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  • Writer's pictureTracey Orosz

When to Hire a Reference Checking Service

You got the interview, and it seemed to go well. The interviewer says, “We just need to check your references and we’ll get back to you.” But the next time you talk to the interviewer, there’s a different tone — they “decided to go another direction.” Uh-oh, there may be a problem with your references.

If you left your most recent company on bad terms, this might not be a surprise. But what if you recently left a company where you had a new supervisor who didn’t know you well? What will he — or she — say about you?

Are your references sabotaging your job search? There are three possible outcomes with a reference check. The reference may provide no additional information to influence your employment prospects, or he or she may either help or harm your chances. Therefore, it is important to carefully consider who you provide as a reference to a prospective employer, assuming you are given the opportunity to submit names for the reference check. Even a “friendly” reference may unintentionally create problems for you.

A 2010 Society for Human Resource Management (SHRM) survey found 76 percent of organizations conduct reference background checks for all job candidates. The survey defined “reference background checks” as verification of information provided by a job applicant or communication with people regarding the job applicant. This statistic did not include credit and criminal background checks. Prospective employers generally contact 2-3 references for each job candidate.

Reference checks are particularly common in some professions, including science, legal, healthcare, technology, operations, and customer service roles.

According to reference checking companies, nearly half of all reference checks result in a negative outcome. This is particularly true when you are paying to have your references checked, because you’re more likely to have issues that would result in a negative reference check. But isn’t it better to know if your references are causing you problems, instead of just wondering?

Unlike a background check or credit check, there is no central “bureau” (like Experian or Transunion for credit reports) for companies to tap into to obtain the information easily. So companies must conduct reference checks with individuals in a position to provide information about you as a candidate.

References respond differently to inquiries from people they know than they will to third party requests — whether it’s a prospective employer or a third party reference checking firm.

If you suspect a previous employer may be a problem, one way to protect yourself is a pre-interview reference check. Like homeowners who order an inspection before putting their home on the market, it allows you to identify and correct deficiencies.

You could have a friend, family member, or colleague call and pretend to be a hiring manager, or you can hire a professional reference checking firm. In addition to more accurately simulating an actual reference check, these companies are also trained in techniques to elicit possible negative information, including reading nonverbal or subtle verbal cues.

With a professional reference check, you’ll also receive the information in writing, in case you need to pursue legal action. If damaging information is uncovered, you want a third party to be able to provide legally admissible information. Some services will provide certified reports and sworn affidavits for this purpose for an additional fee.

In addition, a friend or family member trying to check references on your behalf likely won’t be as diligent or persistent as a professional service, especially if multiple contacts are required. A “blocked number” on caller ID can be suspicious. And a professional service should be able to handle returned phone calls more easily, when a personal reference might receive a return phone call from a reference at an inconvenient time, potentially giving away that you’re checking on your references.

A friend may ask illegal questions inadvertently or allow something to “slip” during the conversation. Professional reference checking services know the law, and will protect your confidentiality. In addition, some states don’t allow you to record conversations without the agreement of both parties — you don’t want your friend to be sued if they don’t know the law.

Some companies have a policy to direct reference checks to the Human Resources department. An independent reference checking service can verify if that policy is being followed.

Do you know what your references will say about you? Even if you think your reference will speak of you positively, wouldn’t be nice to know for sure?

How Does It Work?

You provide the reference checking company with the contact information of one or more possible references, arrange payment (ranging from $30 to $100 per reference), and they will make contact.

You may have to submit a written authorization form for the release of information for the company to keep on file, as some employers require it before providing information for a reference check.

It can take anywhere from one day to several weeks to receive your report(s), depending on how difficult — or easy — it is to track down the contacts. Most professional reference checking companies will attempt between 4-6 contacts, leaving messages each time requesting a return phone call to check a reference.

The reference checker represents himself or herself as a reference checking service on behalf of an unnamed prospective employer, so the person who is being questioned as a reference won’t know you hired a service.

Common questions that are asked by the reference checking service include:

• Verification that you worked for the company

• Your job title and role with the company

• Employment beginning and end dates

• Pay rate

• Evaluation of key performance attributes

• Reason for separation/leaving the company

• Eligibility for re-hire by the company

• Recommendation for hire by the prospective employer

Higher-level packages also often include:

• Additional performance attributes

• Collecting information about accomplishments

• Evaluation of leadership/problem-solving capabilities

Most services will provide verbatim quotes from the reference as part of the written report.

Possible Reference checking Services

Here are three companies that offer reference checking services to jobseekers.

Basic ($29.90); Professional ($44.90); Executive ($69)

No charge for rush service

Standard ($34.50); Professional ($48.50); Teacher ($58.50); Executive ($69.50)

Includes a written report with direct quotes from the conversation

Cease-and-desist letter: $75

Certified report and sworn affidavit: $65 (an alterative to in-person testimony if pursuing legal action against a bad reference) (a service of Allison & Taylor)

Professionals ($79); Teachers ($79); Executives ($99)

Includes a written report with direct quotes

Cease-and-desist letter: $395

Background check (financial and criminal records check): $99

Rush service available for an additional fee

The report will name the individual who provided the reference. This may be different than the contact name you provided — if the reference checker was directed to the HR department, for example.

Some of these companies also perform professional reference checking services for employers, including pre-employment screening services (background checks as well as reference checks).

Note: The fees you pay to a professional reference checking company may be tax-deductible as job search expenses. Consult with your tax advisor for details.

Things To Consider When Hiring a Reference Checking Company:

  • Review the company’s cancellation/substitution policies carefully. If the reference you provide does not return phone calls and cannot be contacted, you probably won’t receive a refund. There are many reasons why a reference may not be able to be contacted, including illness, vacations, or business travel. Or he or she may simply not want to provide a reference and, consequently, be unavailable for contact. (In these cases, the reference checking service will let you know that they were unable to obtain a reference; this is likely the same result a prospective employer would receive, so even that information can be useful. If a reference advises you to use his or her name, and then won’t make himself or herself available to speak to a prospective employer, that’s important information to know. You’ll find out if a reference will cooperate!)

  • Ask the company about callbacks. If the service you choose does not provide employment verification services for corporate clients, make sure the callback number they are using does not appear in Google search results as a third-party reference checking service; otherwise, the reference may discover you’re investigating him or her, leading to future negative references, even if he or she would have provided a positive one previously.

  • Check the company’s confidentiality policy. If challenged by the reference about “who is asking,” most reference checking companies will represent themselves as an independent third-party verification service conducting a reference check. In general, the companies won’t misrepresent themselves as an actual prospective employer if they are asked, because that is against the law in some states.

What Can You Do If You Get a Bad Reference?

If you’ve been involved in a lawsuit in your previous job, this may affect your future employment, depending on what your former employer says about you. Even if you left on good terms, you may find you’re getting a less-than-stellar reference. So what should you do if you find your references are hurting your employment prospects?

It depends on the type of negative information that is uncovered. Common issues include:

• Inaccurate information

• Badmouthing

• Discrimination

Inaccurate information is the easiest to correct. If you’re being badmouthed, you may have to get legal advice for how to handle it. Some reference checking companies will offer services to help you address bad references. For example, can prepare a cease-and-desist letter for you to send to an offending reference for $75.

While it’s not always possible to keep a prospective employer from talking to a bad reference, if you can, send prospective employers to a different reference who can also speak to your experience at that company, but with a more positive attitude.

What’s Next in Reference Checking?

Some jobseekers are using professional reference checks to their advantage in the job search, presenting pre-checked references as part of the interview process — like a “CarFax” for candidates. Presenting a written report of your references, validated by a third-party service, can reassure a prospective employer. This is even more powerful when the references are checked again, and the same information is discovered in the company’s own reference check.

If you find you’re getting interviews, but not job offers, your references might be the problem. A third-party reference checking service can help you identify whether this is the case, and give you the information you need to decide how to proceed. If your references are providing glowing testimonials of your employment, knowing that can also boost your confidence, and potentially give you a tool that you can use to strengthen your candidacy.


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