What Is a Reference Check & How To Conduct One

Hiring is not an easy task. Even with a designated team of human resource professionals in your organization, hiring can be a painstaking process that takes immense time, effort, and resources.

But because having a cohesive team of skilled, trustworthy professionals is essential to your company’s success, you don’t want to cut any corners. Carefully examining cover letters and resumes is crucial, just as asking intentional questions during a one-on-one interview. But there’s another way your organization can gain essential insights about a candidate during this process.

Conducting reference checks on potential new hires is a tried and true method for vetting candidates. Here’s everything you need to know.

What is a Reference Check?

Reference checks are a standard part of the hiring process.

They include contacting previous employers, teachers, supervisors, or affiliated educational institutions to gain insight into a candidate’s background, skills, and overall reliability.

What are the Advantages and Disadvantages of Doing a Reference Check?

While reference checks are commonplace, there are arguments for and against the practice. Here is some of the common reasoning on either side.

Advantages of Reference Checks

Here are some of the key benefits of conducting reference checks as part of the hiring process.

Promote Reliability and Consistency

Recent studies have shown that “structured reference checks have acceptable levels of reliability” compared to other measurement tools and assessments. This learning method about a potential employee can provide insight into what it is like to work with the individual that the candidates themselves cannot accurately convey. Your organization can learn from a unique third-party perspective by speaking to others about their candidates’ experiences.

Plus, checks ensure that everyone is held to the same standard when hiring and vetting. If conducted consistently, they can make the hiring process more equitable across the board.

Show Candidate Trustworthiness

People are expected to put their best foot forward when applying for jobs. You want to make your accomplishments shine on a resume and highlight the successes you’ve had in your previous roles. But there is a big difference between showing your best sides and lying.

Conducting reference checks is a great way to see if candidates are honest in representing themselves. Suppose someone claims they held a particular position or performed specific duties at a previous job. In that case, you can verify that information with a former boss or colleague during a reference check.

If a candidate is lying to get a job, that’s a major red flag that the behavior might continue if hired by your company.

Help Narrow Down Candidates

On average, 118 people apply for every job listing. That’s a massive number of candidates to sort through and consider, especially if you’re in a time crunch to fill a position as soon as possible.

Reference checks can help you narrow in on the candidates you want to interview. By contacting references before interviewing a potential new hire, you can save time and energy by ensuring this person would indeed be a good fit for your company based on their past experiences in educational or professional settings.

Opt to conduct reference checks after phone screens or interviews have been completed. They can help solidify which candidate is the most qualified or which would be the best culture fit for your organization.

Disadvantages of Reference Checks

Here are some of the drawbacks of conducting reference checks.

They Take Time

Reference checks, when conducted alone, take a good chunk of time to complete. In business, time is money. So, even though reference checks are a worthwhile investment, there are still some upfront costs.

Inaccurate or Incomplete Info

When someone fills out an application and lists references for a future employer to contact, it is unlikely that they will list individuals or companies that will speak poorly of them.

Since you can only contact the references provided, you may end up with a one-sided view of the candidate. Because of this, reference checks should be used as part of an employment decision, but there must also be other considerations.

Potential Legal Issues

Former employers may be hesitant to share anything other than factual information when called as a reference for fear of a potential lawsuit if they share too much personal insight. It can be challenging to acquire answers to the questions you have about a candidate.

The reference check process needs to be completed tactfully and consistently to prevent lawsuits or negligence claims.

What Does a Reference Check Include?

Most states have laws prohibiting the unauthorized search of a candidate’s past without explicit consent. Therefore, most reference checks include a potential employer contacting only the candidate’s provided references.

During a reference check, the employer will typically ask questions to prove basic factual information, such as dates of employment and eligibility for rehire. A more in-depth examination may ask questions similar to a job interview to gain insight into an individual’s skillset and attitude.

Is a Reference Check the Same Thing as a Background Check?

While background checks often include information on employment history, they are different procedures than reference checks. Background checks can provide criminal and credit history information, while reference checks focus on employment and education.

Together, these two standard hiring procedures can paint a complete picture of a candidate.

How To Effectively Conduct a Reference Check?

Here are some critical steps to conducting meaningful reference checks.

Prepare

You must be prepared before making a reference check call. Review all the applicant’s provided information thoroughly while deciding what questions to ask. Also, familiarize yourself with the relationship the reference has to the candidate, so you don’t waste any time on the call.

Additionally, you want to ensure that the reference provided is legitimate. If someone is listed as a former boss, look them up on LinkedIn or check out the company website. In desperate moments, candidates may try to fake a reference to get a job.

Engage

Start by thanking the reference for speaking with you.

Summarize the position for which the candidate is applying and the qualities you are looking for in an employee. Refer to the information listed on the candidate’s cover letter or resume during this conversation. The more detailed and relevant your questions, the more likely you will gain the insight you need.

Make sure that you don’t ask leading questions during this process. For example, don’t say, “So what you’re saying is that this candidate is a good team player, right?”. You want to ensure that any information provided is honest, not succumbing to the influence of others.

Conduct at Least Two Checks

Always conduct at least two checks to get a comprehensive picture of the candidate. If you receive contradictory information, be thorough by contacting an additional reference.

Conclusion

Reference checks are an essential aspect of hiring to craft your perfect team. But with so much other responsibility on your plate, why not let someone else do the hard work for you?

ScoutLogic offers comprehensive reference check services and more, making us your one-stop shop for all your hiring needs.

Reach out today!

David Garcia

David Garcia, co-founder and CEO of Scout Logic, is an industry leader in the bulk background check world. With his strategic acumen and expertise in the HR sphere, specifically in hiring, recruiting, legal compliance, background checks, and resume screening, he’s an invaluable asset and consultant.

David's counsel extends across the boards of ScoutLogic, YipitData, and Supplier.io, drawing from his impactful stints on the boards of Infutor and Avetta. With an extensive 25-year journey, he champions unparalleled B2B commercial leadership within data & analytics, significantly shaping the HR landscape.