5 signs your reference checking process is costing you placements

Here's a number that should concern every recruitment agency: recruiters spend an average of 3 hours per reference check chasing referees, according to recruitment consultant Vanessa Raath.  

That’s three hours spent on phone tag, voicemails, and follow-up emails for each candidate. Multiply that by your team and monthly placements, and you’re losing a lot of productive time. 

For busy labour-hire agencies in Sydney, Melbourne, Auckland, or Brisbane, this problem adds up fast. If you place 50 temps a month and each needs two references, you could lose up to 300 hours of admin time just chasing references. 

Why traditional methods fail:  

Referees are busy professionals. They aren’t waiting by the phone for your call. In fact, industry data shows that at least 50% of references are submitted outside normal business hours, such as evenings and weekends, when referees finally have time to respond. 

Phone-based reference checking fundamentally mismatches how referees actually want to engage with the process. They want to respond when it suits them, not when you happen to call.  

That’s why Onboarded's reference checking includes automated reminders you can set and mobile-friendly forms. Referees can complete checks at their convenience, so your consultants can focus on building relationships and making placements. 

Reference fraud is more common than most recruiters realise. Research indicates that approximately one in six candidates (17%) admit to faking references. More recent data suggests this figure may now be as high as one in four.  

Professional fake reference services exist, charging upwards of $150 per reference to impersonate former managers or create fictitious companies. Friends pose as supervisors. Candidates provide mobile numbers instead of company switchboards.  

For agencies in Australia and New Zealand, this is especially challenging. The casual and temp workforce often has shorter jobs and more varied work histories, which makes verification harder and increases the risk of fraud. 

The consequences extend far beyond a bad hire:  

According to benchmarking data from the Society for Human Resource Management (SHRM), a bad hire can cost three to four times the position’s salary. For a $70,000 role, that’s up to $280,000 in direct and indirect costs, often because the reference checking process failed to verify legitimacy. 

For labour hire agencies, there’s another risk: your reputation with clients. One bad temp placement linked to a questionable reference can damage a client relationship you’ve worked years to build. 

Red flags to watch for:  

Structured, consistent reference checking processes with standardised questions and proper documentation help you spot these warning signs before they turn into costly mistakes.

Reference checks should help you make recruiting decisions, not just document them. When done well, they show how candidates perform under pressure, work with others, and handle feedback. Insights you can’t get from interviews alone. 

The opportunity you're missing:  

Good reference feedback can strengthen your client relationships. Sharing valuable insights about a candidate’s work style, development areas, or management preferences shows genuine partnership and helps make sure the placement succeeds long term. 

For temp and labour hire, this is even more important. If you can tell a client, "their previous supervisor said they pick up new systems quickly" or "they work best with clear daily priorities," you’re giving information that helps the placement succeed. 

Access Onboarded lets you customise reference templates by role type in Settings. This way, your warehouse operative references ask different questions than your office admin references. You can also include rating questions to make feedback more structured and easier to compare across candidates.