UK businesses at risk through poor reference checking practices

Only 42 per cent of employees have been through a reference checking process for their current job and half admit to taking advantage of this.

A thorough reference checking process, which should act as a safeguard against candidate fraud and a validation of claims made during the hiring process, is not happening in all UK businesses and is putting them at risk, according to new research released by Xref – the cloud-based referencing platform.

The Xref Referencing and Recruitment Risk Index, which surveyed 1,000 18- 39 years-olds who are currently employed in the UK and have applied for a job in the last two years, reveals that 23.5 per cent of candidates were not asked for either a character reference or an employment reference when they most recently applied for a job. Of those that were, 23 per cent say they were aware their referee was never contacted.

‘It’s clear corners are being cut during the recruitment period, allowing dishonest candidates to take advantage of flaws in the traditional hiring processes. These figures highlight the need for an overhaul of the old, tired reference checking methods most UK businesses still rely on, and should act as a wakeup call to any that see no risk in avoiding the critical hiring step altogether,’ says Lee-Martin Seymour founder and CEO of Xref.

A lack of focus on ensuring the collection of reliable and reportable reference data is facilitating candidate fraud and deception, with 45 per cent of respondents admitting to having lied to a potential employer – the most common embellishments being exaggerating their work experience (36 per cent) and qualifications (28 per cent).

However, while a level of exaggeration is somewhat accepted by the HR industry, more worrying is the finding that 48 per cent of respondents admit they had deliberately exploited flaws in the referencing process to improve their chances of getting a job.

The most common methods adopted by candidates to deceive employers were choosing a good referee, rather than the most appropriate person (32 per cent) and avoiding choosing someone who might give a bad reference (32 per cent).

As well as candidate fraud, a lack of understanding around the referencing process is leaving organisations vulnerable to additional risks. The survey reveals that referees are frequently being asked questions relating to legally protected, personal characteristics of the candidate, which increases a company’s exposure to discrimination claims under the Equality Act 2010.

The research finds that 30 per cent of those that had acted as a referee had been asked potentially discriminatory questions about the candidate, including the candidate’s age (25 per cent), and their marital status (14 per cent).

‘Given how time consuming chasing reference checks can be and the fact it’s often left to the most junior person on the team – or even someone with no experience in HR – it can often lead to a variety of errors. From ignoring the reference checking process entirely, to rushing it or not knowing the correct questions to ask, all disregard for the process leaves organisations open to the risk of – at best – a bad hire and – at worst – legal implications,’ Seymour says.

‘Since launching in the UK in 2016, we have been sharing anecdotal evidence with clients about the risks of doing reference checking badly, or not at all. These findings bring further validation to those claims. The UK must adopt a better, more efficient and more secure approach to recruitment processes in order to avoid fraud, hiring based on inaccurate data and ultimately, money wasted on unsuitable new recruits.’

Further reading on reference checking

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the and titles before moving on to be a Digital Technology reporter for the

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