A new survey shows what many have long suspected; no one, from recruiters, to referees, to employees think that over-the-phone reference checks work.

Checking references over the phone is fraught with risk and often provides little information from which a manager can make a hiring decision, according to research commissioned by ASX listed recruitment data company Xref.

This may not come as a surprise to many HR professionals; most already feel the process is outdated and puts an outsize onus on job-seekers to behave honestly.

In the 2017 Xref Recruitment Risk Index, the company surveyed those who do references as part of their job: HR professionals and recruiters.

What they found is that the bulk of recruitment managers – 39 per cent to be exact – believe that reference checking in its current format is a formality which serves little purpose.

17 per cent also named the reference checking process as the most frustrating element of the hiring process.

Reference checks: a burden on referees, a burden on recruiters – and, annoying for candidates

Not only is checking references over the phone time consuming and a drain on valuable resources, it often becomes a point of contention for those involved, whether referees or those recruiting.

Of the referees who responded to the survey, just over half say they avoided providing references – and 73 per cent said there were risks associated with providing a reference.

The research comes to similar conclusions as those of Dr John Sullivan, Professor of Management at San Francisco State University and author of several HR books.

The reference checking process is filled with holes, he says, from discrepancies in the depth of insight provided by referees, to the propensity for referees to give positive feedback to those leaving an organisation, to legal issues – such as the fact that most employees are offered the opportunity to resign rather than be fired – and problems that arise when references are not recorded or accompanied by a signature.

The study also found that the reference checking process is a threat to a company’s talent pipeline.

A lengthy reference-checking process can turn off prospective employees; it found that 41 per cent of the recruitment specialists surveyed report having lost candidates due to delays specifically during the reference checking period. And its 2016 survey reported that 42 per cent of surveyed candidates have walked away from a job for the same reason.

How can companies improve the reference checking process?

This research should serve as a wake-up call to businesses to either improve their reference checking process – or abandon it entirely, says Lee-Martin Seymour, co-founder and CEO of Xref. “Australian businesses are giving fraudulent candidates a free pass,” he says. “We know from [our] previous index survey that more than 70 per cent of candidates will take advantage of flaws in the process.”

From the risks of inaccurate and time-consuming referee references – to HR’s admission that they consider the practice a mere formality – and an ineffective one at that, the process places added pressure on HR during the recruitment process – and has few measurable benefits.

It’s a sentiment with which Seymour agrees: “Reference checking is still regarded as a burden on the HR team that provides little value during the recruiting period or beyond.”

He suggests organisations need to turn to technology-driven options, which allow referees the privacy, anonymity – and time – to provide honest and useful feedback for recruitment managers. And the fact that 51 per cent of referees say they prefer to provide references outside of day-to-day work hours, via mobile and tablet suggests that efficient online platforms geared to facilitate a more accurate feedback process, may indeed be the way forward.

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