THE ART OF CONDUCTING EMPLOYEE REFERENCE CHECKS
In risk management one of the four main categories of loss is Personnel Losses. Personnel losses include losing employees through death, disability, retirement or resignation. Because hiring the right employees is critical to the overall success of an organization and the challenges in today’s job market of finding qualified people. I recommend to make hiring the right employee part of your risk management process. It has been estimated that hiring the wrong employee costs the organization from one to three times the employee’s salary to recruit, hire and train another employee. Hiring the wrong employee not only costs the firm money but it can also create liability issues and reputation risk. Making it part of the risk management process will reduce the overall risk of a bad hire.
Whenever I run a training seminar to teach screeners how to do reference checks. I always ask them, how many people believe that reference checks is part of the background investigation? They almost always raise their hands and say yes. I tell them no it’s not and explain that checking employee references is the most important part of the hiring process, because you want to determine based on conversations with past employers how they performed their jobs. If I may quote the disclaimer the Mutual Fund Industry uses “Past Performance is not a Guarantee of Future Results.” However checking with past employers is still your best indicator if this person can do the job, will they do the job and will they fit into your organization. So reference checks are to determine the persons work abilities, background checks such as Criminal Records Checks, Credit Checks, Education Verification and Google searches provide verification that this person is who they say they are and have not lied about anything.
HOW TO MANAGE THE RISK OF DOING REFERENCE CHECKS
The risk of not doing reference checks or incomplete checks is far greater than the risk of doing them. The risks includes additional hiring costs, low productivity, time and money spent on recruitment and training, low employee morale, damage to reputation and lost customers. From a legal liability it is either being accused of discrimination and not hiring someone or obtaining information that the candidate did not authorize or consent to.
To manage the risk of conducting reference checks and Privacy Issues, the most important thing to have is an Express waiver signed by the prospective employee. An Express Waiver is a signed release by the candidate that allows you to conduct the reference checks. This illuminates’ any doubt about the intentions of both the candidate and the employer.
The next mitigation tool is to ask only questions that are relevant to the job. I’m very confident that HR people know what can and cannot be asked, however department supervisors and other non HR employees may not be as clear. Rule of thumb do not ask any question that is not directly related to the job. Such as age, race, religion, sexual orientation, medical, disabilities or marital status. Never ask personal questions, they have nothing to do with how the person will perform their job.
CHARACTERISTICS OF A GOOD INTERVIEWER
All good interviewers share certain characteristics. Above all, they are "people persons," and are talented at human interaction. Successful interviewers are the type of people with whom others are willing to share information, most interviewers tend to get too little, rather than too much information, a good interviewer does not interrupt the respondent with unnecessary questions. During the interview, much pertinent information results from volunteered information, as opposed to responses to a specific question. A good interviewer includes all pertinent information and excludes irrelevant information. From the outset, it should be determined what information is relevant and that information should be sought. Irrelevant facts complicate the gathering and analysis of the information and should be avoided.
GETTING PREPARED TO DO THE REFERENCE CHECKS
Do you have an up to date job description that people actually doing the job has had input into the development of it? This is critical to understand the skills and attributes a candidate will need to do the job.
Take control of the reference check process right from the beginning. Have you instructed the candidate to give you three references from people who they worked with on a daily basis within the last five years? It is important to get references from people they have worked with, how else can they comment on the candidate’s job performance and skills if they did not work directly with them. If you get put through to the HR Department, they would have a record of the candidate’s evaluations, overall job performance and reason for leaving. But they have not worked directly with this person so they would not be able to answer many of the questions you need answered. You need to speak to three of their colleagues such a supervisor, a co-worker and a junior employee or some combination of the three. Teachers, Professors, Coaches, Neighbours and Friends can comment on the candidate’s personality but they cannot comment on their job skills and work ethic.
Do you have your reference interview questionnaire with standard reference interview questions with any additional questions pertinent to the position?
Have you decided how to conduct the references? By email, in person or telephone. In person is best because you can read their body language and facial expressions. Sixty percent of communication is non-verbal. Zoom meetings can also work well and the advantage is you can book the date and time with the person giving the interview. Telephone is the next best and most widely used, it is quick and easy and allows you to still listen for verbal cues.
CONDUCTING THE REFERENCE CHECKS (This is the art part of reference checks)
Make sure you introduce yourself to the person giving the reference and tell them why you are calling. As an example: My name is XXXX from XYZ Company and I’m calling about Amy Smith who worked for you and has applied for a position with our company as an office administrator.
You should be professional and instill confidence and trust, stay focused during the interview and have enthusiasm and polish.
Be unbiased and open minded when you call the references. Sometimes we can make it personal because, I had a good vibe about this person or they have exactly the qualifications on paper we are looking for. This can provide obstacles to overlooking information provided, either in a positive way in a less favored candidate or negative information on your preferred candidate.
When you are speaking make sure you speak in a slow, clear voice with proper volume so the candidate can understand you. Practice, use your phone to record your voice when you speak and listen to how it sounds.
Make sure you listen to what is being said by the candidate, once you ask your question stop talking and listen till they have finished answering the question. What is being said is important but how it is being said is also important such as tone, pitch and volume. Listen for pauses and sighs and other non-verbal clues. Then follow up by asking “I noticed you sighed when I asked this question, do you mind if I ask why?"
Ask open ended questions where possible and when you get a one word answer such as “good”. Ask follow up questions such as on a scale from 1 – 10, with 10 being the highest where would you rate the candidate. Then ask the reasons why they rated the candidate so high, low or average and what could they do to improve. An interview is a continuous flow of questions and answers.
THE THREE STEPS TO ANALISING AND APPLYING THE INFORMATION OBTAINED
The first thing is to evaluate the information obtained regarding past job performance. You want to look for consistency in the answers given, the main tool we have for this is asking all references the same questions. Then look for patterns of employee and career growth and any areas of changes in employee performance, good or bad.
Keep in mind that some people, their main talent is to sell themselves to other people. So while they may have done great in the face-to-face interview with you, do not let this prejudice how you conduct the reference questions. Then you can compare the answers the references gave you with your own experience interviewing the prospective employee. A candidate may have done terrible in the interview but has glowing references and vice-versa.
Next you need to compare past job performance with the actual job requirements. The thing to keep in mind here is that even if the title of the job at the last employer is the same as your title EG: Accounts Payable Clerk. Different companies do not operate in the same way. Even if the job descriptions are the same the people, processes and corporate culture will be different. You need to understand the requirements of the traditional job description that outlines the requirements of the job. Then you need to understand the practical job description, which is how the job really works and is usually not in writing. This is how the job works from the inside based on the people, politics and attributes.
Next you need to use the information to develop a career development program based on the reference checks, to help the employee grow and prosper in the position. By having one of your reference questions something like “What do you think the employee needs to continue to grow and develop in their career?”
So for the record, my firm and I have conducted thousands of reference checks, we have also done thousands of investigations on client’s employees regarding workplace violations and criminal acts. We are the parent company of the Workplace Violations Hotline our Whistle Blower hotline and we get to see every day the reports that come in from clients employees reporting wrongdoing. So we know what we’re talking about, hiring the wrong employee is not just about lost productivity resulting in additional financial costs. It is a risk that can and should be managed by organizations by asking the question. Why are we hiring so many wrong candidates? Most of the time the reasons are clear once you analyze it. You cannot control who applies but you can hire the best candidate of the group, it may not always be the candidate that looks great on paper.
It’s not as important how well a bookkeeper knows the accounting software, they can be given additional training on the job. What matters is their professionalism, productivity, interaction with other people, communication skills and management style. It’s not about what they did but how well they did it. Some employees who start a new job and quit after a short period of time, leave because they know that the new firm is not the right match for them. You need to figure that out before you hire them.
I mentioned in a past post on intelligence gathering (that’s what reference checks are conducting an investigation) you look at the source of the information and the quality of the information. That’s why focusing on references that have worked directly with the candidate is going to give you the most valuable information.