Reference Checks 101 June 08 2015

Everything you need to know about conducting reference checks

Employers are becoming increasingly unsure as to how to go about conducting reference checks for potential candidates in an effective and responsible manner.

Nonetheless, we still strongly encourage employers to conduct reference checks before hiring employees.  Conducting reference checks can help employers avoid costs associated with employee turnover and poor performance.

These verifications allow employers to confirm information on the candidate’s resume and sometimes even gain greater insights into the candidate’s skills, abilities, as well as, the quality of their work performance.

In this article, we will explore commonly expressed concerns and misconceptions by employers with regard to conducting reference checks.

Myth:  I have the right to contact former employers whether or not I have officially been given permission to do so by the candidate.

 It is important to have potential employees sign an authorization giving you permission to conduct a formal reference check. In order to avoid any legal liabilities, it is best practice not to contact any references that the employee has not authorized you to contact. 

Myth: I may only contact referees chosen by the candidate. In contrast, other employers believe that if you rely only on the referees listed on a candidate’s list, you’re likely to get a skewed sense of the person.

In either case, the solution is to tell the candidate you wish them to list professional (not personal) referees who have had the opportunity to supervise them directly. The candidate has the right to refuse to list certain references. However, their reluctance may act as a red flag for employers. 

Myth: Reference letters should not be relied on.

This belief stems from the fact that reference letters are sometimes negotiated in severance packages. We recommend simply asking for consent to contact these referees just as you would any other, with the consent of the candidate.

Myth: It is best to email the list of questions to the referees so that they may fill in a standard form.

Though we strongly recommend being consistent with the questions posed to referees, the best reference checks are conducted on the phone, where tone and intonation, even pauses can often reveal more than words.

Myth: There is no sense in verifying references, as everyone will always give a glowing reference.

You may be surprised. Though this may be true in some cases, in other cases, references can be extremely revealing. Some employees who may have been poor performers may list a reference because they suspect the person will not speak negatively of them, or because they are not convinced the employer will give them a call.

Other Helpful tips for Conducting Reference Checks

• We recommend employers verify from 2 to 3 work related references. Ideally these would consist of former supervisors to the candidate.
• Always introduce yourself to the referee, by identifying yourself, your organization and the reason for your call.
• It is very important not to ask referees any questions that would infringe on the candidate’s human rights. For instance, never ask any questions pertaining to or that would reveal the candidate’s age, family status, nationality, race, religion, etc.
• Be respectful of candidates; only verify a candidate’s references if prepared to offer the candidate the position should the reference checks go well. Should the reference verifications reveal that the candidate is not a right fit for the position, only then should you verify references for the next candidate. If you have two or three top candidates, it is okay to conduct the reference checks simultaneously, but you should not bother wasting time conducting references of candidates you will not be considering for the position.
• Do not refer to the candidate as the successful candidate to the referee, but rather as a finalist, so as to protect yourself should you choose a different candidate as a result of the verification.
• Create a list of questions so that you are asking the same set of questions to all referees, giving you a consistent frame on which to base your decisions. A sample of questions can be found on our site.
• Always be professional, do not press a referee to answer questions they do not wish to answer.
• Consider whether performance issues disclosed by previous employers might affect performance in the new position. They may lead you to the decision not to hire the employee, or simply to monitor these areas more closely during the employee’s probation period.
• Be sure to ask the referee the proper questions. We recommend always including the following questions: “Would you rehire this person?” and “Why did the person leave the organization?” We also recommend ending with an open-ended question such as “Is there anything else you’d like to know about this individual?”
• Keep in mind that some employers may have ulterior motives. They may be resentful to have lost a good employee or they may want a poor performer gone.
• Be particularly tactful when contacting current employers. Only do so once you have verified all other references and you are prepared to extend a job offer and have permission to contact them.
• Lastly, when conducting reference checks, do not “put words into their mouths” so to speak. Document the reference’s answers as spoken; do not re-word it or try to interpret what they are saying.

Everything you need to know about acting as a reference for your former employees.

Employers are more hesitant than ever when asked to act as a reference for a former employee. They do not want to be held liable for slander or for not respecting the privacy rights of their former employees. They are unsure as to which information they have a right to disclose.

Myth:  You are obligated to act as a reference for your former employees when you are requested to do so. 

This statement is false.  Even if the employee is required to provide references to the prospective employer, there is no law requiring former or current employers to act as a reference for employees. To avoid liability, some organizations have implemented company-wide policies that do not allow any references; allowing only confirmation that the person did work there, what their position was and the length of time they were employed.

Myth: I can provide a reference for a former employee if an employer requests information. I don’t need the employee’s permission to do so.

It is important to see a written authorization form signed by the employee permitting you as a reference before providing any reference on their behalf.  This helps to minimize the likelihood of any legal liabilities. Employers should implement a policy on providing reference checks and ensure all employees are aware of the proper procedures. Most importantly, you want to make sure that all of your supervisors and managers know to ask for proof that the former employee has authorized them to be contacted as a reference before doing so.

Myth: It is safest to always give a positive reference for former employees regardless of their job performance.

Some employers view these situations as an inexpensive way to get rid of an under-performing employee, with minimal effort and pay. They may see this as an opportunity to let go of the employee without having to provide them with severance pay. In these situations, it may be safest not to say anything at all or to simply confirm employment with your organization.  Ideally we would encourage employers to have Human Resource Professionals give out these types of references. It is important to remember that employers choose to conduct reference checks because they believe the best predictor for future behaviour is past behaviour. 

Intentionally misleading an employer in any situation may hinder your credibility, and may cause the new employer to lose respect for you and/or your organization. It is important to be tactful in these situations, but also to be as respectful as possible for all stakeholders involved.

Myth: You can get in trouble for giving a negative reference.

It depends. However, we always encourage employers to proceed with caution when giving out references that may be perceived as negative by the former employee. Again, under no circumstance may an employer give out a false or misleading reference to the new employer.  This means employers must be very careful to base their statements on facts and not opinion when speaking of a former employee, especially if these statements may hinder the employee’s reputation.  Otherwise, these statements may be deemed to be defamatory. As stated previously, it is a best practice to ask to see a signed consent form on behalf of an employee before giving out a reference. It is important to note however, that a signed consent does not give employers carte blanche to criticize former employees in any which way. Former employers are within their rights to give a less positive reference if it accurately reflects the employee’s performance, although such statements must be very well calculated and thought out. Remember, you are not required by law to provide a reference, so if you are not comfortable in doing so, politely decline to do so. If a former employee asks you to be a reference but you do not believe you would be able to provide a positive reference, you should let the person know that you are not prepared to act as a reference.

Myth: Those who have directly supervised the former employee should be the one’s giving out a reference.

The answer here is yes and no. When giving information on a former employee’s performance, this information should typically be given by their supervisor and/or manager, not a coworker.  Naturally, in most cases an employee’s direct supervisor is in the best position to assess the employee’s performance. However, if an employer empowers all of their managers and supervisors to give out references for their subordinates or former subordinates as they wish, they should be provided with the proper training so as to protect themselves and the organization. Again, ideally, if you have an HR professional on staff, have your employees consult with them, prior to acting as a reference for former employees. Remember to be consistent with whatever practice you choose to implement with regards to reference verifications. We recommend creating, implementing and communicating a standard policy for your employees to follow.