Reference checks are a key component of the interview process and a useful tool for employers in hiring the most qualified people. They can help confirm the accuracy of information presented in employment applications and enable an employer to discern which candidates might conduct themselves differently in an interview than they will on the job. Perhaps most importantly, they can provide critical insights on how an individual has performed in the past versus simply when they performed, which is all that is provided by a records-based background check or employment verification.

Reference checks also can provide insight into an employee's overall character and fit for a particular role. But they must be in compliance with anti-discrimination laws — whether they’re being done the traditional way (on the phone) or using new HR technologies.

Considering the tremendous demands of a job-seeker’s market and the sheer number of processes an HR manager has to perform — from recruiting to off-boarding and everything in between — hiring managers or others involved in the hiring process may not be focused on the risks of asking the wrong question of a job reference. However, if compliance falls to the wayside, a company could potentially find itself in serious legal trouble.

In 2016 alone, the U.S. Equal Employment Opportunity Commission (EEOC) secured more than $482 million for employees. In the hiring context, one of the most common grounds for an employment discrimination lawsuit is that the hiring process relied on criteria that was not job-related and that adversely impacts job candidates who are members of protected groups, such as women and minorities. Any criteria being used in hiring must be necessary to the business and relevant to the job. The questions that references are asked should align with the job for which the candidate is applying.

Almost all businesses say they’re committed to a hiring process that is fair and free of discrimination, but unconscious biases can make its way into the process. If you try to address this problem with an online reference checking solution, there are a number of questions you need answered first.

Fancy graphics and charts are not enough; if, at its core, the software reporting is only capable of presenting reference responses alongside a generic or limited list of personality and behavioral traits, this could spell trouble both in terms of the quality of the hiring decision and compliance with EEOC guidelines. Instead, as with any HR technology you’re considering, it must be properly vetted.

You may want to ask, for example:

• Does the product provide a consistent process which ensures all candidates are treated equally? For example, are all references for all candidates for a given position asked the same questions and in the same survey format? This is especially important when reference checking is integrated within an applicant tracking system.
• Does the product only ask about skills and behaviors that are relevant to and shown to be essential for a specific job? When reference checking is tailored to specific job roles, there is a high probability that the questions are relevant to the job and comply with EEOC guidelines.
• Does the technology contain job-specific libraries of surveys that are mapped to thousands of jobs? Having job specific surveys allow users to efficiently select the most appropriate job-specific survey relevant to the role.
• Does the product and technology include the generation of electronic data and documentation to support the hiring decision? In the event of a claim, it can be very helpful to show the consistency and job-related nature of the reference check process.
• Does the software obtain candidate demographics? By obtaining demographic information and having experts use that data to analyze the reference feedback at a macro level, vendors can produce statistical evidence of EEOC compliance and lack of bias.

Ensuring compliance with anti-discrimination laws is a vital part of the reference check process. While mandating the use of a standard template for “live” reference checks may seem sufficient, this practice carries real risk that there will be deviations and that no two recruiters or hiring managers will document responses in exactly the same way. Using a reference-checking software system, especially one that meets the above criteria, provides organizations with more job-relevant feedback from their reference checking process, while at the same time helping to ensure that information they glean from this feedback is documented in a consistent manner and is fair and unbiased for all candidates.