When HRM reported on a study by recruitment data company Xref that found that a significant amount of recruitment managers consider reference checking in its current format “a formality which serves little purpose”, readers responded with vigour. Here, we reflect on the debate and look at the legalities involved.

The AHRI community’s response

Most website editors give pause before delving into the comment section of one of their stories, especially if a comment begins: “I really disagree with this article.” But at HRM dissent spurs discussion, and HR professionals share their experiences and a wide variety of opinions.

Our article on reference checks is a good example. 

Good and bad reference check practices

“I don’t support online reference checks at all because there are so many variables that come into play that will make it less accurate, particularly if rating scales are used” says Cassandra Winnacott. But she didn’t believe that meant all reference checks were useless. “Research says ‘the best predictor of future behaviour is past behaviour’ so if it’s used correctly, a reference check is actually a great way to get a glimpse of a person’s behaviour.”

As for advice for fellow HR professionals, readers such as Nick Hutchinson suggest that while it’s true that asking set questions doesn’t add value to candidate validation, departing from the script may offer unexpected insights. “Dig a little deeper with your questions,” he says.

Kevin agrees. “I have used the reference check process to help clarify minor concerns that appeared during the selection process. This has involved probing and testing some responses whilst being open and transparent.” The result, he says “has been a more informed view that enabled the probation period to be used more effectively.”

Yet many agreed that even convincing referees should be seen as “unreliable narrators” – and be treated with a healthy dose of scepticism.

Most respondents also agreed that the “inexperienced recruiter” ticking boxes, rather than conducting a thorough investigation, is to blame for the poor reputation of reference checks. In this case, both phone and online reference checks are susceptible to the alleged 70 per cent of candidates able to manipulate the process.

What the law says

“A misleading or erroneous reference can be costly”, says John Wilson, managing legal director, Bradley Allen Love. For example it might result in hiring, “a candidate who requires more training than their reference suggests, or may be entirely unsuited for the position.”

What’s more, legal issues can arise in the case of a derogatory reference, says Wilson. He also says it’s surprising, given the vulnerability workers and prospective employers have to inaccurate references, that past employers have few legal obligations to be honest.

To the points raised by readers, Wilson says that hiring managers should be aware that it is “not uncommon for an employer and outgoing employee to agree upon a reference if the employment relationship breaks down and the employee exits by way of a settlement deed.” These references – typically positive or neutral – might not reflect the employer’s true sentiment.

“If Australian courts do establish a duty to provide accurate references,” says Wilson, “employers could be in breach of that duty by giving a false-positive, albeit agreed, reference.” However, while the law remains unsettled, employers remain in an uncomfortable position.

“Because it is far harder to attach liability for omissions than positive statements, where possible, employers should only include objectively verifiable statements in an agreed reference.”

What’s the best way to conduct a reference check?

Where co-founder and CEO of Xref, Lee-Martin Seymour, suggested organisations need to turn to technology-driven options that allow referees the privacy, anonymity and time to provide honest and useful feedback, most readers agreed the best way to get valuable information from a reference check is to ensure a skilled HR professional personally conducted it.

Sam Smith spoke for many by advocating for the value of a well-executed reference check.

“Reference checks may take time but there have been a number of instances where they have provided a red flag for us during a very important recruitment decision process,” he says. “ In turn saving us money and effort in the long run.”

And as another reader, Taryn, says, all stages of the recruitment process are about gathering information and validating it with the next stage of the process. “No stage should be treated independently, or looked at in isolation from other stages.”

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