References.
As things currently stand, they’re a completely pointless exercise. By the time the referencing stage comes around, the hiring company has generally decided that they’ll hire the candidate anyway.
This means that referencing is a waste of both time and money – especially if the interview process isn’t watertight too. And with 15% of employers realising they’ve hired the wrong person in the first week (and 39% in the second week) – and a bad hire costing businesses anywhere from £30,000 to £130,000 – something needs to change.
Here, we outline the current issues with references and the way they’re collected and used – as well as how they could be approached differently to make them really count.
The problem with references today…
1. They aren’t being collected at all.
You may be surprised at the number of companies that don’t follow up on references listed on candidates’ CVs. Or you may not – it might be that you don’t collect references, as you don’t see the point either.
2. Only basic information is being collected.
As things stand, an employer needs only to give the most basic of references: a statement that confirms that the candidate worked at the company, and the dates between which they were employed. Any more than that is at the discretion of the employer – or is down to the prospective employer, who may not ask the questions that really matter.
With the majority of candidates today having an up-to-date LinkedIn profile that lists their employment history, is it worth the time and effort spent on contacting a former employer just to discover that the dates match up?
3. Former employers are afraid of giving a bad reference
There’s a common assumption that a previous employer is forbidden to give a bad reference – if they don’t want to give a positive reference, they should just state employment dates.
It’s rubbish.
The law states that if a reference is given, it “must be fair and accurate – and can include details about workers’ performance and if they were sacked”.
However, many employers are scared to give a bad reference in case it leads to court action from the employee. Sarah Veale, senior employment rights officer at the TUC, says that as a result, “employers won’t include anything that is seen as subjective. They stick to objective information such as job title and days absent”.
While slander is out of the question, it’s perfectly justified to give an accurate, factual review of a former employee’s work. This can be made easier by better questioning from the recruiter’s side: specific requests for concrete detail, such as “please rate their skills as a C# developer” can make references more useful.
4. References are too embedded into the recruitment process
Just how integral a part of your recruitment process is referencing? For some businesses, it’s an element of the process that’s set in stone – and this can create a barrier to hiring. With referencing, you’re at the mercy of a third party: an individual (generally a manager, who will often be short of time) who you’re relying on to provide you with information about an individual who no longer has any relevance to their business.
“This could mean a lengthy delay before filling a vacant position.”
For this reason, it could take a while for that reference to come back. And if your process is such that your HR team will avoid sending contracts until it’s in their hands, this could mean a lengthy delay before filling a vacant position. This isn’t ideal at the best of times – but it’s even more of an issue if the reference that does eventually come back is of no concrete use.
We’ve given four reasons why the current employment referencing process falls short – but that’s not to say it should be scrapped altogether. Done right, it’s a great way of removing the likelihood of poor hires, or nasty surprises down the line.
Here’s what we propose.
Getting a good reference
If you’re going to just check that a candidate was employed by their claimed former company, you’re better off looking at their LinkedIn profile. At the moment, referencing is a pretty redundant exercise for most businesses: a task conducted purely for compliance.
“You’re better off asking competency-based questions where the former employer is forced to deliver a substantive answer.”
You’re better off asking competency-based questions where the former employer is forced to deliver a substantive answer. These should take the form of more direct questions: think those preceded with phrases like “Tell me about…”, “Describe when…”, and “How did…”.
In this way, you’ll discover whether Dave really did deliver a new IT system to the company, or whether he was the office cleaner. You’ll find out whether Ian really was solely responsible for a £5m budget, or whether he was in charge of the office social fund.
Use this questioning to confirm the responsibilities, skills and achievements that the candidate has listed on their CV. After all, CVs are rarely checked for accuracy. Use these questions (or request a P60) to prove that a candidate really was on a £100K salary in their former role, or if they’re a £50K worker looking for an incredible pay rise.
Ultimately, it’s up to you whether you decide to undertake the laborious task of referencing when hiring new candidates. If you do, though, remember that its key benefit is quality control. While it can be tempting to try NOT to uncover a problem because you’ve already hired that candidate in your mind, the fallout from a candidate lying about their skill set or responsibilities or being unaware of major issues can cost you more – in terms of money, time, staff morale and business reputation – than you may think.
