Should Your Organization Run Reference Checks?

What are reference checks?

Reference checking is the process of a potential employer contacting the previous employers or schools of an applicant to verify information related to the candidate’s experience, skills, traits, etc. Reference checking was once a standard practice in background screening. However, many employers feel this practice is outdated.

What are the pros & cons of a reference check?

There are a few pros to conducting reference checks on either your short list of candidates, or your candidate of choice:

• Might reveal previously unknown information, good or bad, that may sway your view on a candidate.
• May learn more information about your already-chosen candidate’s strengths and weaknesses from the perspective of a previous employer.
• May reveal embellishments on a candidate’s resume.

However, there are also some cons to either spending the time checking references yourself, or hiring a third-party partner to do it for you:

• Often, candidates will not allow a reference from a current employer, giving you no access to the most recent information about a candidate. Alternatively, including a current employer in a reference check may increase the odds of a competitive counteroffer.
• Candidates will generally only leave you with positive references, which may just provide you with information you already knew. This is especially true if you are reference-checking a candidate on your short list, or that you have already decided you will likely hire. You are unlikely to discover any warning signs on a candidate in this case.
• Due to the potential for lawsuits, many employers will only answer a specific set of questions related to the dates a candidate was employed, job title, and possibly whether the candidate would be eligible for rehire.
• Many reference checks are conducted by the third-party partner at the point of a background screen, often after an offer is made. These third parties can usually only ask a specific set of legal-approved questions.
• The redundancy of information “gained” in a reference check costs a company not only money, if using a third party, but also adds more time to the hiring & onboarding process. This may be unattractive to any companies experiencing the current hiring crisis.
• There is a possibility that references may lie, whether the reference is a friend of the candidate and would only provide a positive review, or potentially a disgruntled former employer who may attempt to sabotage a good employee.

So, should your organization run reference checks?

It may not be worth the cost to do so. Reference checks will often be run when a short list has been reached or an offer has been made, pending a background investigation. You are unlikely to learn much, if any at all, new information about your selected candidate that would sway your decision.

In the current hiring crisis, reference checks add more time to the onboarding and hiring process. It may be more beneficial to your organization to conduct a thorough interview and candidate assessments, coupled with your standard background screens, such as employment verifications and criminal checks.

However, if you feel this once-common step in background screening is still important to your organization, here are a few best practices:

• Conduct your reference checks on your short list of candidates before making an offer.
  
• Request references who worked with the candidate directly.
  
• Ask open-ended questions, rather than yes/no questions.
  
• Ask questions specific to the job the candidate is expected to perform.
  
• If you receive negative information on a candidate, be sure to speak with the candidate about these concerns in a follow-up interview.

If a third party sounds best to process reference checks for your organization, contact Cisive.

Cisive is happy to partner with you to determine where, in your background screening process, reference checks make the most sense for your organization.