Are Reference Checks Outdated? When and Why Employers Still Use Them

What is a reference check?

A reference check is a step some companies choose to complete at the final stage of an interview process. Hiring managers will ask a candidate, who they are considering extending an offer to, for a list of former employers/co-workers/managers who they have permission to contact. It’s another opportunity for a hiring manager to reach out to former employers to learn more about a candidate’s work experience, qualifications, and culture fit.

Essentially a reference check is a final step to cross the “t’s” and dot the “i’s.” The hiring manager wants to verify previous employment and make sure the candidate’s experience aligns with what was stated in the interview.

{Related Article: Top 20 Sales Recruiting Tips to Hire Sales Performers}

Do companies still use reference checks? Are they outdated?

Keep in mind, a candidate will provide references who they know will be honest, but will also be able to speak highly of them.

*It should be a red flag, if a candidate cannot or does not want to provide any references.

Company’s still perform reference checks typically if they are a “required” part of the company’s hiring protocol for all hires, for legal/protective reasons, or for personal preferences. Companies may also choose to perform reference checks if a team member(s) is still on the fence with a candidate and needs more information to make a decision.

A reference check is a good barometer on a candidate’s personality and character. They do provide insight in how others view them, helping a hiring manager have a better understanding around culture fit.

That being said, some companies find reference checks a waste of time since they understand a candidate will aim to give positive references.

Reference checks can burden HR and recruiters, essentially wasting valuable resources. Human Resources will be busy tracking down references, completing the reference check over the phone or on paper. If the reference checking process is not optimized and is more time-consuming than helpful, they can be viewed more as a formality than a necessity in the hiring process.

It’s important to note, that companies should be aware of how reference checks affect the length of the hiring process, and the possibility of losing candidates as a result of a long interview process. Don’t let the reference check impact candidate pipeline and interest.

Companies should audit themselves:

• Do reference checks ultimately play into whether or not they hire a candidate?
• How often does HR receive a negative/concerning reference check?
• How long does it take HR to complete reference checks for each candidate?
• Have they decided not to hire a candidate as a result of a reference check?
• How are reference checks affecting the Human Resources department’s time and resources?

A company’s findings should help determine alternatives to reference checks or different strategies that can streamline and optimize the process.

{Infographic: 6 Benefits of Partnering with a (Great) Sales Recruitment Firm When Hiring Salespeople}

If reference checks are outdated, how do I know I am making the right hire?

When hiring for your team, the goal is to effectively interview and qualify top candidates throughout the process.

A hiring manager needs more than a “gut feeling” when it comes to hiring.

They need data.

For instance, when it comes to hiring salespeople, a hiring manager needs more than a resume to firmly understand a candidate’s sales characteristics and selling ability.

Does the sales job require someone who has:

• A transactional or strategic selling approach?
• Inside or outside sales experience?
• Sold into general decision makers or C-level decision makers?
• Sold a product or service?
• Hunting or farming sales experience?

Also consider a salesperson’s previous:

• Sales quota
• Percentage to quota achievement
• Average sales cycle
• Average sales size

{Check out this Kate Miller example.}

This data can help a hiring manager have a more in-depth understanding of a candidate’s experience. Then enabling them to qualify on soft skills and culture fit like coachability, focus, motivation, resilience, and collaboration.

Now hiring managers can use sales recruiting solutions that provide them with this critical data enabling them to make educated decisions on who to hire, improving the process, reducing the time and cost to hire, and increasing retention rates. They manage the entire process on one platform with real insight and the support of an entire recruiting team.

{See how Treeline’s sales recruiting solutions are revolutionizing how companies recruit and hire salespeople.}

Okay, but if I need to perform a reference check what should I do?

If you need to perform an employee reference check, there are few things to keep in mind.

1. First and most important, all reference checks should be done with the highest level of professionalism and respect.

2. Decide at what point in the process a reference check will be performed. Will candidates be required to provide them as a first step in the interview process, or will they need to provide contacts at the end of the process? Consider how it plays into the length of the hiring process.

3. Ask the candidate for references, including the contact’s name, company they worked together at, their title, the dates they worked together, their phone number and email address. Ask the candidate to notify their references that they should expect a phone call from a representative at your company.

4. Have a list of questions prepared to ask the references. Most likely the reference check will be performed over the phone so be mindful of time constraints, with the expectation that someone from your company may need to reach out more than once to get the contact live.

5. Call a reference first, leave a voicemail if needed, and follow-up with an email. Doing a call first is recommended since it is the first outreach and you want your impression to be personalized and sound human.

6. When you get a contact live, start by introducing yourself, the company, and the candidate who you’re calling on behalf of. Confirm that they are willing to provide a reference. Once they confirm, start asking the reference check questions.

What questions should I ask when checking a candidate’s references?

Expect to read between the lines and use the following questions as a guideline for additional questions under each heading.

• Can you confirm the relationship to candidate and employment dates?
• What were his/her responsibilities?
• What was his/her work ethic like?
• What was his/her greatest accomplishment?
• What were his/her responsibilities?
• Can you describe the pace within the environment while working together?
• Can you describe his/her personality?
• How about their ability to interact with others?
• How was their punctuality?
• How about attendance?
• Would you recommend this person?
• Would you rehire this person?

The goal of a reference check is to confirm the assumption and understanding of who you think the candidate really is as a person and professional.

{Related Article: 35 Must-Ask Sales Interview Questions to Recruit Top Salespeople}

What is a backdoor reference check?

Another type of reference check employers may choose to conduct are backdoor reference checks. A backdoor reference check does not involve a candidate providing a list of former contacts/employers for the hiring manager/HR to contact.

Instead the hiring manager may already know someone who has worked with the candidate at their current/former employer and may reach out to them to inquire about the candidate.

It’s essentially asking a mutual acquaintance to share their opinions and experience working with the candidate you’re considering. It’s also a workaround the standard reference check where you assume the candidate would only provide references who would provide positive feedback.

It’s another way to determine if the candidate not only interviews well, but performs well in their job.

*Important: Be careful and professional when performing a backdoor reference check. If the candidate is confidentially searching for new opportunities, you do not want to compromise their current employment.

Also, keep in mind the person you are calling may not have worked directly with the candidate and may not be able to provide information around their work ethic or had limited personal exchanges with them.

Whether or not your company still uses reference checks or is looking for ways to optimize the hiring process, it’s important to determine what data is valuable and the impact it has on your hiring success.
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