Hiring Strategies

Reference Checks

By Patricia G. Pollack

You've found the perfect candidate for the job. His resume is perfect. He interviewed well. You're ready to make him an offer.

Stop! According to the Society for Human Resource Management, almost 25 percent of all resumes include false information. Furthermore, resumes and interviews do not reveal certain facts about past behavior, such as an applicant's credit history or driving record, which can be critical when considering applicants for certain jobs.

If correctly conducted, background checks can alert you to past behaviors that will help gauge future performances. Although there's no way to guarantee that your new employee will be trouble-free, gathering the appropriate information will increase your chances of hiring a qualified and productive worker.

Here are some guidelines:

  • The first step in conducting a background check is to obtain the applicant's signed authorization to allow former employers to release employment information. Such an authorization is typically included as part of the employment application; preprinted application forms containing the appropriate legal verbiage for authorization are available in most office supply stores.
  • Contact the institutions listed on the resume--in writing--to verify education, former place of employment and prior job responsibilities. You can't ask the applicant questions regarding age, religion, race, marital status, parents, children or child-care arrangements, health status, psychological well-being, financial obligations, previous arrests or membership in social organizations.
  • Use credit checks whenever personal financial conduct is relevant, as in the case of a retail-store manager who will have control over large cash receipts. The Consumer Credit Reform Act of 1996 requires employers to obtain prior written permission and to provide copies of the credit report to an employee or a prospective employee before taking any adverse action based on the reports.
  • If there will ever be an occasion when your prospective employee will drive a company vehicle, check the applicant's driving records to ensure the license is valid and free of violations. These records are public information and are accessible through the Department of Motor Vehicles.

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This article was originally published in the November 1997 print edition of Entrepreneur with the headline: Hiring Strategies.

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