Why are you wasting your time with reference checking?

The poor cousin of the recruitment process is the obligatory reference check. Too often it is nothing more than a perfunctory procedure to conclude an exhausting number of interviews.

Most reference checks are the outcome of a telephone conversation, as most recruiters will attach little weight to any written references. Many companies have policies prohibiting managers from providing written references, in light of potential litigation. Often the risks of providing references are overstated, resulting in limited information being provided, due to concerns about negligent referral or defamation. Privacy laws govern the contacting of referees and keeping of information. Though recruiters adopt a code of professional practice, the risk of hiring managers using their informal network to get anecdotal half-truths remains problematic.

A reference check is not a fishing expedition or idle gossip, but a structured and important part of the hiring process. Research has indicated that reference checks have about half the validity of structured interviews.

The declining value of reference checking is because it is badly done, rather than being of little value. The big challenge for recruiters is to develop a new and better way of conducting reference checks with a higher validity so that they can be more useful.

A Strategic Approach to Reference Checking

There are three very deliberate and strategic actions that recruiters can adopt to achieve significantly better results from reference checking. Having successfully implemented this approach in a number of companies, have also resulted in better retention of top talent.

(a) 360 Reference Checking

Extrapolating the benefits from 360 feedback systems, recruiters need to adopt a wider and more comprehensive approach by including:

EN Executives (one over one); Direct Manager; Peers; Direct reports; Clients and customers.

-It It is not sufficient to conduct only a minimum of two reference checks, which seems to be the general practice in many companies.

(b) Competence based Reference Checking

Often companies neglect the opportunity to assess competencies throughout the recruitment process. An ideal process would include screening, interviews, testing and reference checking – often the first and last are omitted or not performed as well.

Even during psychometric assessment there is often insufficient linkage to the specific position description and identified role competencies.

By clearly defining key competencies and developing structured reference checking techniques, a continuum of competence can be identified and validated throughout the
recruitment process.

(c) Integrated Reference Checking

By consolidating the richer feedback of a wider group, information can be interpreted and validated. It is important to keep in mind that some referees may have worked with the candidate at different companies, which may add a different dimension in terms of performance results. Behavioural comments should however be consistent.

Requests for reference checking to be partly handled by an external recruiter and partly by the HR Manager or hiring manager should be strongly resisted. It is imperative that one person conducts all reference checks, otherwise the validity of the reference check will be variable.

Taking Action

In summary, companies can significantly influence the factors that determine the validity of reference checks. Recruiters can make a real contribution by improving the existing referencing checking process. There is no need for a non-rational fear that the reference checking process will capsize the recruitment just before landing the appointment.

Not only should reference checking assist to identify the competent but corrupt individual, but it actually reinforces the suitability and employability of good candidates, by providing a more complete process.

Reference checking is an important step in the recruitment process and needs to be elevated to equal status to other stages. The consequence of this for candidates will be to take much more time in discussing their career objectives and recruitment activities with their referees.

A well-prepared referee who has some understanding of the role that the candidate is being considered for will provide more useful and pertinent information during a more strategic reference check, making reference checking a more valuable recruitment activity.

Comment by Will Branning on July 6, 2010 at 1:33pm: Very good article. I agree that reference checks should be more than just another "required action step." Doing it properly requires identifying key areas to developed structured questions from & asking these same questions to all of the references.

Frankly, I could do much better in this area!

Comment by Greg Moran - Chequed.com on July 6, 2010 at 3:40pm: Charles, excellent article. Here is our take on this ...

There are really four things that we consider paramount to the new model of reference checking:
1.) Predictive / Job Relevant – You hit on this above and it's a biggy. Ensure that the questions being asked are competency based and relevant to the actual position. The old way of the generic and superficial conversation about the candidate is just not going to cut it.
2.) Closed Ended / Assessment Based – The closer you can get to an assessment type format, the better. Online reference checking tools can really help in this regard. It ensures job relevance (see above) and provides a simple method to empirically score a candidate. Again, trying to move away from the generic to the rigorous.
3.) Confidential – Why do most reference providers refuse to give info? Corporate policy? In our experience that usually just provides convenient cover. By providing the reference the chance to speak candidly, without retribution, they usually will (our experience at Chequed.com is generally over 80% for most managerial and professional positions). Again, much easier with an online reference checking tool.
4.) Candidate Driven – When the candidate is making the “ask” of the reference can not HR or the hiring manager, completion rates go up and quality of the reference soars. The pressure of the conflicted dynamic is removed for the reference and, when the first 3 steps are taken, they are free to open up a bit.

I hope you'll pardon the pitch here but we just did a webinar called "Reference Checking Isn't a Waste of Time ... You're Just Doing It Wrong" that is totally aligned with this article. It can be viewed here.

Comment by Charles Van Heerden on July 6, 2010 at 6:44pm: Thanks for all the feedback and comments – certainly seems to an underused and abused process.

@gbpp - companies that are serious about employer branding understand that the courtship takes place during the recruitment process. A probation period is tantamount to a honeymoon period and usually ineffective as low performers just do enough to stay employed. There is plenty of research highlighting the cost of getting it wrong, both in terms of direct and hidden costs. I am working currently with a client has 45% turnover of staff all leaving in the first six months. Recruitment should not be a lottery. The sad reality is that many managers are happy to have a team of average performers rather than building a high-performance team!

@Will - thanks for the honesty. Most recruiters can do better. In fact, I believe companies should insist on the sort of measures I am advocating. It takes more work and time, but it adds heaps of value and after all, the client is paying a fee. I suspect though that many recruiters see this as potentially knocking out a good candidate, rather than as an opportunity to better sell a good candidate.

@Greg - to be honest, I haven't tried an automated tool, but we are certainly both on the same page that references can be done much better. I think it is important to ensure that all referees are qualified and verified, before providing any feedback. We all know that there is a bit of creative license with CV's and this is one way of getting additional information on project responsibilities (so he was a team member rather than the project leader?). Thanks for your additional comments.

Comment by Charles Van Heerden on July 6, 2010 at 7:42pm: @gbpp - I would rather invest than throwing money away with poor recruitment. The premise of my article is this: include more/right people in your references, include key competencies and integrate the information meaningfully. There is always a cost for sourcing talent - whether it is done internally or by using a TPR.

"A robust sourcing strategy is crucial. That means being clear about the kinds of people that are good for your organization, using a range of innovative channels to bring them in, and having a complete organizational commitment to getting the best." McKinsey - The War for Talent.

Comment by Nicoleta DOGARU on July 7, 2010 at 7:15am: Totally agree. The reference checking is an important step in the recruitment process and it is essential do it right. Personally, I ask for references to clarify the concerns that I have. The assessment based only on personal interview is able to let me decide if the candidate has the skills and abilities required by the job. The nuance interpretations must be validated; and the references could be a valuable method to do it. Of course, the reference checking implies a high level of diplomacy and professionalism. In my opinion, the candidate should provide a list with references, according with the 360 technique. It is not appropriate to check the references without telling the candidate.

Comment by Charles Van Heerden on July 8, 2010 at 4:30am: @Nicoletta - fully agree with your comments regarding diplomatic professionalism to get referees to feel willing to share feedback rather than brief one-liners, making it more of a structured conversation rather than an unpleasant reminder of telephone surveys. The more the candidate prepares the referee, the easier it is in my experience.

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