Often seen as a formality, reference checks have somewhat lost their luster in modern times.

Some hiring managers have forgotten their value as a final test of how qualified a candidate is i.e. in providing a window into how they meet desired objectives for customer service, for example.

For others, reference checks feel like so much red tape, with firms going through the motions merely to stay compliant. We’re here to put in a good word for them.

Despite their limitations, well-conducted reference checks can be the difference between making your best hire and choosing a candidate who falls flat.

Done well, they’re a valuable piece of the hiring puzzle to help you assess candidates. They can uncover additional and important insights about things like work style, values, and more.

So, we’ve prepared a reference check handbook to guide agency recruiters and help HR professionals get the most out of the process.

What is a Reference Check?

Traditionally, employers conduct a comprehensive background check to verify a candidates’ credentials. Reference checks are a key part of that protocol.

While the depth and nature of the information collected can vary across companies and industries, the gist of it remains the same.

Employers perform reference checks by contacting previous employers, teachers, or respected colleagues of the candidate to ensure they’re hiring the best person.

However, these are increasingly carried out by rote, the reason being that some hiring managers see the process as adding little value beyond confirmation of information the candidate has already supplied.

Nonetheless, reference checks can provide insights not only about a candidate’s qualifications – whether they know how to build apps, for example – and performance in former roles but also their knowledge, skills, accomplishments, and character.

They can also help rule out unqualified applicants.

Employment Reference Check Uses

Reference checking can help with three key aspects of the hiring process–

1. Gaining Deeper Insights

Suppose you’re hiring an SEO professional. Sure, you can tell from their CV if they know the difference between bounce rate and exit rate, but reference checking can reveal more detailed info about personal qualities, strengths, and limitations too.

This helps you distinguish the best candidates from the pool when you’ve done the hard work of keeping your talent pipeline warm during a candidate freeze.

It also helps you find candidates who are a good fit for your company’s culture and ethos.

Reference checks are an extra chance to screen for any discrepancies between stated competencies in a CV and reality as well.

2. Due Diligence

The most common use for reference checks is verifying a candidate’s work history checks out. Some managers conduct their inquiries solely for compliance reasons i.e. to shield themselves from potential legal ramifications.

3. Employee Onboarding

According to some interesting recruitment trivia, 83% of the highest-performing companies begin onboarding before a recruit’s first day.

Reference checks can help you evaluate the soft skills that elude the application process and improve your onboarding journey.

We’re all familiar with how digitalization is an advantage for business communications such as training. Well, you can incorporate referencing insights into how you support your employees once you’ve hired them too.

You can use them to gain insights into what motivates their best performance or their preferred management style.

Drawbacks of Reference Checks

Referencing feels a little unfairly maligned and can deliver value to employers, but we’re realistic about its ability to measure true performance. Candidates are unlikely to include referees who’ll give them an unfavorable reference, for example.

And, while employers are legally obliged to give fair and accurate accounts, referencing is far from infallible in uncovering sticking points or misleading information.

Getting a reference from a current employer can also prove difficult when the candidate needs to be discreet about the fact they’re thinking of leaving.

Kinds of References & Who Handles Them?

A referee provides a professional reference, vouching for a candidate’s credentials and weighing in on their overall suitability for a role.

Some companies only give a professional HR reference, verifying job title and dates. In other cases, past employers chosen by the candidate can provide a professional (character) reference that sheds further light on their performance.

Written references via email are the most common kind, and you can stipulate they must come from an email with a company domain. This reduces the chances of fraudulent references.

A phone call can also be a good way of performing reference checks, though referencing fraud is a risk.

For your business, you can use automated referencing software to free up human employees, just as small businesses implement CRM systems to automate processes that get in the way of their selling.

When handling referencing, businesses can conduct checks on their own or use third-party referencing services. Third-party checks are a good option when you’re unsure about conducting checks and wary of leaving yourself open to negligent hiring lawsuits.

Stick to work-related topics and steer clear of areas that could catalyze discrimination claims.

If you handle referencing internally, you might worry about the potential for employers to put a thumb on the scales of your decision-making. Inconsistent questions during checks can bias outcomes and prevent candidates from getting a fair shake.

One solution is organizing your information so you can compare candidates according to pre-set criteria. For example, try organizing your findings into separate buckets of relevant skills to see how candidates stack up.

The biggest concern for employers is how time-consuming reference checks can be. If you’re down about a DIY vetting approach, entrust third-party experts with the responsibility to give you peace of mind and save time.

Or suppose you’re a firm striving for a paperless law office</ a>. Third-party services can streamline the recordkeeping process and store all your documents in the event of future complaints.

4 Best Tips for Conducting Reference Checks

1. Get Feedback

The interview process involves multiple colleagues, so solicit feedback on a video call using your VoIP phone number. Use this to inform how you collect references.

Remember, your goal is to discover relevant insights beyond the basic facts in a candidate’s resume. Enlisting those involved with the interview can highlight relevant areas of concern, decisive factors, or follow-up questions. Let this guide what you ask in your reference checks.

Liaise with the candidate directly to identify the people in their orbit best placed to provide the information you need.

2. Be Clear About the Role

Referencing is designed to give you the best possible idea of how a candidate will perform, so be specific about the circumstances and challenges they’re likely to face.

Whether it’s dealing with tight deadlines or handling tough responsibilities, tailor your questions to discover how the candidate has fared in their current role and similar contexts.

You can also use hypothetical questions to infer how an applicant is likely to measure up.

3. Know How to Ask Questions

To get the best read on a candidate’s suitability, you need to ask the right questions, so make these open-ended and specific. A good trick is to include insights already gathered via your questions.

This invites current employers to provide concrete examples of how the candidate performs and handles related challenges.

You can also inquire about intangibles that are harder to verify from a CV – qualities that often come under the rubric of social and emotional intelligence. Ask how well they get on with others, for example, or if they have personality traits relevant to the role, such as empathy or the ability to stay calm under pressure.

Remember motivational and listening skills here too.

4. Workarounds

For all the benefits of reference checks, you can run into challenges when you’re seeking to learn more about applicants. When you schedule a call to a referee, remember to set more store by the facts rather than basing your judgment on factors such as their phone manner.

You may also encounter restrictions on who your organization allows you to contact or from an HR department that’s bound by protocol to confirm only the basic facts about the job role and employment dates.

In that case, consider going down the informal route and seeking references from mutual contacts in your network. If you discover discrepancies between the accounts referees give, always go to the candidate for an explanation that will hopefully reconcile any concerns.

In Final Words

A fatalistic perception of their worth has seen reference checks fall a little out of fashion. Sure, they won’t bring to light every professional skeleton in an applicant’s locker, but by following our checklist, you can delve deeper and gain insights that help you make successful hires.

We hope we’ve given you a better notion of the strengths and weaknesses of reference checks here, so you can plan for your peak hiring season and make it an unparalleled success.

Written by–

Jessica Day is the Senior Director for Marketing Strategy at Dialpad, a modern business communications platform and UCaaS provider that takes every kind of conversation to the next level—turning conversations into opportunities. Jessica is an expert in collaborating with multifunctional teams to execute and optimize marketing efforts, for both company and client campaigns. Here is her LinkedIn.