In today’s hiring landscape, where remote interviewing and automation have quickly become the norm, hiring compliance has come to the forefront for businesses in every industry. For heavily regulated sectors, such as healthcare, finance and education, pressures have increased. The challenge for HR and recruitment teams is balancing compliance and speed in the hiring process to maintain integrity and secure the best talent.
Here, Referoo Director Chris Hunter shares his insights on some of the most prevalent pitfalls and how to avoid them.
#1 Inconsistent background checking
“It’s not unusual to see uneven background-checking processes for similar roles or even within the same hiring round. One process might employ intensive screening and the next just the basics.
“These gaps in consistency not only invite compliance issues but also amplify liability risks,” says Hunter.
He stresses the importance of establishing a uniform background-checking process.
“Identifying the background checks that are important for each role and putting them into policy and practise is pivotal, not only for compliance reasons, of course, but to ensure you are hiring the best possible candidate for your business,” he says.
Hunter explains that offering a wide range of background checks is an essential part of the design of Referoo Hub, a solution that puts all your employment checks all in one place.
“We designed Referoo Hub to be an all-inclusive solution that makes it easy to embed consistent background-checking processes. And that means we strive to offer the widest possible range of background checks. So much so that if a lesser-known check is needed that’s not on our extensive background check list, we’ll actively source it for our users.”
#2 Not obtaining proper candidate consent
Another trap many fall into is proceeding with reference and background checks without the candidate's explicit consent – a misstep that can violate privacy laws and damage a company's reputation.
“Reference and background checking, by their very nature, can delve into areas of privacy concern, so it’s critical to have written consent, or you leave yourself open to serious compliance issues or even legal challenge,” Hunter explains.
However, he also acknowledges that obtaining written consent manually or across multiple background-checking providers can be challenging and create a hiring bottleneck.
“It’s a clunky process, particularly if you use multiple providers for your employment checks. So, it’s one of the things we built into Referoo – seamless automation where candidates provide consent on a single email to cover all your employment checks. It’s simple but effective. Your candidate has clarity, and so do you.”
#3 Failing to verify right to work status
Immigration and visa systems can be complex for employers to navigate, but Hunter stresses that verifying right to work status through official channels is crucial.
“Visas can be a minefield. So using a simple tool to verify a candidate’s status, like Referoo’s Right to Work checks is just good hiring hygiene, ensuring you don’t unintentionally violate employment or immigration laws.”
#4 Relying on manual or paper-based record keeping
“Hiring can be a document-heavy process, but it’s important that the ‘paperwork’ is standardised, digitised and kept in a single source of truth. Otherwise, you are simply leaving yourself open to unnecessary risk,” Hunter says.
He adds that paper-based or manual records are likely being uploaded to your systems, so you are adding significant administration and opening yourself up to data mishandling, human error and subjectivity.
“It’s about having clear, accurate and consistent documentation across the process with secure data handling processes. From when we first founded Referoo, we knew seamless integration with HRIS and ATS platforms was necessary to achieve compliance without the complexity for our users. And it remains a guiding principle for our all-in-one employment-checking solution today.”
#5 Unconscious bias in the hiring process
Unconscious bias has come to the fore in recent years as hiring has become increasingly automated, and Hunter acknowledges that it remains a challenge for HR teams and recruiters.
Hunter advises using structured interview and reference-checking questions to ensure all candidates have the same experience.
And, he says, talk to your team about it.
“Don’t leave unconscious bias as the elephant in the room. Talk to your team about it, let them share personal experiences with it as a recruiter or as a candidate and encourage open discussion about what you can do to recognise and minimise it in your own hiring process.”
#6 Poor data handling practices
According to Stanford research, 9 out of 10 data breaches are caused by human error. Hunter says that if you are mishandling data and transferring it across multiple systems and providers, you’re taking unnecessary risks.
“The hiring process involves collecting significant personal data, from ID and birth date to detailed work and criminal history checks. So, robust and secure data handling processes are a must.
“We particularly see this with background checking. HR and recruitment teams still using multiple providers are inputting sensitive data across several systems and asking candidates to provide ID more than once. A seamless, all-in-one solution integrating with your core HRIS or ATS is key.”
#7 Delayed or incomplete reference checks
Reference checking is a critical part of the hiring process, but it can often take days or even weeks to get hold of a referee, creating a bottleneck.
“Reference phone tag is a professional hazard for those in talent acquisition and recruitment. And when you can’t get a referee for weeks, it may be tempting to proceed without the reference, but then you’re making hiring decisions without all the information,” Hunter explains.
He adds that even when you catch the referee, they may be giving you time between meetings or other BAU.
“If your referee is distracted, the quality of your candidate insights will suffer. And then, of course, there is the risk of fraud in the process – you don’t really know who you are talking to. It may be a reference from a friend or family member. A streamlined reference-checking platform enables fast and complete checks, giving the referee time to consider your question and their experience with the candidate.”
#8 Misclassification of employees and contractors
Hunter highlights the complexity of differentiating between employees and contractors, casual employees and the many award rates in some industries.
“Misclassification here can lead to significant tax and employment law violations, and we have seen many organisations unintentionally falling afoul of these laws recently. Always consult employment law experts to classify roles accurately and clearly define them in contracts," he advises.
#9 Ignoring industry-specific regulations
"Regularly revisiting hiring policies to be in step with sector-specific legislations and working closely with compliance and legal experts is not just sensible, it's essential," Hunter explains.
He says it goes beyond the rule of law too. “Of course, you want to stay within legal guidelines, but it’s important to look at best practices within your industry, too. What are other leading players doing, and how does your process align?”
#10 Poor compliance training and onboarding
Compliance should be at the heart of your recruitment process to both meet requirements and source the best possible talent for your business, according to Hunter.
“A structured approach to onboarding that prioritises compliance training is a must-have. It’s also critical to ensure your tech partners, platforms and providers share your commitment to compliance. That way, your technology will do some of the heavy lifting for you.”
Looking to increase compliance and speed in your employment-checking process? Meet Referoo Hub, the ultimate solution for all your employment checks, all in one place. Book a demo to see it in action for yourself.