Background Checks for Employment: What Employers Need to Know

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<h2>Key Takeaways</h2>
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<li>Take references before making a job offer.</li>
<li>Someone senior on the Interview Team should decide who to talk to and then make the calls. Don’t leave calls to reference checking firms and recruitment agencies.</li>
<li>Get candidates to set up Reference Calls and be wary of those who are unwilling to do so. Find out what candidates don’t want you to know!</li>
<li>Ask referees about candidates’ strengths and weaknesses and make sure to read between the lines because no one likes giving a bad reference.</li>
<li>Don’t rush to offer before reflecting on what you’ve heard.</li>
<li>If you receive a bad reference, consider how credible the referee is and talk to the candidate if necessary. </li>
<li>The effort you put into Reference Calls is worth it compared to the costs and complications of a mis-hire.</li>
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So far in the recruitment process, all the information you have is from the candidate, so always ask for references! Employers are sometimes tempted to skip this step because they don’t understand the value of the information that can be gained from a thorough Reference Calls. Maybe they’ve been fobbed off with cursory information in the past, or feel short of time and energy and just want the recruitment task to be over. Believe me, it’s better to put in a bit of effort now getting good information than having to deal with the pain of a mis-hire down the line. I’ve seen companies not bother with references and get badly burned!

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Take References Before the Job Offer

• I’m a bit unconventional in recommending that you take references from previous employers before offering candidates a job. Once you make an offer it’s hard to withdraw it if you receive a bad reference, so it’s much better to talk to referees earlier. 
• If you’ve been following my advice then you should have reminded the candidate several times about the Promise of a Reference Call and they’ll be fully expecting you to speak to their referees.
• At this point you won’t be speaking to their current employer. You’ll only do this after the candidate has accepted your job offer (see our guide, Expert Tips on How to Make & Negotiate Job Offers and chapter 16.).

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You Should Make Reference Calls & You Should Choose Who to Speak To

• It’s best for the Reference Calls to be done by an experienced member of the Interview Team.
• Don’t bother with reference checking agencies. They rarely give you the richer kinds of information you need to assess if a candidate is suitable.
• Don’t let recruitment agencies or headhunters carry out reference checks as their commissions depend on the person being hired.
• Candidates will want you to speak to people who they know will say positive things. To get a balanced view you need to decide who you need to talk to – ideally at least three former line managers. You might also try to speak to ex-colleagues, or even to former customers if the candidate’s past employer has gone out of business.

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Get Candidates to Arrange the Reference Calls

• The traditional way of requesting references in which the employer contacts referees in writing is slow and often leads to minimal information.
• My SECRET is to have candidates set them up. Tell them who you want to speak to.
• Strong candidates are good at doing this because they’re confident that they’ll be spoken highly of. 
• Be wary of candidates who are unwilling or unable to set up calls.
• Some companies don’t allow employees to give official references. Calling it a “personal reference call” often gets around this problem.
• If you’re having trouble getting a referee to have a conversation with you, consider the possible reasons. Without placing too much weight on the actions of someone you don’t know, could their reluctance indicate a problem with the candidate?

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What to Ask During the Reference Call

You can download a detailed Script for Reference Calls from the Guides & Checklists section of our website. Here are a few tips for making the call: 

• Start the phone call by asking the referee about their connection with the candidate. 
• Ask them about the person’s strengths and weaknesses. Invite them to rate the candidate’s performance on a scale of 1 to 10. 
• You should ask them about the candidate’s reason for leaving and see if it’s consistent with the candidate’s explanation at the interview. 
• Most people don’t like giving negative references, so be alert and read between the lines. Lukewarm praise is often a bad sign – you’re looking for an enthusiastic response. 
• Remember not to ask anything discriminatory such as a candidate’s marital status or religion.
• The essential final question is “Would you rehire them?” This will often give you a sense of how the referee really felt about the candidate leaving. 
• At the end, thank the referee and say that you’d be happy to return the favour when needed. It’s good to follow up with a thank you email too.

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Reflect on What You’ve Heard

• You’ve come this far in the recruitment process and you might be keen to get it over with. 
• Take a breather and really think about what you’ve been told. Sometimes what seem like small issues turn out to indicate bigger ones. 
• Even if they don’t say anything particularly damning, a referee’s tone might betray a lack of enthusiasm and confidence in a candidate.
• Hiring managers often want to fill the vacancy as quickly as possible, and later realise alarm bells were going off during the Reference Call.

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What to Do with Bad References 

• If you receive a bad reference you need to first reflect on whether the referee is credible. Some people are unprofessional and dishonest. If you suspect that this is the case with a referee, then don’t write off the candidate; see what other referees have to say.
• If the referee does seem credible then you’ll need to have a conversation with the candidate. Tread carefully because references are given in confidence. You might say, “I had a chat with one of your referees and a few issues were raised. I wanted to get your side of the story. I can’t be more specific because the reference was given confidentially. What do you think might have been raised?” See what comes up and carefully consider whether you need to reject the candidate.

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What to Do if There Are No References

• In extenuating circumstances, a candidate may genuinely have difficulty arranging Reference Calls. If the candidate can’t arrange them, consider these options:
  • If a potential referee has left a business, try to track them down using LinkedIn and public databases such as Companies House (for UK-based directors).
  • If you can’t reach a manager, find an ex-colleague.
  • If the candidate has recently left school or graduated, contact their form tutor, head of year, or a significant teacher. If they attended a youth organisation like Scouts, reach out to a leader.
  • Failing all these, ask the candidate for copies of payroll/tax documents, which should show the start and finish of employment and confirm salary details.

• Occasionally, you just can’t get references. For example, a parent who has spent 18 years raising a child may only have friends and acquaintances that they can suggest as referees as they’ve been out of the workplace for so long. I tread carefully if I’ve tried and failed to get Reference Calls; I’d insist on making a job offer with a probation period, and I’d be less agreeable to them failing to meet expectations during performance reviews.

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Additional Resources

• Talent Acquisition Book; The Secrets of Great Recruitment: How to Recruit Great Employees.
• Downloadable PDF guide; Use Reference Calls: Find Out What Candidates Don't Want You to Know!
• Downloadable script; Script for Reference Calls.
• Article; Employment Background Reference Checks: How One Simple Call Can Save Your Business!
• Article; How to Conduct a Right to Work Check for Employment in the UK.