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

I’ve made a few mis-hires in my time. I learnt from them and won’t repeat the same mistakes. Bearing in mind I would never dismiss an employee that was valuable to the business, I find it incredible a potential new employer wouldn’t ask for a reference. If they had asked I’d happily tell them.

Sadly they don’t and then they repeat the same mistake I made! For example I remember dismissing an employee whose personal life were constant excuses for poor performance at work. Years later I met one of their next employers who said “we employed someone who used to work for you. They were a nightmare, we could never get them to work!” I replied “well some things never change, I couldn’t get them to work either, that’s why I dismissed them.” They looked shocked, as if they had been sold a lie at interview. It also dawned on them, if only they had spoken to me first, it would have saved them an expensive mis-hire.

Please, learn from their mistake, and thousands of other employers making the same mistake – take references!

How do you know that everything you’ve been told until this point hasn’t been lies and half-truths? They could have used a professional CV writing service. Their LinkedIn profile could have been optimised by a specialist. They could have read loads of 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. This illustration represents what happens to many employers, and what could happen to you if you fail to take references:

When introducing Reference Calls into a company’s hiring process, I challenge convention by recommending they are taken before making a job offer. Taking references at this stage avoids hiring managers getting into a terrible dilemma that I’ve seen so often. An offer is made and seems like a foregone conclusion. A half-hearted attempt is then made to get a reference, but if the reference is bad, it seems almost impossible to withdraw the offer.

The sequence of steps that I’m recommending shouldn’t come as a surprise to candidates if you prepare them properly. Throughout the recruitment process, we’ve been using the PORC to whittle out dishonest candidates and remind the remaining candidates of your intentions. By this point, the candidate knows you’re serious.

Now you must fulfill that promise by speaking to their former employers (you’ll only speak to their current employer if you make a job offer which they accept). It’s critical that you conduct Reference Calls. Nearly all CVs are inflated, and all the information you’ve been told so far has been from the candidate.

I remember interviewing one “great” candidate. When we took references, we became suspicious. It turned out that the person we were speaking to on a mobile number was the candidate’s girlfriend, and when we directly contacted his supposed employer they’d never heard of him! He’d taken the gamble that we wouldn’t follow up on the Reference Call.

Always Make Reference Calls

Some employers overlook reference checks because:

They don’t understand the value of getting more information to make a better decision.
They have low expectations based on past experiences because they’ve used traditional reference checking and been fobbed off with one-line replies confirming dates of employment.
They don’t ask for, and don’t get, very much information.
They accidentally make a job offer without being clear that it’s subject to satisfactory references.
They think they don’t have the time. Believe me, the time it takes to make a couple of Reference Calls is far less than the time it takes to manage a Poor Performer.
They’re tired. Having got this far, they just want the recruitment process to be over.

You might think that following up references is too time consuming. Would you rather invest time now and make a well-informed decision, or have to put in even more time later to correct the mis-hire?

I once saw a company cut out Reference Calls from their recruitment process. Unsurprisingly, their mis-hire rate increased astronomically. They were burned badly and now do Reference Calls for everyone.

Note: Even if a candidate has come via an employee referral, it’s still essential that you make Reference Calls. The referrer might have only known the candidate for a limited amount of time and in a specific role. The referrer might be biased because they like the individual, and for that reason you must get a more balanced perspective.

Don’t Use a Reference Checking Agency

Most reference checking agencies are over-glorified box ticking exercises. They usually send a templated letter to previous employers asking for confirmation of dates of employment and very basic information. When they don’t get an initial response, they’ll follow up. These checks are most useful for verifying qualifications or safeguarding requirements.

But they are unlikely to provide the sorts of insights you need for effective recruitment. A referee may tick a box indicating satisfaction, but you need context, you need to know what else they’d like to share in confidence.

For this reason I don’t recommend using reference checking agencies. When I start consultancy projects, I can often save my customers my fee, just by cutting a reference checking agencies – whilst still delivering a better outcome for the employer.

If the candidate came from a recruitment agency or headhunter, don’t allow them to take references as their commission depends on the person being hired. They may even have coached candidates in how to present well at interviews, so there’s even more reason to be diligent.

This is why I recommend that a member of the Recruitment Team does the Reference Calls. It also helps to have someone with lots of business experience who can understand how credible the referee is.

You Choose Who to Speak to

You should take control and tell the candidate who you want to speak to. While the candidate can provide guidance, you should already know the name of their manager from the interview. Left to themselves, candidates will have the good sense to only nominate referees who they are confident will say something nice. Review your notes to find people who can provide real insights. This usually doesn’t include HR because they can only confirm basic information and rarely have first-hand knowledge of the candidate. Ideally, referees will include a minimum of three recent former bosses or line managers.

While you can’t usually speak to their current employer before the candidate gives their permission, you may be able to find an ex-colleague who is available to speak to you. You can also be a bit creative: if the company closed and made everyone redundant, could you speak to a former customer?

Candidates Should Arrange Reference Calls

Again, I’m going to break with convention here. Typically, employers make initial contact with potential referees, usually in writing. This is often a slow and ineffective process that results in the equivalent of name, rank and number.

Instead, ask the candidate to set up Reference Calls. The imperative is then on them to manage timings and relationships to ensure a smooth process for you where you aren’t chasing people.

You’ll find that 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 run into resistance where it appears the candidate is intentionally obfuscating or it proves hard 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.

Always Expect a Bad Reference

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

I also expect a bad reference because it is inevitable. As a keep saying: people are not perfect, so recruitment is not perfect.

Reference Call Script

This script is powerful because it positions the conversation as a personal discussion as opposed to a formal business reference. You can download a copy of the Reference Call script. We ask straightforward questions in a helpful order:

“Hello {name of referee}, thank you for accepting my call. As {candidate} mentioned, we’re considering offering him/her a job, and I’d really 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}?”
You want to ensure that there are no conflicts of interest. I once found out that the candidate was in a relationship with their line manager, hence I was going to get a biased review.

“I understand they joined you in {February 2020} and left in {August 2023}. Does that sound about right?”
Don’t ask the referee questions they’ll struggle to answer, so avoid asking, “When did they work with you?” Look out for inconsistencies between what the applicant told you and what the referee is saying.

“What were their biggest strengths?”
Hesitation, lukewarm or ambivalent praise may be damning. A truly positive reference communicates a sense of enthusiasm and admiration.

“What were their biggest areas for improvement back then?”
“Back then” is important because it gives them permission to talk about the candidate’s weaknesses in the past 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. Remember a 6 is really a 2. You’re looking for a consistent 8, 9 or 10. I personally wouldn’t be happy with a 7.

“The person mentioned you might say they found […] challenging. Can you tell me more about this?”
The phrase “you might say” is important because it communicates that they have permission to discuss this point. Obviously, only use this question if an issue came up at interview.

“What advice would you give me for how best to manage them?”
This can uncover useful information, but remember that not everyone’s opinion is valid. I’ve met some awful managers who don’t have a clue about managing staff. And they may simply have hired the wrong person for the role, so keep negative comments in context.

“Why did they want to leave?”
Is the answer consistent with the reason the candidate gave at interview? Don’t lead them by mentioning the reason the candidate left, for example, “I understand they resigned, is that correct?” They’ll normally agree and you won’t understand why the candidate resigned or if they were actually dismissed. Don’t accept, “He left to pursue other opportunities.” This is the business equivalent of the politician’s excuse of “leaving to spend more time with the family”.

“What would you do to ensure they settle in quickly?”
Not only will you learn something about the candidate, you’ll also understand how best to induct the candidate once they join.

“Would you rehire them?”
This is a great final question. You’ll get a clear sense of what they really think of the candidate and whether they’re happy or sad that they left (even if more from their tone than the specifics of what they say). Be concerned if a candidate hasn’t mentioned past failures that you uncover during reference checking, and investigate further as necessary.

People don’t like to give poor references because they won’t want to hurt their former colleagues and want to avoid conflict. People want to feel good about themselves, and preventing someone from getting a job can put a downer on their day. For these reasons, learn to read between the lines for riskier candidates.

Tip: Purposefully don’t tell the referee about your company and the role until later because this information may bias them. Only near the end explain what the candidate will be doing in the role and ask for the referee’s view about their suitability.

Keep It Legal

A Reference Call is part of the recruitment process, and therefore you must not ask questions that could be considered discriminatory. Avoid asking about a candidate’s marital status, age, religious beliefs, kids etc.

Remember too that a Reference Call is confidential. The information gleaned should not be shared with the candidate. This can become complicated if you need to ask the candidate about an inconsistency you uncovered.

Thank the Referee

Make sure to thank the referee and mention that you’re happy to reciprocate if required in the future. If possible, send a thank-you email and make a LinkedIn connection as well.

This makes the referee feel positive about taking the time to provide a reference, making them more inclined to do so in future. (Hopefully this will encourage more employers to be willing to provide in-depth references rather than just the name, rank and serial numbers that employment lawyers sometimes champion.)

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 seems 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.”

When a referee deflects or refuses, their tone often tells me a lot. It might make me reconsider whether to offer a job. At the same time, I’m also cautious about placing too much importance on the actions of a stranger.

Ultimately, you can’t force someone to provide a reference, and bear in mind that you’re asking them to give up their time for no personal gain at all.

Re-Evaluate If They’re Still a Great Performer

At this point you might be desperate to fill the job and start to feel almost that the candidate is preordained for it. A feeling of urgency might be pushing you to proceed regardless of the risks.

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

I’ve often found that seemingly insignificant points raised in Reference Calls turn out to be about 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 see this until an employee is dismissed, and upon reflection realise they were implicitly warned in the Reference Call.

Don’t be overly optimistic or only hear what you want to hear in the rush to get the job filled. A little more time spent digging now could save you the time and effort of having to go through a dismissal and rehiring process in future.

What to Do with Bad References

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

If a reference was particularly bad and the referee was credible, I’d recommend that you discuss it with the candidate to establish some context. You have to be careful here because information given to you may be considered confidential. A good conversation starter might be: “I had a chat 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

Because Reference Calls are so valuable, I try really hard to find references.

If a referee has left a company, I’ll try to track them down using LinkedIn and public databases such as Companies House (for UK based directors). If this doesn’t work I’ll often ask for copies of payroll/tax documents which often show the start and finish of employment along with confirming salary details.

If they are a recent school leaver or graduate, I’ll still try contacting their form tutor, head of year, or significant teacher. Perhaps they attended a youth organisation like Scouts, in which case I’ll reach out to a leader.

Regardless, if I’ve tried and failed to get proper references I tread carefully. I’d certainly 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 be thinking “Reference Calls sound like a lot of work! I’m really confident a candidate is a good fit, so I’m going to skip ahead.”

Please don’t. When first working with Recruitment Teams, I often identified recent mis-hires and if they took any references, let alone a Reference Call. I’ve noticed a strong correlation that companies who avoid Reference Calls make more costly mis-hires.

Remember all the costly mis-hires you’ve made. Wouldn’t it have been nice if the solution to avoiding them was spending a few minutes taking a Reference Call?

<div class="grey-callout"><h2>Key Takeaways</h2>You’ve promised a Reference Call, and now you must carry it out to avoid a potentially costly mis-hire. Remember to do the following:<ul><li>Make Reference Calls before making a job offer. When done correctly, Reference Calls are an invaluable tool that reduces mis-hire rates.</li><li>Take control and tell the candidate who you want to speak to.</li><li>At this point you still have the freedom to decide whether the candidate is truly a Great Performer, or to stop and avoid a costly mis-hire.</li></ul></div>

Article Tags:

References

Promise of a Reference Call

Discrimination

Great Performers

Recruitment Mistakes

Background Checks

Written by:

Geoff Newman

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Geoff Newman has dedicated his entire career to recruitment. He has consulted for many well-known international brands, and worked with over 20,000 growing businesses. He has helped fill over 100,000 jobs.

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