Reference Checking and Background Screening— Are They Worth the Effort?

Dec 16, 2016

Let’s assume for a minute that you have kids and you’ve been in a situation where you needed a babysitter. What do you do when you decide to get one?

Think about it for a minute.

That’s right. You interview, you ask for references, and you try to learn more about their background. Of course, you have to, you are going to entrust your children’s safety to this babysitter.

The same is the case with organizations when they are hiring new talent. According to the Society of Human Resource Management, 96% of organizations use reference checks as a screening and selection tool. As to the validity, effectiveness, or worth of this process, however, there are conflicting empirical evidence. So, in this post, we will briefly explore arguments for and against reference checking.


Reference checking is said to increase applicant and new hire quality, reduce violence in the workplace, reduce turnover rates, avoid negative publicity, reduce losses from employee dishonesty, and increase the likelihood of making the right hire the first time. But does it? Let’s see.

Increasing Quality of Hires. According to AMOF, a background check company, when a firm is known for conducting thorough background checks they get fewer applications with serious discrepancies, discourage applicants to conceal pertinent information, and ultimately, improve the quality of new hires. A study by Schmidt & Hunter attests to this. This study on employee selection methods found that reference checks explained a 12% difference in people’s performance at work.

Reducing Turnover Rates. In a study by Hedricks et al., they found that a higher reference response rate is correlated with lower involuntary turnover (i.e. firing). In other words, a candidate who has been referred is less likely to get fired. This study examined reference checks on 7230 employees.

Reducing Workplace Violence. Doing reference checks may also help employers reduce violence in the workplace. Knowing whether a candidate has been involved in dishonest activities in the past allows hiring managers to decide whether a candidate is fit for the organization. Underpinning this is the logic that a person’s past experience is a good indicator of their future actions.

Aside from reducing conflict in the workplace, Margaret Agustin, Senior Consultant at Curran Daly & Associates (CD+A) says reference checks also help ‘strengthen the hiring manager’s decision to hire candidates’. Agustin is convinced that reference checks provide additional feedback on candidate’s performance, achievements, and attitude.


A study conducted by the Society for Human Resource Management found that the perceived usefulness of reference checks rests mainly on verifying factual information like employment history. The study argues that reference checks are not reliable as sources of information for a candidate’s personality traits or interpersonal skills. Here are some of the reasons why:

Referee-related Problems. A candidate’s referee usually provides a ‘positive slant’ because people are not used to saying bad things about other people, especially if the reference is or was a friend or colleague. Conversely, if a referee who has a vendetta, they may slant the reference negatively. Self-provided references are usually misleading and fraudulent as self-selected references are most likely going to provide only positive feedbacks. Kevin Fitzgerald, a Senior Consultant at Curran Daly & Associates, is also not convinced about the worth of reference checking. Fitzgerald says reference checking is like a box ticking exercise.

“I have yet to find anyone says anything even closely negative on a reference check; it’s all back slapping. A background check is of far more use to a client, and/or, making contact with a former boss or colleague confidentially,” Fitzgerald added.  

Fitzgerald’s colleague, Carla Batan, notes that who to contact is key to reference checking. She adds that it must be done with utmost confidentiality.

References affect the decision-making process, not the quality of hire per se. Aamodt & Williams conducted a validity meta-analysis in 2005 and found that the corrected validity coefficient for reference recommendations and actual job performance was a mere .29. It means that references are poor indicators of a candidate’s performance. To this effect, Dr. John Sullivan, an internationally known HR thought-leader and author, considers reference checking and background screening as the weakest of all corporate Human Resource processes.

Of course hearing a positive or negative feedback about a candidate will certainly make a hiring manager’s job a little easier, especially when making a case for or against a candidate. But ultimately, at least according to some empirical evidence, references are poor indicators of performance.

So, should you? Should you bother doing reference checking or background screening? Tell us what you think in the comment section below.

By: Curran Daly + Associates


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