Waking Up to Reality: Why Reference Checks Are a Total Scam

I remember when I started my first job in Talent Acquisition and HR. I totally believed checking references was going to lead me to better, higher quality hires.

My HR university program practically drilled into me the belief that “past performance predicts future performance.”

For all I knew those words were delivered on tablets from Moses himself!

After all, what better way is there to predict a candidate’s future success than to speak with individuals who knew this person the best?

Waking up to the reality of reference checks

And it’s not just anybody: It’s former managers or colleagues who have previously worked with this person – directly or indirectly – and have a deep understanding of how they have performed, and now are telling me how they will perform in the future.

It’s grand design at its finest.

But about 13 seconds into my HR career, I started questioning this wisdom. Call me an HR atheist if you must, but something wasn’t adding up to me.

It was probably around the 100th reference check when I started wondering either I was the best recruiter of all time and only find rock stars (which was mostly true), or this reference check thing is one giant scam!

Yes, reference checks are the perfect scam. And not just any scam, but a scam that everyone is in on. It’s kind of like the Santa scam that you, your family and friends pull off until your kids get to be around 10 or 11 before they figure it out (or age 6 if you have a sister who has a big mouth and loves to crush dreams!).

References almost never get in the way of a hire

Everyone knows the set up:

The candidate wants the job, so they want to make sure they offer good references.
The candidate provides three references that will tell HR the candidate walks on water.
HR accepts this and actually goes through the process of calling these three perfect references.

When I find out that an organization still does reference checks, I love to ask this one question:

When was the last time you didn’t hire someone based on their reference check?

Most organizations can’t come up with one example of this happening. We hire based on references 100 percent of the time.

Does that sound like a good system? Or maybe a better question is, when was the last time your organization didn’t hire a candidate based on their references?

If you can’t find an answer, or the answer is “never,” you need to stop checking references because it’s a big fat waste of time and resources!

There’s no HR “law” that says you have to check references. Just stop it. It won’t change any of your hiring decisions.

3 new (and better) ways of checking references

So, how should you do reference checks? Here are three ideas:

Source your own references — Stop accepting references candidates give you. Instead, during the interview ask for names of their direct supervisors at every position they’ve had. Then call into those companies and talk to those people. Even with HR telling everyone “we don’t give out references,” I’ve found you can engage in some meaningful conversations off the record.
Automate the process — New reference checking technology asks questions in a way that doesn’t lead the reference to believe they are giving the person a “bad” reference, but just honestly telling what the person’s work preferences are. The information gathered will then tell you if the candidate is a good fit or a bad fit for your organization — but the reference has no idea.
Use fact checking software — Google, Facebook, LinkedIn, etc. have made it so candidates who lie can get caught. There is technology being developed that allows organizations to fact check a person’s background and verify if they are actually who they tell you they are. Estimates show that 53 percent of people lie on their resume. Technology makes it easy to find out who is.

The goal: Sourcing better quality candidates

Great Talent Acquisition and HR pros need to start questioning a process that is designed to push through 99.9 percent of hires. Catching less than .01 percent of hires isn’t better quality. It’s just flat out lazy.

Start thinking about what you can do to source better quality hires and your organization might just think you can walk on water.

Your turn: What are your tips for checking references?