It's back-to-school time - so let's start off with a review of what we already know (or might have learned but forgotten over the summer!), with a few blog entries on the need for (and benefits of) a robust reference checking system.
Let's open those spiral notebooks and jot down this great quote from Susan R. Meisinger, SPHR, president and CEO of SHRM:
"Being able to identify unqualified candidates during the recruiting process saves organizations time and money. Employees provide the competitive edge for a successful business, making it critically important for organizations to be able to recruit the right people. With new technologies, reference and background checking has become easier to conduct and increasingly more important to organizations who want to get a complete picture of the job candidates they consider hiring."
Seems like a no-brainer, doesn’t it? Avoiding the dreaded “bad hire” – with all the risks it carries, not just to productivity and bottom-line results, but also to corporate reputation and legal liability – has become more and more crucial, and a solid, robust reference checking system is broadly accepted as a key tool for accomplishing that goal.
But in some companies, the reference check has gone the way of the transistor radio – maybe listened to occasionally, but generally forgotten. In part, this is because of a mostly baseless fear of litigation has driven companies to restrict the amount and kinds of information that employees can divulge about their former co-workers – and in part it’s because it’s just hard to get a reference on the phone in the first place. The process as presently done may just seem like a big waste of time, particularly when the need is to get someone into that empty chair as soon as possible.
Maybe we need to refresh our memories about the kinds of major risks that companies can run when reference checks either aren’t done at all, or aren’t taken seriously as part of the selection process. Here’s a biggie:
Excessive turnover, lost productivity, theft and dishonesty directly impacting the hiring company.
- “It makes sense to adopt a requirement that no individual will be hired unless and until satisfactory references are first obtained. This may seem like an overly strict policy given sometimes stiff competition for even minimally qualified employees and the need for speed in hiring. However, to hire someone without the benefit of adequate job references is to risk employing an unfit individual whose poor performance or dangerous propensities could expose your company to theft, accidents, workplace violence, or a negligent hiring lawsuit.” -- Bliss, Wendy, J.D., Legal, Effective References (SHRM, 2001), p. 61 (emphasis added)
- Approximately two million acts of violence occur in US workplaces annually, according to a July 1998 report by the US Department of Justice. Workplace violence costs American businesses an estimated $36 billion per year.
- Ninety-five percent of US businesses have been victims of fraud by trusted employees, reports American Background Information Services, Inc. According to the US Chamber of Commerce, employee dishonesty costs businesses 1% to 2% of gross sales. (Cited by Bliss, op. cit., p.6)
And ironically enough (considering that companies are loathe to give reference information because of possible legal liability), the possibility of negligent hiring lawsuits provides an even more compelling reason for conducting reference checks - but more about that in the next post...
I don't know how many times I've seen references scanned but never actually contacted. I suppose the interviewers think it will take too much time and effort to do so, but making a hiring mistake is far more costly in the long run.
Posted by: panasianbiz | September 10, 2006 at 07:21 PM