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Real-Time References

Reference checking is the bane of many an HR professional's existence. A solution, online reference checking, is now at hand.

Wednesday, March 6, 2013
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Every human resource executive is well aware of the problems related to reference checking -- the seemingly interminable phone tag, the equivocal responses, the difficulty comparing references coming from different referrers of different candidates. But while the task may be onerous, HR wouldn't be so discontent if it yielded meaningful results. Unfortunately, according to every HR executive interviewed for this story, it doesn't.

"Reference checking [was] something we had to do, but it was very difficult and we weren't getting much out of it," says Michele Hanson, director of talent acquisition at Novi, Mich.-based Learning Care Group. Hanson points out that reference checking is often part of the state licensing requirements for some of the 900 childcare facilities her company runs. And, in fact, the process did help her rule out candidates who were obviously bad fits for the positions they were applying for. But as a way of comparing references to choose the best candidate, it was rarely effective.

In an effort to streamline the process, Hanson moved from telephone reference checking to an online service, Chequed, based in Saratoga Springs, N.Y. Using this service, candidates enter those names and contact information into an online form instead of submitting reference names to the recruiter. The software then generates and emails a referral checklist to each reference person. That list contains about 15 characteristics, which the reference can rate on a numeric scale. The request explains that Learning Care Group will see the aggregate and average of responses from all referrers, but neither the company nor the candidate will see specific results from any individual reference. This form usually takes less than 10 minutes to complete, and Hanson says the average turnaround time is hours as opposed to many days when she used the old telephone-reference process.

Besides shortening the time frame, the process seems to result in more honest appraisals. Hanson says she now gets many more negative responses using online reference checking than she got with telephone reference checking.

Many talent-acquisition professionals and analysts say online reference checking is fixing a process that had been broken for years, but no one knew what to do about it.

Madeline Laurano, research director for talent acquisition solutions, human capital management at Boston-based Aberdeen Group, says many HR professionals view telephone-based reference checking as a burdensome and often pointless part of their jobs.

In contrast, she says, online reference checking "creates a positive experience for everyone involved: the hiring company, the candidate and the reference." Laurano points out that the online process is virtually automatic for the hiring company, easy for the candidate and quick for the reference.

"Online reference checking is still a new technology," she says, "so HR has to learn about it. But my guess is that, in a few years, it will replace the telephone-based process, just as email and texting have pretty much replaced unsolicited telephone calls."

Companies that do very few hires a year, or that are hiring people in a small community where most of the references are members of the same Rotary or country club, may do well to rely on the traditional telephone-reference process. And those seeking to fill boardroom-level jobs, or jobs with search committees dedicated to filling them, may want to have long talks with references as part of the process. But for day-to-day recruiting, many HR professionals find the old way of checking references is out of step with current communication conventions.

Many people no longer pick up their phones unless they expect a call, they don't have the time or inclination for free-form reference questions and they're worried about angering the candidate or inviting litigation if they give a less-than-stellar rating. So, any HR executive who finds those problems of telephonic checking familiar might consider an online service as an effective and relatively easy-to-implement solution.

Online reference checking companies generally sell their products as a service, so they require no internal application implementation and can be used in minutes after a company receives a password. (Integrating it with an internal application -- such as an applicant-tracking system -- can take a bit longer, but rarely more than a week or two.)

Specificity of Questions

When using an online system, the primary responsibility of the hiring company is to select the best template -- the series of characteristics the referrer is asked to rate -- based on the position it wants to fill.

Yves Lermusi, CEO of Mill Valley, Calif.-based online reference-checking company Checkster, says the higher level of accuracy of online referrals compared to telephone referrals results from two things: the better response rate, and the specificity and quality of template questions the reference is asked to respond to. He says when people are presented with questions that call for general responses, as is often the case in telephone referrals, they tend to upgrade their responses out of politeness or a fear of disadvantaging someone. They are more honest when asked to rate qualities on a scale. Says Lermusi: "Say you're at a restaurant, and the manager asks, 'How was the food?' or 'How was the service?' Unless it was really terrible, chances are you'll give a vaguely positive response. But if you're asked, 'On a scale of 1 to 7, how attentive was the server to your needs?' or 'How would you rate the appetizer?' you'd probably give a much more accurate assessment."

Sometimes, having such accurate assessments -- while not the primary reason for moving to online referencing -- is a very pleasant added benefit. Jim Oddo, assistant vice president for talent acquisition at Internet and communications provider Frontier Communications, says he began using Pro-Hire 360 from Philadelphia-based SkillSurvey because the turnaround time for references was too long, averaging three-to-five days. The Stamford, Conn.-based company, which hires about 1,500 people a year, currently does reference checking after a candidate is provisionally offered a job.

"We found the long window of time [before getting all the references back] detrimental to the hiring process," Oddo says.

After implementing Pro-Hire 360, the turnaround time for references dropped to less than 24 hours. In addition, Oddo says, the ratings generated from the reference templates provide much more helpful information about candidates than they got with telephone references. In fact, because the online reference tool is so much easier to use than the telephone- reference process, and because the candidate evaluations are so helpful, Frontier plans to perform reference checking earlier in the hiring process through the remainder of 2013. "We can now use this as a real evaluation tool instead of just a way of eliminating the very poor candidates," Oddo says.

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All online reference-system companies have developed a library of questionnaires, which have been growing over the years so that, by now, the vast majority of job positions are covered. For example, Oddo recently needed a template for the position of "head of procurement". As he tells it, "I thought I was going to have to settle for a similar position -- something like head of finance. But SkillSurvey has a template for the exact position we had to fill."

Despite this thoroughness, some talent-acquisitions managers are experimenting with additional questions that are unique to their company or industry as a way of honing the evaluation process. Says Hanson, "We've been very happy with the templates. But we've been using the system for a year now, and we're ready to see if we can get even better evaluations by adding a few questions of our own."

Jason Pistulka, director of recruiting at Asurion, a consumer-technology-protection company based in Nashville, Tenn., adds that the Checkster-generated evaluations can improve the hiring interview. Asurion uses the online reference tool early in the process, before the initial interview. If a number of references indicate a candidate has a weakness in a particular area, HR will highlight that information when sending the report to the hiring manager.

"We encourage the manager to delve in to that weakness when speaking to the candidate to see if it will affect the candidate's success here at Asurion," Pistulka says.

Identifying Fraud

Another advantage of online reference systems is that they may be able to root out fraud. Because of their experience with hundreds of thousands of references, the online reference companies have developed algorithms that detect such things as the candidate impersonating the reference. While companies don't like to reveal their security processes, things such as a reference having the same Internet address as the candidate and using a gmail account might be flagged.

Kevin Nakao, president of MeritShare, in Seattle, says Checkster saved him from making a serious hiring mistake when he was CEO of White Pages Inc., also in Seattle. "This was a very high-level hire," Nakao says. "The candidate came from a prestigious company. We were really excited to get him." The reference process went swimmingly. The Checkster forms were returned quickly, and the ratings were excellent. But the system flagged one of the referrers as possibly fraudulent. Nakao telephoned the reference, who said he had never received the form. "This revealed what was obviously a very serious character flaw. If we had hired him, it could have been disastrous," he says.

In addition to checking candidates' qualifications, Katherine Jones, director and principal analyst for HCM Technology at Bersin & Associates in Oakland, Calif., says online reference systems may help companies even after the candidate is hired. Since the evaluation reports indicate the candidate's relative strengths and weaknesses, they can play a part in the onboarding process. "You can use those reports to determine what training to emphasize and what you may not need to pay too much attention to, because the candidate already has the skill," Jones says.

While online reference checking may not be a good fit for all companies, and certainly not for all hires, many HR professionals find them much more effective than telephone reference checking. And because they're relatively easy to implement, many companies have decided to at least test them to see how they affect the hiring process.

See also:

Encouraging Candidates to Participate

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