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Automated Reference Checking: Better Intel in a Fraction of the Time

Armed with this software, not only can companies obtain better feedback from references, but also they can obtain more of it per candidate.
March 15, 2012
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For human resources manager Holly Bowers, the payoff of using reference-checking software was immediate.

Bowers, who works at Freedom from Hunger, a 50-employee international development organization in Davis, California, has just a part-time assistant for support. Before automating the reference-checking process, Bowers was lucky if she had time to check three references per job candidate.

All that changed two years ago when Bowers began using Pre-Hire 360, an online reference checking tool offered by software firm SkillSurvey Inc. Gone are the days of trying to wrangle each candidate's references by phone, a process made more complex by the not-for-profit's numerous applicants with international résumés and references. What used to take Bowers up to two weeks now takes as little as one or two days.

"It's a huge time saver," Bowers says. "All I do is input the candidate's name and e-mail address. I don't have to make phone calls."

Instead, a candidate's references are asked to rate the person's skills online, anonymously, in a survey of approximately 25 questions—a process that takes all of 10 minutes and can be done on the person's own time. Once all necessary references have responded, Pre-Hire 360 aggregates their ratings into a report.

Efficiency is only part of the equation, though. According to a new report from Bersin & Associates on talent acquisition trends, more companies are turning to automated reference checking tools such as Pre-Hire 360, Checkster's Reference Checkup and ERC Dataplus Inc.' Selectech 360 Reference Checks to help strengthen their finalist pool. Armed with this software, not only can companies obtain better feedback from references, but also they can obtain more of it per candidate.

"Many organizations are starting to use technology to standardize the reference-checking process in a way that adheres to regulations and also captures a 360-degree view of a candidate," says Karen O'Leonard, director of research methods and analytics at Bersin & Associates. By getting a more comprehensive picture of top candidates, including input from their peers, customers and partners, employers can prevent costly hiring mistakes, she adds.

Bowers, for example, now requires candidates who pass a phone screen to immediately submit a minimum of five references in Pre-Hire 360, two of whom must be past or present managers. Before she switched to the reference-checking tool, Bowers wouldn't reach out to a candidate's references until later in the process and wouldn't have had time to contact nearly as many. Chasing down references by phone was simply too time-consuming. Unfortunately, this sometimes meant sending a less-than-stellar candidate to meet a hiring manager. But thanks to the comprehensive, early intelligence Bowers now receives from Pre-Hire 360, this is no longer the case.

"It's allowing us to pick candidates that are a better fit to go to the final interview process," she says.

In addition to the resource hit, the time-honored tradition of checking a candidate's references by phone isn't exactly known for its insightfulness or reliability.

"Often we were getting stopped at just name, rank and serial number," says Jeffrey Wade, principal of Anchor Planning Group, an executive recruiting firm in Fredericksburg, Virginia, who ditched phone reference checks a year ago.

Since moving to an anonymous online process, "we get much more comprehensive data," says Wade, a Selectech 360 Reference Checks customer. Without the threat of being identified, he says, references tend to be brutally frank about their colleagues, yielding much more useful information.

Bowers concurs. "They don't have to worry about, 'This is going to get back to them.' Sometimes the candidates don't even realize that their references are ruling them out," she says.

"It's a game-changer," adds Ray Bixler, CEO of SkillSurvey, which has roughly 900 Pre-Hire 360 customers, including more than 500 hospitals and corporations such as McDonald's Corp., Kohl's Corp. and eBay Inc.

"Recruiters love it," Bixler says. "They may not bring in one or two people they thought had done pretty well on the phone, based on the reference feedback. Instead of a hiring manager meeting seven people, maybe they'll only meet four or five."

Besides streamlining the interview process, companies using reference-checking software say it's greatly reduced hirer's remorse.

Back when he was checking references by phone, Wade offered his clients the standard 30- to 90-day guarantee on candidates his firm placed. But automating the process has made Wade so confident about his recommendations that he's raised that guarantee to one year.

Of the 30 candidates Wade has placed in the past year, "we only had to replace one," he says. "And that was because one spouse got relocated halfway across the country."

According to Bixler, more than half the companies using Pre-Hire 360 use it to check references after an initial phone screen to determine whether to bring the candidate in.

Littelfuse Inc., an international developer of electrical circuit-protection products, is one such employer. A year ago, it moved from assessing references with Pre-Hire 360 just before making finalists an offer to using the tool to check references right after a candidate's first phone screen. The result: more bull's-eyes.

"It's absolutely increasing the quality of our hires," says Holly Stanton, Littelfuse's worldwide HR director. "I probably would have had 40 percent more people hired that we would have ended up firing or that wouldn't be performing as well."

Stanton knows she's struck gold when all five of a candidate's references give them an off-the-charts rating.

"That's not very common," Stanton says. "When I hire people like that, they turn out to be rock stars."

Michelle Goodman is a freelance writer based in Seattle and author of The Anti 9-to-5 Guide. To Comment, email editors@workforce.com.

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