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What is a Reference Check?

Hiring mistakes can cost you $$$. A strategic reference check can save the day! Learn how to navigate this crucial step in the hiring process and build a strong & resilient workforce.
Illustration of reference check for employee background verification: Referee profile card with picture and info, documents with magnifying glass and checkmark, verified symbol and green background.

You spent hours creating the perfect job description. You looked through many CVs and conducted many interviews. Having narrowed it down to a top candidate whose skills and experience impressed you. But before you celebrate and send the offer letter, there’s one crucial step left.

Reference check: the key in pre-employment assessment. It reveals the candidate’s track record in the eyes of his/her former supervisors, beyond what was on his/her resume and said in the interview. It will help you (employers) make informed decisions if conducted strategically.

What is a Reference Check?

Reference checks involve reaching referees provided by the applicant to ask about their past job performance. It offers valuable insights into a candidate’s work ethic, skills, and performance. Also, they show their overall character. This is usually done through phone calls and emails. They allow employers to evaluate if a candidate fits well within their organization. 

Referees: Individuals close to the applicants at their workplaces before coming for the interview. They may be colleagues, supervisors, or any other party who had professional relations with the applicant.

Why Check References Before Hiring Someone?

Choosing the ideal employee is very important for a business. You spend time and money in making interviews. Sometimes resumes and interviews are a great start. But, they don’t paint the whole picture. That’s where reference checks come in. They are powerful but underused tools in hiring. 

Reference checks can help you avoid hiring pitfalls. They let you learn more about the person;

Work ethic and skills: Are they hard workers with adaptability skills? Did they do their job well in the past?

Personality and fit: Will they fit in with your company? Will they get along with everyone else?

Past performance: Are they telling the truth about their experience? Can they do what their resume says?

Reference Check Process

By following these steps, you will get the most out of reference checking your way into an informed hiring decision. Remember that a thorough reference check can make all the difference between bringing on board a great employee and getting stuck with a deadbeat.

Candidate consent: Obtain the candidate’s consent before contacting references. This guarantees that they are at ease with you contacting their references.

Gather information: Ask the candidate for a list of references, including their contact details and relationship to the candidate (supervisor, colleague, etc.).

Prepare the questionnaire: Create a set of questions and aim for balance. The questions should target the skills and experience needed rather than the role. Verify information, but also gain insights into the candidate’s work style and personality. 

Conduct the check: Introduce yourself, your company, and the candidate (name and applied position). Also, respect the referee’s time. Ask for a convenient schedule and their preferred method (phone/email) for the conversation.

Evaluate the information:
  • After collecting all the reference responses, review them to determine if the applicant has the right qualifications as well as behavior.
  • In due time, assess the information given by references against what has been stated by candidates.
  • In case of discrepancies, consider contacting candidates for more details.

Legal Considerations While Conducting Reference Check

Data privacy regulations regarding reference checks differ internationally. In some jurisdictions, employers can inquire about a candidate’s performance, qualifications, and work habits. Other regions may restrict inquiries solely to job performance, placing the onus on employers to adapt their questioning accordingly. 

To ensure legal adherence, employers must obtain consent from the candidates and tailor their reference check processes to comply with specific country or regional data protection laws. 

Non-compliance can expose organizations to potential legal ramifications, data breaches, and regulatory fines. By understanding the legalities involved in reference checks, employers can develop compliant questionnaires, avoiding wasted time on inquiries that are legally restricted. Some of the country-specific legal and privacy considerations are mentioned below for your reference:

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General LegalityLegal with consent
Consent RequirementIt is not mandatory but recommended for transparency and potential defamation lawsuits
Privacy ConsiderationsPersonal Information Protection Law (PIPL)
Reference ProtectionLimited. References might have less defense against defamation lawsuits even if the information is true
Additional ConsiderationsFocus on job-related skills and experience. Consider cultural aspects of reference giving (e.g., emphasis on positive relationships)
General LegalityLegal with consent
Consent RequirementWritten informed consent specifying the information sought and who will be contacted is crucial.
Privacy ConsiderationsData Protection Act (DPA 2018)
Reference ProtectionLimited. References might have less defense against defamation lawsuits even if the information is true.
Additional ConsiderationsAvoid discriminatory questions.
General LegalityAt-Will Employment (Consent Recommended)
Consent RequirementIt is not mandatory in most states, but obtaining written consent is recommended for transparency and potential defamation lawsuits.
Privacy ConsiderationsFederal and state laws may restrict information requested (e.g., salary history). Fair Credit Reporting Act (FCRA) applies if using background check services.
Reference ProtectionPotential defamation lawsuits for references providing false information.
Additional ConsiderationsConsider specific state and federal laws regarding permissible inquiries.
General LegalityLegal with consent
Consent RequirementWritten consent from the candidate is required for reference checks under the Personal Data Protection Act (PDPA).
Privacy ConsiderationsPersonal Data Protection Act (PDPA)
Reference ProtectionThere are no specific laws on reference protection itself, but adhering to PDPA and avoiding discriminatory practices is crucial.
Additional ConsiderationsFocus on job-related inquiries.
CountryHong Kong
General LegalityLegal with consent
Consent RequirementExplicit, informed, and written consent is needed from the candidate under the Personal Data (Privacy) Ordinance (PDPO).
Privacy ConsiderationsPersonal Data (Privacy) Ordinance (PDPO)
Reference ProtectionN/A (reference protection laws not established)
Additional ConsiderationsThe Mandatory Reference Checking Scheme (MRC) applies to specific job roles in Authorized Institutions (AIs).

5 Best Practices to Follow While Conducting Reference Check

Reference checks are a crucial step in the hiring process, offering valuable insights into a candidate’s work ethic, skills, and overall fit for the role.  To ensure you’re getting the most out of this step, follow these fundamental practices:

Be consistent: Always have a standardized process for reference checks of all candidates. This could include getting written permission, using the template that has questions about the role in question, and recording what has been discussed. This is to be fair and adhere to non-discriminatory regulations.

Ask open-ended questions: Create queries that probe into the candidate’s strengths and weaknesses and their performance regarding areas relevant to the job. Give the referees a chance to give feedback or opine on the employee’s past performance. Tailor your queries depending on the relationship between the referee and the candidate (e.g., supervisor versus co-worker).

Contact multiple references: Speaking with different kinds of individuals, such as supervisors, peers, or clients (where possible), gives you a well-rounded view of what kind of person they are in terms of abilities and interpersonal skills.

Be respectful to referee’s time: Schedule calls during convenient hours and adhere to the agreed-upon timeframe to demonstrate professionalism and consideration for their valuable time.

Maintain confidentiality: Treat all information received during the reference check process with the utmost confidentiality. This adheres to ethical business practices and data privacy regulations. Also, share reference feedback only with those directly involved in the hiring decision.

An efficient reference check process offers a comprehensive understanding of a potential employee’s past performance and professional conduct. By strategically gathering feedback from those who have previously worked with the candidate, employers can better assess a candidate’s suitability for a job role. This not only reduces the risk of making poor hiring decisions but also contributes to building a strong and resilient workforce.

Don’t leave your hiring decisions to chance.

Get the candidate’s full picture with a reference check. Contact our verification expert today!

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