Reference Checking for Insurance
A standard operating procedure for conducting thorough and consistent reference checks on preferred candidates to verify employment history, assess past performance, and confirm suitability for the role before extending a formal offer.
Purpose
To verify the accuracy of information provided by candidates during the recruitment process, gather additional insights about their performance and suitability from previous employers, and mitigate hiring risk by identifying any potential concerns before an offer is made.
Scope
This SOP applies to all reference checks conducted for preferred candidates prior to making a formal job offer. It covers the process of obtaining candidate consent, contacting referees, conducting reference conversations, and documenting findings for all roles across the organisation.
Prerequisites
- Candidate identified as the preferred hire following the interview process
- Written consent obtained from the candidate to contact their nominated referees
- At least two professional referees provided, ideally including the most recent direct supervisor
- Standardised reference check questionnaire prepared for the specific role
Aligns with ASIC regulatory requirements, General Insurance Code of Practice, and AFSL obligations. Includes audit trail provisions.
Step-by-Step Procedure
Obtain Candidate Consent and Referee Details
Contact the preferred candidate to confirm their willingness to proceed and obtain written consent to contact their nominated referees. Collect full referee contact details and confirm the relationship between the candidate and each referee.
- 1.1Inform the candidate they are the preferred hire, subject to reference checks
- 1.2Request written consent to contact the nominated referees
- 1.3Collect referee names, positions, organisations, phone numbers, and email addresses
- 1.4Confirm the professional relationship and dates of working together for each referee
- 1.5Clarify any referees the candidate does not wish to be contacted and understand the reasons
- Some candidates may have reasons for not wanting their current employer contacted — discuss this sensitively
- Aim for at least two referees from different organisations or roles for a broader perspective
Prepare Reference Check Questions
Customise the standard reference check questionnaire with role-specific questions that explore the candidate's suitability. Include questions about specific skills, behaviours, or experiences that are critical for the role being filled.
- 2.1Review the standard reference check template
- 2.2Add role-specific questions based on the selection criteria and any areas of interest from the interview
- 2.3Include questions about the candidate's strengths, development areas, and working style
- 2.4Prepare questions that verify key claims made during the interview process
- 2.5Review the questions to ensure they are lawful and appropriate
- Avoid questions that could be considered discriminatory or that seek personal information unrelated to the role
- Open-ended questions tend to yield more useful information than yes or no questions
Contact Referees and Conduct Reference Checks
Contact each referee by phone to conduct the reference check conversation. Telephone conversations typically yield richer information than email-based references. Follow the prepared questionnaire while allowing space for the referee to share additional observations.
- 3.1Call the referee and introduce yourself, explaining the purpose of the call
- 3.2Confirm the referee's identity and their professional relationship with the candidate
- 3.3Work through the prepared reference check questions
- 3.4Ask follow-up questions to explore any interesting or concerning points
- 3.5Ask the final question: would you rehire this person if given the opportunity
- 3.6Thank the referee for their time and confirm confidentiality
- Listen carefully for hesitation or qualified answers which may indicate concerns
- If a referee is only willing to confirm dates of employment, note this as it may indicate an unwillingness to provide a positive reference
Document Reference Check Findings
Immediately after each reference call, document the responses, observations, and overall impression in the standardised reference check record. Note both positive feedback and any concerns or areas requiring further exploration.
- 4.1Record detailed notes from each reference conversation
- 4.2Summarise key themes including strengths, areas for development, and any concerns
- 4.3Rate the overall reference as positive, neutral, or concerning
- 4.4Note any discrepancies between the candidate's claims and the referee's account
- 4.5File the completed reference check record in the applicant tracking system
- Document findings immediately while the conversation is fresh
- Use the referee's own words where possible for accuracy
Evaluate Findings and Make Recommendation
Review all reference check findings and assess whether they support or raise concerns about the hiring decision. Share the summary with the hiring manager and make a recommendation on whether to proceed with the offer.
- 5.1Compare findings across all referees to identify consistent themes
- 5.2Assess whether the references support the candidate's suitability for the role
- 5.3Identify any concerns or red flags that need to be addressed
- 5.4Prepare a summary of reference check outcomes for the hiring manager
- 5.5Make a recommendation to proceed with the offer, seek additional references, or reconsider the hiring decision
- A single lukewarm reference is not necessarily disqualifying — consider the overall picture
- If concerns are raised, discuss them with the hiring manager before making a final decision
Archive Records and Proceed
Archive all reference check documentation securely and proceed with the next steps in the recruitment process based on the outcome. If references are satisfactory, advance to offer preparation. If concerns are identified, follow the agreed escalation process.
- 6.1File all reference check records in the candidate's recruitment file
- 6.2Update the candidate's status in the applicant tracking system
- 6.3If references are satisfactory, notify the hiring manager to proceed with the offer
- 6.4If concerns are identified, schedule a discussion with the hiring manager and HR to agree on next steps
- Retain reference records for the period specified in your document retention policy
- Ensure reference information is stored securely and accessed only by authorised personnel
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
Percentage of preferred candidates for whom all required reference checks are completed before an offer is extended
Average number of business days to complete all reference checks for a candidate, targeting three business days or fewer
Correlation between reference check outcomes and actual performance in the role, assessed at the first formal performance review
Frequently Asked Questions
How many references should be checked for each candidate?
A minimum of two professional references should be checked for each preferred candidate. For senior or high-responsibility roles, three references from different contexts provide a more comprehensive picture. At least one referee should be a recent direct supervisor.
What should you do if a referee provides negative feedback?
Negative feedback should be documented objectively and discussed with the hiring manager. Consider the severity and relevance of the concern, whether it is corroborated by other referees, and whether it relates to a critical aspect of the role. One negative comment in otherwise positive references may not be disqualifying.
Can candidates provide referees who are colleagues rather than managers?
While peer references can provide useful perspective, at least one referee should be someone who directly supervised the candidate. Peer-only references may suggest the candidate is unable or unwilling to provide a management reference, which warrants further exploration.
What if a referee cannot be reached after multiple attempts?
If a referee cannot be reached after three attempts over a reasonable period, inform the candidate and ask them to provide an alternative referee. Document the attempts made and the decision to seek an alternative reference.
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