Prepare Your References

Reference Check – Best Practices

Recently a client asked me to provide them with a list of reference check questions as a component of a sales recruiting project. My gut reaction was, “Reference checks? Why bother? All most companies will provide is confirmation of very basic information such a dates of employment.”

It struck me that my impression was based on very old information. After all, I hadn’t conducted any reference checks or researched related best practices for many years. I decided that it was time to take a fresh look at the current state of reference checking and summarize my findings in this article.

What is a Reference Check?

Let’s begin by clarifying what a reference check isn’t:

It isn’t a Background Check, which may include a drug test, a check for criminal records and other data verification.

It isn’t Employment Verification, which confirms dates of employment, salary, title and eligibility for re-hiring (though a thorough reference check may include employment verification).

The best definition I found to explain the purpose of a reference check is this: A Reference Check focuses on checking previous colleagues’ opinions about an individual’s performance.

Why conduct Reference Checks?

The primary reason is past performance is one of the strongest predictors of future performance. If you can gather accurate and balanced information (that addresses both positives and negatives) from a job candidate’s past employers, you can dramatically increase your chances of avoiding hiring mistakes and hire people who will perform well.

What challenges are involved in conducting Reference Checks?

Here are some of the key challenges:

Not enough quality references

It can be hard to reach them

It can be hard to get valid data

Time and cost

Most people don’t find doing this kind of work to be a lot of fun

What are key characteristics of a good Reference Source?

When conducting reference checks, you want to speak with individuals who have been in a position to observe the performance of your job candidate. This includes people who have worked with or for the candidate or have supervised the candidate. It does NOT include family members or friends.

Other important parameters to consider are:

Length of relationship

Freshness of relationship

Nature of relationship

Closeness of relationship

Is providing Reference Check information Legally Risky?

Although legal challenges may arise from the reference checking process, they are usually the result of poor practices such as discussing prohibited topics.

According to the 2004 Reference and Background Checking Survey Report compiled by the Society of HR Management, just 2% of companies are sued for reference-based defamation. It is important to note that the standards applied to reference-based defamation suits are the same as those applied to libel suits – the plaintiff needs to prove not just harm, but also malicious and dishonest intent. This is a very high bar.

When you think about it, there can also be risk in providing positive information. If you make positive comments about a candidate and the prospective employer hires the candidate, and the candidate performs poorly, that employer could sue you for not disclosing complete information.