Assessment Technology Revitalizes Reference Checks

Reference-checking software offering a 360-degree assessment of candidates is transforming the process of checking references—formerly a hit-or-miss phone call—into recruiting analytics that can be used for strategic hiring.

Traditional reference checking has become for some an obligatory step in the hiring process with little real value. Some employers abstain from the practice completely due to the time it takes trying to contact references and because of other companies’ HR policies restricting what can be shared about former colleagues. However, most recruiters agree that when done well, reference checks give hiring managers critical information, helping to identify if the candidate will be successful in the new job.

Pain Points

Many employers strictly limit the information they provide about past workers because they fear defamation lawsuits from disgruntled former employees. “Even though it is legal for [employers] to provide factual information about a former employee to a potential employer, they feel like they’re navigating a minefield,” said Susan Heathfield, an HR consultant based in Lansing, Mich. “If they provide factual information and the person is not hired, they’re concerned that they can be sued for defamation or discrimination. They are also concerned that they could be accused of disparate treatment if they supply a reference for one employee and not another.”

A common complaint is that even if recruiters do talk with a former co-worker, the interaction may not yield anything of value. “If you’re not careful, each reference check can turn into a friendly chat during which you don’t obtain the information you need to make an objective decision about hiring your candidate,” Heathfield said.

Can the references a candidate provides even be trusted to be unbiased? “After all, why would a predetermined reference say anything but great things about the candidate?” asked Steve Lowisz, CEO of Qualigence International, a global recruiting and recruitment research firm.

“As employers, we’ve created a situation where we force the candidate to prep their references on what to say when they get the call … drastically skewing the value of having the reference at all. We need to take a serious look at the perceived importance we place on traditional references and whether they are truly benefitting our hiring practices,” he said.

Reference Checks 2.0

To overcome these obstacles, companies are leveraging web-based reference-checking systems such as SkillSurvey, Checkster and Chequed. The systems can speed up the process, provide confidentiality to references, and apply behavioral science and predictive analytics to candidate selection.

SkillSurvey, a software-as-a-service talent analytics company based in Philadelphia, utilizes the popular 360-degree assessment method commonly used to measure employee performance and applies the method to job applicants. “If you believe that the best predictor of future performance is past performance, then a 360-assessment is going to dramatically improve your understanding of what that was,” said Ray Bixler, CEO of SkillSurvey.

The company automates the process of receiving feedback from references and creates reports for recruiters and hiring managers assessing the applicant’s strengths and weaknesses.

First, the recruiter or hiring manager enters the candidate’s information and the type of job he or she is applying for into the system. The applicant then receives an e-mail prompt to input references and contact information. The references receive a web link, via e-mail, to an online form with about 25 questions related to the candidate’s professional skills and behavior. The message also informs each reference that his or her responses will be kept confidential—and that the candidate releases the reference and the company from liability. After a sufficient number of references respond, the collected responses and ratings are reported back to the hiring manager or recruiter in a 360-degree type summary.

Once Clemson University began using online reference checks, the time it took to check references fell from two weeks to a day or two, according to Josh Brown, talent acquisition manager for the school in Greenville, S.C.

The service provides a confidential forum in which references can offer the candid feedback necessary to make an informed hiring decision, Bixler said. “The reference gets an e-mail from the applicant, not from the company. It’s more likely that a reference will respond to a former colleague than another employer or hiring manager they don’t know. The company has been removed from the equation, and it’s just one person offering feedback on another. And because the references’ statements are confidential, it allows for their candor and thoughtfulness to dramatically improve.”

On average, SkillSurvey’s reference-checking process yields an 82 percent reference response rate, which translates to 4.19 references per candidate, according to the company. These statistics represent just over 500,000 candidates, Bixler said.

Bixler recommended using a 360 solution early in the hiring process—between a first and second interview—instead of immediately preceding the job offer, in order to better inform the interview process.

And if an employer doesn’t want to lose that live back-and-forth with a reference, it doesn’t have to. “Online reference checks don’t cancel out the telephone conversation. Employers have all the references’ contact information, and there’s nothing stopping them from calling up any references for additional feedback before making an offer,” Bixler said.

Roy Maurer is an online editor/manager for SHRM.

Follow him @SHRMRoy