Recruitment Report Index 2017 - UK
Recruitment
min read

Reference Checks in the UK: Why Processes Require Attention

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A well-conducted reference is a goldmine. It can shine a light on a candidate’s reliability, training requirements and capabilities before they even step through the door. 

It can also verify the basics. This includes employment dates and job titles, educational and professional qualifications as well as fill in any gaps in a candidate’s employment history. In short, a thorough reference check can save time, money and prevent failed hires. 

However, over the last ten years, the nature of references has changed. UK Employers have switched from providing opinion-based to neutral references that only confirm a candidate’s name, dates of employment and job title. 


Recruitment Risk Index (RRI) 2017: The State of UK Referencing.


So why are UK employers not taking every opportunity to stress-test candidates’ CVs? And what are the risks that arise when businesses turn their backs on thorough reference checking? 

Reference checking in the UK 


According to this the Xref Referencing and Recruitment Risk Index, which surveyed 1,000 jobseekers in the UK aged between 18- 39 years-old*, some 23.5 percent of candidates were not asked for either a character reference or an employment reference when applying for a job. And of those that were asked for a reference, 23 percent said that their referee was never contacted. 

This research points to several reasons why reference checking is not happening and what the associated risks are: 


An outdated process 


Reference checking is usually done by email, or via phone, making it time-consuming and inefficient, and with the current bias towards neutral references, more and more requests are being funnelled through HR. This has led to a huge burden on that department. 

In small companies this task is usually handled by individuals with little or no formal HR training and is, again, an inefficient use of their time. Reference checking has become a huge pain point for HR managers, recruiters and employers alike, when it should be regarded as a real asset. 


A cautious climate 


The present practice of only providing minimal information in the form of neutral references, has arisen due to the fear or paranoia of claims resulting from defamation, negligence or discrimination. Yet inconsistencies in how references are collected via phone and email, is exacerbating the likelihood of this happening. 

The survey revealed that referees are frequently being asked questions relating to legally protected characteristics, which may increase the risk of job applicants bringing discrimination claims under the Equality Act 2010. 


UK’s & Reference Checks - Big Picture


Fraudulent candidates and fake references 


Combined, these outdated methods as well as lack of rigour and consistency, have led to a reference checking process that is no longer fit for purpose. The current process is not efficient or candidate-friendly and the focus on demanding only neutral references has made it too easy for unscrupulous candidates to slip through unchallenged. 

According to the research, more than 28 percent of jobseekers admitted to taking advantage of flaws in the reference checking process, to position themselves more favourably with potential employers than is strictly true or accurate. This includes: manipulating their qualifications, work experience and references to improve their chances, while others have actively encouraged a referee to lie on their behalf. 

So not only are the inefficiencies and inconsistencies in the current reference checking process leaving organisations open to risk in terms of governance, compliance and due diligence, they are also impacting competitiveness and allowing fraudulent candidates to slip through the net. 


Reference check processes require an update


It’s clear that recruiting practices in the UK and the old-fashioned methods used to collect references are helping dishonest candidates get ahead and leaving organisations exposed. 

What’s needed is a complete shakeup. This means reinstating opinion-based references, as the standard form of referencing. 

These add real value to employers, lead to data-driven hiring decisions and are the most effective form of due diligence. But it’s also important that reference checking becomes a way of identifying when candidates aren’t telling the truth while safeguarding against any privacy and data breaches. 

One way to achieve this is to make the whole process quicker, more convenient and more transparent. Automated and mobile platforms like Xref, that put the candidate in control, can help achieve this. 

The penalty for not improving the reference checking process is that star candidates can be lost. And, according to the research, this does happen, with some 14 percent of respondents stating they had found an alternative job, or otherwise not taken a job, because reference checking took too long. 


Understanding Reference Checks in the UK


Launched in 2011, Xref is a secure, cloud-based candidate referencing platform. It was developed to address the inefficiency, inconsistency and vulnerability of the traditional phone and email-based reference checking process. 

With hundreds of reference checks passing through the platform every day, Xref helps tackle reference checking pain points and allows clients to understand their industry, market, talent pool, and the solutions available to them. 

In the six years since the company launched, Xref has proved it can help organisations big and small, overcome the challenge of referencing checking and deliver strategic advantages to their organisations by giving HR professionals time back in their day. However, Xref recognised the need for independent third-party data to help it quantify the problems it was addressing and validate the advice and counsel it was offering clients. 

In February 2017, Xref commissioned research to take a closer look at the recruitment process - specifically reference checking - surveying 1,000 UK jobseekers aged between 18 -39 years-old. 


4 Key Areas of Concern for HR Managers and Recruiters


The resulting Xref Referencing and Recruitment Risk Index draws attention to five key areas of concern for HR managers, recruiters and any hiring organisations: 

1. The burden of reference checking on employers 

2. Candidate fraud 

3. A poor candidate experience 

4. Employer discrimination


1. The burden of reference checking on employers


Although reference checking is part of the day-to-day role of recruiters, the research found that 86 percent of candidates made at least one application directly to an employer. 

For small, inhouse HR teams, the burden of having to request, coordinate and chase referees for responses, can have a significant impact on the performance and resources of a team who could otherwise be conducting more strategic tasks, such as aligning the employee talent pool with long-range goals or forecasting HR requirements. 

Perhaps as a result of the time-intensive nature of reference checking for employers, 23.5 percent of respondents claim they were not asked for either a character reference or an employment reference when applying for jobs. 

Of those that were asked for a reference, 23 percent said their references went unchecked and a further 35 percent didn’t know if their references were checked. 

Failing to reference check means failing to do due diligence. And if an inappropriate hire does slip through the recruitment process, it’s important to be able to show that the candidate has been thoroughly vetted, something which can also be hard to track due to the inconsistency of reference checking by phone and email. 

Some 62 percent of respondents believe there is “a lot” or “some” room for improvement in the current reference checking practice, highlighting just how excluded candidates often are from the process. Some 38 percent of respondents also stated that delays in the reference checking process caused them to feel anxious. Keeping candidates up to speed on what stage they are at, and whether they are still in the running at all, is vital to a positive recruitment experience and to their perception of the company. It can also influence whether or not they take the role. 

With the war for talent becoming increasingly globalised and more competitive than ever, businesses simply cannot ignore the need for transparency. In fact some 84 percent of respondents said they’d be interested in being kept up to date on their progression through the hiring process for a new job. 


2. A Poor Candidate Experience 


As well as increasing the administrative burden on employers and creating a poor candidate experience, reference checking by phone and email also makes it easy for candidates to exaggerate their experience and be selective about their referees without being challenged. 

Some 29 percent of respondents admitted to having deliberately lied to a potential employer, with the most common embellishments being exaggerating their work experience (36 percent) and exaggerating their qualifications (28 percent). 

The research found that 28 percent of respondents also admitted they had exploited flaws in the referencing process to improve their chances of getting a job. 

The most common methods adopted by candidates to deceive employers were found to be choosing a good referee, rather than the most appropriate person (32 percent) and avoiding choosing someone who might give a bad reference (32 percent). 

This group of people, who are comfortable asking someone with no professional connection to act as a referee, includes those who asked someone they worked with but not closely (11 percent), those who asked a friend (6 percent), and those who even used a family member (3 percent). 

Beyond making a strategic decision about who to put forward as a referee, arguably the biggest surprise is the 21 percent of respondents who were willing to admit they’d actively encouraged a referee to lie on their behalf, by exaggerating their experience, as well as the 21 percent who had asked their referee to pretend to be someone they were not. 

These figures are alarming when taken at face value, but it’s also worth noting that the number of respondents admitting to deceiving potential employers during the hiring process is representative only of those that were willing to admit to it. 

The likelihood is that the number of people actually behaving in this way is significantly higher. So businesses need to be armed with solutions to protect themselves from this risk, or they will remain exposed. 


3. Risks on Questions for Organisations


The recruitment and selection process is likely to create obligations for businesses and recruiters under legislation including the Equality Act 2010 and the Data Protection Act 1998 and also places such organisations under pressure to adopt good practices, such as those set out in the Employment Practices Code issued by the Information Commissioner’s Office. 

Although most organisations produce a script or questionnaire to be used for reference checking, the conversational nature of a phone call can often lead to questions outside of the agreed scope being asked. This lack of control puts the organisation at risk and there is always the chance that in trying to build a rapport with a referee or due to inexperience, potentially discriminatory questions may accidentally slip into the discussion. 

The research found that a quarter of respondents had been asked a candidate’s age and 14 percent had been asked their marital status, both of which are protected characteristics under the Equality Act 2010. It is clear that the lack of standardisation and control within traditional reference checking practices is leaving organisations open to risk both in terms of compliance and governance


4. Avoiding Employer Discrimination


It’s clear recruiting practices in the UK and traditional phone and email methods of reference checking are allowing candidates to deceive employers as well as leaving organisations open to risk in terms of governance, compliance and due diligence. 

The first step in combatting this is the introduction of a more efficient, consistent and convenient process capable of challenging candidate fraud, increasing transparency and eradicating discrimination by employers. 

This kind of efficiency in recruiting will translate into efficiency across the entire business. This includes helping to employ and keep great talent, all while protecting your organisation from risk and inefficiency. 

However, to change the reference checking process into something that will really add extreme value to businesses, reference checking must shift away from neutral referencing to opinion-based referencing. 

There is an appetite for this kind of change. Some 73% of referees state that references they’ve given have always been detailed and told employers what they really need to know, yet some 40% say that recruiters are not interested in their opinion of the candidate and only want to confirm facts. 

This mismatch shows that referees may be more willing than we think to provide more detailed responses, but that recruiters are no longer asking for this information. Provided by line-managers rather than HR or Payroll departments these kinds of references will offer qualitative data on candidates that is of value to future employers, and can help identify strengths, training needs and weaknesses. 

It’s a bold step for the UK recruitment industry to make this switch. But it would be one that leads to a new referencing archetype in UK recruitment and HR; one based on greater openness, collaboration and knowledge sharing. 


Actions Required to Improve Reference Checks


The State of UK Referencing The Xref Solution. Reducing the burden of reference checking Xref streamlines reference checking. No more time-consuming chasing by phone or via email and no email attachments clogging HR professionals’ inboxes. 

Instead, Xref’s automated and mobile platform delivers written references that are structured and comparable. They are also secure and available whenever you need them. By reducing the time spent collecting references, Xref also enables HR professionals to spend more time on strategic tasks that offer greater value to the business. 


Improving the candidate experience 


The Xref platform notifies candidates and recruiting organisations of the progress of their references throughout the process. This increased transparency empowers the candidate to reach out to their referees if there are any delays, and reduces the likelihood of employers losing out on the best talent. 

Reducing candidate fraud Xref provides a level of security that cannot be met through traditional phone or email-based methods. 

The platform’s algorithm detects any inconsistencies or concerns in the details a candidate provides for a referee, such as their IP or email address, and raises a red flag with the client if necessary. 

This then offers the recruiter or business the opportunity to question the candidate and resolve the issue before continuing to collect the reference. 


Improving data protection 


Using the Xref platform will assist compliance with data protection obligations by making sure only personal information that is relevant is collected from candidates during the reference checking process. This provides peace of mind to the candidate, the referee and the prospective employer as well as maintaining compliance. 

Better governance If an inappropriate hire does slip through the recruitment process, it’s important to be able to show that due diligence on the candidate was undertaken during the hiring process. This is something that using an automated platform, like Xref, where all references are gathered methodically, reported consistently and stored securely, can ensure. 

Xref also prevents referees from providing a reference without future accountability for their comments as written feedback from a specific email and IP address creates an audit trail that discourages fraud. 


The Xref Solution


Enhanced data 


The better and more accurate the data, the easier it is to screen, select and discover the best candidates. The Xref platform collects more data- which means better insights- and collects it quickly, verifies it and allows you to compare candidates so you can make insightful evidence-driven hiring decisions. 


Comparing the metrics that matter 


Xref collects more data than traditional methods, delivers it more quickly, verifies its authenticity and enables a comparison of the results. The efficiency of the platform reduces the time taken to hire talent and delivers the metrics that enable data-driven hiring decisions. But beyond candidate-specific metrics, one of its most powerful advantages is the industry comparison it enables. 

Data that can be used to benchmark candidates and generate predictive analytics to support future hiring decisions, is what sets the insights generated through automate solutions apart from the feedback gathered using traditional reference checking methods. 

Xref is a secure, cloud-based candidate referencing platform Launched in Australia in 2011, Xref set out to solve a significant pain point for HR managers and recruiters - the way candidate feedback is collected Xref set up its UK operations in 2016. While headquartered in Sydney, it also operates in Singapore, New Zealand and Canada. Xref transforms reference checking to add strategic value to the hiring process, while saving time and money for employers and protecting them from breaches of privacy, discrimination and reference fraud

With Xref, UK businesses are able to make smart, data-driven hiring decisions to ensure they recruit the best talent and future-proof their workforce. The platform also offers candidates transparency throughout the process and the ability to manage the speed at which references are gathered, as well as easing the burden on referees, who are able to share their thoughts and feedback in writing, at a time that suits them. 


You can check out Xref’s powerful Template Builder and set up your best practices questionnaire  in seconds.

For more information about this report, or to find out how Xref could help your business, contact the team at xref.com

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