6 Critical Situations Where Employment Referencing Is Non-Negotiable

When hiring a new employee for your organisation, the stakes are high. Not only when you’re hiring a new executive but also when making an internal transfer or accelerating your hiring just to fill in the gap, making a wrong hiring decision could have a long-lasting impact on your organisation and can be incredibly expensive, not just financially but also in terms of team morale and productivity.

This is where you need to know who you are really hiring from some credible sources. That’s when you need to conduct employment referencing.

Reference checking isn’t just a formality; it is a crucial part of the pre-employment screening process. If done correctly, it can help you understand and evaluate the candidate's past performance and cultural fitness and ensure you’re making the best hiring decision possible.

But when exactly should you prioritise reference checks during your background checks on employees?

Let’s walk through the six critical situations where employment referencing becomes non-negotiable.

1. When You Are Hiring a Candidate Who Had Been Laid Off

During and after the covid pandemic we have witnessed a lot of layoffs taking place throughout the world, regardless of the size of the organisation. It can happen for various reasons and mostly has nothing to do with an individual’s performance. Still, as an employer or HR, you can’t just assume things, you need to verify.

During employment reference, it is important to know:

• If the layoff was business-driven, like a merger or restructuring.
• If it was due to performance concerns, or any hints leading up to it.

By understanding the above, you can rest assured that the candidate was indeed a strong performer who unfortunately just got caught up in the situation. This step in your screening for employment helps protect your business from bringing on someone who may not meet expectations.

2. When Hiring a Candidate Who Was Fired From the Previous Organisation

As times are changing, recruiters are normalising hiring candidates who were fired from the previous organisation, and there’s nothing bad about it, terminations happen for reasons outside of an employee’s control, such as management changes or toxic workplace environments. Other times, they’re a genuine red flag. But again, you can’t just assume things here. Reference checks are crucial in such a scenario.

If a candidate was fired from the previous role, you need to understand:

• A manager's perspective that explains the reasons behind the termination.
• A co-worker’s view that gives a more rounded picture of the employee’s behavior and performance.

Conducting employment referencing in this situation helps you separate perception from reality, ensuring you don't miss out on a potentially great hire; or worse, hire someone who’s not even a good fit for the organisation.

3. When Hiring a Candidate with a Big Career Gap

Hiring someone who has a big career gap need not necessarily be a bad sign. It could be due to various possible reasons, like health, family, education, or personal growth.

But as a responsible recruiter, you need to conduct reference checks to verify:

• Their track record before the gap, if they were a strong performer.
• Their reasons for stepping away, if the reason aligns with their explanation during interviews.

Checking references during pre-employment screening in such cases shows that you value transparency, and care about hiring people who are committed and capable, regardless of unconventional career paths.

4. When Hiring for Executive-Level Roles

When you’re hiring for a leadership role, a thorough background check becomes a necessity.

Reference checks for leadership roles typically involve:

• Talking to multiple past colleagues, both seniors and subordinates.
• Understanding their leadership style, ethics, ability to manage teams, and handle crises.

The risk of a bad hire is increased when hiring for executive roles. Thorough employee referencing is crucial in this case as these roles, which include hiring leaders, shape culture, impact revenue, and represent the organisation externally.

5. When a Candidate is Switching Careers

When it comes to hiring career-switchers, they bring with them new and fresh perspectives, varied experiences and enthusiasm to learn and succeed. But, as they’re likely to enter a new role in a new field, reference checks become the best tool to validate their past experiences and cultural fit.

When checking the reference for such candidates, you should look for:

• Their flexibility, adaptability, and dedication.
• Their ability to excel in unfamiliar environments.

Since you’re hiring someone without direct experience in the same role or field, pre-employment checks, especially reference checks, ensure that you take calculated risks.

6. When Facilitating Internal Transfers

Internal transfers might seem to be an easy task since you already know the candidate, right?

But that’s not as easy as it looks like.

Internal transfers still require careful and thorough screening for employment. Here’s why:

• You can access their performance review which helps you know about their consistent high performance or any specific area needing improvement.
• Speaking to current or former managers can uncover insights into work habits, team dynamics, and readiness for new challenges.

Employment referencing helps you ensure that promotions and transfers are based on merit and not just mere assumptions, thus preventing workplace biasness.

Why Reference Checks Matter

Let’s be honest: Skipping reference checks will save you some time in the short term, but it’s likely to result in expensive blunders further down the line. Whether you are recruiting young graduates or seasoned executives, or whether you are promoting employees or transferring them internally, conducting reference check needs to be central to the hiring process.

Thorough employee referencing help utilise every piece of information available and verifies qualifications, reveals strengths, highlights red flags, and ensures that you’re bringing in the talent that fuels the growth of your organisation.

Remember: One quick call today can save you months of headaches tomorrow.

Need help building a reliable, consistent hiring process that includes thorough reference and background checks?

Let’s talk about how you can make smarter, faster hiring decisions.