Great employees are difficult to find. In turn, so are great references. But as an entrepreneur, to find great employees means not only knowing how to check references, but also how to get the right kind of information from former employers to ensure the proper fit.
Why Reference Checks Are Non-Negotiables
Most entrepreneurs or business managers ask for employment background checks from their prospective employees, but only 25% are actually verified, according to global outplacement firm Challenger, Gray and Christmas, Inc. Yet reference checking is crucial in today's business environment. Why?
- Because bad hiring mistakes are costly and unnecessary; and
- A legal term called 'negligent hiring' is being used more and more often, where an employer is sued for an employee's grossly negligent or illegal behavior and is held liable because they did not know how to reference check.
How To Get Good Employee Background Check Information
Some employers are hesitant to offer job references for their former or current employees because of recent court cases that have awarded very large damages to employees who were unable to find work because of negative reference checks. Yet as a hiring manager, it is crucial to get this data so as to make an informed decision about a potential hire. Therefore, keep the following approach in mind when conducting background checks to ensure good information is received while still upholding everyone's legal interests:
- Ask for permission from the applicant to check references, preferably on the application form;
- Require a reference check from a current employer, with the caveat that if the applicant is unwilling to inform their employer of their job hunt, that if a firm offer of employment is made, it will depend upon a positive reference from said current employer in order to move forward;
- Speak with all references offered, not just one. As well, if the application form authorizes it, ask any references if there are other folks that may have insight on the applicant's prior performance that would be useful, and how to get in touch with them (provided they are not on the applicant's Do Not Call List);
- Ensure that whomever is doing the hiring is also performing the background checks;
- Plan out a list of questions to ask before conducting the reference check, and make sure that there is a full compliment of both close-ended and open-ended questions; and
- Create a method to document the information received, including when, how, by whom, and what specifically was said.
For more information about the kinds of questions to ask while conducting a reference check, see these Types of Interview Techniques. Or, peruse the list of Human Resources articles for related questions and answers.
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