Fri Apr 26

Will checking character references really help you find the best candidate for a job?

Written by Timothy Colin Bednall, Associate Professor in Management, Swinburne University of Technology

Finding the best person to fill a position can be tough, from drafting a job ad to producing a shortlist of top interview candidates.

Employers typically consider information from several sources ^[1], including the applicant’s work history, social media presence, responses to interview questions and sometimes, psychometric testing results.

It’s also common for hiring managers to check an applicant’s references ^[2] by chatting to the candidate’s nominated referees or reading over their letters of recommendations.

Reference checks tend to be the final hurdle; a sort of background check ^[3] for the candidate’s job history and credentials.

Nearly every employer does reference checks, but research ^[4] suggests there are important limitations worth keeping in mind.

Inconsistency can be a problem

A reliable selection method produces a consistent measure of candidate suitability. In other words, reliability enables an apples-to-apples comparison of each candidate.

But early research ^[5] into reference checks found referees tend to give substantially different ratings to the same candidates.

This inconsistency is problematic because it is unclear if a favourable report reflects genuine suitability or the candidate was fortunate enough to nominate a lenient referee.

Part of the problem is employers often do not take a structured approach to obtaining information from referees.

Man and woman check some paperwork while a woman sits nervously on the other side of the desk

Often referees for the same person give inconsistent assessments. Ground Picture/Shutterstock ^[6]

For instance, if asked overly general or vague questions about the candidate, each referee may focus on different aspects of past job performance or omit negative information.

Research suggests using a standardised set of questions ^[7] can produce more reliable outcomes. This provides a stronger basis for making a meaningful comparison between candidates.

Unfortunately, even using a standardised assessment, referees still tend to disagree on their ratings ^[8].

This disagreement may still be worthwhile, as it can reveal important contextual differences in the candidate’s performance. For instance, one referee may have observed a candidate leading a team, while another may have only seen their project work.

However, employers still need to make sense of these different perspectives.

A reference is a poor indicator of future performance

A valid selection method is job-specific and provides useful information about how a candidate will actually perform in the role.

Reference checks are a relatively easy hurdle for candidates to overcome because referees are typically self-selected, and most job seekers can find at least one colleague who is willing to speak positively about them.

As well, a candidate’s performance in a previous position may not always be relevant for the job they are applying for.

For these reasons, reference checks show only a small correlation ^[10] with employee performance in their new job.

But because of their limited ability to predict performance, employers should not rely solely on reference checks.

A mix of checks the best approach

A recent systematic review ^[11] of employee selection methods suggests structured interviews ^[12], work samples ^[13], and pre-employment assessments ^[14] can provide useful insights into how employees will perform.

Unidentified man goes through a folder while another man sits nearby

Reviewing a candidate’s previous work can help in the hiring process. RawPixel.com/Shutterstock ^[15]

Pre-hiring assessments can reveal information about a person’s job knowledge, cognitive ability, integrity, personality, and emotional intelligence where appropriate. They are especially useful for screening numerous applicants, such as for graduate recruitment programs.

Ultimately, the job selection process should be tailored to the role requirements. For instance, if a role requires strong writing skills, this could be assessed through work samples or pre-hiring assessments.

Some candidates could be disadvantaged

A fair selection method is one that is unbiased and avoids giving weight to irrelevant information. It does not disadvantage people because of characteristics such as gender identity, age, or cultural background.

From this perspective, reference checks have several potential problems.

One is that candidates may not have access to referees of similar credibility.

For instance, a person from a high socioeconomic background is more likely to have access to senior leaders or experienced professionals in relevant fields who are willing to provide positive reports.

Reference checks may perpetuate existing inequalities.

In most cases, referees will want to provide positive reports. If the referee is a close colleague of the job applicant, they may be concerned that negative reports will be traced back to them and affect their ongoing relationship.

And employers may be motivated to offer under-performers a glowing review to get rid of them.

Most references are difficult to verify, so referees are unlikely to suffer damage to their reputation if they talk up an average candidate, especially if the referee is outside the employer’s professional network.

Pair of glasses and staff appraisal form sitting on a desk

In most cases a referee will want to provide a positive report. AlexSkopje/Shutterstock ^[17]

Research suggests letters of recommendation ^[18] can actually disadvantage female candidates by planting doubts about their suitability.

For instance, letters about female candidates more frequently contain negativity (such as, “does not have much teaching experience”), faint praise (“needs minimal supervision”) and hedging (“has the potential to become a strong performer”).

These types of statements can lead employers to evaluate female candidates more harshly.

However, when a structured questionnaire is used ^[19], this bias does not emerge.

A flawed but worthwhile tool

While reference checks remain common, their limitations are clear. They can be unreliable, offer only moderate validity in predicting performance at best and raise fairness concerns.

However, reference checks shouldn’t be discarded. By implementing structured questioning and adopting other well-established employee selection methods, references can still be included as a final step in a robust hiring process.