A well-conducted reference check.

Here are four key parts of the reference-checking process that many companies overlook:

1. Find out how well the reference knows that candidate’s work

Reference calls should always include the question, “What were the candidate’s responsibilities?” The purpose is two-fold. First, of course, you want to make sure the candidate gave you an accurate description of his or her experience.

And second, you want to verify that the reference directly supervised the candidate and knows the person’s work well. If the reference can only vaguely describe what the candidate did, you may not want to put that much stock in the rest of the interview.

2. Ask about management style and work environment

A candidate’s reference should be viewed in light of the former supervisor’s management style. Someone could give a glowing review — but that manager could have a completely different style than the head of the department you’re hiring for.

Likewise, learn other details of the company culture to help you judge the candidate’s fit. For example, the candidate may have excelled in a previous position that involved working mostly alone. If teamwork is more important in your position, you may take the review with a grain of salt. Excelling in one environment doesn’t guarantee success in another.

3. Pay attention to neutral statements

Many companies have policies requiring managers to offer only employment dates and job title. Some of those managers won’t give you any other info no matter how you ask.

But other times, references choose to say nothing — or refuse to say anything negative — on their own. That usually means there’s a problem — a good candidate will get a positive review, not a neutral one. Pay attention to lukewarm responses and ask probing questions when you can.

4. Have the candidate sign a waiver

The reason references are hard to get: Companies are afraid of getting sued. The solution: have the candidate sign a release of legal claims. Many companies will only provide useful information if you have one.

An employee’s boss caught him tampering with the company payroll system to lower his federal tax withholding. His actions were against company policy, and he was fired.

Eventually, the manager got a call from another employer asking for a reference for the former employee. He told the caller the man had been fired for misconduct.

The prospective employer asked the employee to sign a release so it could get more information about his termination. He refused and didn’t get the job.

He sued his former employer for interfering with his job search.

The company argued it was simply telling the truth and couldn’t be held liable. The court agreed.

Companies can’t be held liable for giving truthful information, even if it causes harm to a former employee.

Note: Not all courts follow the same standards when former employees sue over negative references, so companies should always proceed cautiously and follow their own established policies. But rulings like this offer some reassurance to HR pros.

Cite: Luttmann v. Tiffany and Co.

Reference checks can be one of the most valuable tools for making an informed hiring decision — but as you know, it’s often tough to learn anything from a contact besides employment dates, titles and salaries. How can you convince reluctant references to open up?

Here are some strategies experts recommend:

• Keep it conversational. As with any discussion, it’s important to warm up the reference before asking him or her to divulge any information. You can start the conversation by talking about your company and the position you’re filling. Mentioning that the candidate spoke favorably about the reference could also get the ball rolling. Another tip: Avoid using the word “reference,” which raises immediate red flags.
• Try a manager-to-manager talk. HR often does all the reference-checking to avoid potential legal issues. But some companies say they get better results if the hiring manager calls the candidate’s former supervisor directly. Managers have a better idea of what questions to ask for each position, and the reference may be more open when talking to a fellow supervisor, rather than someone from HR.
• Have candidates sign a waiver. The main reason companies withhold information about former employees: They’re afraid of being sued for giving negative comments. One tool that can help: a waiver signed by candidates giving you permission to ask about their history. Be prepared to fax a copy to the other employer. Some companies have a policy against providing any information without one.
• Tell the reference what the candidate said. Open-ended questions about a candidate’s performance often aren’t received well. Instead, have references verify or deny what candidates already told you. During the interview, ask what candidates think their references will say. Then, repeat that back to the reference and ask if it rings true (and why or why not).
  
• Read between the lines. Many managers are reluctant to say anything negative about a former employee — but neutral statements might indicate that there’s a problem. That’s why it’s important to listen for lukewarm responses and ask probing questions to find out why the reference isn’t saying something positive.

What strategies have you tried to get valuable information from reference checks? Share your experience in the comments section below.

Of course, the first step is to follow your company’s established practices. If the policy is to only verify dates and titles, do that with all reference calls — making exceptions to bad mouth one individual could lead to a bias claim.

Some other tips for handling these situations:

1. When possible, warn departing employees if you won’t be able to provide a positive reference.
2. Stick to documented facts. For example, explaining the former employee failed to meet a quota is a safer bet than a vague statement such as, “He was lazy.”
3. If the employee hasn’t worked at your company for a few years, you can simply say enough time has passed that you aren’t comfortable giving a reference.
4. Don’t deliver false praise or withhold vital information, such as safety concerns. In one recent court case, a company was sued after one manager gave a glowing reference about a doctor who was fired for using drugs on the job. The company was held liable after the doctor killed a patient while working for his new employer.

Have you ever been contacted for a reference about a difficult or poor-performing former employee? How did you respond? Tell us your experience in the comments section below.

On one hand, many companies are wary of investing any time and money to train someone who may only stick around for a year or two — especially since it might mean the person will leave at the drop of a hat to get more money somewhere else.

But on the other hand, moving from job to job is becoming the norm, especially for younger workers. According to the Bureau of Labor Statistics, the average American now holds 10 different jobs between the ages of 18 and 38 — or one job every other year.

Also, a long list of positions could just mean the candidate is in high demand because of valuable talents and skills.

The best answer: Judge each situation individually by –

• using the interview to find out why the candidate left each job, and
• asking the candidate’s references why he or she left.

For example, you might find that the candidate left those companies because there was no room to advance. That might show you’ve got a successful employee you can hold on to if the right promotional opportunities are provided.

Or, the references may tell you the person wasn’t worth hanging on to. Ask them if their companies would hire the candidate again if they had the chance.

What do you think? Does your organization veer toward employees with a track record of loyalty? Is job hopping OK in some cases? Let us know your opinion in the comments section below.

Read the facts of this real-life case and decide: Who won?

The facts:

An employee was hired under contract to work for two years and be paid $185,000 each year. The document stated that if he left the company, he’d be paid a year’s salary plus the benefits he would’ve been owed, unless he quit or was fired for cause.

Two female staffers working under him complained about sexual harassment. After a very quick investigation — consisting only of a 15-minute interview with the two women — the company decided to fire the man.

The company gave him a choice: He could take half of his salary as severance or be fired for cause, and lose his pay and benefits.

He chose the severance, but after he was let go, the company learned that he had lied on his resume when he was hired. He left off two previous employers and fudged other employment dates to cover the gaps, apparently to avoid being labeled a “job hopper.”

Therefore, the company figured he was in breach of his contract and wasn’t owed the severance pay. The matter ended up in court.

The employer said:

Lying on a resume was enough cause for termination, regardless of when the discrepancies were discovered.

Who won the case?

Answer: The employee.

Why: The court ruled the employee wasn’t fired for cause — the investigation about the harassment complaints wasn’t sufficient to justify a termination, and the false resume obviously wasn’t a motivating factor, since the company didn’t discover it until after the decision was made.

Therefore, the man was owed $185,000 for his salary plus an amount to cover a year’s worth of benefits.

In the decision, the judge repeatedly noted that the company didn’t bother to check the accuracy of the man’s resume before he was hired. Reference calls were made, but dates were never verified.

If that homework had been done at the right time, the employer could have avoided the whole mess in the first place.

Cite: National Medical Health Card Systems, Inc. v. Fallarino

Managers only hire the right person about half the time, say Geoff Smart and Andy Street in their book WHO: Solve Your #1 Problem.

The good news: They say many bad decisions can be avoided.

While no manager will get it right every time, here’s a four-step process Smart and Street believe will lead to better hiring choices:

1. Prepare – Before filling a position, managers should write a scorecard with specific skills the position needs. Having all the needed qualifications organized beforehand will help keep everyone involved in the process on the same page.
2. Always look – Keeping an eye out for talent isn’t something to do only when there’s a job to fill. The authors say the search for potential employees should always be on a manager’s mind. That’s where good networking skills come into play.
3. Interview – Smart and Street recommend a four-step interview process, beginning with a quick phone screen, moving to an in-person screen and a final round with the primary decision maker, and ending with in-depth reference checks.
4. Personalize the sale – Convincing candidates the job is right for them requires some knowledge about the person. When managers try to make the sale, they should be aware of the candidate’s family needs, long-term goals, etc., and structure the offer accordingly.

In a recent survey, most HR pros said they don’t like the recruiting results from online job boards — but most use them anyway. Aren’t there better alternatives?

More than 75% of recruiters and HR managers say big job boards don’t provide a valuable service to employers or job seekers, according to the survey by recruiter Jim Stroud.

The problems: The sheer number of candidates the boards reach makes it hard to find resumes from folks that are highly qualified. Also, recruiters aren’t pleased with the “pay to post” pricing strategy most boards use.

Then where are companies finding their best new employees?

A referral from a current worker is still one of the most trusted recruiting tools. Almost half (46%) of white collar jobs are filled through referrals, according to a poll by the Inavero Institute for Service Research.

Companies also rated the quality of referred candidates higher than applicants from any other source.

Finding alternatives

Some other recruiting methods companies have found success with:

• Specialty job boards — There are new sites appearing that offer a different take on the old job board formula — for example, some only require employers to pay after a hire is made. Also, there are boards that target specific industries, skills or demographic groups. Many companies say they get a better value out of those tools.
• Industry associations — Attending meetings for industry organizations in your area is a great way to network. Someone in the company can volunteer to speak at events to raise your organization’s profile in front of potential candidates.
• Trade publications and Web sites — Advertising in targeted publications can help increase the percentage of qualified resumes that land on your desk.
• Temp agencies — It’s normally quicker and cheaper to hire a temp than a permanent employee. It’s not the best option for every job, but hiring a temp can help out while you’re looking for a long-term hire — and you might even offer the temp a full-time job.
• Training for current employees — If you’re having trouble finding people with specific skills, the answer may be helping current workers obtain those skills through training or a tuition reimbursement program. Then, you may have an easier time filling the lower level positions after those employees are promoted.

What about your organization? Have you found success using job boards? Do you have any other methods you’d like to share? Let us know in the comments section below.

Have a policy and stick to it.

There are a few legal risks companies face when giving out references.

A big one, of course, is discrimination. If most employees just get a neutral reference confirming titles and dates, but one manager strays from the norm to bash an ex-employee, there’s a chance he or she could say it was based on race, gender, religion, etc.

Same goes if a manager refuses to give a reference to one former worker because of membership in a protected class. Consistency is the key.

Negligent references

Another pitfall for employers to watch is the “negligent reference” — when a company fails to warn the new employer about a threat posed by the worker.

In one recent case, an ex-employee got a glowing reference despite being fired for conduct that put people’s lives in danger. The company was sued and lost.

According to the court, if the company had given no reference at all it would’ve been fine. But when the manager offered some information, he had a duty to tell the whole story.

How does your company handle reference requests? Let us know by leaving a comment below.

Most companies will only verify titles and employment dates, according to a recent About.com survey.

When asked how they respond to reference requests, here’s how the companies answered:

• 74% said the requests are forwarded to HR reps, who only release minimal information
• 11% said their companies didn’t have a formal policy
• 5% said HR staff will fill out a rating form another employer provides and speak with someone at the other company
• 4% said managers fill out the form and do the talking, and
• 4% said the usual response was “Other.”

Is there anything HR can do to get more help from candidates’ previous employers?

Some experts recommend having the hiring manager call the former supervisor directly. One boss talking to another may get a conversation going. However, they also must be trained so they don’t ask for anything that could lead to a bias claim if someone isn’t hired.

What about your organization? Have you figured out a way to make reference checks more valuable? Let us know your experience by leaving a comment below.