Did you know that reference checking is often overlooked by businesses during the recruitment process?
Although it may seem time-consuming and unimportant, failing to conduct reference checks properly can have severe consequences.

According to research, over 80% of resumes contain misleading or false information, which makes relying solely on resumes a risky approach to hiring. Imagine the impact on your business if you hired people solely based on their resumes.

Case Study

Recently, I was tasked with conducting a reference check on a management candidate who seemed too good to be true. Upon reviewing his resume, I discovered that he had left out specific details of his achievements, and upon further investigation, I found that he had claimed credit for other people’s accomplishments.

To gain a more complete picture of the candidate, I conducted an online investigation of his previous employment going back 20 years. I discovered patterns of poor teamwork and complaints from his previous managers about his authority issues. It’s worth noting that what candidates say about their previous workplaces on the internet can be easily found by skilled people.

In this particular case, I encountered numerous “black holes” in the candidate’s history, which raised red flags. Such gaps in employment history could be indicative of past criminal activity or name changes.

Because the position required a high level of trust and involved money handling, I expanded my reference checking efforts to gather more information about the candidate. After extensive searching, I discovered that he had spent time in prison for business fraud in another country, which explained the missing time periods in his work history.

When I reported my findings to the company that had hired me, they were shocked and relieved that they hadn’t made a costly mistake in hiring an unsuitable candidate.

Tips

To avoid similar risks, I recommend that businesses implement the following four steps for better reference checking:

1. Obtain at least three references from the candidate’s last two employers.
2. Verify all stated achievements in the candidate’s application
3. Check all qualifications and certificates from the place of issue, and ensure that the HR team has sighted the originals and compared them with other qualifications from that establishment to prevent falsified documents.
   This can simply be done by contacting the Educational Institution.
4. Dedicate a few hours of HR team time to conduct in-depth reference checks for important positions. This can save businesses thousands of dollars in time and damages later.
5. Make employment offers either “Pending Successful reference check” or ensure your employment letter contains a clause that allows for termination if false statments have been made by the candidate during the hiring process (see below).

In my experience, too many recruiters and hiring managers rely solely on the standard two reference check phone calls to screen potential employees. They also dont tend to ask the hard questions that test the validity of the referee.
To avoid these risks, businesses should improve their recruitment processes and dedicate more time and resources to reference checking. By doing so, they can avoid costly mistakes and ensure they hire the best possible candidates.

Example clause for an Employment letter

Below is an example we have seen used to great effect by other employers:

“We take the accuracy of the information provided by our employees during the hiring process very seriously. By signing this employment letter, you acknowledge that any false or misleading information provided by you during the hiring process will be grounds for termination. This includes but is not limited to false statements made on your application, resume, or during any interviews. We reserve the right to terminate your employment immediately and without notice if we discover any false information provided by you during the hiring process.

We believe that honesty and transparency are essential in building a productive and trustworthy workplace. As such, we expect all employees to provide accurate and truthful information during the hiring process. By signing this employment letter, you agree to uphold this expectation and understand the consequences of providing false or misleading information.”