Here’s your guide:
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. The thought of checking job applicants’ references makes many employers shudder. Not only is it hard to get hold of the right person, but what are you meant to say? You’re so busy; it’s far easier to just skip this step, right?
Consequently, many employers don’t do any reference checking at all – 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, and to suss out their track record and success.
Many employers take the applicant at their word – but what they’ve told you may well be inflated nonsense!
Turning a blind eye is so 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 check that what you’re doing is compliant 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 you know 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 and if found to be doing this they can get 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 between 20 and 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. Be sure to ask open-ended questions that focus on finding out the applicant’s strengths and weaknesses, and ask about specific examples. By the end of the call, you’ll have a good understanding of the applicant. 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.
Therefore 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.
Another factor to be mindful of is that you don’t want to jeopardise an applicant’s current employment by phoning around for references. So although in the ideal world you’d do the reference checking before making a job offer, that isn’t always practical. Instead, you can say, “this offer is subject to satisfactory reference check(s) coming back from your referees”. That way, if you do discover something negative in a reference check, 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 answers, explain to them that it is really important and the more info they can give the better. After all, as a business owner or manager they will know the importance of hiring the right person – and how painful it can be to hire the wrong person!
If they hesitate to answer questions, that is usually a red flag. Keep pushing and 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. The more you know the better.
You can also hear it in their tone of voice if they feel positive or negative about the applicant. To listen for this, you have to be alert and focused and not have any distractions when you’re doing reference checks. Also make sure that you’ve got your list of questions in front of you, and plenty of paper and pens to take notes.
Other checks you can make on applicants
Many employers aren’t aware of the range of checks you 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, including driving vehicles.
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 you don’t need me to spell it out what a difference it can make to your organisation to do this kind of homework upfront.