The Reference Check, As You Know It, Is Dead...

Have you heard recruiters or Talent Acquisition leaders say that “reference checks are pointless”?

A growing trend that I’ve been noticing through the various talent communities I’m involved in and my regular customer conversations is that reference checking has become a point of contention for many organizations. The biggest complaints seem to conclude that they take too much time to complete and they don’t ultimately yield any meaningful information.

In a recent LinkedIn poll by Hung Lee, founder of Recruiting Brainfood, he had 1,524 of his talent acquisition and hiring manager followers respond to the question ‘What do you think about Reference Checks?’  

A staggering 71% said they felt that reference checks are entirely pointless, and/or acknowledged that they only completed them for compliance purposes. Less than 25% of respondents said reference checks were an essential part of the hiring process. Some of the most common responses included feedback like this:

1. “Reference checks are inherently biased” 

Recruiters said, “Of course the people the candidate chose as a reference are going to be biased and give a glowing review! Otherwise, the candidate wouldn’t ask them to be a reference, right?”

2. “You must not trust your interview process…” 

Some believe, “If you have to do reference checks there’s something wrong with your whole hiring funnel. Isn’t the interview the deciding factor?”

3. “They’re a waste of time, period.”

This one is often heard: “I have never not hired someone because of a bad reference. What’s the point if it has no bearing on the hiring decision?”

Early in my recruiting career I agreed with all of the above sentiments. I hated doing them, they felt like nothing more than a formality, and 99.99% of the time they simply confirmed that we didn’t miss any major red flags in the interview process. The only real perceived value I got out of them was when I successfully pitched the reference on one of our open positions we were hiring for, and they became a candidate (fun fact, we productized this!) 

So, is this all true today? Is reference checking effectively dead?

The short answer is ‘absolutely not!’ 

The longer answer is that if you’re doing them manually, and approach them through the historical lens of employment verifications, a final check for red flags, and confirming assumptions made during the interview process, then it makes sense that you aren’t getting value from them. 

However, if you approach a reference check as an opportunity to gather as much data about every candidate as possible (particularly in such a candidate-flush market), to learn from their former colleagues and managers how they do their best work, and to understand how to best manage this potential new hire to optimize their path to productivity, then you might see the value of a reference check through a different lens. 

If you’re doing reference checks to merely check the box, then there’s little to no value.

Reference checks can be a highly valuable and impactful hiring process tool. Ask yourself this:  what if you had a tool that could genuinely improve the candidate experience, deliver valuable information about your candidates (in an unbiased manner), enable more data-driven hiring decisions, facilitate more effective interviewing, AND provide onboarding direction that will ultimately improve tenure and performance of your new hires? 

Well, that’s when value gets realized, and I think we can all admit we’d take these benefits all day long, especially if this was all captured in an automated way. Fortunately, there is a growing market of automated reference checking software that helps you accomplish some of the above, and Crosschq 360 reference reports can check all of the above boxes.

Here are 4 Facets of the Hiring Process That Automated Reference Reports Can Help You Optimize

As I’ve been regularly speaking with Talent teams that use Crosschq’s 360 reference reports over the last several months, I’ve learned a LOT, and I’ve bucketed four key benefits that I’m hearing over and over. I wanted to share because I genuinely think that, as a former reference-check-hater myself, doing them the right way with the right intention and the right technology, they can be a genuine game changer. Here’s how…

Interviewing is an inherently flawed process. 87% of interviewers conduct 3 interviews or less per year, resulting in a mere 9% correlation between interview feedback and Quality of Hire (Crosschq’s Q report).  Combine that with the understanding that the purpose of the interview process is to capture as much information as possible about a candidate to make the most informed hiring decisions possible. And if you’re only relying on the data from the resume and that your interview process gathers, you’re making hiring decisions with blinders on. 

Think about that. If your current traditional reference checks provide no value, and your interviewing process may be biased or not gathering the right information, are you merely relying on a person’s resume and your own gut (and possible bias) to make the best hire? This is pretty scary given the cost of making the wrong decision.

Wouldn’t it be nice to back up your gut instinct with hard data? 

Alternatively, if conducted early enough, reference reports can add meaningful value to the effectiveness and efficiency of your interview process. By moving reference checking to before the ‘face-to-face’ interview, you’ll have a chance to review each candidate’s report and use the information you learn to optimize the focus areas of their interviews. 

Take this example:

• A candidate’s top two rated attributes are ‘attention to detail’ and ‘the ability to handle stressful situations,’ while they scored lower on ‘communication skills’.
• All three of these attributes are core traits that are critical to the role you’re currently hiring for.
• Interviewers can:
  • Focus less on assessing for the first two traits, and adjust the interview format to dig deeper into the candidate’s experience and examples related to communication skills.

While automated reference checks like Crosschq’s 360 help optimize many facets of the hiring process, they still serve the originally intended purpose of the reference check which is to help determine which candidates you should hire. 

These days, the cost of a mis-hire can be as much as 200% or more of the employee’s annual salary, depending on their level of seniority. This total cost adds up fast: from the time (and team investment) it took to interview them, onboard them, and ultimately learn they’re not a fit for the role. It’s not only a tangible cost to the business, but also a cost related to the productivity that is lost… had you only made the right hire in the first place. 

In a market with so many qualified candidates looking for work, why not use every tool at your disposal to ensure you get it right the first time?

There are four boosts your hiring decisions get from 360 reference reports:

1. Data-driven decisions
   
   With traditional reference checks, you have to settle for whatever data you can extract from a reference over the phone or by email, which means you barely scratch the surface when it comes to finding out what a candidate is really capable of in the workplace.
   
   With digital reference checks, you get consistent data from one reference to the next, starting with the candidate themselves: 
   
   
   • Questions which are geared to skills and attributes required for the open role
   • Results which can be averaged across all references for each candidate
   • Final scores which can be leveraged to compare candidates without unconscious bias
     
     
2. Faster hiring
   
   With the need for speed when it comes to attracting and hiring top talent butting up against the critical requirement for Quality of Hire, recruiters and hiring managers are trying to balance competing priorities. 
   
   Automated reference checks practically run themselves (kicked off with the recruiter via one click in the ATS, but managed by the candidate). We often get the majority of reference information within 48 hours. And by running the checks earlier in the hiring process, you’re able to identify front-running candidates earlier, narrowing down your work scope much faster.
   
   
3. More consistency and less bias
   
   One of the biggest advantages of using digital reference checks is to ensure consistency across all candidates. Since the same questions are put to every candidate’s references with a simple 1-5 rating system, you can make apples to apples comparisons across candidates, even if they all had different recruiters. Many companies don’t train recruiters on what questions to ask or how to remove bias from their questions. Using a product like 360 reference checks removes any bias and creates a dependable standard for evaluation. 

Perhaps the biggest value of 360 reference reports is the structured feedback from a candidate and former colleagues and managers. This information can contain must-have information about how to best manage the new hires once they’ve started the job:

• How do they like to receive feedback?
• How do they prefer to communicate?
• When and where do they do their best work?
• Do they thrive when closely managed, or when left to work independently? 
  
  

Getting feedback on these kinds of questions from people who actually worked with the new hire in the past can be exponentially more valuable than any assumptions an interviewer might have made during the interview process. And references tend to provide a lot more detail, and honesty, in the easier to use digital checks. So the information you’re receiving is not just more accurate, it is more thorough.

As a result, the hiring manager has in-hand a summary report with scores, and detailed comments about candidate attributes, key hard and soft skills, and areas for improvement about their new hire. This information can be used to customize training and onboarding specific to those strengths and weaknesses, making the new hire’s chance for success that much more likely.   

The power of the data doesn’t stop there. If you want to dramatically improve the new hire’s speed to productivity, and support their long term success at the company you simply combine all sources of information: the new hire’s reference report, notes from their interview(s), and any assessment scores from the hiring process. These can be utilized as an Onboarding Dossier, if you will, that you can hand off to the appropriate manager before a new employee officially starts. 

And finally, you can also use 360 reference reports to refer back to if there’s ever a situation where you need to navigate certain management challenges with the new hire. Here at Crosschq and across our users, managers often refer back to employee 360 reports if they’re working through a personnel issue to see if there’s anything they can learn that might show how to manage a particular situation based on the feedback from the people who know them best.  

So there we have it. The reference check, as you likely know it, is dead. But the new “candidate success check” is new, alive and thriving. Send me a note, ping me on social – let me know what you think about this new way of using reference checks and whether you’ve found it to be a boost to your hiring process.