Why digital referencing is the future of recruitment

Why digital referencing is the future of recruitment

The UK has one of the slowest hiring processes of developed countries globally, meaning vacant positions are empty for longer, and businesses are unable to operate to their optimal levels. Accelerating the hiring process would ensure faster economic growth, easier pathways for workers to enter the labour market, and improved performance for businesses.

At a recent live event, we asked our attendees what part of the hiring process remains the most time consuming. 65% answered that referencing was the most significant barrier to a fast onboarding process.

We ran a survey of over 100,000 employment references, and the results show significant issues within the referencing process. These include:

  • Volume – of the 100,000 referenced requested, only 61% were returned
  • Veracity - of those returned, 31% were found to have discrepancies against information provided by the candidate.
  • Value – 81% of those received contained only the dates of employment.
  • Verification – 65% of referee information provided by the candidate were not the correct details.

However, by modernising and introducing instant referencing, these issues can be minimised.

Types of reference

Different roles and industries require different levels of information from referees.

Basic: Simply a confirmation of dates worked at a company as well as salary and job title.

Enhanced: A more detailed description of the role the candidate performed, as well as notes on attitude, capability, and any issues that need to be flagged. Used in roles where safeguarding is required, such as in health, social care, or education.

Mixed: both qualitative data and basic references.

Instant referencing

Designed to modernise and streamline the referencing process, instant referencing uses payroll and open banking data to verify dates of employment and salary information.

The vast majority of UK adults have their key employment data confined within either their monthly pay checks, or their financial transactions. Solutions with consent-driven processes allow users to share this data on a single-use basis. That data is then used to determine when and where the user worked and can be shared instantly with any party privy to their employment verification. This solution is already returning data that used to take days to be surfaced, in seconds.

As digital identity is a growing part of the hiring process, future plans include linking other data to digital IDs, such as references, employment history, credentials, and training. All the data attached will be verified using available information and manual verification. This means that the hiring process can be accelerated and both employers and candidates can benefit.

Benefits of instant referencing

Faster – In 2022, we invited our candidates to measure the effectiveness of the system, and The high-level results were a resounding success: 43% of requests completed within three hours and 70% were done within a day.

Where manual referencing requires admin, compliance and HR teams to chase information stored in HR systems or payroll systems, instant referencing works using automated systems to verify data, resulting in a faster, more streamlined process.

More control for candidates – manual referencing involves the sharing of data between previous and prospective employers about a candidate, but not with the candidates themselves. While data protection laws mean that employees have a right to access the data that is being held about them, in many recruitment processes employees never have the opportunity to view or control their own data.

With instant referencing attached to digital IDs, candidates have more control over how their data is shared. While the information itself is checked and verified externally, to ensure it is accurate, candidates now own their own data.

Better security – manual processes are often carried out via email, meaning the risk of personal data being sent to the wrong email address, or being intercepted, is always prevalent. Many safeguards are put in place to ensure that doesn't happen, but the fact is that this information is being shared in emails and documents that are sent back and forth and are susceptible to fraud.

With instant referencing, Identification Service Providers (IDSPs) need to ensure robust security around the digital ID and referencing as part of the certification process, and therefore sharing data using digital ID is provides greater security than manual processes.

How can Reed Screening help?

Ensuring your candidates experience a positive recruitment and onboarding process while maintaining the integrity and compliance of your screening procedures means building a robust process.

At Reed Screening, we have years of experience in providing fast, smooth, and thorough employee screening and background checks, to bolster your candidate experience. Our AssuredID service offers an easy and accurate way to verify a candidate’s ID digitally.

For more information, get in touch with our team.