The Ops4Less model of IT Operations cost control:
P A I D ™
People
Get the right people, get the people right
□ Recruitment
□ Culture
□ Motivation
□ Evaluation
Activity
Do the right things, do things right
□ Planning
□ Process
□ Measurement
□ Improvement
Investment
Spend to save money, save money on spending
□ Technology
□ Services
□ Suppliers
□ Projects
Dealing
Manage the business, the business of managing money
□ Funding
□ Service
□ Outsourcing
□ Revenue
Made in New Zealand 
Comments
Hire appropriately educated
Hire appropriately educated people in IT.
Look at future potential to learn and change with time.
Past experience is not a good indicator, effectiveness and ability to deliver is which can only be judged when seen in action. Recommending a 3 month contract-to-hire with a challenging delivery as the condition to hire. Past references can be doctored with social networking sites and group of loyal friends.
Hard questions asked eye-to-eye
I see your point about a good real test is by starting with a 3-month contract. If you can arrange it, and if your national laws permit it, and so long as they don't pull their finger out for 3 months to land the job.
Not so sure about education in IT: many good people entered the industry without education. And many youngsters get a good IT education and don't know **** about how to get a job done. I'm all for professional certification, which involves education, but we aren't there yet
Agreed references are NOT a measure of past performance. Hard questions asked eye-to-eye in interview are. "What did you deliver there? What part were you personally responsible for? Who helped you with that? Do you feel that was your own personal achievement?" etc. Any decent interviewer will soon know if they are B.S.ing