Does reference checking still hold value?

As a professional reference and background checker, I firmly believe in, and have seen the value of performance based reference checks. So, when I recently heard a recruiter say that she doesn’t conduct references on her candidates I asked why. She told me it doesn’t make a difference; candidates only give out references who will speak favourably about them.
Our expectation is that a good candidate will provide references who know them and will speak highly of them. We expect our candidates to inform the references that someone will be calling and that they will be available to speak to the reference checker. If a candidate does not give their referees a heads up that a recruiter may be calling, it is a red flag, it speaks to the candidate’s communication skills.
Employment references are more than just hearing that the candidate was good at their job. It is about the details, what makes them good at their job. It’s about learning how they have performed in the past. What were their accomplishments and successes and what have they done to achieve them? How have they handled mistakes and failures? Everyone makes mistakes; how someone handles them and what they have learned from them, shows you who they are.
When this was mentioned to the recruiter, she said that she has developed interview questions that delve into successes and failures and how that candidate has handled them.
While deeper questions in an interview are always a good idea, another perspective will give you a broader view on the candidate’s past performance. Getting a perspective on how a candidate managed a project, tackled a problem or dealt with adversity, will be different than what the candidate tells you, and will allow you to have a holistic view of the candidate.
A few years ago, we conducted a reference for a business development manager in the automotive industry. On paper, he looked terrific. He had his MBA with a myriad of international business experience. Our client said that he interviewed very well, he was charming, affable and did a good job in addressing all the behavioural based interview questions. We uncovered that he did not have his MBA. In fact, he was enrolled in a business certificate program in continuing education, which he did not complete. His international business experience turned out to be helping a friend at his cafe in Switzerland for a couple of weeks. The friend, who was one of his references, came clean because he couldn’t answer all our questions. This candidate presented well in both his interview and resume. If our client did not do their due diligence, they would have ended up hiring someone who completely misrepresented himself. Could the candidate have succeeded in the job, possibly – I don’t know. I do know that the candidate would not hesitate to lie or tell a story when things got derailed.
The cost of a bad hire is steep. It costs about a year and a half of the employees’ salary, taking into consideration recruiting, onboarding and lost productivity. When productivity is low, it affects the morale of the entire team.
In a candidate driven market, reference checks are especially important. Recruiters are in a rush to fill the position. The better candidates have two or three simultaneous offers. Because of this, references are not being conducted or generic forms are emailed to the referees. In this market, you need to hire with a sense of urgency, but you still want to fill the job with the best candidate. References should not slow you down, it should be part of the hiring process and it should be started as soon as the best candidate is identified.
Hiring managers need to know that reference checking is a golden opportunity to learn who you are bringing into your organization. Asking the right open ended questions will give the hiring manager insight on how to motivate and support the new employee, how they deal with adversity and confrontation, which in most jobs, is a normal part of every day.
Every now and then, you will uncover a piece of information that may surprise you. We found out a candidate, who applied for a position with a pharmaceutical company, never completed the required science degree. However, she said that she had her Bachelor of Science. She did not have a university or college degree. She was not new in the industry or her career. She had a proven track record with glowing references, accolades and awards. Our client did not hire her. It was not because she did not have her degree, but it was because she lied. Instead of admitting that she did not have her degree, she became defensive and confrontational. They said that they could not move forward with her application because of her attitude.
Reference checking is quite time consuming. It takes time to connect with the reference. Often the recruiter or the hiring manager is leaving messages or sending emails to make an appointment to speak to the referee. With global employment, you can be arranging to speak with references on the other side of the world. Each reference should be treated as a short telephone interview. Questions should be open ended and specific to the candidates’ soft skills. It’s hard to find the time when there are so many other responsibilities. However, it is worthwhile. One bad hire can have an immediate negative impact on your organization. Reference checking has always been the final step in the hiring process, and it should not be overlooked. It still holds value. If you do not have the time to conduct thorough references and background checks, consider outsourcing. The cost of not doing your due diligence can outweigh the cost of the references and background checks.

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