Even though many companies treat reference checking as a simple formality, it’s worth taking the process seriously. With the high cost of employing staff and the negative impact of a bad hire, getting as much input on candidates as possible during pre-employment screening is essential. Even if only one out of every 50 candidates is filtered out of the hiring process due to a negative reference, you’ll see a return on the time investment you made checking references for all of them.
To get the best results, you need to treat reference checks as more than validating resumes. In this article, I’ll cover the basics of the reference-checking process and explain some key best practices you should adopt before, during and after checking a candidate’s references.
before the reference check — how to prepare.
notify the candidate before checking their references
This will happen naturally if the candidate doesn't supply references in their application; they'll be notified when you ask for the references' details.
However, if you already have the references’ contact details in the candidate’s application, you should still let them know that you will start checking. While there's no federal law that explicitly requires a US employer to obtain consent for contacting references the candidate provided, there are two key legal and professional considerations:
- FCRA compliance: If you use a third-party service (a vendor) to contact and vet references, that report may be classified as an "Investigative Consumer Report" under the Fair Credit Reporting Act (FCRA). If so, you are legally required to provide the candidate with a written disclosure and obtain their written authorization before the vendor proceeds.
- Current employer risk: You should always ask the candidate if it is safe to contact their current employer. Doing so without permission could jeopardize their current job and lead to an adverse employment claim, even if it's not strictly illegal.
Beyond these legal requirements, notifying the candidate before checking references is a matter of trust and respect. It gets the relationship between you and the potential new hire off to a good start and allows them to prepare their references, ensuring you get the most helpful feedback. As always, consult the experts to ensure your reference-checking process fully complies with the relevant state and federal regulations.
make sure one of the references is a former manager
Getting input from former colleagues, especially if they work closely together, can be precious. These colleagues will likely have valuable insights into the candidate’s strengths and qualities that a manager might not have.
However, a manager is ultimately the one who is responsible for assessing performance and can provide the best insights into how the candidate is as an employee—and not just as a coworker. In the US, the vast majority of companies take reference checking seriously: most surveys find that 80% to 90% of US employers conduct reference checks before hiring. This commitment underscores the value US employers place on verifying information.
Despite this high rate of checking, employers frequently find issues that lead to changing their mind. Research shows that up to 69% of US employers have changed their opinion of a candidate after speaking with a reference (either becoming more or less favorable).
By getting hold of a former manager, you’re much more likely to get valuable input that makes a difference to your hiring decision, helping you avoid being in the minority of employers who skip this crucial step and potentially miss a red flag.
don’t forget to consult your ‘internal references’
In large companies, multiple people are usually involved in the hiring process. Not all of them participate in interviews, but they may still have met the candidate in a more informal setting. When trying to build up a picture of the candidate, don’t forget to ask these colleagues for their opinions. They may be able to provide input and contribute new perspectives based on their own departments or job roles.
Before making the commitment to employing someone, getting this internal feedback can ensure the new hire fits in with the company’s culture and values.
decide how to conduct your reference call — email, phone or video call?
A wide range of solutions on the market streamline the reference-checking process with automated emails. These reference-checking software tools send requests and store feedback automatically without a human reference checker. Large companies with a steady stream of new hires can really reduce the burden of administration by using tools like these. However, email can’t provide the depth of a ‘live’ conversation conducted over the phone, in a video call, or in person. A phone or video call is the best medium for senior positions in highly critical roles.
during the reference check
how long does a reference check take?
The reference-checking process can take one or two weeks, depending on the number of references and the time it takes them to reply. The length of the reference checks, whether done over the phone or via video call, will also vary. If you want to do more than simply confirm the candidate’s employment history, you must set aside some time. However, the conversation shouldn’t be so long that you struggle to navigate your notes or the reference struggles to find time. A good rule of thumb is to book an hour and finish earlier if you get answers to all your questions sooner.
provide an accurate job description
Don’t just jump straight into your questions. Once you’ve confirmed you’re talking to the right person, give them some information about the role you’re hiring for and the duties the candidate will take care of. It’ll help the reference adapt their input to your needs. It’s also essential for getting accurate feedback. Even if the candidate was a star employee in a previous role, they wouldn’t necessarily be the best choice for the job you’re hiring for.
stay alert for ‘red flags’
In most reference checks, the reference will give positive feedback. If the candidates themselves have chosen them, it’s doubtful they’ll make any strong criticisms. However, pay attention during the conversation for small details that hint at something negative. If they turn out to be something significant, you risk making a bad hire. However, ‘red flags’ shouldn’t disqualify the candidate thoroughly. Instead, make a note and follow up with the candidate directly. Surveys of senior managers in the US show that around 34% of candidates are removed from consideration after reference checks, so stay alert for information that could make them a less attractive prospect.
after the reference check
compare findings from reference checks and interviews
Combine your findings from all the reference checks and your main learnings from any interviews with the candidate. Try to find an overall picture of the candidate and look for patterns. Do you see the same things coming up multiple times? If so, it could be worth following up on them with the candidate in an additional interview, particularly if they could be seen as negative.
make a hiring decision
Candidates know that reference checking is typically the last stage of the recruitment process before a job offer is made. So once you’ve checked their references, they’ll await your reply. Save them some stress and make a good impression by getting back to them as quickly as possible. Making them wait a long time or failing to reply completely isn’t just impolite — it severely damages your employer brand.
improve your hiring process with our reference check checklist
This article should have given you a basic framework for a great reference-checking process, but if you want more detail, make sure to download our Excel checklist. It covers the key steps to follow throughout the process and makes it easy to delegate and track progress for individual reference-checking tasks. Take a look, and feel free to adapt it to fit your company’s unique needs.
