“Reference checking is the last thing in the hiring process that nobody has ever really innovated around,” says Greg Moran, founder of Chequed, a company that provides “predictive talent selection technology.”
“Phone-based reference-checking is done today the same way it was 50 years ago,” Moran explains. “The problem is, it stopped working about 20 years ago. Companies really stopped providing any information at all about a candidate — any useful information about a candidate.”
Moran has a point. When I say “reference checks,” what associations come to mind? Let me guess: they aren’t pleasant ones. Checking references can feel like trudging through miles of knee-deep mud just to find out that the oracle at the end of your slog isn’t terribly interested in helping you out. “Essentially, that phone-based reference check turned into this kind of check-the-box activity where somebody from HR would call a previous boss of a candidate and say, ‘Hey Matt, tell me about Greg,’ and you would say, ‘I can’t really tell you about him, but he worked here from this date, here’s when he left, and here’s what he got paid,’” Moran says.
Dissatisfied with this sad state of affairs, Chequed has created ChequedReference, a service designed to apply the behavioral science behind pre-employment assessments to the reference-checking process, thereby creating a tool that predicts employee performance.
A New Kind of Reference Checking
“Coming out of the assessment world, we have seen assessment technology be able to really accurately predict successful hires for a number of years,” Moran says. “What we really wanted to do with ChequedReference was take that same behavioral science that has been used in assessment for decades and decades and decades and apply it to the reference-checking process.”
Moran reasons that past performance is the best predictor of future performance, so a useful reference check should provide information about an employee’s past performance – not just salary history and employment dates. “The trick is really getting someone to tell you that [performance history],” Moran says.
Chequed built ChequedReference to get references to divulge information about a candidate’s past performance. A candidate adds their references, and the system sends the references a brief online assessment. Moran says it takes between 90 seconds and 2 minutes to complete these assessments. The assessments are structured and ask questions relevant to the candidate’s job performance and cultural fit.
“What [references] are really completing is a 90-second to 2-minute assessment about that candidate’s job fit and culture fit,” Moran explains. “What happens is that you’re getting structured and very job-relevant information about that candidate’s fits for the job and culture. You’re not only getting high-completion rates; you’re also getting really structured information about that candidate.”
Moran believes that ChequedReference’s brief, highly structured surveys will lead to higher completion rates for reference checks because more references will opt to complete the checks and the time needed for the reference-checking process will dramatically decrease. According to case studies from Chequed, companies are seeing results: after utilizing ChequedReference, advertising media company GroupM was able to collect and assess 84 percent of response data in three days, compared to the 2-3 weeks needed to collect and assess data gathered by traditional telephone-based reference checks.
“Phone-based reference checks take a lot of time. You’re constantly playing phone-tag,” Moran says. “With a system like CheckedReference, you go in, [add] first name, last-name, [and] email address, and you’re done. So, from a recruiter’s standpoint, the amount of time it takes to reference check is really down to seconds, instead of the hours that it takes typically.”
Moran says that automation is one of the biggest advantages that his system has over phone-based reference checks, but it isn’t the only one. He believes that ChequedReferences also turns reference checks into predictive tools. “You’re applying assessment-based logic, so when the references are completing [the survey], they’re not completing a kind of subjective narrative about a candidate,” he says. “What they’re doing is answering assessment-based questions related to the competencies that make somebody successful in that job, at that company. You’re getting predictive information about a candidate as well.”
Moran says that building a predictive hiring platform is of the utmost importance to organizations, even if predictive has not traditionally been the recruiting industry’s primary focus. “I think for a long time — for really the past decade — a lot of companies have really been focused around automating the hiring process, and that’s a really valuable thing, obviously,” he says. “But, the predictive side of it is really about quality of hire. What we talk about all the time is, a typical applicant tracking system or workflow system like that around recruiting, while it makes the job of the recruiter easier, it can also very elegantly help you hire the wrong person, because it doesn’t do anything for you to really identify whether this person is right for your organization and right for the job. It just helps you move the candidate through the process.”
Moran stresses that automation is important, but predictive tools offer the critical and objective data that is necessary to make good hires. “While the ROI around automation is good, the ROI around avoiding bad hires and really increasing the caliber of talent in your organization will really drive a company’s value more than anything you could possibly do around automation,” he says.
Using References to Source New Talent
Another way that ChequedReference looks to innovate the reference-checking process is by turning it into a sourcing opportunity. “Once that reference completes [the survey], they’re delivered a custom-branded recruitment experience on the part of that company, asking them if they want to opt-in to that company’s talent community,” Moran explains.
Systemwide opt-in rates average about 42 percent, according to Moran. “A very high number of references are then saying, ‘I would love to hear more about opportunities at your company,’” he says. “Essentially, it’s creating new candidates as well as getting critical job fit and culture fit information.”
Used in conjunction with Chequed’s other modules – ChequedFit, which offers early-stage candidate assessment, and ChequedInterview, a scorable, competency-based interview guide — ChequedReference helps companies create a sort of circular recruitment process, according to Moran.
“If you kind of think about it, in terms of a circle, you’ve got early stage assessment, interview, referencing checking, and then using the reference checking to build your passive talent pipeline by getting those references to opt-in,” Moran says.