Automation in Talent Acquisition - Part 2: Reference Checking

Automation in talent acquisition should be present at all steps of the process. Part I of this series covered why and how to automate steps in candidate sourcing. Once candidates have been identified, filtered, and rated according to the best candidate match based on qualifications and skill sets, reference checking provides another layer of data that can help you make better, more informed hiring decisions.

Reference Checking: Useful Tool Or Waste of Time?

Reference checking has gotten a bad rap for being time-consuming, costly, and ineffective. Between company policies that only allow basic employment and role verification and ineffective procedures for reference checks, many organizations started veering away from this tool to save time and money. 

However, this could mean letting go of one of the most useful tools for candidate evaluation. When done properly, reference checks can provide a wealth of information about a candidate’s skills, temperament, and ability to work for and with others to achieve company goals. 

There is also a distinct shift in hiring practices over the last few years to consider. One survey of 400 U.S. hiring managers revealed that in-person interviews are falling sharply out of favor, with 43% of respondents saying they have reduced the number of in-person interviews conducted and an additional 25% reporting that their company has discontinued in-person interviews completely.

Instead, hiring managers have moved to digital and automated means for conducting candidate evaluations. Survey respondents reported that the following methods are now preferred:

• Video interviews (62%)
• Assessment testing (53%)
• Reference checks (46%) 
• Background checks (35%)

None of these methods, including reference checking, guarantee success or Quality of Hire. Still, certain tools, like Crosschq 360 digital reference checks can help identify candidates who are skilled and work well with others to help predict Quality of Hire. The key is reading the right people and asking the right questions - then comparing scores across candidates to identify those with the most potential for success.  

Automation in talent acquisition can be bolstered with a process that turns reference checking into a powerful, low-cost tool for identifying strong candidates with the potential to turn into long-term, productive employees.

Employment Checks vs. Reference Checks vs. Background Checks 

What’s the difference between a basic employment check, a reference check, and a background check?

Employment checks

Employment checks verify that what a candidate claims about their employment history and roles or positions held is true. This type of check involves contacting companies and finding out if the candidate was employed there, what dates they were employed, and what their job title was. 

Many companies only do this type of check in lieu of a reference check, but it’s no substitute for the kind of information that can be obtained from people who supervised and worked with the candidate. However, it’s fairly easy to automate this kind of check by creating a simple form with easy-to-complete fields and sending it out to HR departments for every candidate.

Reference checks

Reference checking is designed to get feedback from people who know and worked with a candidate and can speak to their skills, abilities, and work habits. This type of check needs to be carefully structured to avoid bias from clouding the report. 

References are usually supplied by the candidate, and they must be contacted by the hiring manager. In most cases, references or former managers or coworkers of the candidate, and are handpicked by the candidate in hopes they will provide positive references.

Reference checks that are done without a clear plan and structure in place open the door for falsified references. One survey found that 17% of companies reported that one or more employees had faked at least one reference; further, 40% of the fake references came from mid-management level applicants. 

A fake reference can mean starting the recruitment process over, adding more time and costs. Automated reference checking can reduce both of those figures, and make it easy to weed out fake references early in the process. 

Background checks

A background check is typically conducted by a third party who looks into the candidate's records to identify past criminal acts or behaviors. They may also conduct financial dives to see if the candidate has trouble managing money, particularly if the filled role carries any financial malfeasance risk.

However, what a background check doesn’t reveal is what skills a candidate has, how likely they are to fit into corporate culture, or whether or not they can be productive members of a team. For answers to these questions, a reference check is still the best option. 

Traditional Reference Checking  

Traditional reference checks can take days to complete, as a hiring manager strives to track down the candidate’s referral sources and connect with them to ask questions. Once contact is made, there are additional pitfalls, such as having only an informal reference checking structure in place and depending on the flow of conversation to reveal information that can be leveraged for decision-making.

Structuring your reference-checking process to provide data that can be compared across candidates is preferable. A set of standardized reference questions can make the process more equitable and help remove unconscious bias and potential legal issues. However, even with all of the factors taken into account, the fact still remains that the reference-checking process simply takes too much time. 

The days required to complete a traditional reference check can severely impact time to hire. Gartner notes that the average amount of time it takes a hiring manager to make an offer after interviewing is now a staggering 33 days. In-demand candidates are increasingly likely to accept other offers rather than continue to wait.

Making the reference-checking process more structured, and designing it to allow reporting to be compared against all candidates on the shortlist for hiring may seem to be adding time and complexity to an already expensive task. The good news is that applying these changes to traditional reference-checking guidelines makes the entire process easier to automate and better able to return actionable results. 

Automating Reference Checking

Automation in talent acquisition can provide more equity for applicants and help to surface the best candidates for any given position. Companies who have been skipping reference checks due to the time and monetary costs involved can utilize automated processes to make reference checking more accessible to their hiring managers.

Benefits of adding reference checking back into the mix

Reference checking can substantially reduce cost per hire and help companies land top talent that is the right fit for their organization. This in turn reduces turnover by increasing employee retention, preventing a revolving workforce door and the sunken investment in recruitment that comes from hiring employee after employee who don’t work out.

Reports generated from reference checks can be compared to one another as well as against a position checklist to help figure out which candidates are the closest match for an open role. Since questions are designed to avoid bias and concentrate on skills and abilities over personal likes and dislikes of the references themselves, the answers can carry more weight.

Automating reference checking allows hiring managers to concentrate on other tasks that aren’t suited for automation, like video interviews or administering personalized skills tests to final-round candidates. Reference checking can be conducted seamlessly in the background and data added to each candidate’s file as their references complete the process.

Using Crosschq 360 to streamline candidate reference checking

Crosschq 360 takes the work out of reference checking, reduces the costs of reference checks, and can take the amount of time needed to complete a reference down to as few as three days. 

With Crosschq, organizations can embrace automation in talent acquisition and generate the reports and insights they need to effectively compare candidates in the talent pipeline based on similar data points. 

The Crosschq Process

Candidates start the reference-checking process by completing a self-reference check and scoring themselves across a specified range of attributes, skills, and abilities. This not only allows the candidate to actively be part of the hiring process, it also gives them an overall good candidate experience.  

Next, reference requests are sent out automatically to former managers and peers who are asked to score candidates against the same set of queries, providing a holistic picture of the candidate’s past work ethic, performance, and capabilities.

There’s no need for hiring managers to spend hours on the phone or send email after email trying to complete reference checks for shortlisted candidates. Instead, Crosschq streamlines efforts without ever leaving the ATS. With the repetitive tasks removed, recruiters can instead spend more time selling and focusing on the candidate experience. 

Finally, a complete report is generated that can be compared against other candidates who have completed the same reference-checking process using the same data points. The results equip the hiring manager to make a data-driven decision on who the best candidate is for that role.

Being able to complete reference checking swiftly and confidently allows hiring managers to take decisive action when it comes to getting offers out quickly to selected candidates in a competitive market. With customizable real-time alerts and notifications and an easy-to-use, mobile-ready interface, Crosschq 360 can reduce overall turnaround time reduction by 85%.

Don’t let high-value candidates get away while time is spent on traditional reference checking, and avoid the cost of a bad hire resulting from skipping reference checks altogether. Instead, embrace automation in talent acquisition, and deploy digital reference checking by Crosschq to secure top talent and improve your bottom line. To learn more, request a free demo today.