A deep dive into how lazy referencing leads to costly oversights—and how to fix it.
Over the years, reference checks have quietly slid into the “tick-the-box” category of HR tasks. But with the rise in hiring fraud, workplace theft, and repeated behavioral issues slipping through the cracks, this casual approach is no longer just outdated—it’s dangerous.
“We’ve seen employees abscond with company property—ranging from laptops and sensitive documents to unpaid loans—simply because no one thought to verify their employment history or disciplinary record properly,” says Enitan Folami, Head of Business at 360 Verify. “Reference checks could have prevented a lot of that.”
What Happens When You Skip Proper Reference Checks
A flawed or skipped reference check process doesn’t just increase the risk of hiring underqualified candidates. It opens the door to much bigger problems:
1. Theft and Asset Mismanagement
Multiple organizations have reported cases where new hires absconded within weeks—sometimes days—with expensive company assets, sales commissions paid in advance, or unresolved debt. In nearly all such cases, a well-conducted reference check would’ve revealed red flags from previous employers.
“In one case,” Enitan shares, “an employee hired as an account officer left with ₦3 million of reconciled payments. When we back-checked later, we found that the individual had been terminated from two previous jobs for misappropriation. But the HR team had never verified any of those roles.”
2. Undisclosed Performance or Behavior Issues
Candidates may present well on paper and in interviews. But how they actually performed—or behaved—on the job is often hidden behind the resume. Only a structured reference check can uncover this.
3. Legal and Compliance Risks
Certain roles, especially in finance, legal, and compliance-driven sectors, demand extra diligence. If a new hire with a disciplinary record or pending litigation slips in unnoticed, your company could face legal exposure.
Why Most HR Teams Struggle with Reference Checks
Even in well-structured organizations, reference checks fall short because of:
- Rushed Hiring Timelines
Reference calls are pushed to the final stage, often skipped if there’s pressure to close the role. - Unverified Referees
Candidates provide friendly contacts who have little insight—or incentive—to share the full picture. - Vague, Unstructured Questions
“Was this person a good employee?” is not a useful question. It gets vague answers. - Lack of Specialization
HR generalists may not have the time or training to conduct forensic-level reference screenings.
“HR teams are under pressure to fill roles quickly. But when reference checks are an afterthought, the cost of a bad hire can wipe out an entire quarter’s progress,” says Enitan.
Fixing the Problem: The New Standard for Reference Checks
If reference checks are going to be meaningful, they need to be treated as an investigative and preventive function—not a formality. Here’s how we recommend companies improve the process:
1. Structure Your Reference Questions Intelligently
Ask specific, behavior-focused questions:
- What was the candidate’s performance like under pressure?
- How did they respond to feedback?
- Were there any disciplinary actions?
- Would you rehire them? Why or why not?
The goal is to gather predictive insight, not polite praise.
2. Always Verify Referee Authenticity
At 360 Verify, we’ve encountered multiple fake referees—people who had never worked with the candidate or who were personal friends posing as ex-managers. A good reference check begins by verifying the verifier.
3. Use Independent, Third-Party Screening Partners
When internal HR lacks the time or expertise, outsourcing your reference checks to professional background screening firms offers depth, neutrality, and legal compliance.
“We cross-reference employer records, HR logs, blacklists, and even verify dates and responsibilities—not just opinions,” explains Enitan. “Our method ensures clients don’t rely on biased or incomplete information.”
4. Don’t Just Confirm—Look for Patterns
Too many reference checks simply confirm what’s already known. Instead, look for consistency or discrepancy across multiple sources:
- Are there gaps in the employment timeline that no one can explain?
- Do the stated roles and job functions align with what referees report?
- Are there recurring red flags (e.g., integrity concerns, poor team fit)?
The Business Case for Better Reference Checks
Let’s talk numbers.
- The U.S. Department of Labor estimates that a bad hire can cost up to 30% of that employee’s annual salary.
- Add the cost of replacing them, retraining, lost productivity, reputational damage—and the cost multiplies fast.
- In Nigeria’s fast-paced and competitive sectors like tech, finance, and FMCG, a single oversight can derail a team’s momentum for months.
Investing in high-quality reference checks isn’t just a recruitment hygiene step. It’s a business-critical risk management tool.
Conclusion: Time to Make Reference Checks a Non-Negotiable
We don’t ask candidates for references just because it’s tradition. We do it to protect our teams, our culture, and our business operations.
It’s time for HR teams to bring rigor back to reference checks, by making them structured, independent, and genuinely insightful.
And when in doubt, don’t just rely on what’s handed to you, verify it. Thoroughly. Professionally. Consistently with 360 Verify today.