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A reference Is provided to a potential employer by an applicant. The purpose of the reference is to allow the company to validate previous experience or other claims made by the applicant with a third party. The third party will typically be a previous employer.
References are checked as part of a recruitment management process. Typically, they are only checked once a candidate reaches later rounds of the process or after they have been made a conditional job offer. As a candidate may use their existing employer as a reference it is typical that a recruitment process will make it clear to applicants at what stage a reference will be checked.
Some candidates may be put off from applying for positions if their current employment will be notified prior to an offer being made.