Employment Background Reference Checks: How One Simple Call Can Save Your Business!

<div class="grey-callout">
<h2>Key Takeaways</h2>
<ul>
<li>Reference Calls reduce expensive and avoidable mis-hires: The effort you put into Reference Calls is worth it compared to the costs and complications of a mis-hire.</li>
<li>Call before making a job offer: This avoids having to withdraw an offer based on a bad reference.</li>
<li>Take control: You should select who you want to speak to, not the candidate.</li>
<li>Candidates arrange the Reference Call: They can be arranged more effectively by the candidate, and it can indicate their confidence in receiving a positive referral.</li>
<li>Expect negative feedback: Priming your mind to hear something negative can help uncover crucial information by keeping an open mind.</li>
<li>Reference Call script: Use it to ensure you don’t miss a vital question.</li>
<li>Re-evaluate candidates: Even if a candidate seems perfect, negative points raised in Reference Calls should prompt a re-evaluation of their suitability.</li>
</ul>
</div>

‍

How do you know that everything you’ve been told until this point hasn’t been lies or half-truths? A candidate could have used a professional CV writing service, a specialist could have optimised their LinkedIn profile, they could have read books and watched hours of YouTube videos to deliver the perfect interview answer. At the very least, everything they have said has been biased based on their point of view.

That is why you must get a dispassionate observers’ perspective.

For example, I dismissed an employee whose personal life was a constant excuse for poor performance. Years later, I met one of his employers who said, “We employed Ben who used to work for you. He was a nightmare, and we could never get him to work!” I replied, “Well, some things never change; I couldn’t get him to work either, so I dismissed him”. The employer looked shocked, and it dawned on him that if only he had spoken to me first, it would have saved their company an expensive mis-hire. If asked, I would have happily told them.

Please, learn from their mistake, and thousands of other employers making the same mistake – make Reference Calls!

This illustration represents what happens to many employers and could happen to you if you fail to make Reference Call:

Making Reference Calls shouldn’t surprise candidates if you briefed them properly. Throughout the recruitment process, I’ve advocated using the Promise of a Reference Call (PORC) to reduce dishonest answers and remind candidates of your intentions. By this point, the candidate knows you’re serious.

Now, you must fulfil that promise by speaking to their former employers (you’ll only talk to their current employer if you later make a job offer the candidate accepts).

I remember interviewing one “great” candidate. When I took references I immediately became suspicious. It turned out that the person I was speaking to was the candidate’s girlfriend. When I contacted his alleged employer, they’d never heard of him! The candidate had taken the gamble that we wouldn’t follow up on the Reference Call (probably because he’d got away with it in the past).

‍

Always Make Reference Calls

Some hiring managers overlook Reference Calls because:

• They have poor expectations: Based on past experiences, they’ve used basic reference checks and been fobbed off with one-line replies confirming dates of employment.
• They don’t know how to make an effective call: That’s why I have provided a Reference Call Script for you to follow to get the best results.
• They don’t think they have the time: Believe me, the time it takes to make a couple of Reference Calls is far less than it takes to manage a Poor Performer and eventually replace them.
• They’re mentally exhausted: Having gotten this far, they just want the recruitment process to end!

‍

<span class="grey-callout"><p><span class="text-color-purple">Important:</span> Even if a candidate comes via an employee referral, it’s still essential that you make Reference Calls. The employee referring them will be biased, and potentially motivated by a referral reward.</p>
<p>Similarly, if a candidate comes from a recruitment agency, don’t allow them to take references because their commission depends on the candidate being hired.</p></span>

‍

Don’t Use a Reference Checking Agency

Most reference checking agencies offer glorified box-ticking exercises. They usually send a templated letter to previous employers asking for dates of employment and very basic information. These checks are usually only useful in verifying qualifications or safeguarding requirements.

They are unlikely to provide the insights needed for effective recruitment. Beyond ticking a box indicating satisfaction, you need context and to know what else a referee would like to share in confidence, if they were just asked.

Based on my experience and this evidence, I can’t recommend using basic reference checking agencies. Schmidt & Hunter (1998) also found basic reference checks were not a valid predictor of future success (scoring 0.26).

Instead, I recommend a member of the Interview Team makes the Reference Calls. It also helps to choose someone with lots of business experience to understand whether a referee is credible.

‍

Make Reference Calls Before Making a Job Offer

I challenge convention by recommending that former employers be called before making a job offer. This prevents hiring managers from getting into a terrible dilemma I’ve seen too often; a job offer is accepted, a bad reference comes back, and it seems impossible to withdraw the offer.

‍

You Choose Who to Speak to

Left to themselves, candidates will have the good sense only to nominate referees who they are confident will say something positive. 

That’s why you should take control and tell the candidate who you want to speak to. While the candidate can provide guidance, you should already know their manager’s name from the interview. (Generally, avoid HR because they usually confirm basic information and rarely have firsthand candidate knowledge.) 

Ideally, referees will include a minimum of three recent former bosses or line managers. 

‍

Candidates Should Arrange Reference Calls

Typically, hiring managers contact referees in writing. This is a slow and ineffective process that results in the equivalent of name, rank, and number.

Again, I’m going to break with convention here, and ask the candidate to set up Reference Calls. They must manage timings and relationships to ensure a smooth process. You’ll find Great Performers are good at arranging calls. They aren’t concerned about the risk of someone giving a negative reference, and if they think one is coming, they’ll provide their side of the story first.

If you encounter resistance, such as the candidate intentionally obfuscating, or it proves problematic for them to arrange calls, consider this an amber flag. If the candidate can’t or won’t provide details for a Reference Call, seriously reconsider whether you want to offer them a job.

In extenuating circumstances, a candidate may genuinely have difficulty suggesting referees. Because Reference Calls are so valuable, if the candidate can’t arrange them, I might try myself:

• If a potential referee has left a business, I’ll try to track them down using LinkedIn and public databases such as Companies House (for UK-based directors).
• If I can’t reach a manager, I may find an ex-colleague available to talk to me.
• If the business closed and made everyone redundant, I could speak to a former customer.
• Failing all these, I’ll ask the candidate for copies of payroll/tax documents, which should show the start and finish of employment and confirm salary details.
• When the candidate has recently left school or graduated, I’ll still try contacting their form tutor, head of year, or a significant teacher. 
• If they attended a youth organisation like Scouts, I’ll reach out to a leader.

Remember, you must not contact their current employer until a job offer has been accepted.

‍

<span class="purple-callout"><p>A quick mention: I'm available if you're seeking advice or hands-on support. Get your free consultation.</p><p>You'll also find my talent acquisition book helpful -it's a bestseller!</p><p>I can even advertise a job on top UK job sites for just £199.</p></span>

‍

Always Expect a Bad Reference

I always expect to be given a bad reference. This is a crucial reframe – if I look for the good, I generally only see the good; but if I prime my brain to look for the bad, I will often find it. Ultimately, that is what we need to make an informed decision – the good and the bad.

Equally, you need to learn to read between the lines. Referees generally don’t like to give poor references because they don’t want to harm their former colleagues’ chances of getting a job, and they want to avoid conflict. Referees also want to feel good about themselves, and preventing someone from getting a job can put a downer on their day.

Reference Call Script

Ask these straightforward questions:

“Hello {referee’s name}, thanks for accepting my call. As {candidate’s name} mentioned, we’re considering offering them a job, and I’d appreciate your comments about their performance and how I might best manage them. Naturally, anything you say will be treated in strictest confidence. If you don’t mind, I’d like to start by asking”...

‍“What’s your connection with {candidate’s name}?”

You want to ensure that there are no conflicts of interest.

“I understand they joined you in {month, year} and left in {month, year}. Does that sound about right?”

Avoid asking, “When did they work with you?” because a referee will struggle to answer. Instead, suggest when you think the candidate joined and left.

“What were their biggest strengths?”

Hesitation, lukewarm or ambivalent praise may be damning. A genuinely positive reference communicates a sense of enthusiasm and admiration.

“What were their biggest areas for improvement back then?”

“Back then” is important because it permits a referee to talk about the candidate’s weaknesses in the past tense, as if they’ve improved (in reality, people don’t change that much).

“Overall, how would you rate their performance in the job on a scale of 1 to 10?”... “Why specifically did you give that rating?”

Don’t use the Fibonacci Sequence here as it would take too long to explain; just use the familiar 1 to 10. Consider a 6 or lower to be poor, and 7 is neutral. You’re looking for consistent 8, 9 or 10.

“{Candidate’s name} mentioned you might say they found {an issue/situation} challenging. Can you tell me more about this?”

The phrase “you might say” is important because it communicates they have permission to discuss this point. Only use this question if an issue is discussed at interview.

“What advice would you give me for how best to manage them?”

This can uncover helpful information, but remember that not everyone’s opinion is valid. I’ve met some awful managers who don’t have a clue.

“Why did they want to leave?”

Don’t repeat what a candidate said, for example, “I understand they resigned. Is that correct?” Referees normally agree, and you won’t understand the truth. Don’t accept, “He left to pursue other opportunities”. This is the business equivalent of a politician’s excuse that they’re, “Leaving to spend more time with the family”.

“What would you do to ensure they settle in quickly?”

You will learn something about the candidate and will understand how best to induct them.

“Would you rehire them?”

This is a great final question and the most important. It gives a clear sense of what the referee really thinks of the candidate and whether they’re happy or sad that they left.

‍

<span class="grey-callout"><span class="text-color-purple">Tip:</span> Purposefully avoid telling the referee about your company and the role until later in the conversation because this may bias their answers.</span>

‍

Thank the Referee

Thank the referee and mention that you’re happy to reciprocate in the future. If possible, send a thank you email and make a LinkedIn connection.

This makes the referee feel positive about taking the time to provide a reference, making them more inclined to do so in the future.

‍

Keep it Legal

A Reference Call is part of the recruitment process, and therefore you must not ask questions that could be considered discriminatory.

Additionally a Reference Call is confidential and details should not be shared with the candidate.

‍

Hostile Referees

Some companies don’t permit managers to give references. One way around this is to refer to it as a “personal reference call”. It sounds like semantics, but it generally works.

I’ve had situations where a referee has defaulted to “send me an email”. The best response is to say, “I understand you’re busy, and I just want a quick informal chat because without having a conversation, I can’t make them a job offer”. If they only accept an email, I am most interested in asking, <span class="text-style-email">Why did they leave?</span> and <span class="text-style-email">Would you rehire them?</span>

When referees deflect or refuse, their tone often tells me a lot. It might make me reconsider whether to offer a job. At the same time, I’m cautious about placing too much importance on the inaction of a stranger. Ultimately, you can’t force someone to provide a reference and you’re asking them to give up their time for no personal gain.

‍

Re-Evaluate Whether the Candidate is Still a Great Performer

At this point, you might be desperate to fill the job; this urgency might push you to proceed regardless of what you’ve been told.

Stop and think. Could you avoid a mis-hire? Are they really a Great Performer?

I’ve often found that seemingly insignificant points raised can disguise big underlying issues. Sometimes, referees use language that doesn’t inspire confidence, but more often their tone indicates there could be an issue. 

Unfortunately, most hiring managers never have the foresight to see that they were implicitly warned until it is too late.

But if you’re completely satisfied, quickly progress to making a job offer.

‍

What to Do with Bad References

If a reference is bad, consider whether the referee is credible. Some managers lack commercial acumen and professionalism. In these cases, I’m more willing to give a candidate the benefit of the doubt, but I keep digging with other referees to see if there’s a pattern.

If a reference was awful and the referee was credible, I’d recommend that you discuss it with the candidate to establish some context. You must be careful because the information you were provided by the referee is considered confidential.

A good conversation starter might be, “I chatted with one of your referees and a few issues were raised. So, 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?” The candidate may flounder and raise things you never knew about, or they may need a bit more guidance.

After this conversation, you might decide not to continue with the candidate’s application.

‍

What to Do if There Are No References

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.

‍

Foresight is Better Than Hindsight

You may think, “Reference Calls sound like a lot of work! I’m confident this candidate is a good fit, so I’m going to skip ahead”. Please don’t! I’ve noticed a strong correlation between companies that avoid Reference Calls and those that make more expensive mis-hires.

Remember all the recruitment mistakes you’ve made. Wouldn’t it have been nice if the solution was spending a few minutes making a Reference Call?

‍

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; Background Checks for Employment: What Employers Need to Know.
• Article; How to Conduct a Right to Work Check for Employment in the UK.