The scary economic reality of traditional candidate referencing

This week Xref Limited released the results of research it commissioned to understand the current trends in the recruitment market and some statistics it un-covered are quite simply staggering. Its the first time this type of research has been done and its scary to read!

Hear Xref Co-Founder & CEO Lee-Martin Seymour on 2UE discussing the findings of the research

70% per cent of candidates are prepared to lie to potential employers, and many are using deceptive methods such as bogus referees.

Whilst its often joked about that candidates would never put a bad reference on their CV, to read that 70% of them would go to such deceitful lengths to land a role, including using family members to pose as referees to try and beat the system is shocking.

Apart from the fact that lying to get a job at any level in an organisation is a direct reflection of the type of person you may end up hiring (ie, a person of low moral and ethical standing) the cost to the economy as a whole when the wrong people are hired is huge.

Any time a business needs to hire someone new into a role, the cost to firstly find them, then onboard and train them is huge. They say it can sometimes cost upwards of $30,000 to go through this process in respect of actual cash outlays as well as the time and opportunity cost. Then if the wrong person is in the role, their cost to your business of doing the job wrong or being under-productive is sometimes never known. And finally to off-board the wrong employee and then go through the re-hire & on-boarding process again is another hit to the bottom line.

Regardless of the size of the business, this is a real cost. Small businesses can not-afford to go through this process over and over and often keep the wrong employees employed and large businesses just churn through employees, incurring the on-boarding and off-boarding cost many times over. This is all wasted resources and in the end WE ALL PAY one way or another.

Ultimately it is the economy as a whole that bears the brunt of candidates lying and being deceitful to get a job.

Knowing the cost to the economy as a whole, combined with the day to day challenges business owners face already to hire staff its no wonder that traditional phone based candidate referencing needed to be disrupted and needed the “technology brush” wiped all over it many times over. And that is why Xref was born

As an accountant and technology leader I have spoken many times about how technology and the access to real time data can provide such a powerful boost to the economy as it eliminates time wasted to “get” the data needed to make data driven decisions, particularly in small business (who are the backbones of most first world countries).

That is why its so important for businesses to continue the technology transformation within their businesses beyond the finance function. Next to cash in the bank, human capital is just as important if not more important regardless of the business type and so ensuring you eliminate the chance of hiring into your business one of those 70% of candidates willing to lie to get your role on offer is business critical. So if you are still taking phone based references or worst still, taking no references whatsoever, time to embrace technology into your HR function.


Published by James Solomons

FCA, GAICD. Innovative Business Leader. Global CFO @Xref (ASX:XF1). Director at @business_Depot (formerly Aptus Accounting & Advisory @AptusAA). Former Head of Accounting @Xero Australia. Advocate, Entrepreneur & Educator #Family #Football #Fastcars!

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