The Reference Check Reality: Why 40% of Bad Hires Could Have Been Caught
A fintech company hires a Senior Engineer recommended by their network.
Interview: Great. Smart. Articulate. Led teams. Shipped products.
Reference checks: Were supposed to happen, but hiring manager was busy. Skipped.
Month 2: Engineer struggles. Can’t meet deadlines. Doesn’t take feedback well. Blames others.
Month 4: Manager discovers: At previous company, engineer was put on performance plan (reason he left). References would have revealed this.
Cost: RM 50K recruiting + RM 40K onboarding + 4 months of low productivity + distraction = RM 200K+ wasted.
What went wrong? Skipped reference checks.
The data:
- 40% of bad hires could be caught by thorough reference checks
- Reference checks catch: Performance issues, communication problems, integrity concerns
- Most companies skip or do them poorly (5-10 min call, surface-level questions)
This guide shows you how to do reference checks right.
Why Reference Checks Matter: The Data
What Reference Checks Can Catch
Performance issues (25% of bad hires):
- “They struggled to meet deadlines”
- “Productivity was below expectations”
- “Needed significant support to succeed”
Communication/teamwork (35% of bad hires):
- “Difficult to work with”
- “Didn’t accept feedback well”
- “Created conflict with team members”
Integrity concerns (15% of bad hires):
- “There were concerns about honesty”
- “Exaggerated accomplishments”
- “Missed deadlines without communication”
Cultural fit (25% of bad hires):
- “Didn’t align with our values”
- “Wasn’t motivated by the mission”
- “Seemed transactional rather than committed”
The bottom line: A 20-minute reference call could save RM 100K-200K in bad hire costs.
Reference Check Timing: When in the Hiring Process
The Sequence
Best practice: Check references BEFORE final offer (not after)
Screening → First interview → Second interview → Third interview
↓
Final interview (or concurrent with final interview)
↓
Reference checks (before offer)
↓
Offer + Background check
↓
OnboardingWhy before offer?
- If references are bad, you save offer negotiations
- Shows due diligence
- Candidate expects it
- Rare that reference check changes outcome AFTER offer (too late)
Timeline: 2-3 days to complete reference checks
Malaysia Legal Considerations: What You Can & Can’t Ask
What’s Legal to Ask References
Legal in Malaysia:
- Employment dates (verify)
- Job title/responsibilities
- Performance (general: “How did they perform?” or specific: “Did they meet deadlines?”)
- Reason for leaving (if they volunteer)
- Strengths/weaknesses
- Would you rehire them?
- Attendance/punctuality
- Team contribution
What’s NOT Legal to Ask
Not legal in Malaysia:
- Personal information (age, marital status, religion, ethnicity)
- Medical/health information
- Criminal history (that’s background check, not reference)
- Financial information (salary, debt)
- Disability status
Malaysia Employment Act Considerations
Under Employment Act 1955:
- Employers have right to verify employment history
- References must be truthful (can be sued for defamation if they lie)
- No legal requirement for reference checks (but best practice)
- Privacy: Reference should be confidential (don’t share details with others)
Best practice: Keep reference check process professional and documented.
Who to Ask for References: Types of References
Primary References (Most Important - Always Check)
1. Most Recent Manager (Mandatory)
- Directly supervised them
- Can speak to recent performance
- Most valuable reference
- What they can tell: Day-to-day performance, work quality, collaboration
2. Second Most Recent Manager (If available)
- Confirms pattern (was recent manager’s feedback outlier?)
- Broader context
- What they can tell: Consistency across roles, growth trajectory
3. Peer/Team Member (Add credibility)
- Different perspective (manager view vs. peer view)
- Can speak to collaboration
- Often honest (not their direct report)
- What they can tell: Teamwork, collaboration, communication
Secondary References (Helpful but Not Always Possible)
Client/Stakeholder:
- External perspective
- Performance under pressure
- Business value delivered
- What they can tell: Delivery, external credibility, professionalism
Direct Report (If applicable):
- Leadership style
- Mentorship ability
- People management
- What they can tell: How they lead, delegation, development of others
Red Flag: Candidate Won’t Provide Manager Reference
If candidate says: “Don’t call my current manager—they don’t know I’m job searching”
Response:
- Respect it (current employment is confidential)
- Ask for previous manager instead
- Or ask for peer/colleague reference
- Or proceed conditionally (“We’ll do this reference after offer”)
Never say: “If you won’t provide reference, you’re not getting the job.”
Reference Check Questions: What to Ask
Core Questions (Always Ask These)
1. Verification Questions (Confirm facts)
"I'm calling to verify [Candidate] worked at [Company] from [Date] to [Date]
as a [Title]. Is that correct?"
Expected answer: "Yes, that's correct."
Red flag: Dates don't match, title is different2. Performance Question (Most Important)
"How would you describe [Candidate]'s performance in their role?"
Listen for:
- Specific examples (good) vs. vague (bad)
- "Exceeded expectations" or "Met expectations" vs. "Struggled"
- Details about accomplishments
- Any hesitation (red flag)
Red flag answers:
- "They were... OK" (lukewarm)
- "They had some challenges" (vague)
- Long pause (hesitation)
- "I'd rather not get into specifics" (bad sign)3. Strengths Question (Build profile)
"What were [Candidate]'s top 3 strengths in the role?"
Good answers:
- Specific: "They were really strong at system design and mentoring juniors"
- Detailed: "They took complex problems and broke them into manageable pieces"
Red flag:
- Vague: "They were a good person" (not about job performance)
- Generic: "Hard working" (everyone says that)
- Negative: "I can't really think of any" (bad sign)4. Weaknesses/Development Question (Honesty check)
"What are some areas where [Candidate] could improve or develop?"
Good answers:
- Constructive: "They could work on public speaking—great engineer, but could
present findings more effectively"
- Realistic: "They sometimes moved too fast without documenting enough"
Red flag:
- "I can't think of anything" (unrealistic)
- Very negative: "They were terrible at X" (suggests poor fit)
- Irrelevant: "They're not a CEO" (strawman)5. Teamwork/Collaboration Question (Soft skills)
"How did [Candidate] work with their team members?"
Good answers:
- "Collaborated well, open to feedback, contributed ideas"
- "Sometimes quiet in meetings but strong 1:1 communication"
Red flag:
- "Difficult to work with"
- "Created tension on the team"
- "Didn't take feedback well"
- "Worked in isolation"6. Would You Rehire Question (Ultimate test)
"Would you hire [Candidate] again if you had the opportunity?"
Answer: Should be clear YES or NO with reason
YES = "Definitely, they were a great contributor"
NO = "No, we're looking for different skills" (acceptable)
HESITATION = Red flag
This question cuts through everything else.Industry-Specific Questions
For Engineers:
"Can you speak to [Candidate]'s technical skills? Where were they strongest?"
"Did they deliver on projects on time?"
"How did they approach problem-solving?"
"Any concerns with code quality or architecture decisions?"For Managers:
"How did [Candidate] develop their team?"
"Can you give an example of how they handled a difficult team member?"
"What was their leadership style?"
"How did they handle performance management?"For Sales:
"What was their sales performance like? Did they hit targets?"
"How did they build relationships with clients?"
"Any concerns with integrity or honesty?"
"How did they handle rejection?"The Reference Check Call: Script & Structure
Opening (30 seconds)
"Hi [Name], this is [Your Name] from [Company]. I'm calling about
[Candidate] who has applied for a position with us. They listed you
as a reference. Do you have about 10-15 minutes to chat?"
[If yes, continue]
"Great. I want to verify some information and get your perspective
on their work. Everything you share will be confidential. Sound OK?"Main Questions (10 minutes)
- Verification (1 min)
- Overall performance (2 min)
- Strengths (2 min)
- Development areas (2 min)
- Teamwork (1 min)
- Would you rehire? (1 min)
Closing (1 minute)
"This is really helpful. I really appreciate your time.
Is there anything else you'd like to share about [Candidate]?"
[Listen for final thoughts]
"Perfect. We'll be in touch. Have a great day!"Document Everything
After the call, write down:
- Date/time of call
- Who you spoke with
- Key points from each question
- Overall assessment (Proceed, Caution, Don’t hire)
- Direct quotes (if notable)
Example note:
REFERENCE CHECK - Sarah Chen (Senior Engineer role)
Reference: John Lim (Previous Manager at CloudTech)
Date: January 5, 2026, 2pm
VERIFICATION: Employment dates correct (Jan 2022 - Oct 2025), Senior Engineer title
PERFORMANCE: "Exceeded expectations. Strong system design, great mentoring."
STRENGTHS: System architecture, technical leadership, mentorship
DEVELOPMENT: "Could work on public speaking and taking on more visible projects"
TEAMWORK: "Collaborative, open to feedback, good communicator"
WOULD REHIRE: "Absolutely. Top talent."
OVERALL ASSESSMENT: Strong reference. No concerns.Red Flags: What to Listen For
Major Red Flags (Don’t Hire)
| Red Flag | What It Means | Action |
|---|---|---|
| ”I’d rather not discuss this” | Reference uncomfortable, something wrong | Don’t hire |
| ”They didn’t take feedback well” | Coachability issue, possible conflict | Don’t hire |
| ”There were concerns about honesty” | Integrity issue | Don’t hire |
| ”They couldn’t work in teams” | Collaboration problem | Don’t hire |
| ”Performance was below expectations” | Competency mismatch | Don’t hire |
| Long hesitations/vague answers | Reference avoiding truth | Dig deeper or don’t hire |
Minor Red Flags (Proceed with Caution)
| Flag | What It Means | Action |
|---|---|---|
| ”They moved on quickly” | Possible flight risk | Ask why |
| ”Communication could be better” | Soft skill gap | Worth it for strong engineer? |
| ”They need structure/support” | Not independent, needs management | Know what you’re getting |
| ”Motivation dipped at the end” | Lost interest, ready to move on | Understandable if they’re leaving |
Lukewarm References (Yellow Flag)
If reference is technically positive but delivered with hesitation:
- “They were… OK”
- “They did the job”
- “No issues”
- “Sure, they were fine”
This is a red flag. A genuine strong reference is enthusiastic. Lukewarm = hesitation.
Phone vs. Email vs. Platforms: Comparison
Phone References (Best)
| Pros | Cons |
|---|---|
| Real conversation, tone/hesitation detectable | Time-consuming (need to schedule) |
| Can ask follow-ups | Reference might be guarded on phone |
| Can read pauses and emotion | Hard to document |
Best for: Senior hires, critical roles
Email References
| Pros | Cons |
|---|---|
| Easy to distribute | Response rate low (30-40%) |
| Written record | Reference might be vague |
| Works across time zones | Less personal |
Best for: Quick verification, non-critical roles
Reference Check Platforms (Growing)
Popular platforms:
- Checkr (RM 5K-15K per check)
- GoodHire (RM 3K-10K per check)
- Talentdesk (RM 2K-5K per check)
- LinkedIn (built-in recommendation system, limited)
Pros: Standardized, documented, automatic
Cons: Expensive, generic, less conversational
Best for: High-volume hiring, large companies
Malaysia Reference Check Platforms
Available in Malaysia:
- Checkr Malaysia - International platform, works in Malaysia
- Background check services - Local providers (Azerty, Fintech Recruitment Partners)
- Manual phone/email - Still most common in Malaysia
Cost: RM 2K-15K per background check (reference + background combined)
Timeline: 3-5 business days
Case Studies: Reference Checks That Prevented Bad Hires
Case Study 1: Senior Manager, Strong Resume, Bad References
Situation:
- Candidate: 10+ years management experience
- Resume: Impressive titles, big company names
- Interview: Smart, articulate, compelling vision
- Reference Check: Reveal…
Reference #1 (Previous Manager):
“Actually, they didn’t finish their time with us. We had to transition them out due to performance and team concerns.”
Reference #2 (Peer):
“Great person, but struggled with direct reports. People left the team while they were there.”
Outcome: Don’t hire. Resume didn’t reveal departure or team issues. Reference check caught it.
Cost saved: RM 150K+ (bad manager can damage team for 6+ months)
Case Study 2: Engineer with Great Interview, Average References
Situation:
- Candidate: Excellent technical interview, solved problem perfectly
- Background: Startup, then mid-market
- References: Positive but lukewarm
Reference #1 (Previous Manager):
“They’re talented, but need a lot of structure. Without it, they struggle with follow-through.”
Reference #2 (Peer):
“Smart person. Just doesn’t communicate progress well. You’ll have to check in often.”
Outcome: Hire, but with plan. Hiring manager knew: “This person needs more management and structure. We’ll pair with strong manager.”
Result: Worked out great. Candidate had right support, thrived. Manager’s understanding from reference made the difference.
Common Reference Check Mistakes
Mistake 1: Skipping References for Time
Problem: Hiring manager is busy, says “We’ll check references after offer.”
Why it’s wrong:
- If reference is bad, offer is awkward
- Shows lack of diligence
- Can’t ask reference for offer negotiation feedback
Fix: Check before offer. It’s 20 minutes that saves RM 100K+.
Mistake 2: Asking Only One Reference
Problem: Only call most recent manager (candidate’s choice). Get good review.
Why it’s wrong:
- Candidate picks references likely to be positive
- One opinion isn’t enough
- Pattern doesn’t emerge from single reference
Fix: Always get 2-3 references, ideally from different companies/roles.
Mistake 3: Not Listening to Red Flags
Problem: Reference says “They didn’t take feedback well,” but hiring manager wants this person anyway.
Why it’s wrong:
- Red flags are usually right (80% of the time)
- Coachability issues are hard to fix
- Will cause problems on your team
Fix: Red flags = reconsider or get additional references before proceeding.
Mistake 4: Asking Leading Questions
Problem: “You must have found them easy to work with, right?”
Why it’s wrong:
- Biases reference to agree
- Prevents honest feedback
- Not useful
Fix: Ask open-ended: “How did they work with the team?”
Handling Difficult Reference Situations
Situation 1: Candidate Won’t Provide Manager Reference
Candidate: “Don’t call my current manager—they don’t know I’m leaving.”
Your approach:
"I understand. Your current employment is confidential.
Can you provide your previous manager instead? Or a peer
from your current company who can speak to your work?"
If they can't:
"No problem. In that case, we can:
1. Do reference checks after offer (they'll know you're leaving then)
2. Use peer references + your other manager
3. Proceed without reference on condition of background check
Which works for you?"Situation 2: Reference Gives Negative Review
Reference: “They had serious performance issues. I wouldn’t rehire them.”
Your decision:
- Get additional reference - Was this a fit issue or competency issue?
- Ask candidate - “I got feedback about performance challenges. Can you walk me through what happened?”
- Decide:
- Clearly doesn’t match role: Don’t hire
- Fit issue, not competency: Might still work in different context
Situation 3: Reference Gives Vague/Deflecting Answers
Reference: “I can’t really get into specifics. You’d have to ask them.”
What to do:
"I understand there might be some discretion needed.
Let me ask it differently: Would you be comfortable
hiring them again if you had the chance?"
Usually, they'll give a clearer answer here.
If still vague = Red flag. Proceed with caution.Reference Check Checklist
Before Making Offer
- Have you checked at least 2-3 references?
- Did you ask the 6 core questions?
- Did you take notes on each call?
- Did you listen for red flags?
- Are you comfortable with the feedback?
Before Onboarding
- Background check complete?
- Reference feedback shared with manager?
- Are there specific support areas identified?
- Has onboarding plan been adjusted based on references?
Key Takeaways
-
Reference checks catch 40% of bad hires. It’s worth the time.
-
Check BEFORE offer. Don’t waste time on offer negotiations if references are bad.
-
Always get 2-3 references. One opinion isn’t enough.
-
Listen for red flags. Hesitation, vague answers, lukewarm enthusiasm = concerns.
-
Ask good questions. Open-ended, specific, behavioral.
-
Document everything. Write down what was said.
-
Respect confidentiality. Current manager reference can wait until after offer.
-
Don’t ignore red flags. They’re usually right.
-
Follow up with candidate. If feedback is negative, ask candidate before rejecting.
-
Use references to support onboarding. Share feedback with manager to set up for success.
Next Steps
This Week
- Create reference check script (use template above)
- Identify who you’ll use as reference contacts
- Add to your hiring process checklist (before offer stage)
Next Hire
- Schedule reference checks (2-3 days before anticipated offer)
- Conduct calls (10-15 min each)
- Document findings
- Decision: Proceed or pass
Going Forward
- Make reference checks standard practice
- Train hiring managers on how to conduct
- Document results for future reference
Related Articles
- How to Interview Like a Pro: 50+ Interview Questions By Role
- Bad Hire Cost: How Much Does a Wrong Hire Really Cost?
- Salary Negotiation for Employers: Counter-Offer & Negotiation Tactics
- AI & Automation in Recruitment: The Complete Playbook
About Weizhen Recruiters
Weizhen Recruiters helps companies conduct effective reference checks.
What we do:
- Reference check process design
- Reference interviewer training
- Background check coordination
- Red flag detection & assessment
- Malaysia legal compliance review
Our results:
- Bad hire rate reduction: 30-40%
- Reference check quality: High (comprehensive feedback)
- Time-to-completion: 2-3 business days
- Candidate experience: Positive (professional process)
Learn more about reference check services
Or book a free consultation to audit your reference check process.
