Is It Normal for Previous Employers to Charge for Reference Checks? Seeking Insights from HR Peers

Dear All,

Recently, a new candidate joined us. When his previous company was contacted for the reference check, they mentioned that they charge for this service. This is the first time I have heard of a previous company charging for reference checks, as I know that the situation can be vice versa at times. It seems like a give-and-take scenario.

Can you confirm if this practice is common and valid?

Regards

Hi,

It's completely wrong, and I think no company does this. You can contact his reporting person (previous organization) by phone. Don't indicate that I am calling from a company; rather, use that I am calling from XYZ Consultancy. Before processing his resume for our client, I need to add some facts to the sheet and want to know more about him, such as special qualities, behavior at the workstation, and relationships with peers, seniors, and subordinates.

I believe this is a good way to proceed.

Thank you.

Dear Kartiken,

This is a totally wrong practice. I think that X company does not have proper HR norms, and I totally agree with Madhu.

A totally wrong practice to charge for complying with reference checks. It is the HR's duty and not a luxury we are requesting them to provide.

I have had a weird experience with the HR of Premier Evolvics in Coimbatore, who told me that, according to her, taking time for reference checks is a waste of time. I wish the company knew that she was a waste of time there!

You just need to educate them and tell them, "It makes no sense, and please don't create a poor image of your organization!" All this information should go to the senior management of the company. Just write an email to their CEO or MD and ask who created this policy that creates a bad image for their company.

Yes, dear all. In fact, I was too astonished to hear the same... but more to my astonishment, this comes from a reputed company, much known to all. Strange. I will try with some hoax call then and later, if required, tell them of correcting it... I feel this is okay.

These charges are possible if the company has a huge staff strength, multiple subsidiaries, or regional HQ status, and HR is on a shared services model. HR gets to charge a fee in exchange for the transactional services provided. Charges are usually based on time and complexity related factors (how much time is needed to complete the transaction and the level of expertise needed). This is one method to transform HR from a cost center to a profit center.

Autumn Jane

Dear Jane,

Thank you for the input. I thought this was a weird practice or hoax to prevent unnecessary botherations. Is it possible for any organization or are some specifications required to implement the same?

Regards

Don't make it about business. Because then you will only hear what you want to hear - not the facts when we conduct reference checks. That's just an absurd idea.

Don't tell me that conducting a reference check with one company is so significant that you need to consider it a "luxury" to gather information on someone before hiring.

Guys, why don't you charge something else!!!!

Dear Kartiken,

To most, it may be a weird practice or an absurd idea because we are charting into unfamiliar ground. Professionally, I have come across three such organizations where HR adopts a fee-based approach in conducting their HR services. The first company is a global supply-chain company; the second company is also a global company with headquarters in Finland, and lastly, a shared-services organization (HR, IT, Finance & Training) with 450 staff supporting 80,000 employees worldwide. In all three companies, HR itself is a separate entity and is accountable for its own bottom line.

In the incident that you have mentioned, we can't confirm whether it is a hoax or not. But one thing is for sure - the leaders of the three organizations that I have mentioned are far-sighted and dynamic enough to break away from norms and succeed in what they strongly believe in.

Regards,
Autumn Jane

Autumn, I don't call it absurd because it's "charting out a different idea". Look at the end result - if this is practiced, to reduce "cost", people will stop even seeking references. Because you see - that will be a part of the HR cost-saving strategy! And once companies are not interested in paying for reference checks - people would start being more creative on their resumes!

Karthi - Follow what makes sense, honey - not everything!