Why you’re likely to hire the wrong person if you don’t do proper reference checks

Reference checking is one of the most important stages in the recruitment process – but most employers either skip this step, or don’t do it properly. Tanya Gray shares her reference-checking tips to help you recruit the best applicant (and avoid expensive hiring mistakes).

The thought of checking job applicants’ references makes many employers shudder. Consequently, many employers don’t do any reference checking – or they don’t do it properly. And that’s a big mistake.

Why is reference checking so important?

Reference checking is your opportunity to confirm that an applicant is capable of doing the role they’ve applied for. Many employers take the applicant at their word – but what they’ve told you could be inflated nonsense!

Turning a blind eye is much easier when your business is an employee down, and you need that vacancy filled right away. But if you don’t take the time to reference check, you risk employing a dud – and you could be re-recruiting for the very same role in just a few weeks or months. So it’s definitely worth taking this step – and doing it well.

The correct approach to reference checking

The hiring manager or business owner should do the reference checking themselves and not delegate the task to a junior. (The only time to delegate this task is when an expert does it for you.)

Always conduct reference checks over the phone: it’s vital that you can hear the referee speak and have the ability to ask probing questions.

You must have permission from the job applicant before approaching a former employer. The best way to do this is to have them sign an authorisation form and declaration form (which is usually on the job application form). You also need to comply with the Privacy Act.

Legally, you can only speak to the individuals the applicant has named, so you need to make sure that the applicant has given you authorisation to contact their previous supervisor or business owner. Don’t speak to colleagues, friends, or any staff that the applicant managed, as they won’t know the applicant’s core KPIs.

Contacting anyone else in the organisation, or a friend that is in management there to have an “off the record” chat, is in breach of the Privacy Act. People do this all of the time but it can get you into legal hot water – something that’s best avoided!

Some employers just call anyone and speak to them without asking for permission, but that’s another no-no. Instead, it’s good practice to ask the applicant to let referees know that you’ll be calling, and ask for a specific time to make the call. This will help you get the best results from the reference check, as the referee will be prepared and will have time available to speak with you.

A good reference check should take 20 to 30 minutes, and you should have questions ready prepared, just like you would for a job interview. Your questions should all relate back to the job description. Ask open-ended questions that focus on finding out the applicant’s strengths and weaknesses, and ask about specific examples. Be aware that the same discrimination laws apply to reference checking conversations as to job interviews so steer clear of personal topics.

Confidentiality issues to consider

A job applicant can ask to see their completed reference, but to protect the referee you can ask them if they’re comfortable with this. The referee has the right to say “no”, and in this case you must keep the information confidential from the applicant.

It can be a good idea to begin a conversation with a referee by discussing this. You can tell them that anything they say can be kept confidential, and that’ll make them feel happier about disclosing the truth.

Also, you don’t want to jeopardise an applicant’s current employment by phoning around for references. In the ideal world you’d do the reference checking before making a job offer, but that isn’t always practical. Instead you can say, “This offer is subject to satisfactory reference check(s) coming back from your referees”. Then if you do discover something negative, you can legally withdraw the offer.

What kinds of things should raise warning flags?

If the referee is not forthcoming with their answers and they’re just giving one-word replies, explain the importance of the reference check. As a business owner or manager they will know how vital it is to employ the right person – and how painful it can be to hire the wrong person!

If they hesitate to answer questions, that’s usually a red flag. Keep pushing, and ask really probing questions. You need to be happy for the conversation to go off-track, and let the referee talk and talk.

You can also hear it in their tone of voice if they feel positive or negative about the applicant. Thus you need to be alert and focused and not have any distractions when making the call.

Other checks you can make on applicants

Many employers aren’t aware of the range of pre-employment checks they can carry out on applicants. These include:

  • Legal entitlement to work in NZ: this is relevant for every employer, whether it’s for office roles or construction, trade and physical jobs.
  • Serial ACC claimants: this is a very popular check to make.
  • Credit checks: particularly important for finance/accounting roles.
  • Criminal and NZ Police checks: important for all jobs types.
  • Drug and alcohol testing: particularly relevant for machinery operators.
  • Psychometric profiling: a popular way of checking that an applicant is a good fit for the role you’re recruiting, and your organisation as a whole.

Most SMEs don’t make any of these checks before making a job offer, but it’s clear what a difference it can make to your organisation if you do this kind of homework upfront.

Next step: Do you need help with reference checking?

Recruit NZ can help you with the time consuming tasks of reference checking – as well as undertaking a wide range of other pre-employment tests. Contact us to find out more.

Either give us a call on 09 280 3977 or email info@recruit-nz.co.nz

Contact us to find out how we can help your business.

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Tanya Gray is your strategic HR partner, passionate about driving clients’ productivity with innovative solutions and collaboration.

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