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Reference checking software saves time for Herbalife

Nutrition company finds reference checking software saves time for recruiters, provides new insights on applicants and employees and anonymity for references.

A global nutrition company is automating reference checking to save time for recruiters, build a new pipeline of...

job candidates and avert some poor hires.

In May 2014, Herbalife purchased Chequed.com offerings for a 10-week pilot and then decided to permanently use the reference checking software, said Brandon Moreno, director of global talent acquisition for Herbalife. "It is an additional tool for our talent acquisition and hiring teams in terms of providing key insights about candidates," he said.

Before buying the cloud reference checking software, Herbalife recruiters would make phone calls to verify references provided by applicants. Recruiters would often play phone tag, he said. After switching to Chequed.com, "We saw the results very quickly," Moreno said. "After the first month, we knew we would continue with it."

The reference checking software automates the process and is easy to use, Moreno said.

It is currently used separately but has the capability to integrate with various applicant tracking systems. The reference checking software was easy to implement, taking about two weeks to be up and running, he said.

Hundreds of reference checks affected

Herbalife uses the reference checking software for all hires in the U.S. Last year, it aided about 200 of the company's 700 new hires in the U.S., Moreno said. 

It takes minimal upfront time to build up a database for Chequed.com, Moreno said. Herbalife currently has 171 different types of jobs that Chequed has been used on. The company develops and sells products related to weight management, healthy meals and snacks, sports and fitness, energy and targeted nutrition and personal care. It takes about two minutes to set up a position in the software with the right set of questions, Moreno said.

References receive email rather than call

To complete the reference check, each candidate for a job supplies a personal email, plus the names and emails of five references on a company-branded template. Moreno or another user logs in to the software and enters the candidate's email, and the system then automatically populates and emails a questionnaire separately to the applicant and each of the references. 

References receive about 10 questions aimed at exploring different candidate competencies, such as humility, ability to get along with others, personal drive, resiliency and communication skills.

Each email to a reference and applicant contains questions tailored to the position being sought. A hiring manager can also add questions. For example, one common question is, "Would you rehire this person?"

Depending on the question, a person ranks the answer from one to five, with five being the highest ranking. For instance, on the rehire question, the responses can be no; perhaps; yes; yes/probably, or yes/absolutely. The reference can then offer a detailed response as to why an answer was given. 

Software analyzes candidates compared to employees

Herbalife also uses the software to measure the quality of candidates, Moreno noted. It compares the data in the Chequed.com rankings to the company's data that ranks the performance of employees in order to gauge the quality of hires, he added. "It allows you to improve statistics and analytics within your recruiting function."

Another key reason the Chequed.com system is effective is because the responses from references are anonymous.

The reference checking software provides an analysis on the rankings provided by the candidate versus the rankings of each reference. That data is also useful for judging a candidate, Moreno said. Over the next year, the company will look at employees who received rankings of three and four to see if there is a noticeable difference in their performance. "It will be interesting to see those results," Moreno said.

According to Moreno, 88% of references complete the automated checks, and about 4.7 references per candidate return the questionnaires, considering that some candidates might provide six or seven references; more than the five requested by the company.

What's more, the company asks references if they want to learn more about job opportunities at Herbalife and if it would be all right to contact them at some point, giving the company a new source of job candidates. During the 10-week pilot, 119 references, or 24%, opted into that program, Moreno said.

Also during the pilot, the company avoided paying $247,000 in salaries of people who otherwise might have been hired, he said.

Additionally, the company saved 64 hours of time during the pilot, he said. It reached that conclusion by comparing the average time for Chequed.com to complete a reference check to the average time it would take a typical recruiter.

"We are [now] averaging 1.2 days for a reference to be returned," he said. "Most come back within a day. We would not have been able to do that from a time perspective unless we had someone dedicated to that."

Reference software garners honest appraisals

Moreno noted that references appear to be much more candid when they use the reference checking software. Recruiters report that references often seemed more reluctant to give average or bad reviews over the phone, he said.

During the pilot, 20% of candidates received subpar reference checks, according to Moreno. "We were getting candid information that we would have not received if we were doing the reference check the traditional way," he said. "That helped convince us to move forward with it."

Moreno said the service from Chequed.com is first rate and he often recommends the software to leaders of other companies.

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There are a lot of red flags here for me that would make me concerned to apply to a company using one of these products. Anonymity means you lose the opportunity to validate the results. How many people mistook 5s for 1s or vice versa. Is it fair to hold a references poor computer usage against an applicant? What about applicants to don't have 5 references that use email regularly? This sounds like a good way to get a lot of false negatives.
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CarolBrands: Those may be some valid points, but if you are searching for a job, you probably need to have your references in order. If you are applying to Herbalife, you might need to line up five references, contact the references and alert them about the process ahead of the checks. Thanks for your comment.
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