Reference Checks: Are They Worth The Time?
Reference checks are a routine and tedious part of hiring. According to a 2004 survey by the Society of Human Resource Management (SHRM), 96% of HR professionals state their organizations conduct some form of reference check.
Other research indicates the average reference check takes 30-60 minutes with a pretty dismal response rate of 50% (Hendricks, Robie, & Oswald, 2013). Clearly, conducting a proper reference check requires an investment of time and resources.
In this post, I tackle another taken-for-granted hiring practice. Reference checks: are they actually worth conducting?
What the research reveals about reference checks
Turnover. A 2013 study conducted by Hedricks and colleagues examined reference checks on 7230 employees across various organizations. The reference checks in question were web-based, consisted of 18-22 items using a 7-point rating scale (never to always) measuring professionalism, interpersonal skills, problem-solving and adaptability, and personal value commitment, and were conducted with managers, colleagues, direct reports, and clients. The average number of references completed per employee was high at 4.
Results indicate that a higher reference response rate (i.e., the number of references completed divided by the total number of requests) is correlated with lower involuntary turnover (i.e., firings). Statistically, an increase in the reference response rate of one standard deviation corresponds to a 18% reduction in the likelihood of an employee being fired. That’s pretty good!
Job Performance. A famous analysis on employee selection methods by Schmidt & Hunter (1998) found reference checks explained a respectable 12% of the differences in people’s performance at work.
So are reference checks worth it? The data argues yes with some caveats.
How to properly conduct a reference check
- Use a structured reference check form.
- Assess job-related competencies and skills.
- Record replies using a quantitative rating scale.
- Get references from multiple sources.
- Weight reference scores consistently across job candidates in your overall hiring decision.
The SHRM survey reveals that the perceived usefulness of references checks rests mainly on verifying employment history but they aren’t as reliable as sources of information on job candidates’ personality traits or interpersonal skills.
However, properly conducted reference checks do appear to be a useful part of your overall data-based hiring process.
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