Although they may sound similar, there’s an important difference and use value for background checks and reference checks. If HR teams and employers are going to fully benefit from both background checks and reference checks, it’s essential that they understand exactly how each is used and how they can optimize their hiring process with each verification method.

While both reference checks and background help employers learn about candidates, background checks function to verify employee data, history, and information, while reference checks are geared more toward employer needs, giving a thorough look at a candidate’s fit and compatibility within an organization. 

[Read more: Best Reference Check Questions]

Thus, background and reference checks’ importance depends on what the candidate's role and title will be, and how much it matters to your organization. So let’s dive into the details.

What is a Background Check?

Background checks are often necessary for government positions, professions in education, careers in healthcare, financial fields, IT and computer-related positions, security roles, and more. These are often required because of practical reasons, but there are also legal requirements to background checks that aren’t as prevalent in reference checks. 

Background checks look into almost everything that can be verified through data registries, including work history, criminal background, financial status, driver’s history, credit history, education markers, and other identity markers. 

Types of background checks include:

• Employment  history
• Credit score check
• Financial status verification
• Universal background checks
• OIG background checks
• Criminal background
• Self check e-verification
• international background checks
• License and certification verifications
• Personal background checks

While background checks are useful and often necessary for specific fields, they do have limitations. Below we’ll get into everything background checks don’t tell employers. 

Background Check Limitations and Drawbacks

While background checks are useful and often necessary for specific fields, it’s important to understand what blind spots they leave you with when assessing an applicant. 

Some of the things background checks will not tell you include:

• How qualified or knowledgable a candidate is 
• How responsible, accountable, and reliable a candidate is
• How effective of a communicator an applicant is
• How creative and flexible a candidate is
• Whether or not a candidate is a good fit in your organization
• Whether or not a candidate is receptive to criticism
• The long-term potential of a candidate within your company
• A sense of an employee’s work ethic or diligence on the job

What a lot of companies and hiring teams are now trying to assess is how suitable a candidate is relative to their corporate culture and expectations. Background checks simply don’t provide these kinds of insights, which is where reference checks show their real value. 

What is a Reference Check?

Reference checks are designed to weed out bad hires, empowering employers with predictive data that ensures candidates are a good match with their company. State-of-the-art reference check solutions, like Crosschq, rely on proprietary technology that help automated an otherwise tedious process, allowing for faster, more accurate, and more effective reference checking. 

Reference checks provide consistent feedback that is measurable and qualified to ensure that new hires are a good fit for their company. Reference checks are also useful in eliminating human bias from the hiring process, providing hiring teams with an authentic and seamless way to verify quality hires. 

How Do Reference Checks Work?

Rather than manually calling each individual reference, which is both time-consuming and ineffective, digital reference checks rely on technology that gathers data from candidates and generates powerful and predictive insights into their compatibility with your organization. 

Reference checks simplify the process for employers by generating easy-to-ready on-demand reporting and analytics. Reference check solutions offer organizations with:

• Digital referencing that evaluates references in less than 10 minutes
• Employee self-assessment surveys that acts as a foundation for analysis
• Culture survey capabilities that allow companies to customize their surveys to fit their company culture
• Peer, manager, and co-worker insights
• ML & AI feedback loops
• Data-driven reporting
• Personalized candidate accounts that store unique candidate profiles

For companies looking to hire faster and smarter, digital reference check solutions are making bad hires a thing of the past. Reference checks are best utilized after the first rounds of interview, providing companies with all the knowledge they need to proceed confidently in the hiring process. 

Why Crosschq is The Reference Check Solution

Crosschq offers a state-of-the-art reference check solution that will make sure you never waste more time, energy, resources on a new hire than is absolutely needed. Crosschq’s proprietary, cloud-based technology is the leading reference check solution, providing companies with all the insight, analytics, and reporting they need to make smart hiring decisions.

Empower your hiring team with all the tools they need and try the Crosschq demo today.