Validity of Reference Checks during Hire Process | DCR Workforce Blog

Validity of Reference Checks during Hire Process

What is the “one” quality that every customer, every vendor and every banker wants to see in the companies and people they deal with?

Consequently, what is the “one” quality that any hiring process should identify in a new hire? It is “integrity”. It colors every interaction of every employee and reverberates thorough the entire value chain, affecting all “moments of truth”.

The bad news:  there is no single “foolproof” method to accurately identify if a new hire has it or not.  The good news: if used intelligently with other tools, “reference checks” help.

Most reference checks proceed along the lines of a robot reading a script:

“What are their strengths and weaknesses, how is their team orientation, how do you rate them on a scale of 1 to 5, would you hire them again, and so on”.  In my own experience, the caller blurts out predefined questions so mechanically that it would put a parrot to shame.   A “script” helps.

But you would have forgone an excellent opportunity to get a deeper and broader perspective on the candidate.

Some of the advantages of a well done reference check mechanism are:

Prevent Neglect Hiring

Failure to take reasonable care during hiring may prompt courts to hold your company liable for negligent or wrongful acts of the employee.  Proper care during hiring process, on the other hand may help your company avoid legal liability for neglect hiring.

Predict Future Performance

Past performance does not guarantee future success (ask your stock broker!). But, given the limitation of human mind to accurately look into the future (at least for now), we are left with using  Sherlock Holmes like deduction and try to form a reasonably accurate picture of what an employee is capable of. Through a well done reference check you can find out competencies of the candidate that are the critical to success.

Verify Credentials

Ronald Reagan’s signature phrase “Trust, but verify” was useful in the context of  U.S. and former Soviet Union relations. And it also is a good guide for pre-hiring. Proper verification of education, experience background, past salary information, certifications, etc. will avoid an unpleasantness later on.

Safe working environment

Proper verification will also yield information on whether the employee is prone to any misconduct that may lead to unsafe environment for others and for the company as a whole for example as a result of   Harassment, embezzlement, theft and other serious illegal activities.

Legal compliance

Reference checks also help in ensuring that any special provisions regarding hiring for specific positions or specific persons or backgrounds are adhered to. Non-compliance of such provisions, in addition to leading to court action will also dent your company’s reputation.

However, reference checks are not a panacea. Some of their drawbacks include:

  • Bias on the part of a supervisor or a co-worker may vitiate the quality of information.
  • In most cases, though, the opposite may be true: a positive bias and leniency affect may lead to overtly positive feedback and avoidance of negative feedback.
  • References provided by the candidate himself, may be misleading.
  • Candidates’ consent may be compulsory for specific checks, depending on the laws applicable.
  • Lack of expertise on the part of person doing the reference check may not yield the right results.

To overcome some of the limitations, the person doing the reference checks should be trained properly in eliciting the relevant, broader information.

A 360 degree feedback from the candidates’ managers, peers, direct repartees and clients will help in seeing the information from multiple perspectives. You can even get feedback from your own network or using Google to get one more perspective.

In summary, reference check is a useful process that, like any other process or tool has its drawbacks.  For a new hire process, its results should not be considered in isolation.  Before making a decision on the new hire, its results should be combined with those from other tools like structured and unstructured interviews, work sample tests, personality inventories, trainability tests, etc. You may then hope to get as close to identifying the integrity of the candidate as one possibly can.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.