what is a reference check and why are they important?

Studies show that about 95% of employers already use reference checking in the hiring process. However, they often fail to see its total value. 

In today’s highly competitive job market, it’s more important than ever to make sure your company is hiring the right candidate the first time around. When done right, reference checking can help you do just that. For example, reference checking is an ideal tool for determining job and company fit.

To make the most of your reference-checking process, it’s essential to understand precisely what this recruitment tool is, what value it adds to the hiring process and how to gather the insights you need to choose the right candidates.

Keep reading to learn more about the importance of reference checking.

what is a reference check?

Reference checks are typically conducted near the end of the recruitment process. They are used to gain insights about a specific candidate by requesting feedback from current and former employers This feedback is typically acquired by asking the reference a variety of questions regarding the applicant, either through a phone call or email.

The reference checking process is a straight-forward process. The candidate provides you with a list of current and former employers, managers and professors who have first-hand knowledge of their workplace skills and attributes. Using the contact information provided by the applicant, your job is to reach out to each reference and ask them a series of questions, such as ‘How would you rate the candidate’s ability to work on a team?’

Since this process is typically done during the late stages of the recruitment process, you only need to conduct a reference check on the candidates you have shortlisted.

While the process may be simple, the trick to obtaining useful information  from the reference check  is to ensure you ask the right questions. In other words, a reference check is not something you want to do without having a plan in place.

why are reference checks important?

There are several reasons for conducting reference checks, including:

obtain relevant information

References are oftentimes one of the best sources for gathering work-related information about the applicant. In fact, references may be the only source, other than the candidate themselves, that has first-hand knowledge of the applicant’s workplace performance and on-the-job skills.

Using the right questions during the reference checking process can provide you with a wealth of information, such as the applicant’s strengths and weaknesses, ability to meet deadlines and willingness to learn on the job. This in turn can help you determine if the candidate has the right skills and attributes for the position.

determine job fit

As a hiring manager or HR professional, you already know that having the right skill set is just one factor to consider when selecting the right candidate. Besides job fit, you also want a candidate that is a good fit for the boss and company. 

Conducting reference checks can help you to determine if the candidate will be a good fit. After all, who knows the candidate better than someone who worked with them day in and day out. Typically, you can tell by the way the reference responds to the questions whether the applicant is well respected and valued or just another employee.

Be sure to include some questions that directly link to your company culture. For example, if your company has a workplace culture built around collaboration and team building, ask the references questions regarding the applicant’s ability to work with others. Or ask for instances when the applicant worked in a team to accomplish a specific project.

verify applicants’ information

One of the most important benefits of reference checking is that it can help you verify facts on the applicant’s resume and job application. Don’t hesitate to ask the reference to verify some of this information, such as job title, job duties, workplace responsibilities, training and skill sets. The reality is that current and former employers are often the best person to judge the candidate’s skills and aptitudes.

It’s also important to realise that references often provide their personal opinions that could be based on a variety of factors. It’s good to keep in mind that most applicants only provide the names of references that they know are going to say good things about them. To get clarity on some of these answers, be sure to ask follow-up questions. For instance, if the reference states that the applicant is a good leader, follow up by asking what specific leadership skills does the candidate have?

identify red flags

Another benefit of reference checks is that they can alert you to potential problems with the candidate. For example, if the reference’s answers don’t align with the applicant’s resume and job application, it could be a sign that the candidate embellished some of their skills and experiences.

The reference may also inadvertently hint at toxic workplace behaviours, such as frequent unexplained absences, tardiness, argumentative or offensive communication traits.

Another red flag to look for during the reference checking process is if the reference cannot answer simple questions regarding the applicant. This may indicate that the reference and the applicant didn’t work closely together, so they may not be the best judge of the candidate’s on-the-job performance.

tips for conducting a reference check

There are a few things you should consider when a conducting reference check, including:

set aside enough time

Reference checks are very valuable to the recruitment process, but they can be very time-consuming. If you are doing this by phone, be sure to set plenty of time aside to properly conduct the number of reference checks necessary. You can also consider using automated reference checking software, like our Relevate Reference, to complete the process in a fraction of the time. 

ask direct, open-ended questions

Don’t make the mistake of asking a series of yes or no questions. This type of questioning provides little real value and hinders the references’ ability to provide insights into the applicant’s true capabilities. Instead, stick primarily with open-ended questions that give the reference plenty of time to provide details about the applicant’s skills and abilities.

request work-related references

It’s a well-known fact that applicants are most likely to provide the names of references they trust to provide a positive review. While this practice really can’t be stopped, you can require the applicant to only provide names of people they currently work with or have worked with in the past and to include at least one person who directly managed them. You can also request that the applicant not use family members or friends as references, even if they have worked with them before. Taking these steps can improve the quality of the reference by ensuring they have first-hand knowledge of the applicant’s workplace skills.

understand your legal responsibilities

You must understand the legal limits when it comes to reference checking. For example, many regions in Australia do not allow employers to request personal information about the candidate, such as their age,  if they are married or have children. These legal limits typically apply to the  references as well. It’s vital that you take the time to connect with your legal and data protection team to better understand the legal limits in your specific area to avoid any compliance issues.

prepare the questions

It’s also a good practice to have a list of prepared questions ready before beginning a reference check. This step can not only help you stay on track and make sure you gather pertinent information, but it can also help you avoid these types of compliance issues.

examples of reference check questions

Before conducting the reference checks, take the time to obtain input from other members of the hiring team. Ask them to point out any areas of the candidate’s application that require more input or any areas of concern. You can use this information to ask very job-specific questions during the meeting with the reference.

Typically, reference checks start with several basic questions just to confirm that the reference did in fact work with the applicant. For example:

• ‘During what time frame did you work with the candidate?’
• ‘What was the candidate’s job role?’
• ‘What specific job duties and responsibilities did the candidate have in their role?’
• Then you can move on to more work-related questions, such as:
• How would you rate the candidate’s ability to handle stressful situations?
• How well did the candidate handle conflicts at work?
• How do the candidate’s work abilities compare to others in similar roles?
• Do you know why the candidate quit?
• Would you rehire or recommend the candidate for this position?

Next to this, give the reference the opportunity to provide additional details pertaining to the applicant, address any concerns or clarify any previously given answers.