Background Check Vs Reference Check: The Ultimate Hiring Showdown

Professionals frequently refer to reference checks as “background checks” when they mean the opposite and vice versa.

Although background checks and references are frequently utilized throughout the interview process, it’s crucial to remember that they are extremely distinct and offer very different levels of verification.

Both seek to learn about a candidate’s past, with a background check only as a data verification procedure and a reference check as a more flexible and thorough recruiting tool.

What Is A Background Check? 

A background check is a simple procedure a person or business employs to confirm a person’s identification, legal history, and educational or professional background.

How To Run Background Check?

To run a background check, follow these general steps:

  • Obtain written consent from the job candidate to run a background check.
  • Determine what type of background check is needed based on the job requirements and industry standards.
  • Select a reputable background check provider or conduct the check in-house.
  • Collect the necessary information from the candidate, such as their full name, date of birth, and social security number.
  • Conduct the background check and review the results for any red flags or concerns.
  • Adhere to legal requirements and guidelines, such as the Fair Credit Reporting Act (FCRA), when using the information obtained from the background check.
  • Use the background check results as one factor in the hiring decision, along with other considerations such as the candidate’s qualifications and interview performance.

Top Criteria for Effective Background Checks

Background investigations examine a person’s criminal past, educational background, work history, and other actions that have been documented.

Background checks come in a variety of forms, including but not restricted to the following:

  • Employer confirmation
  • Criminal history records
  • Checks on everyone’s backgrounds
  • OIG vetting of backgrounds
  • Background checks with e-verify
  • Worldwide background checks
  • Credit history inquiries
  • Personal investigations
  • And background checks for professionals

Whatever kind of background checks must be conducted will depend on conformance laws and your company’s policies.

Remember that the results of a background check can only be as good as the research you do, and the fees might rise as you run or demand more searches.

Background Check Procedure

Here are a few fundamental actions businesses do when attempting a fast background check on a prospective employee.

  • For information, look through internet databases and public documents. (Remember that not all records are accessible to these.)
  • Look up your possible employee on social media.
  • Engage a background investigation firm. They will give you different estimates for background checks containing details like credit records, criminal histories, and job verification alternatives.

The vendor’s database’s quality impacts the accuracy of both background check information.

A crime committed outside of the state or nation won’t appear just on the background check record.

A background check would never reveal improper activity that resulted in dismissal but was not reported to the authorities.

Doing a background check may be important in some circumstances.

The conventional background check will provide you with only some of the details you need to make informed hiring decisions.

Why A Reality Background Check Is Not Enough?

Background investigations are excellent for acquiring straightforward information like criminal history or job verification.

Background checks come up short here because most hiring managers need more data to select the best hires.

Following are more details about applicants you won’t learn through a background check.

Background investigations won’t reveal:

  • How well-versed an applicant is in areas relevant to the position.
  • How effectively a candidate has operated while employed.
  • What were the job description and actual duties of a candidate were.
  • History of commitment and drive of a candidate.
  • How well a candidate interacts with peers, bosses, and direct reports
  • How well may a potential employee integrate into your company culture?
  • The dedication of a candidate.
  • How open a candidate is to receiving coaching or criticism.
  • How trustworthy a candidate is.

Major Difference Between Background Check And Reference Check

Background CheckReference Check
Verifies candidate’s background informationObtains information about candidate’s work performance, character, and interpersonal skills from past colleagues
Conducted by third-party provider or in-house HRConducted by employer or HR
Requires written consent and legal complianceRequires written consent, but less strict legal compliance
Information obtained through public records and databasesInformation obtained through personal references
Focuses on verifying candidate’s qualificationsFocuses on evaluating candidate’s fit for the job and work culture

What Is Reference Check?

A reference check is a process of contacting the references provided by a job candidate to verify their background information, such as past employment and character, to help employers make informed hiring decisions.

How To Run Reference Check?

To run a reference check, follow these general steps:

  • Obtain written consent from the job candidate to run a reference check.
  • Determine who to contact for references, such as past supervisors or colleagues.
  • Contact the references provided by the candidate and ask if they are willing to provide a reference.
  • Prepare a list of questions that are relevant to the job and the candidate’s qualifications.
  • Ask the reference questions about the candidate’s work performance, character, and any other relevant information.
  • Document the reference’s responses accurately and objectively.
  • Adhere to legal requirements and guidelines, such as data protection laws and the candidate’s right to privacy.
  • Use the information obtained from the reference check as one factor in the hiring decision, along with other considerations such as the candidate’s qualifications and interview performance.

Optimizing Your Reference Check Schedule

Reference checks must be used in current recruitment techniques.

How and when you conduct a reference check in your hiring process will be a key strategy hiring managers and recruiters use.

The reference check is often only done as a last-ditch effort in the employment process.

This strategy could be better, especially given the skills shortage we’re experiencing.

Reference checks should be conducted promptly following the first or second phase of in-person questions rather than being saved until the end as a simple red flag indicator.

Why? Simply because one should get more information about a candidate’s personality and performance before spending extra time interviewing personnel.

By checking references early on, you can determine if they are a good match.

Or could they affect your applicant rankings by highlighting a certain talent or quality based on comments from peers and past managers?

Perform a thorough screening procedure.

Referrals and background checks are parts of a thorough screening procedure that helps to hire managers to make better judgments.

By checking references, employers can go further into some parts of a history screening or pose questions that might not be obvious from conventional background checks.

A full-service business-like data check can assist you in ensuring that no phases in your new employee orientation procedure are skipped.

We know the value of following up with professional references and helping businesses develop robust screening methods that inspire trust in recruiting practices.

Details of a person’s application, interview, and employment history are verified using both techniques.

Yet they have different functions. When a corporation employs both methods, the reference check is often conducted before the background check.

Because part of the recruitment process, the majority of companies examine references.

 To verify important job and educational materials and discover more about a candidate’s past, experiences, and talents, reference checking entails contacting the candidate’s old bosses, supervisors, schools, and other relevant parties.

Because employers often pay for background checks, they frequently only do them on individuals they are interested in employing.

Background checks, however, only sometimes result in job offers.

One explanation for this is that a potential employer can ask for background checks from several candidates.


A reference check vs a background check. Although they serve the same purpose, they offer various bits of data to assist in evaluating job candidates.

This post has helped you better grasp the distinctions between a background check and a reference check.

In conclusion, a thorough investigation is used to research a candidate’s financial, commercial, and criminal histories.

On the other hand, a reference check aims to prevent your business from making a poor hiring or underperforming employee.

In conclusion, receiving a job offer following a reference check may be the final stage in the hiring procedure.

It’s a good sign that you currently meet the employer’s standards to get employed for the position if they inform you that they will examine your references.


Is A Background Check Included In Reference Checking?

While reference and background checks aim to learn more about potential employees before they begin work, they are two distinct stages of the screening process.

A reference check, which usually occurs just after a job interview but even before a contract is accepted, is not a component of a background investigation.

In our view, background checks often occur after an offer is accepted but before a candidate begins work.

Do employers verify references before or secondary to a background check?

Before running a background check, employers frequently examine references.

Typically, in my experience, sources are contacted after an assessment but just before an offer. Background checks are frequently performed after an offer has been accepted but before a person begins a job.

Normally, job offers are structured to be contingent upon a satisfactory background check so that employers can withdraw an offer if they find any red flags.

Background checks are frequently conducted in this manner because corporations normally have to pay for them and only want to do so for applicants who they anticipate joining the company.

Can a background check cause you to lose your job?

An employer has every right and frequently does to revoke a job offer if it discovers a red flag, like a criminal background that raises concerns or evidence that you misled on your résumé.

Can a reference check cause you to lose a job?

Sure, a reference check might result in you losing your job.
Although I have never declined an offer because of a background investigation, I have seen managers decline offers because of issues that surfaced through reference checks.

Therefore, it is highly likely that a terrible reference will prevent you from getting a job.

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