It's no secret that great businesses are made up of great employees. Your staff is the make or break of your organisational success. Sure, you can have a groundbreaking product, but without the right personnel to support it, you'll likely see little traction.

That's why the recruitment process is so important. You need to make sure you are locating the right talent at the right time to help your business excel. Recruiting has a lot of moving parts – from identifying candidates to conducting interviews, it's a time-consuming process, but few things have such a critical impact on your company's success.

Yet, one of the most important elements of this process seems to be falling by the wayside in many industries: Reference checks. Why are reference checks so critical and how can you ensure you're conducting them effectively? Let's take a closer look. 

Are reference checks really that important?

Over the years, we've had questions about the importance of reference checks. Should they really hold weight in hiring decisions? Are they worth the time they take to complete? In fact, recent research found that 52 per cent of HR professionals avoided reference checks because they thought it slowed down the hiring process.

Sure, reference checks can take up a fair bit of time but they are 100 per cent worth the effort. Consider this: A study by job site CareerBuilder found that 33 per cent of poor hiring choices were a direct result of a failure to research employee skills or conduct a reference check.

This becomes even more concerning when you consider the cost of a bad hire. The same survey found that 41 per cent of companies lost at least $25,000 in the last year due to to poor hiring decisions, an additional 25 per cent said they had lost at least $50,000 for the same reason.

Recruiting the wrong staff member isn't just an issue when it comes to the hard numbers either, CareerBuilder found that:

• 41 per cent of companies reported decreased worker productivity after a bad hire.
• 40 per cent cited lost time due to the recruitment and training of a new worker.
• 36 per cent pointed to a negative impact on overall office morale
• 22 per cent revealed bad hires had a negative impact on client solutions.

Bottom line: Reference checks are an extremely important tool to ensure you don't make the wrong hires and suffer the repercussions. Past employers have insights on the reality of working with your potential candidates, and when reference checks are conducted properly you can glean critical information about issues and potential roadblocks.

But this process isn't all about digging up the negatives. The same way that it can weed out ill-suited applicants, a reference check can reveal high-potential candidates who may not be the best at interviewing.

How can you ensure you're conducting the most effective reference checks possible?

As with anything, reference checks are only effective when they are conducted properly. After over 20 years of coordinating and carrying out reference checks on behalf of our clients, we have a pretty good idea of what's needed to conduct an exceptional reference check, below are the most important steps.

1. Check the references

Businesses are often surprised by how many professionals provide fake references but it happens all too often. Do your research before scheduling calls with these contacts. Try checking LinkedIn or call the direct line of the company listed on your candidate's application instead of the reference's personal number. This sets the tone for the whole process by ensuring that any information you get is completely legitimate.

2. Craft thoughtful and pointed questions

Questions are the backbone of a good reference check. That's why it's critical to take the time to create effective questions. Here are some hard and fast rules:

• Always call, never email: Emails are fine for scheduling a time to talk, but you should avoid conducting a full reference check through this medium. Professionals are often hesitant to put any negative commentary in writing. More than that, using emails eliminates your ability to ask follow-up questions or read verbal signals. Bottom line: Pick up the phone for these conversations.
• Ask open-ended questions: You don't want to ask questions that can be answered with a simple 'yes' or 'no.' You want to get your candidate's references talking. Come up with questions that make them expand on their answers naturally.
• Don't ask leading questions: Don't lead the reference to the answer you want to hear. Instead of asking "Tom was a strong member of your customer service team, wasn't he?" try asking "How would you describe Tom's customer service skills?"
• Address red-flags: If you felt like any information the candidate was giving you during their interview was off, try and address that in these reference checks. For example, if the interviewee got sheepish when asked about their time management skills, make sure to ask their references about this area and see if there are any major issues.

3. Use your intuition

Sometimes there is more to be learned in what's not said than what is. When you talk to references take note of their tone of voice. Are there certain questions that make them hesitate? Maybe you sense a slightly irritated inflection when you discuss timeliness. Pay attention to your intuition in these instances. Sometimes you may have the feeling that the reference is not providing you with the whole story. If it is something critical use these chances to probe and ask if there are things not being said.

4. Compare your data and pinpoint inconsistencies

After you've done all of your reference checks, sit down and compare the data. Pay particular attention to inconsistencies. If you receive information that is inconsistent with other information you have, consider checking in one more time with the reference to better understand the anomaly.

Recruiting with Barringtons

Reference checks are important, but they are only one part of the recruitment process. Barringtons has decades of experience helping businesses from a wide range of industries conduct thorough and effective recruiting. Our team is well-versed in getting the most important information – ensuring your candidates are thoroughly vetted and ready to join your organisation.

We help with the recruitment process so you and your team have more time to focus on other important organisational tasks. To learn more about how Barringtons can help optimise your recruitment process, reach out to one of our team members today!