Dr John Sullivan Talent Management Thought Leadership

Cheating on reference checks is at an all-time high.

To slow this trend, this article provides a scannable list of the problems that cause flawed reference-checking processes to produce a significant number of bad or failed hires. The reference-checking process in most businesses and corporations needs immediate attention. After years of neglect, it’s time to treat reference checking as a vitally important component of hiring with significant impacts. In fact, our disdain for the reference-checking process becomes even clearer when you realize that most companies routinely assign their lowest-level employees (and sometimes even interns) to execute both the reference-checking and the reference-giving components of the hiring process.

Normally, the reference check is the last hurdle (and dealbreaker) that finalist candidates must pass. References are actually the final decision factor in the hiring process. So when your reference checking is inaccurate, your corporation will unnecessarily spend millions of dollars on bad hires. They are labeled as mis-hires when the reference process mistakenly allows candidates to be hired who wouldn’t have been hired if the reference-checking information were 100% accurate. Conversely, bad-hire costs go up when your company passes on a great candidate who actually had great reference support. But this support wasn’t fully disclosed during a faulty reference-check process.

“Reference Cheating” Is Currently at an All-Time High

Today, circumstances are forcing us to redesign reference-checking processes. I estimate that the amount of “reference cheating” is now at an all-time high. Because now, unscrupulous candidates can purchase phony reference websites that make it look like your candidate has worked for a real company. That, coupled with the fact that an increasing percentage of managers now rely exclusively on AI to write their reference responses. And it doesn’t take much research to identify the different types of reference cheating happening. Because it literally becomes easier each month to make a candidate’s reference information appear to be much stronger than it actually is. So even though most talent leaders don’t connect misleading reference information to the number of bad hires, they should start making that connection.

---

A Long List Of The Problems That Most Corporate Reference-Checking Processes Have

Because you can’t fix a broken reference-checking system until you know the problems that are causing its dysfunction. The rest of this article covers the ever-growing list of things that actually go wrong in corporate reference-checking processes. This article presents the problems in an easy-to-scan bullet-point format. The problems that occur throughout your reference-checking process are separated into four distinct categories. Those categories are the most damaging problems, how changes in the business environment are impacting reference checking, and how the people involved in reference checking often actually make it worse. And finally, the administrative problems that face many reference-checking processes.

Category I – Today’s Most Damaging Reference-Checking Problems

Note that the highest-impact problems appear early in each of the following four lists of reference-checking problems.

1. Few companies measure the prediction accuracy of their own process – the most important of all metrics related to reference-checking is the percentage of new hires with outstanding references that, six months after being hired, actually become outstanding employees. Unfortunately, few seem to even realize that follow-up on a reference check is supposed to be conducted after six months to see if their reference level actually predicted the future of that employee. Unfortunately, most in HR don’t even request this critical follow-up correlation check. They just don’t seem to know (or care about) the validity (i.e., the predictive accuracy) of this last step in the hiring process. And even if they wanted to, the fact that you assign a numerical score to each completed reference check. Without a quantified score, that alone makes it impossible to calculate any correlation between reference scores and job success. The reality of reference checking is that almost no output from a reference check is ever quantified. Instead, all hiring managers typically receive from a reference check, of course, is usually a mixture of a few checked boxes and even fewer handwritten notes. And without quantification and data, AI cannot be used to improve the reference-checking process.
2. Scientific studies also show that reference checks have a low predictive value – most simply assume that because everyone uses them, reference checks accurately report past behavior and accurately predict what the candidate will do in the future. Unfortunately, academic studies have shown that reference checks don’t accurately predict! And if you take the time to look at the research data. You’ll find that employment reference checking and background screening are frequently identified as being among the weakest of all corporate assessment steps. For example, the classic 1998 study by Frank Schmidt and John Hunter found that traditional references have very low predictive validity (r = 0.26). However, this dismal predictive value hasn’t changed the fact that 96% of US organizations still use reference checking (SHRM survey). 
3. Unfortunately, the reliability of reference checks is also horrible – we already know that the corporate reference-checking process doesn’t predict very well. But few also know that this process is also highly unreliable. Which means that the actual execution of your process varies so much each time it is applied. That it’s almost impossible to get the same repeated answer from your reference check system. Because your process is continuously applied in a different way, and to make matters worse, those doing the reference check also act differently each time. This is because most reference-checking is completely decentralized. It’s quite difficult to make the process consistent across the company to get consistent results between your different candidates for this open job. Incidentally, requiring a thorough checklist to be used each time is the best way to improve process reliability.
4. Social media reference checking is common but fraught with issues – currently up to 73% of managers and recruiters check their candidates’ social media accounts during their screening process. And that is a huge problem because there is, of course, no evidence that social media reference checking provides any predictive value. And because there is no documentation of what was searched, you really have no way of knowing what social media information the manager used to decide for or against each candidate. And much of the information that managers and recruiters view on social media shouldn’t even be looked at, let alone used to support a hiring decision. 
5. You must decide which of the six types of references that you must have checked – there are generally six types of job-related information that can be checked with a reference search. Depending on the job, you may need to know the candidate’s work history, educational accomplishments, credit history, criminal background, right to work in the US, and whether the candidate has the proper licenses. A related problem occurs when reference information from different checked areas ends up contradicting each other. Often, reference-checking elements like right to work in the US, no criminal background, and having the right license should be optional. Instead, they should be absolute gates, which means that you can’t be hired without any one of them.
6. Even though you really want your rehire question answered, many HR departments prevent managers from answering it – questions aimed at identifying whether a former employee would be rehired at their former company. They often go unanswered because HR rules forbid managers from answering that question. So your hiring manager is often forced to compare candidates with no rehire answers, with mixed rehire answers, and with completely positive rehire answers. It’s also important to note that if your candidate last worked at a major competitor. Your competitor likely won’t provide your company with any reference information on one of their current employees.
7. Few reference providers will give you the detailed performance and skills information that you really need – because employers often face legal action relating to defamation. Many companies have a strong policy restricting reference conversations to factual information such as job title, dates of employment, and possibly salary history. What many potential employers really want is performance appraisal information, a list of their skills, and any indications of either outstanding or bad behavior. 
8. The personnel records of a former employee are not reviewed at any point during the reference check – unfortunately, most references (especially telephone references) are provided by employees who rely heavily on their memory to provide reference information. And I estimate that less than 10% of reference givers ever look at the employee’s personnel file or their yearly performance appraisals.
9. It’s now almost impossible to talk to the candidate’s former manager directly – the days of talking to the candidate’s manager directly are long gone. And now, the best you are likely to get from their former manager will be generated by an AI robot.
10. The reference provider’s knowledge of your candidate will often be limited – for a variety of reasons (like when the employee’s manager has moved on). And because many reference requests are handed off to a subordinate of their past manager. The individual who will provide you with your reference information may actually have limited or no actual knowledge of the former employee whose references are being checked. 
11. Personal references are an ugly problem – personal references should not be allowed because they often only provide non-job-related information. The personal references that the candidate provides are highly likely to be biased in favor of your candidate. And of course, there is no proof that personal references accurately predict the future success of your candidate.
12. Remember these checks only provide historical information, when what you really need to know is how they will act in the future – the reference information that you receive probably won’t reflect how the candidate will act today because all reference information is historical. So candidate references can, at best, reveal how the candidate acted in the past. And in a world changing so fast with AI, robotics, and other technologies. To make an accurate hiring decision, your hiring team will need to find another way to determine how your candidate will act today and in the future. 

---

Category II – Problems Related to Our Changing Business and Job Search Environment

In the second category of problems, the reference-checking process is being impacted by changes in both the business and the job search environments that we work in. The changing environment means the type of reference checks we are accustomed to receiving (i.e., small-town, brutally honest reference checks) is no longer possible. So, in order to continually give and receive accurate references, those who manage the reference-checking process need to know how our environment is changing.

• Few realize that your own reference checkers will have a tendency to “find nothing” – few realize that when corporate employees conduct reference checks on their own top candidates. There is a noticeable tendency to be “lenient” and to avoid or downplay any negative information that they might find. This “leniency” is caused in part because finding too much negative information will mean that the reference checker will be asked to delve deeper into the candidate (more work). And that if too much negative information is found. Their whole team will have to reopen the job and go through your painful recruiting process once again. 
• Don’t let your candidate provide you with the contact numbers for their references – it’s a fact that “reference cheating” has gotten so bad. Now you can’t even trust the contact information of the references that your candidate has provided. Yes, this form of fraud is becoming a huge problem because many companies allow the candidate to provide the names, e-mail addresses, and phone numbers of each of their references. Unfortunately, many candidates are now actually providing completely false manager names, contact numbers, and email addresses. That, unknown to you, when called, they will be answered by the candidate’s best friends hiding behind the name of a phony company. So even though looking up the actual contact numbers will take a lot more time, it will protect you from a great deal of this type of “false contact information fraud”. I should also note that this practice is especially common among immigrants and North Korean ghost workers. For a variety of reasons, they don’t want a potential future employer to talk to anyone they work with.
• Credit checks are now problematic because a large percentage of candidates now have bad credit – for obvious reasons, employers have been unwilling to hire candidates with poor credit ratings. However, in today’s inflationary economy, affordability issues are rising. A significantly higher percentage of candidates now have real credit problems. So companies that used to supplement employment reference checks with outside credit checks may need to restrict credit checks as they face the possibility of having no remaining “good credit candidates” to hire. 
• An increasing number of businesses no longer exist, making reference checking difficult – it’s a fact that due to an increasing number of bankruptcies, mergers, and layoffs. It is now much harder to find individuals who can give an accurate reference check. Many employers no longer exist, so they can’t be contacted. This is also because of management delayering at many companies. There are far fewer managers available to provide accurate references for former employees. This is also because of layoffs and lean staffing within HR. Many HR departments are now extremely slow in responding to reference requests. 
• The rise in identity theft makes accurate reference checking even more difficult – it’s a fact that identity theft has moved beyond credit card fraud. It’s now prominent in reference checking. So unless you take and verify your candidate’s fingerprints (or DNA). You may often find that “the good person” that you are doing a reference check on is actually some “bad character” who has simply stolen the name and reputation of a real, quality candidate. That has never applied at your company, and if they are hired. Their performance certainly wouldn’t match that of the actual “good person” they are impersonating. And be aware that a fraudulent new hire may, on their first day, rob you and your data systems blind.
• Because global hiring is now more common, you will have to deal with the difficulties of global reference checking – because of the globalization of hiring. US companies are often forced into checking candidate references worldwide. This is especially difficult because different cultures and regions around the world have unique ways of handling candidate references. As a result, many globally obtained reference results are simply not comparable to USA references. This makes side-by-side comparisons of US and internationally obtained references extremely problematic. 
• The increase in resume lying has drifted over to the reference-checking process – in a weakened economy where individuals are desperate to land a job. The percentage of candidates who lie on their resumes has increased dramatically. And most recently, the tendency for a candidate to lie has spread over into reference checking. Many candidates will lie about who they are, when they worked, what their duties were, and who their supervisors were. And with so many lies to sort out. Your reference checking will take much longer. And unless you are diligent, they will be much less accurate. Because you will now have to decide between a mix of reference checks from your different candidates. Some candidates’ references will be 100% complete, others will be closer to 50% complete, and some will be mostly blank. Comparing candidates with strikingly different levels of reference check completeness and accuracy will be extremely difficult.
• Ghost North Korean candidates are becoming more common and more difficult to spot – perhaps you read about it. Still, today’s technical job market is flooded with remote working ghost candidates that live in North Korea. And when you suspect that you have one of them as a candidate. You can guarantee that the North Korean government will have provided them with what appears to be a credible but almost impossible-to-check list of references. So recruiters, reference checkers, and hiring managers must be especially diligent because hiring a North Korean is quite illegal.

Note: Next week, on September 29, Part 2 of this article will be published on my website.

Thanks for reading and reposting this article.

Notes for the reader

This is the latest article from Dr. Sullivan, who was called “the Michael Jordan of Hiring” by Fast Company.
Please help spread his ideas by sharing this with your team/network and posting it on your favorite social media.
Dr John Sullivan is its author – it first appeared in the 9/22/26 issue of Aggressive Talent Management.