While a dominating 94% of companies believe that talent acquisition is critical to the overall success of the business, that doesn’t mean HCM professionals enjoy an unlimited budget. In fact, most HCM departments face hurdles when vying for the budget to implement programs like online reference checking. Best-in-class companies understand the value of programs like online reference checking and are able to convey that value to their decision makers. That is why Best-in-class companies are 2.1 times more likely to use online reference checking.
Here are three references you can use to demonstrate the measurable value of online reference checking to get the budget you need.
- Prove Reduced Liability
In the past, reference checking was largely a task that was undertaken on the phone, between two parties; the recruiter and the former employer. This method allowed for very broad interpretations of what was allowable information to be shared, and even more indistinct definitions of performance records and skills. Lawsuits claiming defamation of character flooded courtrooms around the country. As a result, laws were put into place to protect the job candidate. These laws prohibited most of the communication beyond confirmation of employment dates, title and salary. Subsequently, 52% of organizations shy away from conducting reference checks on all but the most essential job roles.
With the introduction of online reference checking, prior employment records can be accessed in an un-biased manner that protects the work-related status of prior employees while allowing for accurate comparison of candidate statements versus verifiable facts. HR professionals no longer subject their companies to lawsuits involving slander, discrimination, and hearsay when online reference checking documentation is standardized and factual in content.
- Prove Effects on Employee Work Cycle and Retention
Technology that provides online reference checking allows HCM professionals to re-order the process for new hires. Rather than waiting until just before hiring to check references, online reference checking makes it easier to build a suitable talent pipeline for present and future job roles. Businesses that move reference checking to the front of the line are 19% more likely to retain first-year employees than organizations that wait until the last minute to check references. Recruiters utilizing online reference checking can also mimic Best-in-Class organizations, which are 80% more likely to draw from an inventory of established talent profiles to maintain a vibrant talent pool. Studies show that pre-assessment processes that include reference checking early on in the hiring track can reduce the incidence of bad hires. Estimates indicate that one single bad hire replacement cost can reach upwards of five times the employee’s salary.
- Prove Effects on Customer Satisfaction
Organizations that do a stellar job of hiring, engaging and retaining employees can enjoy optimal customer satisfaction reports. Beyond the visceral effects of uninterrupted employee work cycles and reduced disruption in the overall talent pool, companies that employ online reference checking report higher levels of customer satisfaction and higher profits than those that don’t. Organizations that budget for their HCM professionals to use online reference checking are nearly 2.5 times more likely to recognize direct cause and effect relationships between the source of candidates and employee performance.
There are very real, measurable benefits to employing online reference checking technologies. With these stats in hand, plus the resource paper, “Online Reference Checking: A New, Strategic Focus in the Age of the Candidate,” you will be well armed to approach your budget manager regarding online reference checking technology.
