Human resources professional Suzanne Johnson used to pick up the phone, call a company "and get honest feedback about an applicant." But that doesn't happen in most organizations today, Johnson said. "And I haven't given out much information either. It's usually company policy." Thus was born a $10 billion-a-year reference- and background-checking industry. It has mushroomed in the last three years since hiring withered and hundreds of applicants vied for single job openings.
"It's expensive to make a hiring mistake," said Sue Christopher, a vice president of human resources in Overland Park, Kan. "We want to know as much as we can about a person before they're hired so we can make a good hiring decision — are people who they really say they are?"
When employers stopped spilling opinions about how good or bad an employee was, the next employer had to get the skinny some other way.
"We need to have some information below the surface of what we can see," Christopher said. "So many companies are doing their due diligence by outsourcing background checking."
Hundreds of companies now work for both employers and even applicants to check work and education histories; dig up lawsuits, criminal, credit and driving records; and see what people's references and past supervisors will say, even when policies say they shouldn't.
The findings are cringe-worthy.
"We return unfavorable data in about half of all reference checks," said Jeff Shane, executive vice president at Allison & Taylor. The company works for applicants, helping individuals learn what former employers are finding or saying about them.
"Unfavorable data" can mean anything from lies on resumes to a negative tone of voice when a supervisor follows company protocol and gives only the barest information about a former employee.
Background checking, said Darren Dupriest, with Validity Screening Solutions in Overland Park, is a "necessary evil." Workers tend to embellish their credentials, so employers are even more cautious about hiring.
So organizations will spend a modest amount — maybe $60 per check — to research applicants rather than get hit later with expensive lawsuits connected to bad hires.
According to a survey by the Society for Human Resource Management, three-fourths of employers routinely verify previous employment and dates of service for all job candidates.
Society membership skews toward employers with professional human resource staffs. But even the "mom-and-pops" are more sophisticated about checking whether applicants are who they say they are and did what they say they did.
In the last few years, background checking has extended even beyond applicants to inside employees being considered for promotions. No wonder many workers say they're paranoid.
"Yet in theory, we shouldn't get any negative references at all," Shane said.
That's because employment law attorneys tell employers to confirm only a "name, rank and serial number" — to give out only dates of employment, job title and rate of pay.
Some also permit an answer to a standard question: Is this person eligible for rehire? A "no" may indicate the employee was fired.
Lawyers, insurers and employers fear that spilling more information might make the organization vulnerable to lawsuits from disgruntled applicants who learn that negative things were said.
"In theory, we shouldn't be getting unfavorable input for any reason because of lawsuit fears," Shane reiterated. "But the fact that we do many thousands of interviews and about half come back with negativity, it's fair to say it's not all worker paranoia by any stretch."
Skilled researchers, even when stymied by name-rank-serial number responses, often get names of others who talk.
Then there's social media. LinkedIn and Facebook are treasure troves to find who worked with whom.
"You don't really get official references any more, since most are circumspect," said Barbara Griggs, executive director of Concerned Care Inc., which hires workers to help people with disabilities in their homes. She needs to be sure about the character and credentials of her employees.
So without endless time or dollars to pay for probes, "what helps is to have any personal contacts," she said. "The best is to have someone referred by someone we know and trust."
The downside? Personal references tend to create workplaces based on "who you know."
In reality, an applicant is unlikely to successfully sue an employer for a reference that was or wasn't given.
To win, a worker must prove that a reference defamed or libeled them, or that comments violated sex, racial, religion, pregnancy, age or other forms of antidiscrimination laws.
If laws are followed, "someone would be hard-pressed to find legal grounds to go after anyone," said career coach Meg Montford. "But face it, it's not always run by the book."
Montford tells her clients to be up front about negative things that prospective employers will unearth about them.
"That's the only way to have the possibility of an interview in which you're able to talk about it and overcome it," she said.
Executive recruiters Katey Tryon and Mary Heideman said they also advise job candidates to make sure the people they list as references know they're listed by name and let them know what kind of job is being sought.
Then be open and ask your references whether they'd have any problem advocating for you in connection with any aspect of the job, Heideman said.
Many applicants won't get that far. Often, Dupriest said, a criminal conviction — or even a misdemeanor — puts a candidate in the reject pile.
"A lot depends on the job," he said. "If the job involves driving or bartending, even that old minor-in-possession case may have an impact, while it might have very little effect on most other jobs."
Long-term unemployment also has elevated another kind of background check to importance: the credit check. The theory is that if someone poorly manages personal finances, they may be a judgment risk as a worker. Long-term job hunters say that's an unfair takeaway from their situation.
"But there's no question that credit checks are playing an increasing role in background checks," said reference-checker Shane. "They're not on the same level as background or reference checks, but they've been on the ascendancy."
The Fair Credit Reporting Act, which covers more than credit checks, offers workers the right to get free copies of background reports obtained by prospective employers.
Applicants are supposed to sign waivers, allowing prospective employers to launch the checks, though experts admit that the waiver presentations don't always happen as they should.
But there is one thing to bet on, said Steve Snodgrass, an executive recruiter in Overland Park: "Honesty will prevail."