The importance of references, and the consequences of not checking them

28th May 2017

Q&A: Justin McGuire: “Candidates are hired on a whim – and hired fast”

 

Author: Kirsty Tuxford | Date: 3 May 2017

Recruitment expert and CEO of MCG Group, Justin McGuire, on the importance of references, and the consequences of not checking them

Very few companies in the UAE are checking candidates’ references. Recruitment specialist Justin McGuire explains why he believes some recruiters are prepared to compromise and employ people without checking their backgrounds, despite a lack of buoyancy in the current job market.

 

How widespread is the trend of not checking references?

Multinationals have a process, but many of the local small- to medium-sized businesses – particularly those in the creative sector – hire without calling anyone for a reference. I notice this in the recruitment world as well. I know of people who have been hired just because they have a prestigious company on their CV, so recruiters assume the candidate will be fine.

 

Why aren’t companies contacting referees?

The problem here is that everyone is on a visa and the battle for talent is very restricted. Companies are prepared to compromise because it’s so hard to find good people, so rather than go through the rigmarole and expense of relocating people from abroad, candidates are hired on a whim, and hired fast, because businesses are scared that someone else is going to snap up the talent. The cost of making a mistake here is a lot more expensive than anywhere else – you’ve got to put an employee on a visa, on health insurance, pay for their annual flights and if they work for a year, you’ve got to pay them a gratuity. The cost to hire could easily be Dh50,000 in a year, just to have someone here and doing the job.

There’s a tendency towards complacency in some HR departments because typically we haven’t previously seen the qualifications or governing bodies who look after certain industries or monitor who goes into certain jobs – and the result is that best practice tends to get compromised.

A typical problem you have with an emerging market, such as Dubai, is that things move quickly. Businesses want to expand, companies arrive here and best practice takes a while to follow.

 

What advice would you give to recruiters about references?

You’ve got to do some digging – if someone left to go to a competitor or if they took some business with them, then there’s obviously going to be some bitterness, so if you get a bad reference you’ve got to be quite measured and composed about it and take at least three different references for that person. Get references from the top and the bottom, so you can get a feel for how someone behaved or was treated in their job. It could just be that two personalities clashed, but previous to that the person had a very successful career. If someone provides me with a really terrible reference, I suspect it’s suspicious – particularly with a sales role where someone may have taken some commission or there could be some competitive issues between colleagues. What I will pay attention to is if there are consistent reports of lateness or a laissez-faire attitude.

 

How expensive is it to employ the wrong person?

For a relocation, aside from the Dh50,000 I already mentioned, companies will be flying out the new employee and maybe their family, putting them in a hotel for two to four weeks, and possibly giving them a relocation allowance – you’re talking about something around Dh30,000-100,000. That’s a significant amount of money. Some companies have a clause where if the candidate doesn’t work out, they are responsible for paying all their own relocation costs, which ends up as a horrible legal spat and doesn’t do anyone any favours. What it boils down to is that a quick hire can be a very expensive hire.

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