Don’t Hire a Liar
The Definitive Guide to Reference Checks
In Steven Speilberg’s film, “Catch Me if You Can”, Leonardo di Caprio portrays Frank W. Abagnale a master impostor and forger. Abagnale used false identities to work as a doctor, a lawyer, a college professor, even a co-pilot for a major airline company—all before reaching his 21st birthday. It’s a very funny and entertaining movie but it does beg the question, “how did this guy ever get hired?”
Truthfully, it’s not that hard. Con artists and masters of deception trick employers every day, robbing the economy and putting people’s lives at risk.
A serious problem that is growing
According to the Association of Certified Fraud Examiners, US organizations lose more than $660 billion annually to fraud and abuse. Bernard Lawrence “Bernie” Madoff set the record at $65 billion when his Ponzi scheme unraveled in 2008.
The following statistics underscore a serious problem – the incredibly expensive price and high stakes consequences of hiring the wrong person into your organization.
- The American Management Association says employee theft causes 50% of the nation’s business failures
- 95 % of all businesses are victims of theft, but only 10% discover it.
- Average employee embezzlement is over $125,000
So if the “average” employee embezzles $125,000 over the course of their career, imagine what an organized guy like Frank could do. Unfortunately, we don’t need to “imagine” because we know.
Fraud and violence in the work place can have a devastating effect that may leave permanent scars
The financial costs can sometimes be passed on to consumers – but the human cost of violence in the work place is permanent:
- Over 85% of all resumes contain errors, omissions and false statements.
- 60% of college registrars regularly experience attempts to document false credentials.
- 33% of job applicants falsify employment applications.
- 40 million Americans have arrest records.
- 1 in 6 violent crimes occur in the work place.
- Workplace violence cost employers in access of $5 billion in lost work and legal fee.
- The workplace is the scene of approximately 3.2 million crimes and thefts every year.
- There are 1.5 million probationers.
- 45% of potential employees have; a criminal record, bad driving record, worker’s compensation claim, or bad credit history.
- Persons with substance abuse are 10 times more likely to miss work, 3 times more likely to have an accident, 33% less productive on the job and file 5 times as many workers’ compensation claims.
It’s bad out there and it’s getting worse every day.
The compound effect of a bad hire: poor moral, high turnover and lagging sales are symptoms of a bad hire – a mistake that could have been avoided. As if things could be worse, there’s always the cost to jettison the excess baggage. Firing isn’t cheap. An entire industry called Outplacement evolved because firing extracts such a heavy toll on those who must do it. Then of course there’s the endless litigation and God forbid, the whole “negligent hiring” aspect of improper hiring. Reference checking can help you avoid all that pain. Foresight and proper planning can help keep you out of trouble.
Why don’t employers simply check references?
First, it’s quite tedious. Second, by the time most managers get to the end of a hiring process and find their star candidate they just want the process to be over. Third, most employers don’t like giving references because of the fear of litigation from an unhappy, unemployed, former colleague whom they simply told the truth about, so they assume there’s little point. After all, what candidate would actually give you a bad reference? It can be quite frustrating.
Finally, there’s the emotional aspect to hiring. Once the manager has decided the candidate is a fit they become emotionally attached, to a certain extent, to that decision. Sort of like when you have finally chosen the right car or pair of shoes to buy. You used your personal judgment in the process and to go back and question your decision is too embarrassing for some people.
You don’t have to be a reference check refugee.
In truth there are a lot of people who don’t like giving references. Some will go out of their way to avoid you. Fortunately, life doesn’t have to be that way. We’re going to show you how to warm up the most frigid reference so you can glean all the information you need to make an informed hiring decision. We’ll actually go so far as to tell you exactly what to say and how to say it, so people will gladly answer your questions.
Record unemployment works against you
The recent proliferation of resume factories, coupled with higher levels of unemployment, has led to “credential-creep”. Credential-creep is the fine art of exaggerating. Sometimes it even means out-and-out lying on the off chance that an employer won’t or can’t do a reference check to verify the details. The fact is, people do lie and exaggerate on paper when they’re looking for a job. The slightest edge is often what makes the difference between securing an interview or being filed in the circular cabinet – in a boom economy or a busted one.
Credential- creep can range from a candidate claiming they had greater responsibilities than they did, to claiming they worked for a company when in fact they didn’t. To illustrate that fact, let us tell you about Brian’s experience.
Brian called me shortly before Christmas. He was preparing to hire a candidate he’d met at a party and wanted our input on the offer. On paper, the fellow was a dream come true. A sales vice president with twenty years’ experience from three of the world’s largest systems integrators. Pedigrees like that are rare. The nice chap had even provided written references from the presidents of these firms. They were sterling. A little too good actually. We checked the references ourselves. It turned “Reggie”, as he referred to himself, had a deep rich fantasy life. None of the three presidents had even heard of him. When confronted with the lie more lies were told… Thankfully a competitor ‘snapped him up’
Some people exaggerate just a little…
Now this may be an extreme case but people do fudge – embellish – augment, and incorrectly describe their credentials. Take for example the former president of Lotus, Mr. Jeff Papows who got in trouble several years back for misunderstandings surrounding his education and military service record. According to the Wall Street Journal as reported through The Register (http://www.theregister.co.uk/content/archive/4047.html)
Papows is “not an orphan, his parents are alive and well. He wasn’t a Marine Corps captain, he was a lieutenant. He didn’t save a buddy by throwing a live grenade out of a trench. He didn’t burst an eardrum when ejecting from a Phantom F4, which didn’t crash, not killing his co-pilot. He’s not a tae kwon do black belt, and he doesn’t have a PhD from Pepperdine University.”
Granted these are unusual cases, which you aren’t likely to run into, but credential-creep happens at all levels with great frequency.
Some people lie on purpose with the help of friends
Patricia Gillette a San Francisco lawyer who defends companies against former employees told Maxime magazine, “Probably 90 percent of the time, people lie on their résumé.”
An article in Maxim magazine titled, “How to Lie on Your Resume” actually shows you how, quoting Jim Petersen, author of How to Lie on Your Resume – and Get the Great Job You Want (Ariza Research Press, 1998) As you’ll see a little effort, is all that’s required.
“Some résumé cheats create false references that are difficult to check. Jim Petersen, the Cleveland-based publisher and author of How to Lie on Your Resume—and Get the Great Job You Want!, found a way to do this when a computer company he worked for went belly up. “About a half-dozen of us stood around the parking lot and agreed to act as supervisors to give references for each other,” he recalls. Petersen always gave a fellow conspirator a ring before a recruiter was going to call, to make sure they had their story straight.”
Job hunters are often more skilled and better equipped at interviewing than interviewers
There are so many books and success coaches nowadays to help coach candidates on how to perform during an interview that most job-seekers are more skilled at interviewing than the interviewers themselves
For most hiring managers who do occasional interviews the process is a farce. It reminds us of a gentlemen’s tennis match where everyone is politely dressed in white and is being careful to remain immaculate. Questions are asked, questions are answered. Back and forth – forth and back, with very little in-depth discussion. The mood is light and congenial. Nothing like real life.
Interviews rarely reflect real life situations or the real people involved. We North Americans live in a world where gregarious extroverts often win out over the quiet, steady performers. As they say, “bullshit baffles brains” –far too often, we’re afraid.
Reference checking is often the last and indeed the only, way to separate out who’s really got the skills and who’s just a fast talker. Frequently interviewers extend offers based on their “first impression”, “gut feel”, or “chemistry”, with little regard for the hard evidence that proves which candidate is the right one for the job. If this isn’t enough to convince you of the necessity to reference check every candidate then let’s talk about your legal obligations.
Legally, everything you do may be held against you
“Employers are not only vulnerable in their workplaces if a poor hiring decision is made; they are also liable to third parties for the actions of their employees. The scope of that potential liability is dramatically increasing with greater sophistication on the part of potential claimants, “ says Janice Payne, partner of the law firm of Nelligan O’Brien Payne in Ottawa, Canada.
To keep up to date with this developing area of the law, you should ask your legal department or seek outside council.
New rules can hold you liable for more than a bad employee’s severance
Can you be held liable if you don’t check references? You bet. As a matter of fact, many companies have been held liable for crimes committed by their staff. These crimes have ranged from murder, to rape, and theft. This was all made possible because of a new concept called “Negligent Hiring”.
Negligent Hiring varies from state-to-state but essentially it means a company can be held liable for failing to conduct an adequate pre-employment investigation into a job-seeker’s background. If an employee has a history of misconduct indicating a propensity for criminal behavior which an employer could have discovered through a background investigation, the employer could be held liable for any resulting injuries. Failing to adequately investigate before hiring can expose you and your company to liability for actual injuries, pain, suffering — and even punitive damages. You put your whole firm at risk. Now do you understand the raging debate on Facebook profiles?
You Can you be held liable if you give a false reference or bury the truth.
In a widely publicized case a lawsuit was brought against Allstate Insurance Co. This is an example of a “negligent referral” case. The suit was settled before going to trial, but a Florida judge ruled that Allstate could be sued for punitive damages for concealing the violent nature of a former employee who killed co-workers at Fireman’s Fund Insurance Co.
In this case, the wrongdoing allegedly occurred when Allstate wrote a recommendation letter saying the employee was let go as part of a corporate restructuring. In truth, he had been fired for toting a gun at work. Fireman’s Fund Insurance Co. said it relied on the letter from Allstate when they hired him. In January of 1993 this man shot five Fireman Fund co-workers in the company’s cafeteria. He killed three of them, before fatally shooting himself. One of the survivors and the families of those who were killed filed the suit against Allstate. One positive outcome from the tragedy was the resolve and subsequent legislation to ensure this didn’t happen again.
Granted, this was an extreme case, but it’s the most compelling example for seeing that references are done – and done correctly I can think of. In the United States, 35 states have passed laws that protect employers by granting them immunity from civil liability for truthful, good-faith references. While the laws vary by state, the statutes specify that an employer will be “presumed to be acting in good faith unless the current or former employee can prove that the reference provided was knowingly false, deliberately misleading, malicious or in violation of civil rights laws”.
As professional recruiters, with more than a 1000 successful projects under our belts, we assure you that most employers will follow the Golden Rule, “do for others as you would like them to do for you”. Most employers will answer your questions and provide more than salary verification and dates of employment if you ask them the right way. We will show you how in the next section.
Personally, we always find the composition of a candidate‘s reference list fascinating. When it‘s full of people who can’t talk about his daily work we know immediately that there’s a problem. We likely have a candidate who’s trying to hide something.
“Who You Gonna Call”: The profile of a suitable reference
The most important aspect of any reference check is not the questions – it’s choosing whom to contact. Yes, whom you contact is more important than the questions you ask. You can have the most rigorous process known to mankind, but it won’t help you one bit if you ask the wrong people.
You likely already know that most candidates stack the deck in their favor when asked for references, but this bear repeating. Unless you specify with exactly whom you want to speak their list will be filled with people ready to sing their praises. Can you blame them? If you really really REALLY wanted a job wouldn’t you do the exact same thing? Okay, maybe you wouldn’t but most people would. Most candidates don’t want to risk having someone tell the truth. So where can you obtain objective information?
Like most people, you probably realize that a person’s past job performance is a good predictor of their future performance. The theory is that a star will perform well regardless of where they work. For the most part this is true. If “Joe” did a great job at “ABC Company” chances are Joe he’ll do a good job for you.
So, who can tell you the truth about Joe?
It’s not their priest, best friend, or drinking buddy. It’s probably not a spouse. You need to talk to the people who can judge the candidate’s ability to do the job they’re being recruited for. People who have recent, first-hand experience with the candidate on the job are the best references. Most often, direct supervisors, peers and subordinates are best placed to have observed the candidate’s performance in the level of detail we require.
The purpose of the reference check is to obtain comments and observations about the candidate’s performance and experience related to the job they are being considered for. It is of little value to obtain a reference’s “opinion”, unless you are very confident in their judgment. If you don’t know the reference personally, which is most often the case, you have limited opportunity to clarify their credentials or capacity to make sound judgments. To assist in this we suggest you always make sure you thoroughly understand the professional relationship between, the candidate and reference.
These two types of references are useless
Do not use personal references in the place of business or professional references. Relatives and friends are of very limited if any value to you as a reference. Their opinions can’t possibly add any insight into the candidate’s work habits on the job. His “buddies” don’t know what he’s like to work with. Yes, character references have their place but it’s not here.
The most frustrating, and we would contend irrelevant references, are those from the Human Resources Department of the company where the candidate last worked or currently works. Why? Because they don’t work with Candidate daily so they can only comment with second-hand knowledge or anecdotal information. They won’t be familiar with the candidate’s day-to-day performance unless he’s a super-star or a complete “dud”. Also, most HR departments are hesitant to reveal anything, no matter how true, which might lead to legal action. If they choose to comment it’s usually just to tell you, “yes, (s)he worked here”. That isn’t what we’re looking for. And by-the-way if the candidate is a super-star, or a dud, they may try to intentionally mislead you.
For true perspective talk to these people
The best references fall into two major categories, direct and indirect. The most useful references come from people who are, or have been, professionally involved with Candidate’s day-to-day work, — past supervisors, peers and subordinates. For maximum benefit make sure you clearly understand each of the relationships between Candidate and his references before you begin.
Get a complete picture using 360-Degree Feedback
Bear in mind, no one person will be able to give you all the information you’ll need to make an informed decision. You need to check a Candidate’s references slightly differently with his boss, than his peers and subordinates to get a complete picture of his competencies. Each reference offers another perspective – another piece of the puzzle.
- Candidate’s direct boss assigns his responsibilities.
- Candidate’s peers know what an overachiever he is.
- And most importantly, the people who work directly for him — Candidate’s subordinates – know everything Candidate’s boss and peers don’t.
Obviously, the reference questions you will ask a supervisor are not the same as those you should ask a peer or a subordinate.
This type of 360-degree feedback is enlightening to say the least. And frankly, next to his boss, Candidate’s subordinates will provide the most insight into his character. Here is what do you do you do when the candidate hands you his list of references. First, determine if the people on the list are the ones who you need to speak to. Here are the questions you ask the Candidate to assess the suitability of each reference:
- Did/do you report directly to them? For what length of time? (less than 1 year is too short a period to form a valid impression).
- Did/do you complete or contribute to your performance appraisals? How many?
- Or if they were a per or subordinate you want to ask:
- Did /do you work directly with the candidate as part of a team? For what length of time? (Longer is better).
Note: If you clarify the relationship at the start and find the reference to be unsuitable contact the candidate, explain the situation and ask for a more suitable reference. We’ll actually explain exactly you how to set this up during the interview stage so it isn’t a problem.
How you approach a reference will affect the outcome
The best possible information on how life will be with the Candidate will come from the Candidate’s boss, — who should be your counterpart at his current or former employer. Generally speaking your peer at the Candidate’s place of employment is more likely to be truthful with you if you call them directly, than if someone else does the reference for you. You’re in the best position to ask specific questions regarding the job for which you’re hiring. After-all, you’re in a better position than anyone else to drill down on specific concerns you may have, or to query them on the finer points of the job itself.
As executive search professionals, we insist that our clients check at least one reference personally and it’s always with their counterpart. Often that even means having the client call and re-do references we’ve already done. As well, the Candidate’s boss’s boss may provide a different perspective on how he performed.
We’ll talk about this in greater length later, but in the meantime, remember that even if you don’t do any of the other references personally, you as the hiring manager must do the reference on the Candidate with your counterpart at the Candidate’s old firm. There are no exceptions to this rule.
Guess who knows where all the mistakes are buried?
The qualities most in demand today are the ones the Candidate’s peers are in the best position to comment on — leadership skills, communication skills, a bias towards action, and passion. We typically do at least two peer references for every supervisory one. The same ratio applies with subordinates. Candidate’s peers can give you a true picture of his strengths and weaknesses as they pertain to his job function. We even ask them to rate the candidate against his peers and the former people who have held that position, just in case there is someone better whom we should be recruiting.
No one understands better whether the Candidate is pulling his weight than his direct subordinates. Failed projects, blown budgets, poor management skills can all be fixed by a hard-working team stranded below a poor manager. Subordinates also know where all the “dead bodies” are buried… you know, those projects that were never quite completed properly etc., or the one which cost the company a million dollars to fix. Likewise, it might be good to know that a few dedicated subordinates followed Candidate over from his last gig and are likely to do it again when he moves.
Delegate this and you court disaster
We are often asked, “Who Should Check the References?” and, simply put, reference checking is a “do it yourself” project. This is the one job which shouldn’t be delegated. If Candidate is going to report directly to you, you need to do the reference checking personally. No matter how thoroughly you prepare someone else, you are in the best position to drill down on answers that appear vague or off the mark. You understand the intricacies of the job, so you’ll be able to think of additional questions that won’t occur to others. All in all, it’s in your best interest to get the facts directly.
If you don’t have the time to do a thorough job yourself, and feel compelled to assign the task, then compromise by assigning just part of the reference checking to your most trusted assistant, but reference check the Candidate’s boss yourself.
As we said before, your counterpart at the Candidate’s present firm is likely to be more open to speaking with you personally, than some third party who’s simply going through the motions on your behalf. Presidents should speak to Presidents, and managers to managers etc. The camaraderie afforded by your respective positions will prompt a more honest and detailed reference. Be prepared for real candor because the higher up you go in the company hierarchy the more candid the responses will be.
Clarify your end goals first
If you are like most people, you may not appreciate the specific steps you should take before and during the interview process to refer checking an easier and more successful exercise. To most people references are what you do AFTER you decide whom you want to hire, but a fully integrated process is your best bet against a dishonest Candidate.
Set the stage prior to the interview
Decide what’s important in the job. This sounds so simple, doesn’t it? Alas, we can’t tell you how many times a client has backed away from hiring a candidate because they were hung up on factors that had nothing what-so-ever to do with the job like hiring a “team player” when what the vice president really needed was a “kick butt” take no prisoners Attila the Hun type – because he’s 18 months behind on his product release and the company needs revenue from the new product line yesterday.
You must understand clearly what you are looking for before you begin interviewing even your first candidate. If you haven’t already done so, list in order of importance the top 6 functional tasks to be performed, the personality type and the direct experience the position requires. Then decide what you need/want to, know from references to validate your assessment of each candidate.
For example, if managing project complexity is an issue make sure you focus on it during the interview. Jot down whom they worked with and what they accomplished so you can verify the candidate’s story later. Most companies don’t take note of the specific details and later they find it nearly impossible to verify the details of the candidate’s accomplishments. You don’t want to put yourself in a situation where you must call the candidate back later and say, “your reference doesn’t remember…” or “who can verify….?” At the best, you look incompetent.
As they say, “an ounce of prevention…”
The single best thing you can possibly do to protect yourself and your company before you begin interviewing is to require all non-executive candidates to complete your company’s official job application form and attach it to their file. It should be standard operating procedure for all hiring except senior executives.
Your application form should glean as much detailed information as possible about work history and education, including all beginning and ending dates of employment on a single page. Ask for the names of their direct supervisors. Most people will be able to take the information straight off their resumes in a few short minutes. More importantly, this is the first place you will try to gently dissuade less than honest candidates.
You need to consult a lawyer on the specifics, but we suggest you should state on the application that, “all information will be verified and all references will be checked.” It should also state that any information will be kept confidential and only communicated to those individuals who are directly involved in the screening and hiring process. At this point most candidates will think twice about fudging their credentials.
Finally, the candidate should also agree in writing to, “release former employers and others from any liability that might arise from the disclosure of accurate information”. Have this note, or one similar to it drawn up and validated by your company’s legal department because I am not a lawyer and I’m not giving you legal advice. Have the candidate sign the statement to complete the employment application.
Now, why should you go to all this trouble? Because, when you clearly signal to candidates that your company has high standards and won’t hire just anyone, you raise your company’s worth in the eyes of all candidates. You increase the value of your company in the eyes of the people you want to hire, and scare off the dishonest candidates because they know they’ll get caught. Dishonest candidates will not complete the application. They will leave areas of the form blank on purpose hoping you won’t notice. More often, they’ll just get up and leave your waiting room – good riddance. You can also implement this with your organization’s online application process.
Bottom line: — our experience has proven that the “opting out” process triggered by a consent form can save you from a lot of time and aggravation down the road.
Set a positive expectation for telling the truth
Another excellent way of reinforcing to a candidate that references will indeed be checked, is to start the interview by saying “Ms. Candidate, if we’re interested in you by-the-way, we want you to feel free to check us out too.” You can also tell the candidate that you won’t be able to make them a job offer without references. The result is that most Candidates will stick to the facts during the interview and will later provide you references that will talk to you.
During the interview ask one or two key questions you intend to ask their references. Jot down their responses – the “who, what, when, where and why ” of their accomplishments. Drill down on their accomplishments to get specifics. For example, if they “increased efficiency by 100%” ascertain if they did it alone or as part of a team. This is an especially useful exercise to use with sales people. Later you will compare answers with references. If there’s a difference between what the previous employer says and what the candidate said, you’ll be in a position to clarify.
Another useful interview technique which helps when referencing is to ask the candidate: “What duties did your boss perform?” And then immediately follow that question with, “What duties did your subordinates perform?” Later, when you want to pinpoint their personal contribution it’s difficult for the candidate to take credit for the accomplishments of others. If the candidate can’t recall a supervisor’s name, or the specific details of an accomplishment you noted from their resume … run … you have a liar in front of you.
Optimize your reference time using these pointers
After weeks of intense interviews, you’ve concluded you have an ideal Candidate. The Candidate’s experience, attitude and skills are exactly what you want. He’s your ideal candidate. Now it’s time to get down to business and find out if your Candidate is the real deal. Wrong.
Before you jump right in you need to assess the list of references so you can prepare yourself. For each reference provided, you must assess the following:
- What was the nature of the reference’s relationship to the candidate?
- Was it business, personal, or both?
- If they worked together, was there a reporting relationship?
- Was the reference a superior, peer, or a subordinate?
- If there was no direct reporting relationship, in what capacity did they work together?
- What was the nature of their last contact?
- When did they last work together?
- What was the reference’s title and responsibilities at the time the two worked together?
- What is the reference’s current title and responsibilities? (This helps establish the reference’s credibility and helps us view their comments in the proper context.
At Perry-Martel for example, we would use our reference database to select the most appropriate questions for the role based on the references relationship to the candidate. Our standard reference check assesses every candidate on 10 need-to-know areas including leadership attributes, managerial skill, character, etc BUT, we still need to also include, role and “fit” specific questions. Despite having nearly 490 questions to draw from we still add a few new ones each year.
A typical reference check done by anyone on our staff can include more than 70 questions and require more than an hour to work through. All this to say that you must customize your reference questions every time and take your time when you perform the reference check, listening carefully to every word.
Beware of Thieves and Fraudsters
Be wary of all letters of reference provided directly by a candidate. Pre-written references can be very misleading. Many are written at the time of termination. Firing a person is a very sensitive task and there is a tendency on the employer’s part to be full of praise, with few, if any, negatives. Candidates may even have written such letters themselves.
Face-to-face is the 2nd best way to go
Face-to-face references are very effective if you have any nagging doubts about a candidate. An in-person visit isn’t always practical, but when you’re hiring an executive it’s worth the effort. They are often difficult to set up, but will produce the most candid responses and give you the opportunity to detect nuances — the raised eyebrows, limited eye contact, dubious expression, or hearty belly laugh. References are also far less likely to lie straight to your face, especially given the recent legislation around negligent hiring.
Using this simple tool is the best way
The telephone is a wonderful tool. Phones are fast, inexpensive and nearly everyone has one — or two. If you’re well organized and focused it’s the best tool. It’s been our experience that references are far less guarded over the phone than when you see them in person. The telephone also affords you the opportunity to ask spontaneous follow-on questions. If you listen closely and pay attention to the tone of their voice you can often detect enthusiasm or a lack thereof.
Put a reference at ease and they’ll talk
References don’t need to like you but it sure helps. Here are a couple of suggestions to facilitate loosening the tongues of even the dourest reference.
If possible, try to find out something about the reference ahead of time. You may have a few things in common — the same hobby, same sports interest, and same area of residence, same school, or better yet — same business contacts. One way to find out this information is to ask the candidate, during the interview, to tell you something about each reference. You can often look at their LinkedIn profile as well for ideas. Most importantly, assure them that the entire conversation will be kept in strict confidence.
Keep the discussion conversational. If a reference senses an interrogation is in the offing, they’ll tighten up and not share as much as they might have otherwise. Speak with a smile in your voice to encourage references to be candid with you. It’s wise to be friendly when you speak with them. Friendly, not familiar. Note: the stories the reference tells are as important as the tone of voice used to tell them. The calmer the reference, the more likely they are telling you the truth.