Published By:


Should Executives Do Their Own Reference Checks?
Authors say those at top should do it
Skill demands discipline, instinct

BY: Rick Spence May 13, 2004

Called any good references lately?

Business experts agree that reference checking is an essential part of the hiring process, especially in these days of rampant resume inflation. A recent analysis by Accenture Canada of 350 resumes found inaccuracies in 25 per cent of them.

Larry Bossidy, Ram Charan and Charles Burck, authors of Execution: the Discipline Of Getting Things Done, says business leaders, including CEOs, should start conducting their won reference checks when hiring for important positions.

Lots of candidates interview well, explains Bossidy, former CEO of Honeywell. But resumes, interviews and personality tests can’t tell you whether someone can produce results.

When Bossidy needed to strengthen his executive team, he started making his own calls to former employers, to find out specifically if the candidates knew how to perform. Bossidy asked direct questions about prospects’ energy level, work ethics and accomplishments. And because success hinges on a team effort, he also made inquires about a candidate’s ability to motivate and work with people to achieve results.

But not everyone is prepared to roll up the sleeves and make those calls.

In the book, Bossidy admits that many executives wondered why he was calling, and not someone from human resources.

But Bossidy believes building more effective teams is a leader’s most important task, so he gave it 20 per cent of his time.

Most business leaders prefer to delegate reference checking, says Toronto executive search consultant Michael Stern. Experienced in-house human resources staff and outside recruiters all know who to call and how to sniff out underachievers.

Occasionally, Stern says his staff will recommend that a client do a reference check personally – usually when the source is someone the client might know or is likely to run into in future. (He figures sources are most likely to tell the truth to someone they might meet again.)

Sometimes the clients will agree, he says, “but it’s not something they would think of themselves.”

And Stern will only suggest a client check references when he is sure the executive understand the process and knows what questions to ask. “It’s important that this be done by someone who knows what they’re doing.”

The psychology of reference checking is subtle, Stern says. “As a reference, people normally want to say positive things about a person. But they’d prefer not to lie if they can help it. So you have to ask questions that allow no wiggle room.”

Stern likes to ask open-ended questions such as, “Tell me about three things this candidate did really well,” followed by, “Now tell me three things they did not do so well.” If you notice signs of hesitation or doubt, zero in for more details, he says.

Stern asks a simple “clincher”: “Would you rehire this person? He says it’s surprising how many people find ways to say, “Well, not necessarily.”

Management professor Daniel Ondrack has some concerns about taking up Bossidy’s checking challenge. “I can certainly see the argument, but I think it’s pretty risky,” says Ondrack, of the University of Toronto’s Rotman School of Management. “Most executives are not trained or experienced in checking references.”

Ondrack worries that under-trained executives might miss important information. Checking references involves both discipline and intuition. Inexperienced questioners could miss subtle warning signals from sources, or neglect to ask follow-up questions that would elicit important information.

“You can also get into legal hazard by asking the wrong questions,” notes Ondrack. Asking about prospects’ marital status, dependent children or illnesses that might affect their work, for instance, could land an employer in hot water.

Ondrack is concerned that some executives checking up on prospects might tend to call people they know – perpetuating the image of many industries as “old boys’ clubs,” where who you know is more important than what you can do.

Still, Ondrack recognizes that when recruiting for senior positions, bosses should be as close to the process as possible. “If you’re going to work very closely with that person, they have to be your kind of person,” he says.

Neena Gupta, a Toronto employment lawyer with Goodman and Carr LLP, says employers should conduct more formal background checks on prospective employees. “In recent years, there have been spectacular cases of massive resume fraud,” she notes, at organizations ranging from sunbeam Corp., to the Toronto Blue Jays.

Background checks are best contracted to outside specialists, says Gupta, especially those who do criminal record checks. While that may sound expensive, it’s really an investment, she says. “The very fact that people know you do these checks will eliminate a lot of undesirable candidates.

But when it comes to assessing “fit” or a candidate’s ability to get things done, Gupta thinks senior insiders should be involved – either the key hiring executive or the most senior human-resources specialist.

“These qualitative things require a real knowledge of your organization, and it’s not really fair to expect that from third parties or a junior HR person.”

Besides, says Gupta, leaders in other firms will often be more candid with your senior executives than they would be with juniors or outsiders. “They’ll see this as a legitimate persona asking legitimate questions, and they’ll respect that.”

Gupta doesn’t worry about senior executives “messing up” a reference check. “Good CEOs can ask very incisive questions about an employee’s performance,” she says.

“I’ve seen many more cases where employers had problems because they didn’t do a reference check, than because they did and they blew it.”

Gupta assures all amateur reference-checkers that concerns about litigation are overblown. Some employers worry that saying something negative about a job candidate could leave them open to a lawsuit.

No fear, says Gupta: Canadian courts recognize the importance of frank discussions about the strengths and weaknesses of job applicants. “Someone would have to be able to prove malice – that you were out to get them – before a court would hold you liable for a negative review.”