According to a study, hiring the wrong person costs a company roughly $50,000 between lost work, wasted training, additional seeking to locate a new hire, and additional training. Candidates certainly don't make it easy for you. Roughly one in three candidates will provide a fake reference (we know of at least one person who put on fake accents and pretended to be his own references) while roughly 1/3 of references provided will not give positive references.
Not catching people before they get hired not only costs your client time and money, but also your company as well. Be sure to ask your candidate and their references the following questions to make sure their answers align, which will help you gauge how trustworthy the candidate is.
1) What is an area the candidate needs to work on? Old school advice is for the candidate to turn the answer into a positive. For example, having OCD could be twisted into, "So my desk is always super neat." No one is perfect, and it's okay for a candidate to admit a shortcoming. This shows they know they need to work on an area, and knowing is half the battle. If your candidate says OCD is their biggest issue but their reference says it's lateness, there's something off and further questioning is needed.
2) How do you two know each other? Cue that awkward moment when a friend is supposed to be a boss, but they've known each other since Kindergarten.
3) What were the candidate's responsibilities? I saw a comic once (I tried to find it to give credit, but I failed. My apologies to the author; it was very well done!) where someone was filling out a resume or application, but was translating their video game playing experience into real world experience. Leader of a guild = management to 500+ individuals, for example. People tend to exaggerate on resumes, and talking to references is a great way to find out if your candidate is guilty of such.
4) Why did the candidate leave the company? Being fired is the number one reason people lie on their resumes and applications. Be sure to find out the real reason they're no longer there. Keep in mind that if a candidate was let go, the reason why should be taken into consideration. If it was a downsizing, being fired should not be held against the candidate, but if they lied about it, that should. I myself was fired from a previous employer, but it was because I reported him for highly unethical behavior. The company found out about the firing and gave me a nice sum of money as a "We're sorry this happened to you," and he was fired as well. By that time, I had already moved on to other things, so I did not take a position back with that company. Unfortunately, some application processes only allow for multiple choice on fired or quit and not a reason; give people a little bit of room to explain their situation before making that decision.
5) Would you hire this candidate? This is almost always answered with a yes, but some people love to embellish on why, which is the real answer you're looking for. I had one person who was so enthusiastic about the idea of hiring a candidate, and the candidate had already said she had loved working for him and wished he was hiring, I was able to move behind the scenes and arrange things so that they were reunited as employer and employee. I got the placement fee, and they were both delighted that I had made both their desires happen. The employer has been a client since, whenever he needs another hire.
Whatever the references share, remember to keep it confidential and be sure to let them know. The references will appreciate it, they are more likely to be honest, and will be more likely to choose your agency for their own employment needs. Also, just because a reference says it, doesn't mean it's true; try to get the candidate's side of the story before making a final decision.
Hopefully, these questions will help you weed out some of the less-than-ideal candidates and find the gems you've been looking for. Let us know how they work for you! What questions do you ask references? Have some things to look out for? Let us know that, too!