When hiring new employees, it is important that you adequately vet their history and experience. In order to gain the most complete and relevant picture of a potential hire’s history – and therefore, their future performance – you may perform a reference and/or background check. What's the difference between the two? And which is more valuable?
Background Checks
The information uncovered in a background check can encompass a wide variety of subjects. A background check usually searches public records such as driving records and criminal history, education and licensing verification, and personal credit history; it can also check the job candidate’s social media and online presence.
Depending on the type of information requested, background checks can become expensive. However, some job types and industries require this type of pre-employment screening. These include positions of security and positions of trust, such as for those caring for vulnerable groups such as children, the disabled, and the elderly.
- When initiating a background check, you focus only on information directly relevant to the job position you are hiring for. This will save you money on the hundreds of checks you may have to perform each year; a desk worker’s driving record isn’t really applicable.
- Credit checks should only be performed for positions in which the candidate may have to make important financial decisions. The economic downturn has taken a toll on credit scores; the Equal Employment Opportunity Commission sued a company in 2010 for inappropriately utilizing credit checks as a barrier to employment.
- Social media searches are a relatively new "background check" and shouldn't be given the same heft as a formal background or reference check. Be aware that, due to the number of people who share the same name, the online presence you discover for John Smith may not be that of the candidate you’re investigating. Furthermore, some information gleaned from internet searches, including race, ethnicity, and religion, can open you up to potential discrimination lawsuits. In general, you should avoid soliciting any extraneous background information that is irrelevant to the job description and could open you up to discrimination lawsuits.
Reference Checks
Reference checks seek out information from a candidate’s former employers to confirm their date of hire, the title of their position, and salary and incentive information, as well as soliciting information regarding the applicant’s job duties, experience, and performance. Employers are prohibited by law from giving false or misleading information in their references, or couching their statements in inflammatory terms.
- According to a survey by Office Team, 21% of applicants are removed from the candidate pool following their reference check.
- The most important information employers wished to receive from references was input on the applicant’s duties and experiences (36%), insight into the applicant’s strengths and weaknesses (31%), and confirmation of employment dates and job title (11%).
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