Why Background Screening Companies Shouldn’t Do Your Reference Checking

Are you using a background screening company to complete your candidate reference checks?

User beware: background checks and reference checks are two very different things. And a reference check not done well, is not worth the time or money. Whereas, a reference check conducted correctly can make a significant positive impact across your hiring lifecycle.

Here’s why you’re much better off using a reference check tool designed specifically to give you actionable data to hire better, faster, and with an eye to Quality of Hire and long-term retention.

Background Check Companies Are Great at Background Screening. Reference Checking? Not so Much.

Background screening compliance is a must for many companies. However, this is a hugely time-consuming task, requiring access to multiple databases. The purpose of a background check for employment is to gather very basic records and ensure candidates aren’t hiding a shady past. 

It's common practice to hire a background screening company to complete the logistically straightforward task of fact-checking a candidate’s background and screening for any red flags just before you make an offer.  This task is exactly what background check companies are designed and equipped to do.

However, although the “check” nomenclature sounds similar, modern reference checking is a completely different level of analysis and method for gathering candidate data and insights. 

Take a look at the report you’d get on a background check vs. reference check:

Many background check organizations are now offering to check your candidate’s references as well as provide basic traditional HR background screening. If you decide to use such an add-on service to check the box on checking your references, you will be missing out extremely valuable, high-quality data you need to make the right hire. 

Bottom line: background screening companies verify historical facts well - that's their job. But when it comes to gathering relevant data on the capabilities, skills and competencies of a prospective candidate, they do not deliver. 

When it comes to gathering relevant data on the capabilities, skills and competencies of a prospective candidate, background check companies do not deliver. 

Understanding why you shouldn’t be using background checking firms to do your reference checking can help you save time, money and headaches AND get better data on your candidates, faster.

Challenges With Using a Background Screening Company to Check Your Candidates’ References

Here’s why you DON’T want your background check company checking your candidate’s references:

It’s ridiculously expensive for what you get  

Having your background screening company do your reference checking leads to even longer turnaround times than doing it in house. Add to that, they only try to contact a reference three times then it’s considered complete whether they got any information or not.

This means you’re paying for attempts, not results, and you have to deal with delayed insights when you could be waiting to pull the trigger on an offer to a promising candidate. You can’t require specific references, and you can’t control the reference checking process at all.

It’s non-specific and adds little of value 

You’re also going to get very generic feedback from a background check company, because they are used to just verifying basic facts, not digging for insights. The questions your background checkers will ask aren’t going to be informed and designed by psychologists to get important data about candidates, like what their skills and competencies are. 

There’s more. When you get your report, there won’t be any fraud alerts to tell you if a bunch of references all gave glowing reports from a single IP, so it doesn’t help you catch fraud. You also won’t get any contact information on the references, so there is no way to follow up on comments. Finally, you won’t be able to take advantage of additional benefits like sourcing.

Your background check company might think they are offering you a great deal with an “upgrade” to include reference checking for an additional charge.  In the end, however, you don’t really get value from this type of arrangement.

Crosschq 360: Purpose-Built to Check References Efficiently and Accurately While Providing Actionable Candidate Insights

When you choose a tool like Crosschq 360 Digital Reference Checking Reports over a background checking company’s “add-on” service, you really get value for your investment. Here’s what you get when you start using Crosschq 360 to handle your candidate reference checking process:

Fast, easy top-of-funnel vetting 

360 lets you move reference checking to earlier in the recruitment process. It makes recruitment cheaper and faster by removing candidates who aren’t a good fit before you bother to spend extra time scheduling interviews and meeting with them.

You’ll get plenty of valuable insights early in the hiring process, reducing hard costs and recruiting time. You won’t have to pay for as many background checks on unfit candidates, and you can weed out applicants who seem likely to have post-hire performance issues or might quick-quit or ghost you on their first day of work.

Job-specific ratings & feedback

While a background checking company will simply use a standard set of questions across all job categories, 360 lets you customize your questions and surveys based on industry and role. You won’t have to repeat the same rote questions for your engineers and your sales leaders. 

You’ll be asking targeted questions based on the open role and the department the candidate is applying for. With surveys that gather job-specific ratings and feedback, you’ll be  ensuring that the answers you get yield real information about each candidate’s  skills and competencies. 

Deep dive into each candidate 

Candidate self assessments don’t exist with background checks. You won’t have any idea about what your candidate’s strengths are when they come in for an interview, and they don’t get a chance to highlight why they think they'd be a great fit.

With Crosschq 360’s candidate self-assessment process, your candidates can score themselves on the same survey you’ll be sending to their former peers and managers, and get a chance to put their best foot forward.

Higher response rates in a shorter time frame 

Completion rates for background check companies doing reference checks is only 60% to 65%, but “complete” doesn’t really mean “complete.  Background checking companies still use the phone almost exclusively to complete reference checking. 

That means if they call three times over three days or so, and get a machine three times, that’s it. You’ll get charged for the “completed” reference check, but you get zip. In contrast, Crosschq has a typical 85% response rate - within just two days of starting the process. That’s faster and more effective!

Sourcing bonus

Crosschq lets you ask references if they, too, might be interested with a position in your company at some point - helping you build a passive candidate pipeline. These individuals can complete a self-reference check and be added to your database. A background checker won’t go to the extra trouble.

Much lower cost 

As mentioned, you get charged if a background checker even attempts to contact a reference, regardless of whether they actually connect. Crosschq fee structure is based on hires (as many candidates needed to get those hires), ensuring a focus on gathering responses, and saving clients 20%+ on overall cost.

Ability to follow up directly with references

Background screening services won’t share contact information for references, so you can’t follow up and get more information if needed. Crosschq ensures you have all data on hand so reaching out via email or phone to continue a conversation about a candidate is easy.   

Fraud detection  

A background checking agency won’t have processes in place to verify if the candidate even worked with the reference. There’s no plan to check for any red flags or fraudulent behavior. Crosschq can tell you immediately if one or more of a candidate’s references used the same IP or computer, including the one the candidate completed their self-reference check from.

Specific reference choices

Most background checkers keep the process as dumbed down as possible, allowing only a certain number of references to be checked and not accepting any further direction. Crosschq 360 lets you specify your preference or requirements for references by job title, department, or recency of working together.

Compliance with diversity initiatives  

How can you know if a background checking company is even EEOC compliant? Improper reference checking practices and questions driven by bias  can hurt your DEIB initiatives. Crosschq uses survey questions carefully developed by IO psychologists to eliminate bias and encourage diversity. 

Better quality feedback

Background checking companies are required to allow candidates to see all responses. This can lead to disingenuous feedback, or even none at all if managers are under a company directive to refrain from providing feedback on past employees to a background checking company.  Crosschq is designed to be non-invasive and there’s no mandate to share answers with candidates, allowing managers and peers to be frank.

Better candidate, recruiter, and interviewer experiences

Reference checks performed by background check companies typically use a separate, unbranded form to gather reference information or add it onto the actual background check, making the process seem invasive and cumbersome. By using Crosschq to handle your candidate reference checks, you streamline the process, remove bias, and make candidates feel like it’s worthwhile.   

360 delivers a simple tool for the recruiter to request and manage reference feedback. In turn your candidates are empowered to use the easy-UI tool to request reference feedback via email or SMS texting. Your recruiters, candidates, and references all have a better experience.

Budgeting for Crosschq instead of background check add-ons

Are you worried about asking for budgeting for Crosschq? Sometimes it feels easier to  add a service with an existing vendor, yet requesting a separate budget for a new tool is more challenging. Here’s how to sell your CFO on Crosschq based on ROI.

Using a background check company IS negatively impacting your bottom line by failing to give you the actionable data on each candidate you need to make quality hires. 

Crosschq helps you hire the best person for the role, faster, and can improve your overall bottom line. 

Crosschq 360 clients enjoy:

• Shortened time to hire
• Increased offer acceptance rate
• Reduced quick quits / ghosting after offer
• Better candidate data for increased quality of hire, retention, and new hire productivity
• Comprehensive, easy-to-compare reports with  ratings on relevant skills and competencies
• The ability to build a shareable candidate dossier/ reports for interviewers/managers 

Are you ready to use reference checks to make data-driven hiring decisions? Contact us for a free demo today.