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 respoReference-checking2nse rate of 50% (Hendricks, Robie, & Oswald, 2013). Clearly, conducting a proper reference check requires an investment of time and resources.

In previous posts, I examined whether our faith in resumes and job interviews is warranted. Unfortunately, the data reveal that they’re both not great for selecting productive job candidates.

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.

The takeaways

So are reference checks worth it? The data argues yes with some caveats.

How to properly conduct a reference check

  1. Use a structured reference check form.
  2. Assess job-related competencies and skills.
  3. Record replies using a quantitative rating scale.
  4. Get references from multiple sources.
  5. 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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Ji-A Min

Ji-A Min

Head Data Scientist at Ideal
Ji-A Min is the Head Data Scientist at Ideal. With a Master’s in Industrial-Organizational Psychology, Ji-A promotes best practices and data-based recruitment. She writes about trends and research in talent acquisition, HR tech, and people analytics.
Ji-A Min

Comments

  • Ellis

    I can’t believe the reference response rate is so low, when I got my sales manager job my references were checked at least three times by the new company!

    • I think it just goes to show how unpopular reference checks are for the references too!

  • reference checks are a waste of time. reference interviews can be valuable, yet you have to ask the right question. most reference check interviews I’ve responded to on behalf of colleagues have been conduced in a juvenile perfunctory fashion. superficial would be the best word to describe the interview questions. most people who agree to provide reference interviews intend for that person to do well, so the questions really matter a lot.

    • I agree, the way most reference checks are conducted, they unfortunately end up being a waste of time. Virtually all reference checks are superficially positive, which makes it extremely important to conduct them using an objective, quantifiable method that results in useable data for hiring decisions.

  • Hard to say Ji…..afterall,we’re dealing with human beings who are not objective, and whose tests always express some bias…..sample sizes for reference checks are very small, and not subject to normalization the way you’d tend to think about it…..good reference checks require a good conversation, and some really great questions imho