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Do You Know How to Conduct Effective Reference Checks?

Do You Know How to Conduct
Effective Reference Checks?

As an HR or hiring manager, you are probably wondering if you are handling reference checks effectively. Many times, reference checks are no more than a method for screening candidates out for placement, but they can be so much more in terms of a hiring tool. Effective reference checking can shed more light on candidates before a bad hiring decision is made. More companies are using reference checks for a variety of purposes including:
  • Verifying candidate employment backgrounds to fill in gaps in work histories or other missing application sections.
  • Determining the actual identity of candidates by name to make sure they match up with government identification systems.
  • Eliminating candidates who lie on their applications about their work and educational history.
  • To gather information about past work assignments and responsibilities as they relate to the resume provided.
  • Gaining more insight into the candidate's suitability for the job.
You'd be absolutely amazed if you saw some of the items of interest that come up on job candidates, simply by taking the time to conduct a thorough reference check before offering a job. It also gives you, as the hiring person, more information to make your decision and the opportunity to talk with candidates about any potential issues.

So, here are five tips for effective reference checks:
  1. Get all applicants' written permission to check backgrounds.
    As part of the application process, it's always better to err on the side of caution than to not mention you may be doing a reference check. The Fair Credit Reporting Act states that you must get signed permission from candidates, especially those that involve a third party to conduct the reference check. This can be easily accomplished by adding a disclaimer at the bottom of the application and asking the candidate to sign. Or you can create a release form, ask the candidate to fill in the employer information and sign and date the bottom to give written permission to contact that employer.
  2. Obtain complete work history from candidates.
    As part of every hiring process, you should make sure that all employment candidates fill in the work history section. A resume is not an adequate substitute for providing the name and contact information for every employment reference. Candidates who fail to provide this information generally do so because they either have something to hide, had a negative experience at a former employer's place of business, or are not serious about the work opportunity. It is also legal to ask candidates for additional information that backs up their work experience by requesting copies of old pay stubs, business cards or reference letters written on company letterhead.
  3. Reduce resistance to reference checks.
    When conducting employment reference checks, it's generally the rule of thumb for former employers to provide verification of the candidate's work title, dates of employment and eligibility for re-employment. Even so, some former employers may be hesitant to provide any background information for fear of lawsuits. Break the ice with HR personnel by sending over a faxed reference request, calling by telephone to explain the nature of the company you represent, and then advising them that any information provided will be held in strictest confidence.
  4. Ask only the relevant questions.
    When conducting an employment reference check, it's important to have a list of three to five questions that pertain to the candidate and the job for which they are applying. Get the basic questions out of the way first, such as the dates of employment, position held, duties of that position, reason for leaving, and if the employer would rehire the candidate or not. Then ask in a non-threatening way if there is anything else they are willing to share that will help you make the best hiring decision based on their experience with the candidate.
  5. Keep confidential documentation of any reference information obtained.
    This is very important and can keep you from being accused of EEOC discrimination, negligent hiring or defamation, if a candidate decides to pull that card. Maintain a written record of any conversation and reference information provided by former employers. If by any chance the named reference or former employer refuses to provide any information, document that on the reference form. Make sure to keep any faxed reference forms securely attached to each candidate's application and filed in a locked filing drawer.
Not conducting effective reference checks can cost you...

Remember, it's up to you to be informed about any candidates before making a formal job offer. It is never okay to conduct a reference check after a job offer is made and accepted; to do so would be illegal under present employment and equal opportunity hiring laws. Taking the time to conduct thorough reference checks can take time, but this wise action can save you in the long run because you avoid making a bad hire.

Need help with putting together an effective reference check policy? We can help! Call us today to discuss a reference check program that will help you avoid making a costly mistake.

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