Often, you’ll hear professionals use the term "background check” when they really mean reference check, and vice-versa. There is a critical distinction to be made here. It’s important to note that although both a background check and a reference check are often used during the interview process, they are very different and provide very different levels of verification. Both look to uncover historical information about a candidate, with a background check being solely a data verification process , and a reference check a more versatile and comprehensive tool for hiring.
What is a background check?
A background check is a straightforward process that a person or company uses to verify a person’s identity, legal records and education or work history.
What do background checks look for?
Background checks look for a person’s criminal record, education, employment history, and other activities that have been recorded. There are many different types of background checks including but not limited to:
- employment verification
- criminal background checks
- universal background checks
- OIG background checks
- e-verify background checks
- international background checks
- credit background checks
- personal background checks
- and professional licenses background checks
Compliance laws and your company’s regulations will determine which type of background checks should be run. Keep in mind that the findings from a background check are limited to the type of search you do, and the costs can increase with each additional search you conduct or require.
How to Run a Background Check
These are a few basic steps companies take when looking to run a quick background check on a potential employee.
- Search online databases and public records for information. (Keep in mind these do not have access to all records.)
- Perform a social media search on your potential employee.
- Hire a background check company. They’ll provide you with separate quotes for background searches that include information such as credit reports, criminal history, and employment verification options.
The quality of the background check data relies on the quality of the vendor’s database. If a crime was committed out of state or country, it may not show up on the background check report. If someone got fired for inappropriate behavior, however it did not get reported to the authorities, that also will never show up on a background check.
In some situations it’s absolutely necessary to run a background check. However, the traditional background check will fall short in providing all the information you need to make intelligent hiring decisions.
Why You Need More Than a Fact-Checking Background Check
Background checks are great for gathering simple data such as criminal history or employment verification. However, most hiring managers require more information to make the best hires, and this is where background checks fall short.
According to Inc, 89 percent of hires fail within the first 18 months as a result of low motivation and/or the inability to be coached.1 These attributes or tendencies will not come out in basic background checks. Below you’ll find other information that you won’t learn about candidates from a background check.
Background checks will not tell you:
- How knowledgeable a candidate is about job-specific topics.
- How well a candidate has performed on the job.
- What were a candidate’s actual job responsibilities and job description.
- A candidate’s historical level of loyalty and motivation.
- How a candidate communicates with his/her peers, managers, and direct reports.
- How well a candidate may fit into your corporate culture.
- A candidate’s work ethic.
- How accepting a candidate is of being coached or critiqued.
- How reliable is a candidate.
Background Check vs Reference Check
The difference between a background check and reference check are highlighted by the information they gather above. In summary, a background check is used to look up criminal, commercial, and financial records of a candidate. Whereas, a reference check looks to find the perfect employee fit, and protect your company from a poor performer or bad hire.
How to Run a Reference Check
Some companies still manually call each reference, which is an old, outdated, and expensive method for checking references.
Digital reference checking tools like Checkster’s Reference Insights save companies time and money by automating the process. Checkster allows applicants to submit reference requests online, directly to their contacts. The process is so pain-free that Checkster is able to gather feedback from 6 references on average, providing more candid input at the same time. This data is consolidated into easy-to-read reports providing insights including probability of re-hire and rankings for a candidate’s strongest and weakest attributes relevant to the job.
This data provides powerful insights that will give you a real view into the experience and fit of a potential candidate.
When to Check a Reference
It’s no secret, modern recruiting strategies must leverage reference checks. How and when you conduct a reference check in your hiring process will be one of the key strategies used by hiring managers and recruiters. Most organizations conduct the reference check as an afterthought, in the final phases of the hiring process. This is a counterproductive approach, especially with the current demand for talent.
Reference checks should not be reserved for the end, as a simple “red flag” identifier, but rather should be implemented immediately after the first or second round of in-person interviews.
Why? Simply because you should learn about a candidate’s actual performance and personality prior to investing more interview time with employees. Conducting the reference check early uncovers whether they are a right “fit” or may change your candidate rankings, illuminating a particular skill or attribute based on peer and former manager feedback.
Receiving this level of detailed information can save you time, money, and help you make better hires. Check out the benefits of conducting automated reference checks here, or better yet, give it a try for free now and get started in just a matter of minutes!