Beat the hiring odds with these 5 steps to insightful reference checks
No amount of interviews or online research is enough to truly know someone. That’s why even top companies have a hiring failure rate of 30–50%.
Fortunately, there is a simple way to radically improve your chances of success.
If you’ve travelled in the pre-internet era, you’ve probably been in this situation:
You walk past a travel agency and lose yourself in the glossy posters. You imagine yourself all alone on the pristine beach in Phuket, meditating on a peak in the Himalayas, and galloping through Wadi Rum.
Perennially overworked, you decide to finally go on that overdue vacation, and take up the agent on their 5★ packaged deal… only to find yourself in a room with a broken toilet, next to a crowded beach, in a city with traffic jams that make you long for your work commute.
Yet all it took to avoid this disaster was to talk to a few travellers who have been to your destination before!
The situation is quite alike with hiring, fundraising, and any other professional courtship.
The only way to truly know someone is to work with them. A reference from a former co-worker, a client, or their boss is the next best thing.
Reference checks are the strongest signal on a candidate, especially when hiring for a position where competence is difficult to test (think marketers or PMs), or if you’re about to enter a long-term, legally binding relationships (think co-founders or VCs).
How to get the most out of reference checks
Reference-check continuously
As soon as you begin to seriously evaluate a candidate, you should start reaching out to mutual contacts and validate everything you read and hear.
Too many companies do this as the last step in their hiring process, but by then they’ve basically decided, and might no longer pay attention to the warning signs.
The strange thing about most reference calls is that by the time the hiring manager is calling she is often already pre-disposed to hiring the candidate.
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But the problem is that by the time you actually call people you really WANT to hire the candidate. So often people who do reference calls ask softball questions. That’s not your job. Your job is to seek “disconfirming evidence” meaning you go in with the assumption that Stacy is great but you want to be sure there isn’t something you totally missed.
— Mark Suster, VC at Upfront Ventures
Be respectful of people’s time
People are busy, and they’re providing you with the reference as a favour.
If you’re doing a background check on an executive hire, an investor, or another decision that will have an irreversible impact on your company for years to come, make that clear from the get-go, so the referencer can prepare, and clear up more of their time.
For regular hires, keep reference calls short and to the point, usually 5–15 minutes max.
You can learn a lot even from just their reaction to your outreach email — did they reply promptly, and with excitement? How much effort did they put in their response?
Geoff Donaker, ex-COO at Yelp, swears by this three-line email:
“I’ve been talking with Candidate X about a senior position at [your company]. We’re really lucky we have several great candidates for the role. If Candidate X is one of your favorite people you’ve worked with, I’d love to hear back from you and chat with you about it for a couple minutes.”
It’s not a question, right? It’s a statement that says, if this person is amazing, I’d like to hear back from you. Nine times out of ten, if you send three of those front channel references with the way I just worded that, people will respond within a half-an-hour. “She’s amazing. I would hire her again in a heartbeat.” Fast responses like that are the types of signals you’re looking for.
In the follow-up call, you can also ask whether the candidate is in the top 10%, 5%, and 1%. If they aren’t, dig deeper into what would get them into the 1%.
Power tip: While you have the reference on the call, get a list of their one-percenters, and reach out to them as your future hires.
Always go beyond the list
A job applicant can have a stellar resume, but if their former colleagues mention issues of trust, will you still consider them the same?
An investor can have a star-studded portfolio, but if you find out they’ve backed out on term sheets, will you still do that pitch?
Of course, you’re unlikely to hear any such feedback from the five references the candidate provided based on your request — you always have to go off-list.
The further you get away from the provided references, the more valuable the data. You can reach out to their past colleagues on LinkedIn, ask each on-list reference to introduce you to a couple more contacts, or chat to some of your super connected friends.
Note: It’s best to ask a candidate for permission before you hit the backchannel. For example, they might warn you not to talk to their employer, unaware that they’re hunting for another job. If they’ve got nothing to hide, they’re unlikely to object to the idea overall.
Get an even mix of references
To get a fuller, less biased picture of the candidate, aim to get feedback from all of their recent workplaces, and a variety of contact types:
- Peers can give you feedback on how well the candidate fit the company culture and gelled with the team. Avoid talking to friends and close colleagues though, as they’re unlikely to be as impartial.
- Managers will have insight into how well the candidate handles feedback, their work ethics, and skill.
- Direct reports are often more biased, but they can share their first-hand experience with the candidate’s mentorship and leadership skills.
- Replacement hires who took over the candidate’s role are more likely to speak out and can give you a feel of the state in which the candidate left their previous team.
As you do your checks, be careful about how you interpret the feedback.
If you feel that a reference is tainted with personal bias, make sure double-check the specific qualities with your other contacts.
You also remember that nobody is perfect, and consider carefully whether the candidate’s more negative traits should stop you from making the hire.
Ask for weaknesses indirectly
Most people you’ll talk to will be positively biased. They’ll be less direct when describing the candidate in a bad light, and asking for weaknesses can put them on a defensive.
You must also remember that everything you discuss on the call is likely to travel back to the candidate, and any negativity could impact your work relationship in the future.
That is why Tom Tunguz, VC at Redpoint, spends the most time of his reference interviews on the following question:
What kinds of people does the referenced need around him/her to be successful?
Asking for the right mix of people to complement the candidate’s skill allows you to find out the same information, without discussing unfavourable traits head-on.
What are you waiting for?
You now understand the importance of reference checks and have all the tools to get an accurate picture of your candidate. It’s time to get out and start reaching out!
The whole process can feel a bit awkward at first, but you’ll soon find that people are very happy to share their work stories, and remember their former colleague.
And if ever they’re not, you can thank me for beating the odds, and saving you from yet another unfortunate hire!
