Dr John Sullivan Talent Management Thought Leadership
With the continuous increase in candidate lying, reference-check fraud, AI-generated reference responses, and the increasing unwillingness of companies to provide any negative work-history information, it now means receiving a positive workplace reference that used to predict a candidate would become a good employee no longer predicts that! Because of the over 40 flaws in the reference check process that I highlighted in the first two parts of this article. In part 3, I recommend 7 actions that will make your background checking process more efficient and accurate.
First Realize That…
In a New Environment, the Past Is Seldom a Good Predictor of the Future
It’s important to be skeptical. Even before reference checking was dominated by today’s level of fraud. Even a 100% accurate work history report was historically seldom an accurate predictor of the candidate’s future performance at the company that they were joining.
Why? Each new company that a candidate joins has a completely different culture, resource availability, manager support, and set of technologies. As a result, the best salesperson at one company doesn’t automatically become the best salesperson when they join another company (even if they are selling the same thing).
In addition, you also need to consider the fact that something significant may have changed in the candidate’s life (and it caused them to job search), and that will affect their future performance. So, the conclusion that you should reach is that it’s a mistake to be a Pollyanna on reference checking. Even the most accurate positive reference checks have not historically been accurate predictors of the future success of a new hire.
Now, let’s shift to the main part of this article, which covers the top seven reference-checking improvement actions that I recommend.
Action #1 – Stop Doing Work History Reference Checks On Many Jobs And Rely On Your Probationary Period
Because of the rise in reference-checking fraud and the unwillingness of reference providers to share negative information about a candidate. I recommend that you stop doing work history reference checks for most jobs. Because they are costly and they take up so much time, they may make your time-to-fill non-competitive. And weak references don’t always drive action because I estimate that 90+ percent of managers still hire candidates with weak work references anyway! Instead, strengthen your probationary-period policy and fire quickly when you see weak new-hire performance or when you learn your candidate lied about the information they gave you.
Action #2 – On Your High-Priority Jobs, Conduct More Thorough Background Checks
Of course, everyone knows that it’s a huge mistake to assume that all jobs have the same business impact. In some jobs, in the past, a single weak hire immediately caused a catastrophic error or a significant financial loss. Because the cost of a bad hire in key jobs is so high, these jobs need to be prioritized so they receive the highest level of reference-checking. These jobs should receive background checks in these 5 areas (work history, criminal background, licensing, credit, and educational attainment). The bar for passing each of these 5 areas needs to be at least 25% higher than normal jobs. The types of jobs that are often prioritized for reference checking purposes include executive and senior management positions, the heads of strategic business units, and almost any job in AI, data security, those with access to sensitive databases, or jobs that deal directly with children.
Action #3 – Don’t Use the Same Reference Checking Process for All Jobs
Because high-priority jobs require much more thorough reference checking, it’s a critical mistake to use the same reference checking process for every corporate job. Obviously, your prioritized jobs should undergo the most thorough of all reference checks. However, recruiting needs to work with its COO’s office in order to determine what background areas should be checked (and how deeply) for each job family. And remember, for consistency in work history checks, send the reference provider a form to fill out. In addition, manager and leadership roles need to add reference components that are specifically designed to identify leadership skills.
Action #4 – Begin limiting the background areas that you check
At too many companies, background checks are run in all of the 7 possible background areas (professional licenses/degrees, work history, criminal background, the right to work in the US, degree level, credit rating, or their social media). This is costly, and it is a wasteful mistake. I recommend that you only conduct criminal background checks and credit checks (using a vendor) in jobs where employees handle money, or there’s been a history of employee fraud. And unless it is necessary for a particular reason, I would resist checking educational attainment and social media files for most open jobs.
Action #5 – Stop Worrying So Much About “Covering Your Butt”
Hiring managers and recruiters are notorious for unnecessarily checking candidates’ backgrounds. Not because there is any business reason for it. But instead, primarily to “cover their butt” in cases they end up hiring a bad employee (negligent hiring). Because even a cursory check allows you to say “yes, I checked their references!” But the truth is that these negligent hiring cases are exceptionally rare. And “I checked their references” won’t be enough of an excuse for your boss because the primary candidate assessment mechanism (the interview) is still 100% your responsibility.
Action #6 – Don’t Allow Any Employee to Conduct Reference Checking Until They’re Trained
Digging down to get the real truth on a candidate requires special tools, skills, and knowledge of the 40+ reference checking errors (listed in Part 1 and Part 2) that must be avoided. It’s time to realize the fact that reference check training likely has the highest impact of any corrective action that you take. So put together your own online training for your reference checkers and periodically assess a sample from each checker.
Action #7 – Verify the Accuracy of Your Reference Checking Process After You Hire
It’s important that you don’t make the same mistake that everyone currently involved in reference-checking makes: assuming that your overall reference-checking process is making accurate predictions on whether a candidate with top references will become an effective employee (and vice versa). The best way to verify that correlation is to assign a 1 to 4 rating to each completed reference check (very strong, strong, average, below average, questionable). And then check after the hired candidate has completed six months on-the-job. This helps determine whether candidates with high reference scores (very strong and strong reference ratings) are still with us and performing at above-average levels. Obviously, you should expect new hires that had average or weaker references to be failing at a higher rate.
Final Thoughts
As I mentioned earlier in this article, I am not the only industry leader to speak up about this flawed process. Industry giant Tim Sackett called reference checking “a circus” and “a massive hoax.” I alternatively label it as the process with the lowest ROI in hiring. And in my view, reference checking is a long-established tradition that must dramatically change. To respond to record-breaking levels of reference-checking fraud. And the continually increasing need for quality hires in areas like AI and data security.
Thanks for reading.
Notes for the reader
This is the latest article from Dr. Sullivan, who was called “the Michael Jordan of Hiring” by Fast Company.
Please help spread his ideas by sharing this with your team/network and posting it on your favorite social media.
Dr John Sullivan is its author – It first appeared in the 10/6/26 issue of Aggressive Talent Management
