Want to Hire the Best? … Then Check References!
By James T. Stodd, SPHR
For quite a few years now I’ve been teaching classes on employee recruitment and selection, and continue to be almost “shocked” by some of the things I hear and learn from my students about what their employers do and don’t do. In particular, I’m alarmed by those who say their employers don’t check references on job candidates, won’t respond at all with the reference checking activities of other prospective employers, or will only do so by giving out little useful information about former employees (e.g., dates of employment, positions held, and possibly final compensation).
I even know of employers who have established policies prohibiting managers and executives (often including the HR staff) from providing written letters of recommendation or responding to reference requests, either at all or with anything beyond the very basic information.
So it seems the days have gone by when employers could or would talk with each other candidly about candidates (and former employees), and exchange useful information concerning their suitability for employment with a particular organization or a particular job.
This strikes me as very sad, contrary to the best interests of employers generally, even society as a whole, and clearly seems to be a case of the “tail wagging the dog”. Why should we care? Well let’s take a look at the merits and usefulness of a good old fashioned reference check.
Why Employers Should Check and Give References
Actually, personnel selection is really about “risk mitigation” – we want to hire the best talent but also want to minimize the chances of hiring mistakes. Typically we start with a fairly large pool of applicants, but are then challenged to narrow the pool down to the “one” (or “several”) who we think will do the job better than the other candidates, and will do so without bringing along troublesome negative baggage. In making these selection decisions we may engage in a wide variety of candidate screening techniques including: interviews, objective tests and measures, work samples, background checks and perhaps even drug tests. But at the end of the day we are still left with making nothing more than an educated guess.
However, amidst all this inquiry is one of the profound “truths” of personnel selection that we must reckon with. That is, the best predictor of future behavior (and job performance) is past behavior! In fact, all valid pre-employment inquiries involve collecting behavior samples that we hope are predictive of who will do well and who will not. Given this simplicity, it doesn’t make sense that we completely forego asking former employers how someone did in their place of employment, particularly when the job in question may be very comparable to, or require similar competencies, as the one being filled.
Checking references can be a powerful tool in adding useful information and mitigating risk. While it may not be a very efficient process for evaluating a large number of “average” candidates, it is a technique very well suited to distinguishing folks at either end of the “candidate desirability” continuum.
On the low end, references can be very helpful in identifying the “bad apples” who are likely to do very poorly on the job, bring with them nagging bad habits or baggage, or engage in undesired (even illegal or harmful) behavior. Drug screens, criminal background checks and consumer background checks may cover some, but not the full range of negative traits, characteristics and behaviors that concern us … particularly with respect to job performance. So, what better way to learn about these things than to talk with former employers about their experiences with that person?
On the opposite end of the scale are those we often regard as “stars”. We all want them, but how do we identify them? The sad truth is that “stars” often blend in very well with the “regular folk”! Stars don’t necessarily look any better than the average candidate, interview any better than the average candidate, or do better on standardized tests than other candidates. Some of them may not even have the best credit ratings or driving records, and some of them have even made reportable mistakes earlier in life. But they do perform better on the job than others, and do so “habitually”!
Granted, some people may seem like “stars” during interviews or assessments, but are they really? Or are they just people who do well in the candidate screening process only to disappoint us later (hiring mistakes)?
If we are trying to minimize risk, doesn’t it make sense that we will feel better taking the risk on a person who has the backing of a handful of very positive and perhaps glowing references? And in those cases, the employers who are willing to share that information are not only doing the next employer a good deed, but the candidate as well. Additionally, failure to inquire or listen to the glowing remarks available about “stars” does them a disservice…and they deserve better.
Why Employers Don’t Check or Give References
Given the obvious usefulness of reference checks in helping employers identify “stars” and mitigate risk in the personnel selection process, why are so many employers just not doing it? When you ask employers (or their HR professionals) why they don’t check or give references, you’ll hear a number of reasons. Various reasons are grounded in some measure of wellfounded caution and concern, while others stem from different forms of legal folklore that resemble childhood stories of the “boogey man”.
But in all cases it comes down to FEAR! We have been groomed to be afraid by a few situations gone badly, and now we all suffer … both employers looking for “stars”, and the “stars” themselves.
So, Let’s Address The Fear.
While I’m not a lawyer, I have been a practitioner and teacher of good HR management for a lot of years. In so doing, I’ve learned that many of our “fears” about reference checking have been overly exaggerated while the risks associated with not checking references have been woefully understated.
One of the top fears employers have is that they may be charged with “invasion of privacy”. Yet under our laws employers have been granted a “qualified privilege” to make inquiries helpful to the employer in determining qualifications for the job. This qualified privilege provides a certain level of “immunity” from legal action in order to conduct proper (job-related) reference checks and/or provide job-related information about former employees to prospective employers. Why? Well it’s simply in society’s best interests to allow employers to do so!
Other employers – particularly those providing information about former employees – are often concerned with the threat of “slander” or “defamation” suits. And of course there are some court cases where former employees have successfully sued employers because of questionable practices and things said. However, the reality is that proving “slander” or “defamation” is a daunting challenge for a former employee!
Moreover, by using proper practices (and training their managers in those practices) an employer can minimize the risks of any valid claims of this kind. This can be done by ensuring that all information released about a former employee is factual, verifiable, and free of subjective opinion. In short, truth is always an absolute defense in cases of this nature!
Other employers are concerned about complying with all the requirements of Fair Credit and Reporting Act (FCRA), and should be. However, one prestigious law professor clarified for me (and others), that the purpose of the FCRA is to regulate information collected, stored and transmitted by “third parties” (like those hired to do background checks). Are employers really “third parties”? He doesn’t think so, so you might want to check with your attorney about the need to comply with all the FCRA regulations when the communication is directly between two employers (no third party).
Finally, if you are still uncomfortable about the risks involved in checking and giving references, then I suggest one further step that is gaining popularity with a number of employers. That is requiring all job candidates to sign an agreement (as part of the application process) that releases you, the prospective employer, to conduct a thorough reference check, and releases former employers from any claims associated with the references they provide.
By obtaining these signed agreements not only are you (the prospective employer) provided an extra measure of protection, sending copies of these signed agreements to reference providers may give them the extra measure of comfort necessary for them to cooperate with your reference inquiries. Many have found this approach successful, so you might want to give it a try.
About the Author Jim Stodd is a Principal and Managing Director of JT Stodd & Associates. Jim has helped numerous clients develop the organizational architecture and infrastructure required to achieve their strategic visions and goals. In addition, he has assisted other organizations to build strategically-focused and highly successful human resource management programs by introducing forward- thinking approaches to talent management issues. Before starting an independent consulting practice in 2001, Jim spent more than 15 years in senior management positions where he was responsible for human resources, organization development and change management. In addition, he was associated with several leading professional service firms including Ernst & Young LLP, Hay Management Consultants, and First Transitions, Inc. Jim is a specialist in Strategic and Organizational Planning, Change Management and Human Resource Management. He regularly teaches classes in those subjects at the University of California-Irvine, and is a recipient of UCI Extension’s “2010 Distinguished Instructor” award.