’t worked with and can discuss their individual values; mainly requested for graduates or those with less work experience. A professional reference is provided by a former boss or manager who can vouch for a candidate's employability or skills. Most recruiters prefer at least two professional references. 


What is a ‘no referral policy’?

Some companies have a standard ‘no referral policy’, which means that employees cannot provide a verbal or written reference for previous colleagues. Organisations often opt for this approach to avoid defamation claims if a former employee tries to state that an adverse hiring decision came as the result of a reference provided.


While there are alternative approaches to obtaining employment references such as asking for the employment tenure, character reference or performance review feedback, we would always advocate for the value of a full, detailed reference check. When conducted online, reference checks are provided verbatim, nothing is taken out of context or can be misunderstood. So, as long as the information provided by the reference provider is true and accurate, they are at no risk of a legal challenge.


Can candidates legally ask to see notes from a reference check?

If a prospective employer has gathered information about a potential candidate, the applicant has the right to access those reports and can ask the employer directly to share them. It is then at the employer's discretion to decide whether or not they are happy to share the information. 


Best Practices

  • Ensure a safe, secure and compliant data environment. As recruiters gather candidate sensitive information every day; organisations need to ensure they have the right data security and privacy measures that are compliant with local laws.
  • Always have permission from a candidate to reach out to referees.
  • Avoid discriminatory questions; this could include questions directed to women checking their ability to manage work pressure if she has kids.
  • Consider implementing a standard policy for the reference checking process. This policy should address the minimum number of references you must reach before making an offer (at least two is ideal).


Benefits of Online Reference Checking:

Some recruiters may argue that the traditional phone-based method is a more human approach to reference checking. However, here are five key reasons why online reference checking is the safer, more efficient alternative:

  1. You don't lose out on the right candidate: Great talent is always sought after by eager employers and good job offers; in such cases, time is of the essence. 
  2. It frees you up for people-related tasks: A reliable online reference checking solution works for you outside of working hours and your timezone, if required. Imagine completing all your referencing in as little as 24-36 hours. 
  3. It’ll help you standardise your pre-screening process: You could hire diverse people or talent overseas, and a standardised questionnaire will help you develop a fair, unbiased hiring system.
  4. No phone tag and no unprepared referees: You don’t want to run into a loop of phone tag with referees, which sometimes happens even when you’ve scheduled a call. Online reference checking gives a referee sufficient notice to recall details about the candidate's past employment. 
  5. System tampering? You get notified! Reference fraud happens more than you think. A reliable service provider will have a built-in feature to flag any suspicious activity such as the candidate trying to fill in their own reference check. 


Final Thoughts 

So, the next time you weigh up your candidates, make sure you have a robust employment reference checking process in place. We recommend an automated, digital reference checking approach that will do the work for you and give you valuable insights on your new hire. Your due diligence could be the difference between a great new addition to the team and having to rehire after a couple of months.


We’ve been in the industry for 10 years and understand the pain points of reference checking. Our industry experience drives us to improve our product and deliver a best-of-breed solution to our customers. If you’d like to know more, get in touch for a demo today.

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