Reference checks can be integral to assessing a candidate’s suitability but could be useless if recruiters don’t look out for these issues. 

Reference checks are standard practice in the recruitment process. Though some recruiters argue about their effectiveness, and there is evidence that they are one of the least effective ways of evaluating a candidate, they are currently still an integral way to assess a potential employee. 

But a flawed process is still worth getting right. Some interesting research shows that there are three out-of-the-ordinary aspects of reference checks recruiters should be aware of. 

The informal referee 

An ‘informal recommendation’ is when a colleague or someone of influence provides a reference for a candidate offhandedly and often unprompted. This ‘referee’ is usually connected to the applicant through familial relations or the like. 

Sometimes it can feel like nepotism is everywhere and it’s likely a lot of us have either benefited or engaged in it – who doesn’t want to help a friend or family member get along in the world? The trouble is that informal references don’t seem to have much connection to successful outcomes.

A 2018 study published in the Administrative Science Quarterly looked at over 20,000 US applicants to a full-time MBA program. While obviously not the same as a job application, it has a lot of similarities. People are assessed on past performance, formal references (letters of recommendation) and informal references. 

The researchers found candidates with informal recommendations were more likely to get an interview than those without. However, they didn’t necessarily perform better at the end of the program. 

In fact, the study found ‘endorsed individuals’ performed no better than other applicants either academically or on the job market. The researchers conducted interviews with those involved in the selection process and although some claimed the endorsed candidates were ‘better qualified’ there was little data to support this.

Returning to how this would play out in the workplace, another problem with a candidate who gets the job because of an informal recommendation from a superior is that their endorser might not just do the one favour. If the informal referee is in a position of power within your company the candidate may receive several unearned promotions or pay rises. This leaves the organisation open to complaints of favouritism. Indeed, it can open you up to claims of unlawful discrimination.

This is not to say you should entirely dismiss informal recommendations. The ‘informally recommended’ MBA applicants were more likely to engage with campus clubs, particularly in leadership roles, and contributed more as alumni. So there’s an argument they might be a natural fit for your organisation’s culture. 

However, any informal recommendation ought to be considered alongside formal reference checks, and the information gathered through interviews and assessments. 

Who knows the candidate best?

When’s the last time you conducted a reference check only to find the referee didn’t seem to remember the employee that well or couldn’t give specific examples of their work? 

It’s not uncommon for candidates to list references who perhaps weren’t as closely linked to their work as recruiters would like. Usually, this isn’t done to purposely mislead but because having ‘CEO’ or ‘Founder’ in their reference list will appeal more to potential employers. 

But while a more senior referee might look good, there is evidence that they are actually less capable of giving you the information that would help you make the right hire. You’d be better off asking the person sitting next to them in the office.

A 2017 report by reference check website ‘SkillSurvey’ found co-workers were more likely to give feedback about the candidate’s personality and interpersonal behaviours, while managers gave more task-focused feedback like, ‘reliable’ or ‘meets deadlines’. While feedback about a candidate’s work performance is important, information about a potential employee’s interpersonal behaviours is going to be more valuable – a work test or ‘job audition’ is a better way to evaluate skills. 

The questions we’re not asking

A 2019 study published in the International Journal of Selection and Assessment looked at over 900 subjects who had provided reference checks in the past year. Interestingly, 73.7 per cent of participants reported they were not asked about “a candidate’s work-related areas for improvement”. 

Almost every interviewer will ask a candidate where their weaknesses are, so why are we avoiding asking referees the same question?

The study is from the US, but if it’s also happening here the answer could be due to Australia’s collective unease about giving a ‘bad’ reference. The myth that ‘bad reviews are illegal’ is pervasive in Australian business however it is just that, a myth. Provided the reference is accurate and fair then there should be no risk of defamation or open the employer up to potential legal risks. 

The researchers suggested recruiters provide guidelines to the candidate when collecting references information. They suggested recruiters prompt candidates to choose referees who:

• They have worked with recently
• Have been directly involved in their work
• Are aware they’ll receive a call regarding their application

What do you think? Should informal references be dismissed? Do co-workers make better referees? Is asking about “weakness” entering dangerous territory? Let us know in the comments.

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