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We wrote the (e)Book on Reference Checking
Does your perfect candidate leave the toilet seat up?
- Get a reference every time
- Learn more from your references than dates of employment and salary history
- Overcome reference-checking objections
- Eliminate the fear that keeps you from asking and checking
If this eBook doesn’t help you check your candidate’s references with ease and produce results every time, we’ll do it for you!
The Candidate Reference Check
The history of employer liability for the prior actions of employees stretches back to 1908, when the Louisville & Nashville Railroad Company was sued after a worker’s prank caused the death of a coworker. A shop apprentice named Hodge had a habit of playing pranks on coworkers using a compressed air hose in a dangerous manner. Management was aware of this behavior but did nothing to discipline him. One prank ended with the death of a coworker, John Ballard.Though in this case the prior actions also occurred in the workplace, it laid the groundwork for future expansion of employers’ liability for not doing thorough reference checks.
By 1951, case law had made it clear that employers have a duty to carefully screen potential employees for behavior patterns that put customers or the public at risk. In Fleming v. Bronfin et al, a grocery delivery driver assaulted a customer after being hired without reference or background checks.  The justification for holding the employer liable is that the simple act of asking the right employee reference questions would have revealed that he had a habit of working under the influence, putting customers at risk.
Reasons Reference Checks Aren't Done
By the 1970’s the negligent hiring theory of liability was common practice.  In the modern era, it is more important than ever to get hiring decisions right the first time because hiring the wrong person could lead to costly repeat candidate searches or liability issues later on.
Given this history, it seems almost inconceivable that employers would hire any candidate without a thorough reference check, and yet there is a common (albeit misguided) fear of doing reference checks. Some employers fear that many reference check questions are possibly illegal in some way. While it is true that a combination of state and federal laws potentially limit the questions to ask a potential employee, this list is short and easy to manage. For example you can maintain a list of blacklisted reference questions or a precompiled reference check form with whitelisted questions that are sure to be safe.
Another deterrent to thorough reference checking is the cost involved. Checking references is a labor-intensive process, involving calls, emails, and potentially lengthy conversations with several people. With an employee reference check and employment verification costing between $50 and $300 per candidate when using professional reference check services, it is not feasible to check every person who applies for a job.  With an average of more than five candidates interviewing for each job position filled, costs could easily add up. That is why typically only late-stage candidates are subjected to a thorough reference check. Unfortunately, the later in the process you get, the fewer alternate candidates you have to choose from if a candidate doesn’t pan out due to issues revealed during the reference check process. This could influence a company’s motivation to do the minimum possible check to maintain the appearance of thoroughness while rubber-stamping a favored candidate.
Reasons to Do a Reference Check
Perhaps the biggest source of friction is the time and effort required to do a reference check. A company looking to hire a candidate will need to make calls and send emails to former employers and other reference providers, and wait for follow up. The long cycle of calling, leaving voicemails, and following up takes a toll on both the hiring company but also the companies providing references. Reference providers in particular have little incentive to act quickly, since helping former employees provides no benefit, and due to the common fears described above, they may actually perceive possible harm from providing negative information in response to reference check questions. Additionally, modern background checks involve online research to verify claims made by the candidate. Increasingly, the answers to many personal reference check questions (including off-limits questions) can be found through social media searches. Employers who perform social media searches have to avoid the appearance of bias when using this readily available information.
At the most basic level, a simple set of reference check questions can be used to confirm a candidate’s honesty. If the candidate believes with certainty that their future employer will actually be speaking with their references the candidate will be significantly more truthful during the interview process. In a competitive job market, pressure is higher than ever to exaggerate or completely fabricate details on resumes, job applications, and interviews.
Because candidates know that the probability of a full professional reference check is low, there is little risk if candidates stretch details in their work history, even if the most cursory reference check questions would quickly reveal this dishonesty. A small detail such as changing a job title or changing the start and end date of a job would likely go unnoticed, but a 5 minute call to the HR department of a candidate’s previous employer would quickly confirm or refute it. Establishing a pattern of honesty or dishonesty at this stage of the process serves as a reliable indicator of future patterns of honesty once employed. An employee willing to lie on a resume or job application will likely be willing to lie to customers or superiors after hire.
Selecting the right personal reference check questions will also help you confirm that a potential employee has the right qualifications for the job. Although it is not an exact science, employment verification at least confirms that candidates actually performed work in roles comparable to the current job opening.
Confirming an applicant worked in a particular position at another company for a significant period of time gives you the confidence they were more likely to be a competent contributor at that company, therefore he or she can be reasonably expected to be competent at your company.  In addition to confirming employment start and end dates and position, it is possible, though not guaranteed, to get salary information. Base salary, bonus, and benefit information supplied by a former employer is invaluable when entering negotiations when an offer is made. Keep in mind that some states such as California prohibit you from asking about past salary history or basing salary offers on past salary information. In the absence of objectively-verified information from a neutral third party, employers are forced to rely on the word of candidates, who are motivated to present themselves in the most positive light. 
An Additional objective reference check you can perform are verifying educational credentials. Checking a degree is a basic check to see if the candidate possesses the basic skills required for the job. In some cases a specific degree may be required, as in the case of medical professionals. Similarly, checking licenses and credentials is a low-threshold check to see if a candidate is qualified to work in jobs requiring professional licensing. Most professional licensing bodies will also provide information on disciplinary action against licensees that can help inform your decision to hire or not. If the profession requires bonding or insurance such as liability or malpractice insurance, you can check prior claims to see if past behavior indicates the potential for future issues if employed.
Other areas to check are a criminal history that may disqualify the candidate. Felony convictions may make insurance more expensive. A history of theft or violence may not be appropriate for employees who handle money or interact with customers. A bad driving record may disqualify candidates for driving jobs. Credit check may show red flags such as high debt or defaults that
may indicate higher risk of embezzling while good credit shows organization and responsibility. Caution should be taken when using criminal background and credit reporting information as there may be state or federal laws that limit the ways in which you can use this information to make hiring decisions.
Is a Candidate Reference Check Legal?
Getting more useful information to guide the hiring decision requires knowing the right questions to ask when checking references. The goal is to get beyond simple verification of information on the resume and job application, and to get to a point where you know this is the right person to hire. To this end, look for reference call questions that reveal the character of the candidate. How did people get along with the candidate, and how did he or she perform on the job?
How did he or she handle stress on the job? What accomplishments, completed projects, awards or commendations distinguished this person from others at the company? Given the chance, would you hire this person again? These are all questions that guide you to to the all-important question of whether to hire this candidate.
Types of Reference Checks
Assuming you pick the right reference check questions, they are absolutely legal. To be in compliance with relevant federal and state laws prohibiting discrimination, you must avoid asking questions that directly or indirectly elicit information about candidates that suggest the job decision will be made based on age, race, sexual orientation, ethnic background, religious beliefs, marital status, or socioeconomic status. Even innocuous questions such as “Do you have a car?” or “Do you go to church on Sundays?” can be problematic.
The former suggests a bias based on socioeconomic status and could be worded “Do you have access to a reliable source of transportation?” while the latter suggests religious bias and could be worded “Are you able to work a schedule that includes Saturdays and Sundays?” As long as you avoid this relatively short list of off-limits questions, you have quite a bit of flexibility in the reference check questions you ask.
Here is an overview of the types of reference checks employers can perform on candidates:
By following a structured process to reference check calls, you make sure the conversation is short and informative, and that you get all the info you need without getting off track.
Save Time & Money
Our Reference Hunter software automates the reference checking process, giving you more time to find the right candidate.