Nine Tips on Checking References

Checking applicants' references is one of the most important procedures in the hiring process. Many job seekers misrepresent their backgrounds and credentials; others simply leave out important information. And no matter how honest applicants are, you can still learn a great deal by talking to other

Checking references takes time, but it can save you a lot of money and headaches down the road. A negative reference could save you from hiring someone who is woefully unqualified for a job or who has destructive tendencies that could land you in trouble. For example, you can be held liable for a new hire who becomes violent and injures an employee or customer, or commits fraud — if it's proven that a reference check could have stopped you from hiring the applicant. The best rule of thumb: always check applicants' references before offering them the job.

These nine tips will help you get the goods on a job applicant:

1. Tell all applicants that you will check their references before you make any hiring decisions. Business owners often hire applicants because of a sharp-looking resume or a "good feeling" from an interview. No matter how quickly you'd like to get a position filled, always perform due diligence before you take the hiring plunge.
2. Ask each applicant to sign a release form permitting you to ask detailed questions of former employers and other references (sample background check permission forms are listed on this page). Make sure the form prevents the applicant from suing you or any former employers based on the information you learn during the reference checks. Without this permission, you may only be able to confirm employment dates, pay rate, and position — information that tells you little about a prospective employee's character. Also, check with your lawyer, because some kinds of liability cannot be waived.
3. Fax over a copy of the prospective employee's background check waiver and your personal credentials before you call a prospective employee's references. Many employers fear being sued for defamation if they say anything negative about a former employee. Your fax will ease their fears. Keep in mind that some states now consider employers' comments to be "qualifiedly privileged." That means the employer cannot be held liable for the information he or she reveals unless he or she knows it to be false or reckless. If that's true in your state (check with your lawyer), make sure the references know it.
4. Verify basic information such as employment dates, job titles, salary, and types of jobs performed. If one of the basic checks doesn't match the prospective employee's resume or what you heard during an interview, you've got a clear sign that something may be amiss.
5. Avoid vague questions. Ask specific questions based on what you learned about the applicant in the interview. For example: how did the employee contribute to projects mentioned in the interview?
6. Pay attention to neutral or negative comments from references. Lukewarm comments or half-hearted praise speak volumes. Ask the former employer if they would hire the person back. If they hesitate, move on to the next applicant.
7. Put less weight on positive references. Most people can find someone to say something good about them. And some employers give positive references even to bad ex-employees, because they're afraid of legal action or are tired of paying unemployment taxes on the applicant.
8. Use former supervisors or senior coworkers as references. An applicant might not want you to contact their current employer (who might not know about the job hunt), but there are always people who can provide a reference.
9. Don't rely on prospective employees' verbal word regarding salary figures. Ask for a current pay stub to verify employment and pay rate.

Another bit of research you might conduct on a prospective employee is a background check. Not every company does this, and not every position merits it, but it might be appropriate for many of your staff. Learn more about how a background check is different from a reference check.

Our guide to online recruiting includes some general guidance on interviewing, reference checks, and other aspects of hiring, and it also tells you about the different online resources available to support your hiring and recruiting.