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Effective reference checking: A definitive ‘why’ and ‘how-to’ guide

“A mixture of art and science, a forensic and rigorous examination of a candidate’s strengths and weaknesses is a vital risk management process: not just for the organization undertaking the hire (and the executive search or recruiting firm working with that organization), but for the candidate as well.”

In an era of increasing AI, automation and digitization, the importance of traditional reference checking as a risk management mechanism cannot be undervalued. We look at why it is so fundamental to hiring success, and provide helpful tips for ensuring your process is robust.

Undertaking a thorough and diligent reference checking process for candidates is just as important as the interviews with those candidates. This is particularly the case for executive and senior level hires.

A mixture of art and science, a forensic and rigorous examination of a candidate’s strengths and weaknesses is a vital risk management process: not just for the organization undertaking the hire (and the executive search or recruiting firm working with that organization), but for the candidate as well. This is an element that is often overlooked.

Unfortunately, the current reference checking environment is both complex and challenging for organizations. Speed is absolutely crucial to not missing out on an exceptional candidate (see more about speed vs quality below). Within this context, some organizations are increasingly seeing the reference checking component of the hiring process as a simple ‘box-ticking’ exercise, not allowing the stage to influence the actual decision of whether to move to an offer, and leaning very heavily on the interview process as their one and only benchmark of how to proceed.

Additionally, third party services that provide online reference checks increasingly feature as part of the hiring process. These are particularly useful in a limited capacity for appointments which have a reputational, security or compliance risk associated with them, however they should be seen as an addition to your process and never be a substitute for a more complete and traditional reference check.

A 100% online standardized questionnaire assessing the performance of a particular candidate is largely worthless. A conversation with a referee provides insights and nuances that complete a much more detailed picture of a candidate, and allow you to unpack certain aspects of their responses in real-time, contextualized to the concerns of the specific role and the broader organizational fit.

Suggested Tips
Having worked with thousands of clients to successfully source and place executive-level candidates, these are our key suggested recommendations for effective reference checking.

When to do a reference check
Either when a single strong candidate emerges from the shortlist, or when there is a ‘short’ shortlist of two or three potential hires. With the current market need for speed, introduce referee checking as soon as practically possible. It can work in parallel to other stages, such as the final interview/presentation or even occasionally in tandem with a verbal/written offer (which should always be ‘subject to references’).

Who to approach
Along with candidate-generated referees, it’s a good idea to source one or two others that you would also like to approach. Do not source referees from the candidate’s current company. Due to privacy and legal reasons, it is essential that you share who you would like to approach with the candidate, and get direct consent from them before doing so. There are three main sources that will collectively paint a comprehensive picture of the candidate:

  • Former managers that the candidate reported to
  • Peers, particularly if they are senior individuals who are part of a firm’s management structure
  • Those that directly reported to the candidate.  

Assessment methodology

Being highly targeted and structured in what you ask referees will speed up the process and avoid paralysis by analysis. It will also provide a clearer picture as you move to a decision point. There are three main areas of assessment:

  • Capability
  • Values
  • Fit with culture.

When we undertake this process, we benchmark each of these three main criteria against the expectations of the client we are working for. The degree to which a candidate has the right capabilities, values and fit with culture can vary dramatically, depending on the industry, role, reporting lines, organization, and personality profiles and expectations of the leadership group.

Key Questions to Ask
As per the above, there should be no ‘standard’ questions that fit all reference checking processes, and all lines of enquiry should be contextualized to fit the particular paradigm of the organization’s hiring need. However, as a starting point, we see the most incisive questions as usually being:

  • Please confirm the nature and type of work you and the candidate have completed together. Over how long a period of time was this?
  • Overall, what do you see as the candidate’s major strengths in relation to this role?
  • We would appreciate your input regarding a project where the candidate had to engage with conflicting agendas and how the candidate navigated/resolved the situation?
  • From your observations, to what extent does this candidate have the influencing and relationship management building skills required for a role such as this?
  • How would you describe the candidate’s leadership style in relation to this role and their ability to bring their team with them?
  • Overall, what do you see as any particular areas for development, or situations that might challenge this candidate in this role?
  • Are there areas that we have not asked you about, that we should have?

Additional Due Diligence – Social Media
One other area of suggested research is how the candidate appears on social networking sites. Social media profiles show months and years of information that can often provide additional intel of a potential hire’s personal traits, values and professionalism. This is increasingly used by companies as part of their hiring decision, although some care has to go into ensuring that the profiles of the person you are ‘reviewing’ online belong to the actual candidate you are considering.

Even more importantly, be aware that in some regions of the world, particularly those that operate under GDPR law, you need to inform candidates if you plan to review their social media profiles as part of your screening process, even if these profiles are publicly available. To be compliant under this legislation, companies need to explicitly disclose with a candidate which of their social media profiles they will be looking at, how they will be doing so and why.

Negative Feedback
Sometimes a potentially show-stopping item emerges. Our recommendation here is to take this very seriously but not as an automatic ‘no hire’ trigger. It could be due to a personality clash or a bit of professional score-settling. Is there a way to verify the referee’s perspective? Or to address the same point with other referees for their insight? While every situation of this type is unique in terms of content, confidentiality etc., we consider it best practice normally to give the candidate a ‘right of reply’ by putting the concern to him/her, along with the opportunity for his/her input that feeds into a balanced ‘hire/no hire’ decision.

Speed vs Quality
Finally, and as previously mentioned, a difficult balancing act exists in the current climate (and more generally, with exceptional candidates who are actively looking and are considering more than one offer) in terms of the speed of the search vs the quality of the search. In essence, we would argue that every reference checking process has to have some elements of both speed and quality, and how much there is of each is contextually dependent on circumstances (e.g. how good the candidate/s is/are, the difficulty of filling the role, etc.).

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