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Discrimination or Due Diligence? The Perils of the Reference Check

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This article was submitted by Advorto

The latest jobs market figures from REC (Recruitment and Employment Confederation) reiterate the unrelenting pressure on HR to source talent quickly. Demand for staff is at a 21 month high and candidate availability remains in freefall. As the pressure mounts to hire quickly, skipping the reference check has become routine for some employers. But for those that carry out this essential part of the hiring process, the situation is becoming more hazardous.

The problem of missed reference checks

A recent survey reveals the extent of the problem with reference checks[1].

  • Nearly a quarter of candidates (23%) aren’t asked for character or employment references following their job application. Of those that provide names of referees, nearly one in four weren’t pursued by their prospective employer.
  • Nearly half of candidates (45%) admitted to providing false information to a potential employer, specifically exaggerating their experience and qualifications. A similar number took advantage of the gaps in the employer’s hiring process to improve their chances of securing a job offer by providing false information in their job application.

The problem isn’t exclusive to the private sector. It recently emerged that up-to-date background checks have not been carried out on thousands of police officers across the UK[2].

The implications of a bad hire for HR affect culture, morale and productivity in the workplace as well as reflecting negatively on your employer brand. Employers who omit taking even basic reference checks risk exposing their business in a number of areas, including:-

  • Fines of up to £200,000 per hire when new employees are not eligible to work in the UK.
  • Fraudulent activity.
  • Vicarious liability’ , for the actions of their employees.

Here’s where a dilemma often arises. The uncertainty over background checks was highlighted when a recent employment tribunal ruled in favour of a candidate over a reference which resulted in their job offer being withdrawn. The reference provided was deemed to be discriminatory.  As such, some employers are understandably cautious about confirming any details relating to their former employees beyond dates of employment and the position held. But even this basic information could still be vital in verifying a candidate’s claims.

Social media ‘background checks’

As part of their pre-hire assessment and dilemmas over reference checks, a growing number of employers are turning to the social media profiles of their job applicants to assess their suitability. The CIPD reports that one in five employers now reject a potential candidate based on the online activity on their social media pages[3].

In larger organisations, social media accounts of job seekers are used as an integral part of their screening process.

A social media profile should not be considered an effective reference check or a part of your formal pre-hire screening, whether in favour or otherwise of a candidate.

In addition to resulting in discrimination or breaching data protection laws, these types of checks are often subject to unconscious bias.

Discrimination or due diligence?

The dilemma for HR is whether to trust the information provided in a reference check and knowing which questions to ask (or answer) to avoid a potential discrimination claim arising from it. As employers become more cautious, automated pre-hire screening processes integrated in your recruitment software ensure compliance with the basic requirements in your hiring process.

These include:-

  • Initial pre-hire screening in the form of online recruitment assessments carried out during candidate screening. These may include personality questionnaires, psychometric assessments or situational judgement tests to evaluate a candidate’s suitability for a specific role.
  • The use of anonymised CVs through your applicant tracking software avoids the tendency to carry out a social media review of your candidates, reduces bias and ensures initial screening is carried out based on appropriate company and job criteria.
  • Automate formal reference checks which begin at the onboarding stage to prevent delays in the candidate’s start date. Modern recruitment software includes inbuilt links to accredited checking agencies and DBS (Disclosure and Barring Services). HR is automatically alerted over any problematic response that might affect a candidate’s eligibility for your job. These checks ensure compliance without risking discrimination.

The CIPD provides more detail on what is permissible for references on its website.

On a final note, as the availability of permanent candidates remains low, employers are turning to temporary workers to source candidates with critical skills within their business. Your temporary hires should be subject to the same reference checking procedures through your screening process as permanent employees.

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