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Why employers in the UK and EU should check references

15/12/2022
8
min read
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Sometimes “reference check” is used as an umbrella term for any kind of pre-employment background check, but that isn’t the case. A reference check is a very specific part of the recruitment process that can help identify the best candidates and also weed out potential problem hires.

What is a reference check in the UK?

A reference check is a conversation with a candidate’s referees - their previous managers and co-workers, academic supervisors or volunteer organisations to confirm a candidate’s resume and gather insights about their work history. By using these sources, employers can gain a better understanding of how the candidate performed in their previous role, their strengths and weaknesses, and whether the split with the previous employer was amicable or not. 

Why conduct reference checks instead of simply confirming employment dates?

Standard practice for reference checks in the UK is typically little more than a letter confirming the dates of employment with little to no other information. While such a rudimentary check can help confirm the basic details of a resume, they contain no real information of particular use to a recruiter. 

Referees can fill in gaps left by a resume and interview with a candidate. In an interview and resume, a candidate will always portray themselves in the best light, highlighting achievements and omitting any negatives unless specifically asked. Even then, a candidate is more likely to put a positive spin on any weaknesses or failures than admit to any real shortfalls.

Reference checks can give potential employers a better indication of past performance, as well as the strengths and weaknesses of a candidate. A referee can also verify the information presented within the candidate’s resume, such as start and end date, the reason for leaving, salary, job title and tasks performed.

Think of a reference check as due diligence. Talking to a referee ensures that a candidate has the skills and experience they profess to, and gives an insight into their work behaviour and attitude. This in turn gives employers the confidence that they are hiring the right candidate. 

What stops recruiters from performing reference checks?

There are a few reasons why companies may choose to not perform reference checks. One of the key factors may be that performing manual reference checks by phone is time-consuming and inaccurate. After finally connecting with the referee - an act that may itself take numerous calls - asking a few questions isn’t an efficient way of gathering information on the job candidate. 

The referees may not be prepared to answer specific questions or may not have the time to give detailed answers. It’s also challenging to verify any of the information gathered or even if the referee is genuine. On top of that, many employers may not even realise the benefits of performing reference checks.

Another reason people may be wary of reference checks may revolve around the legalities of reference checks in the United Kingdom and Europe. The privacy laws appear to be complicated, but they are actually very straightforward and easy to understand.

Are reference checks legal in the UK?

Reference checks are absolutely legal in the United Kingdom. That said there are some specific rules that must be followed when asking for a reference check.

Employers are required to give references only if they have entered into a written agreement to do so, or are in a regulated industry, such as financial services.

While reference checks are legal, there are guidelines that must be followed regarding how an employer responds to a reference request. All references must be fair and accurate. This means that a check can contain information including the candidate’s performance in a previous position, if and why they were dismissed from the position, along with other information such as job title, dates of employment and salary.

Can a candidate see or challenge a reference?

Candidates have the right to see their references. While candidates may ask a prospective employer to see their references, candidates have no right to ask a referee to see the reference they have given. 

Candidates have the right to challenge a reference if they feel it is inaccurate or unfair. The candidate must also show that the reference caused them to suffer a loss, such as a job offer being withdrawn due to a reference.

Are reference checks legal in the EU?

In the European Union, reference checks must abide by General Data Protection Regulation (GDPR) rules. These are some of the strictest privacy laws currently in use. Although this may sound daunting, it simply means there are some rules that must be adhered to when conducting a reference check within the European Union.

Quote image detailing how strict DGPR priacy laws are

Employers must ensure that the data they are seeking is of legitimate interest. Information sought must not violate any reasonable privacy expectations. This means that the reference questions must not touch on personal or discriminatory information, such as age, sex, marital status, sexual orientation or ethnic background, or otherwise have little to do with a candidate’s individual performance.

One of the core tenets of the GDPR is data destruction and the “right to be forgotten”. This right means that people can ask to have data containing personal information about them deleted, but it is not absolute. The right to be forgotten only applies in certain circumstances, such as when the information is no longer needed for its intended purpose, or when a person withdraws their consent for the information to be used. 

In practice, this means that candidates can ask you to destroy reference checks after they have been successfully used, or if a candidate withdraws their consent for the references to be used.

If the information gathered in a reference check is to be sent overseas, as may be the case in remote hiring for a multinational company, then there are guidelines for where and how the data must be transmitted and stored. The GDPR features a list of 14 countries that are considered to have a level of data protection comparable to the EU.

Data transfer between the EU and these countries is expressly permitted. Data transfer to countries other than those on the list is not prohibited so long as the person sending the data follows sufficient data protection protocols. 

Do you need consent for reference checks in the EU and UK?

Candidate consent is required for all forms of background checks in the EU. This includes reference checks. If references are required, the candidate must be informed and their consent must be given before contacting the referees.

In the UK, candidates must gain written consent from referees before they can be used as a reference, and an employer must get the consent of the candidate before they can check references.

How do I perform a reference check? 

There are a number of ways of performing reference checks. Traditionally references were either taken by phone or by mail, with the employer calling or writing to the referees nominated by a candidate. These methods by nature are time-consuming, as they either require calling a referee and hoping they have time to talk, or waiting for a written response.

A more modern and efficient form of checking references is by using what is referred to as a reference checking platform. 

Reference checking platforms, such as Xref allow organisations to conduct efficient, unbiased automated reference surveys. Not only does this save the time it may take to chase up referees manually, but it also ensures that all referees are answering the same questions. Because the reference surveys are conducted online, they can be done when it suits the referee, giving them more time to consider their responses than a spontaneous phone call.

How does Xref improve the reference checking process?

Xref is tailored to meet the unique needs of hiring managers, HR professionals and anyone involved in the hiring process. Rather than wasting time playing phone tag, employers can use Xref on mobile or desktop to create, send and receive a completed reference check in a few simple steps. 

  1. The organisation can create a survey using a template of best-practice questions or compile a customised questionnaire.
  1. A link is sent to the candidate who enters the contact details of the referees into the platform. Once the information is entered, the referees are emailed the online reference survey. 
  1. Once results are returned, they are analysed by the Xref algorithm and presented in easy-to-understand graphs. Hiring managers can then make an informed hiring decision using data-driven feedback.

The simplicity and effectiveness of the reference survey platform has led Xref to be an industry leader in 195 countries. Xref is ranked #1 on the G2 reference checking software list, scoring 94% on ease of use and 93% for both customer service and ease of setup. Xref also boasts a Google review score of 4.8/5 in the UK.

G2 Best badges and a 4.7 Google review score

Why are Xref reference checks perfect for the UK and EU?

Xref reference checks can be built from a range of carefully curated, HR best-practice, GDPR-compliant questions. Given the necessity that reference checks in the UK and EU must be fair and accurate, the available questions mean that employers can create custom reference surveys that only gather the required information. 

Xref supports multi-language functionality so employers can select a language that best suits a candidate’s needs. New languages are added to the platform according to demand.

What are Unusual Activity flags in reference checks?

Not all candidates are honest and may try to influence hiring decisions by faking references. Xref reference surveys feature a smart algorithm that identifies instances of unusual activity. When a reference is given using the Xref platform, the algorithm analyses multiple data touchpoints, looking for similarities in digital body language between the referee and the candidate. If the two match, this can be an indication that the reference is suspicious.

If unusual activity is flagged in a reference check, the individual conducting the reference is informed, leaving them to decide if and how they would like to take action. After assessing the nature of the suspicious activity detected, organisations can then choose to remove the candidate from the hiring funnel or proceed with the hiring process.

Conclusion

Reference checks are an important part of the hiring process as they let employers gather information that may not have been evident in the resume of a candidate or during an interview. Referees can give context and detail to the work ethic and character of a candidate as well as a better perspective of their strengths and weaknesses than a candidate may supply themselves.

The laws and rules surrounding privacy and data protection in the UK and EU may seem intimidating, but this is not the case. Permission for references must be obtained and the questions asked must be relevant and don’t touch on discriminatory information. As long as those simple rules are followed, reference checks are legal.

With Xref online reference checks, UK and EU businesses are able to make smart, data-driven hiring decisions to ensure they recruit the best talent and future-proof their workforce. 

Note: Information provided in this blog is not legal advice.

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