The Reference Check: Everything You Need To Know

A reference check may be included as part of the hiring process to help employers understand more about a candidate’s history and work style. In this article, we dive into what reference checks are, how they stand apart from other background checks, their potential advantages and challenges, and some common questions employers ask about reference checks. 

---

Employers looking for valuable insights to aid their decision-making in the hiring process often turn to reference checks. These checks offer a deeper understanding of a candidate’s past performance, skills, and character traits—information that may not fully translate over interviews or on resumes. They are an important measure that can provide clarity, reduce risks of hiring poorly fit employees, and contribute significantly towards building a thriving work team.

In this article, we’ll go over:

• What is a reference check
• Benefits and drawbacks of reference checks
• The reference check process
• Types of reference check questions
• FAQs about reference checks

What Is A Reference Check?

A reference check is part of a comprehensive hiring process and involves contacting a job candidate’s previous employers, managers, coworkers, or teachers. It’s considered a type of background check and helps companies understand a candidate’s performance in prior roles and gather insights into their knowledge, skills, abilities, and character.

Reference checks can also help verify information provided on a candidate’s resume or in the interview process. For example: tasks and responsibilities previously handled, proficiency in certain skills, and the circumstances under which they left previous employment. In a competitive hiring landscape where you can’t risk a bad hire, reference checks are a critical tool for talent acquisition and can help you make informed hiring decisions.

Benefits & Drawbacks Of Reference Checks 

While reference checks often provide valuable information about a job candidate’s work history and soft skills, their impact may be limited by factors such as who the candidate chooses to list as a reference and barriers to contacting current employers.

Let’s start with a couple of drawbacks: Candidates may only supply reference information for people who are likely to give them a positive review (skewing the results of the check), and you might not be able to speak with their current employer, as they may not want to disclose they’re job hunting. Sometimes, you may need to use your best judgment about whether a reference’s perspective is relevant to your hiring situation.

On the plus side, reference checking can give you a deeper understanding of the candidate’s abilities, how they approach their work, and other details that may not be apparent in an interview. Conducting these checks can also help you identify any inaccuracies or exaggerations within job applications. They can also help you mitigate risk for your team during the recruitment process by helping you hire the right person for the role.

What Happens During The Reference Check Process?

The reference check process starts when a hiring manager or a background check service, like GoodHire, reaches out to the professional references provided by a job candidate. This is usually done after a candidate’s application has been reviewed and one or more interviews have been conducted. 

Once you connect with their references, you’ll get the chance to ask reference check questions that give you deeper insight into the candidate’s skills, work style, and attitude. Some employers choose to conduct pre-employment reference checks over the phone, and some may send a written questionnaire that can be returned electronically.

Reference checking usually involves asking about the candidate’s role in their previous company, how long they worked there, why they left, and how their skills can fit into the position they’ve applied for. Focus on choosing questions that can help you understand the candidate’s work style and whether they’d be a good fit for your organization.

Best Practices For Conducting A Reference Check

To get the best results, consider the following reference check best practices: 

1. Be consistent. Documenting and following a consistent reference check process for all candidates is important to ensure your organization follows guidelines for non-discriminatory hiring. Generally speaking, you can maintain fair hiring practices by determining which questions to ask based on the position you’re hiring for or your business—and not based on your personal thoughts about individual candidates.
2. Ask open-ended questions. Posing open-ended questions can encourage a deeper conversation with the reference. Keep the conversation going with follow-up questions.
3. Contact multiple references. Don’t stop at speaking with just one reference—contact a few to get various insights about the candidate. 
4. Use a reference check service. You can ease the workload on your human resources team, speed hiring, and even reduce overhead costs by partnering with a service, like GoodHire, that specializes in conducting fair, focused employment reference checks.

Types of Reference Check Questions

When conducting a reference check, the questions you ask can provide deeper insights about your potential hire. Here are four types of reference check questions that can help you turn reference checks into a valuable source of information:

Job Performance

This question category focuses on the tasks and assignments your prospective employee has tackled before. You might ask questions like, “Could you give me an example of a project where the candidate particularly excelled?” or “How did the candidate respond to challenging situations in their previous role?”

Professional Strengths & Weaknesses

These questions are meant to identify what the candidate does best and where they might need a little extra guidance. For example, you could ask, “Could you name a skill or ability where the candidate particularly shines?” or “Can you identify any areas where the candidate has room for improvement?”

Work Ethic

To get a read on a candidate’s dedication and integrity, you might inquire, “Did the candidate consistently meet deadlines?” or “How committed was the candidate to maintain high standards of quality work?”

Style of working

This helps you understand how a candidate approaches work, how well they integrate into a team, and if their style will fit in with your existing team. Questions might include, “How does the candidate handle feedback?” or “Could you describe the candidate’s ability to work as part of a team?”Remember, these categories merely provide an outline; you can frame your questions to help get the specific insights you want. The more information you have, the more confident your hiring decisions can be. You may want to consult your legal counsel to determine if any types of reference check questions are prohibited by legal regulations in your region.

Background Check and Reference Check Laws

Many states have laws that regulate what information an employer is permitted to request from a candidate’s former employers, and federal regulations like the Fair Credit Reporting Act (FCRA) may also dictate how businesses conduct reference checks for employment.

These laws generally outline the boundaries within which employers can investigate a candidate’s previous work experiences or criminal record history, as well as processes that should be followed if a candidate is disqualified from employment following a reference check. Maintaining compliance with these regulations not only helps you mitigate risk for your business but also protects you against the potential for unfair discrimination between candidates.

While background check and reference check laws differ between states, here are a few common regulations that impact employee reference checks:

Fair Credit REporting Act (FCRA)

US employers who work with a consumer reporting agency (CRA) to conduct background checks, including reference checks, are required to adhere to federal regulations outlined in the FCRA. Notably, employers need to give candidates written notice of their intent to perform a background check and receive their written consent before proceeding. If an employer chooses to disqualify a candidate from being hired based on the results of a background check, they should follow the adverse action process. See law. 

State reference check laws

A majority of US states have laws in place that regulate how employers may conduct reference checks. Many states require that employers receive consent for a reference check in writing from a job candidate, and some may prohibit employers from asking about certain information—such as previous salaries or personal details not related to job performance. Many states even have laws in place that protect employers from civil suits based on information they share during a reference check.

You should review relevant background check laws in the states where you are located and where you will be hiring before conducting reference checks to help ensure compliance.

Let’s look at a few examples of state laws that regulate reference checking:

Search

State	Reference Check Provisions
California	California Labor Code § 1053 permits employers to disclose truthful statements concerning the reason a job candidate was either discharged or voluntarily resigned. Former employers also reserve the right to disclose if reports of sexual harassment led to the termination of the candidate, according to California Civil Code § 47.
Colorado	Colorado Rev. Stat. § 8-2-114 protects employers from civil liability when sharing information about the suitability of a candidate for re-employment, their work-related skills and abilities, and the reason for an employee’s separation upon request from a prospective employer. They may not, however, maintain any form of blacklist designed to prevent an individual from future employment.
Illinois	In Illinois, 745 ILCS § 46 protects employers acting in good faith from civil liability when providing truthful, performance-related information about a current or former employee during a reference check.
New York	New York State Labor Law § 194-A prohibits employers from asking about previous salaries during a reference check or at any point during the hiring process. New York City’s Fair Chance Act also prohibits running a criminal background check prior to a conditional offer of employment. However, employers in the city can conduct non–criminal background checks, including reference checks, prior to making a conditional offer of employment.
Texas	Texas Labor Code § 52.031 protects employers from civil and criminal liability for providing a truthful statement about the reason a former employee left their employment during a reference check. This law also prohibits employers from maintaining any blacklists designed to stop an individual from gaining employment. Furthermore, Texas Labor Code § 103.001-103.003 protects employers from civil libel suits after sharing information about employees’ job performance during a reference check.

FAQs About Reference Checks

Save Time With Reference Checking Services From GoodHire

Reference checks provide a more comprehensive understanding of prospective employees’ skills, work history, strengths, and weaknesses. They also help identify any inaccuracies within job applications and offer a chance to consider feedback from the people who have closely worked with the candidate. With the right methodologies and by asking the right questions, employers can maximize the benefit drawn from conducting reference checks.

Managing reference checks in-house can be challenging and time-consuming. That’s why many employers partner with trusted professional reference check services, like GoodHire. GoodHire specializes in providing professional, detailed, and prompt reference checks as part of a comprehensive background check process. We help you improve turnaround times and lighten your hiring team’s load so they can focus on what matters most—choosing the best candidate for your organization. Get started with GoodHire today.

---