Why Paid References Are Evil

There's an entire industry holding people's employment data hostage. Employers need to be aware of who they're getting references from and how they're enabling a sh**ty business.
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“References provided upon request”. If you’ve read a resume recently, you probably noticed that little statement printed at the bottom. It’s common practice for candidates to offer references from their previous jobs to employers they’re interviewing with. How many times have you accepted that offer?

Most hiring companies don’t check references at all. This isn’t too surprising when you consider that the chance of receiving a response to a reference call is slim. That’s because we now work in an age of fear.

An Environment of Fear

It used to be considered a professional courtesy to provide information about a previous employee when asked. Although there wasn’t a direct benefit for them, former employers recognized it as a proper thing to do. After all, they have to hire new employees as well and would expect to receive the same courtesy from other companies. More importantly, they recognized that the data belonged to the employee and she had the right to share it with whomever she wished.

Then the lawyers took over. They created an environment of fear around providing any information that could put the company at risk of being sued by a disgruntled former employee who received a bad reference. They advised their clients to prohibit any of their managers to speak about former employees in case they said something damaging (or truthful). On a side note, the stupidity of disempowering managers from decision-making is a frequently visited topic in this blog.

Companies initially managed the risk by delegating all reference verifications to their internal human resources professionals. It seemed a good way to apply standard practices for disseminating employment information. This is how the “dates & duties” reference came about. Companies would provide future employers only the dates of employment and the job duties of their former workers. Although this didn’t give insight into the candidate’s potential, at least you could verify her resume was accurate.

The funny thing about operating in an environment of fear, though, is that you never feel secure.

So in recent years, companies locked down this information even tighter. Now, when you contact a former employer for references, it’s more likely that you’ll be forwarded to a third-party verifier.

Monetizing Employment Data

Third-party verifiers (TPV’s) are contracted by companies to provide reference verifications of their former employees for a fee, of course. They charge the requestor (that’s you) money in exchange for releasing the barest amount of information about the employee. Usually, dates of employment and last job title. Sometimes, only dates of employment.

This has two effects. The first is that information which should be accessible to both the employee and any party he wants to share it with has been monetized. There’s always somebody willing to take money for nothing, and the TPV’s were formed for that purpose alone. The second is that it provides a way for employers to completely abrogate any responsibility or duty to the people who work for them.

Not only have they disempowered their managers from practicing good judgment – they’ve also blocked their employees from having access to their personal data. Because who really owns the information? If I’m a professional with a work history, shouldn’t I have the right to provide access to my data to anyone I want? The companies that use TPV’s don’t think so. They are saying that that they are the sole owners of the data and have authorized the TPV’s to offer a peak at it in exchange for a ransom.

Mind you, the TPV’s will never provide the complete information because they don’t have access to it either. Basically, they act like a bag man in a kidnapping scheme. They’ll give the family of the victim a grainy picture as proof of life in exchange for a brown paper bag filled with small bills. But they won’t actually have the power to release him.

Think this sounds extreme? In the Information Age, why shouldn’t we expect to have access to our own employment history and the right to share it with whomever we want? Maybe third-party verifiers aren’t actually evil, but they enable their customers to act in bad faith.

And to me, that’s a real sh**ty way to do business.

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