How Essential Are Reference Checks? 4 Tips for Great Checks

How Essential Are Reference Checks? 4 Tips for Great Checks

How Essential Are Reference Checks? 4 Tips for Great Checks

June 5, 2023

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Key Takeaways

  1. 75% of HR respondents said they had caught out an applicant’s lie about their employment history while doing reference checks
  2. Reference checks frequently top the list of the most troublesome and lengthy parts of the recruitment process
  3. Individual information protection laws may mean that financial or criminal checks are not possible in-house and require specialized support
Summary

 

When hiring new team members, reference checks and background checks provide you with a great opportunity to check the quality of your applicants. It’s never certain that qualified individuals will match your company culture, or that candidates are being entirely honest about their skills or experience.

But it’s important to ask what makes a good reference check? And how can you integrate checks into your hiring and selection processes without adding potential delays? Here, we go through the essentials of reference check procedures and give you 4 key tips for improving your recruitment process.

 

 

What is a Reference Check?

 

 

If you’ve ever taken part in a hiring process as a recruiter or hiring manager, you’ve probably found yourself sitting across the table or on a screen (in a video interview) from someone that appears to be the ideal candidate. Their CV is impeccable, and they are telling you everything you want to hear.

A reference check is an integral part of the hiring process as it allows you to dive deep and get to the real facts on their strengths and weaknesses before moving on to making an offer.

Typically, a reference check means that an applicant provides 2-3 individual references who can corroborate key aspects of their skills or experience. These references may be previous managers, past clients, or HR representatives with the right knowledge of the applicant’s background. They are not friends, family members, or other unrelated people.

References can be provided either as email addresses and/or phone numbers (although emails are preferred as we will see later).

 

 

 

 

Why Does a Reference Check Need to Be Part of Your Company’s Recruitment Process?

 

 

They’re necessary to check that the candidate is truthfully representing their skills and experience.

 

It’s not always possible to tell if a candidate is telling the truth (or at least telling the whole truth) during an interview, even if that interview is face-to-face. That’s why an employment background check helps to give you a chance to verify the aspects of a candidate’s experience or expertise that need to be true. In fact, in one study 75% of HR respondents said they had caught out an applicant’s lie about their employment history while doing reference checks.

 

It’s a great way to find out about any red flags in the past

 

While few people get along with everyone they’ve ever worked for or with, having a chance to learn about a candidate from the perspective of their previous employer can highlight any personal, behavioral, or professional problems they may have had in the past. You can then choose to address these in an interview or confirm if you suspect that the candidate is hiding something (such as why they left their previous job).

 

They give you a sense of how far the candidate come, and how far they’re likely to go with you

 

It’s important to consider every potential employee’s long-term potential, and there’s no better way to gauge this than to see how much progress they’ve made over their work experience. While this may not work as well for younger candidates, you can still get an overall sense of their potential going forward.

 

References can provide you with additional information not gained during an interview

 

It’s hard to summarize an entire person’s experience and character in a single interview. Thorough reference checks can help to streamline the process and tell you what you need to know without one interview after the other.

Here you also get the first real test of a candidate’s commitment. It’s not uncommon for candidates to give up once they’re asked for references. Therefore, the reference check can act as an important assessment of the candidate’s willingness and ability to see the process through.

 

They offer a personalized view of the candidate essential for checking cultural affinity

 

Perhaps the most important thing a reference can tell you about a candidate is their opinion of the applicant as a person. More than anything you’ll learn on paper or a screen, a reference can tell what it’s like to really work without someone, giving you a much better idea about how they’ll fit into your team.

 

 

What is a Background Check? How are Background Checks Different from Reference Checks?

 

 

Background checks are those that investigate a candidate’s education, financial records, criminal background, and whether they can take the job. They can be used to complement a reference check when you want to verify someone’s CV is telling the truth, but they may also highlight issues that prevent them from working in certain positions or industries.

For example, a criminal background check may show that a candidate has been caught committing fraud in the past, making them unsuitable for positions where this may go against national laws or company policies.

Part of this step may also involve an administration check. This check is particularly important for global employment because it is a check to see if the candidate is eligible to work in your company or country. It involves making sure that the candidate is allowed to work in the country, if they have or can apply for the relevant work permit, etc.

Be careful though, in some countries individual information protection laws may mean that financial or criminal checks are not possible in-house and require specialized support from a licensed third-party background check service company to run a background check.

These checks can therefore become costly if required, or lead to serious penalties or fines if done improperly. Because of this, it’s always best to verify first if you can carry out these checks in-house or how much it might cost to have them done professionally.

 

 

When Should You Verify References During the Candidate Screening Process

 

 

Exactly when you should conduct a reference check or background check may differ according to your specific hiring procedure or company needs, but it’s always agreed that these checks should be done before any kind of job offer.

In general, we recommend that checks take place once you’ve shortlisted applicants down to 2 or 3 final candidates. This way you can limit the amount of unnecessary checks done on unviable candidates.

The background check should come first as this can be more heavily tailored to your needs. This step is often quicker and useful as it lets you check that the candidate is able to take the job or apply for a visa if the position is overseas.

Discrepancies here can quickly narrow down the remaining candidates if you are struggling to do so. A background check is also the best way to confirm that someone is eligible for the job before going into lengthy negotiations.

Finally, after this, a reference check can be done to give you the final information you need to make your decision. Because reference checks are ultimately more personal, they’ll answer any questions you have about the candidate(s) fitting into the company culture.

Doing reference checks at this stage will also give the candidate and their references time to prepare, hopefully reducing the chance of delays.

 

 

4 Big Tips for Conducting Effective Reference Checks from a Real Recruitment Expert

 

 

1. Always ask for the reference’s company email address (ideally one that can be tied to a legitimate company domain)

 

A reference’s email should be a business email, rather than their personal email address. You could additionally ask for a link to the reference’s LinkedIn account. These are the best way to ensure a reference is legitimate.

 

2. Email references first

 

While phone calling used to be the primary go-to for reference checks, emails should now be the first form of contact you try. This gives the reference time to put together their thoughts, and you’re more likely to be speaking to a real manager than when you call.

Emails are especially important when dealing with an overseas reference due to the added complications of time zone and language differences.

 

3. Use a reference check agreement letter to ensure compliance 

 

It’s essential to get the approval of each candidate to perform these checks and to reassure them that their private information is confidential and protected as long as it will be stored on your servers.

This extends to the personal information of references during a reference check. As a result, make sure you have all candidates that you will run checks on sign an agreement letter that confirms what you will be using any information provided for, and how you intend to keep that information on record.

Not only is this necessary in many international regions, but it’s a great way to give candidates confidence in your attention to safety and responsibility as an employer.

 

4. Set a deadline

 

Finally, reference checks frequently top the list of the most troublesome and lengthy parts of the recruitment process. Often, this is not the fault of the candidate, but it can slow down your search right at the final step.

Introduce a deadline for reference responses early on; this is to potentially let your candidates know that there will be a background and reference check even before you intend to do them. If the deadline passes and you still haven’t heard anything back, then a missing reference can tell you just as much as a response.