Imagine you're considering hiring me. Does it matter to you what I know? (I'm guessing it does.)
So, how do you know what I know? Think about that one for 4 seconds.
You can look at my degrees and academic transcript, but how do you know what I actually learned in school? More importantly, how do you know what I remember today?
You can see my employment history, but how do you know what I've learned on the job? I've listed my job skills on my resume and LinkedIn profile, but how do you know if I actually have those skills?
You can talk to my professional references and co-workers, who probably have a good sense of what I know. But I'm friendly with them. How likely are they to tell you the whole truth (and nothing but the truth) about what I actually know and am able to do for you?
Let's face it: You don't know much about anyone you hire. Not with the main methods in use today. Employers today rely upon checking diplomas, transcripts, resumes, and references. These methods are not only limited, but also distorted. People are going to 'puff up' their resumes. (The truth is, your job candidate can't take sole credit for that game-changing product strategy; there were actually three other people who developed it.) In general, job candidates are going to merchandise themselves to you. It's human nature.
No matter where the candidate has worked, no matter where he or she went to school, or whom you both know in common, you're taking a risk in hiring that person. How much of a risk? According to multiple reports such as this one, hiring the wrong person can cost employers 30% of that person's annual salary.
Graphic by Shannon Holloway.