Making Reference Checks Useful (Again)

March 31, 2023

min read


Kerry Wang

If reference checks are so important, why are they also so hard to do? Many intelligent hiring professionals agree that reference checks produce valuable information that the hiring team couldn’t get any other way. In fact, Jack Altman, CEO and Co-founder of Lattice says:

"One of the most underrated secret weapons for hiring is reference checks”, and reports from the Harvard Business Review agree.

At the same time, many recruiters and hiring managers find reference checks frustrating because the process for conducting them can be challenging. Digging into this issue more, the traditional process for checking references has several problems including:

  • They take too much time to execute and coordinate, and slow down the interview process.
  • The data is text heavy.
  • The data is never used after it’s collected.
  • They are done too late to impact the interview process.
  • They rarely disqualify candidates.
  • References have a positivity bias.
  • There’s no standardization (of questions, reference requirements, etc). 

At the time of writing this, it’s no secret that the labor market is tight and job candidates have a lot of power in the negotiating process. That makes these problems even more difficult to tolerate. If you take too long to make an offer, top candidates can get snapped up by someone else. Even hiring teams that believe reference checks are important, find it hard to justify potentially losing an MVP candidate just to get more data that might not even be useful.

The risk of not doing references checks

The solution, in our minds, isn’t to get rid of reference checks. Let’s ask ourselves, what is the opportunity cost of not doing reference checks? It might be missing out on a stellar new hire, or hiring the wrong person for a key role. How much could those mistakes cost? How much does backfilling add to your time-to-fill? Compared to that, the small amount of extra time and effort required to check references (especially using the strategies explained here to streamline the process) seems much more worthwhile.  

Another point that I think often gets overlooked – reference data is especially good at measuring cultural alignment. More aligned employees perform better and are less likely to leave their roles. It’s also important to know the ways in which a new hire isn’t aligned with their team or organization, so that can be addressed in onboarding or with their manager. 

The best solution is to change the process for doing references so it’s faster, easier, and provides more valuable data to everyone involved. Here’s our approach on how to overcome each of the problems identified above. 

Fixing "They take too much time"

Phone calls are the culprit here – scheduling calls (or trying someone again and again until you catch them at a good time) creates more work for the hiring team and slows down the process significantly. Instead, why not send references pre-built surveys (with questions based on I/O psychology to get the most useful data on a candidate’s behavioral traits). We’ve found that if these survey questions are built to be easy to complete, references are complete in 1-2 days.

Fixing "The data is text heavy"

Written feedback takes time to read and understand. Depicting data from references visually, like a scorecard showing how well each reference rated a candidate in key areas, lists of a candidate’s top strengths or gaps, or a spectrum that shows how close the candidate is to the working style of the team they would join, can make reference data easier to understand. In turn, this makes it more likely to be used in the final decision.

Fixing "The data is never used after it’s collected"

Reference data should be uploaded to the ATS for easy access. Reference data is also extremely useful for onboarding new hires (here is an example in Searchlight’s onboarding guide). Providing this data to the new hire’s manager will help onboarding go faster, and set the candidate up to feel more welcome and engaged in their new role. 

Fixing "They are done too late to impact the interview process"

Making the reference process more efficient means the hiring team can consider asking for references earlier in the process. Zapier found an effective way to use references async with final round interviews. Data from references should answer these questions for the hiring team:

  • Does this candidate have the strengths best suited for this role?
  • Is our team equipped to address the growth areas for this candidate?
  • Are their working styles conducive to doing this job well?

Ideally, the team could quantitatively compute how well the candidate matches the role in question. 

Fixing "They rarely disqualify candidates"

If references are just acting as a rubber stamp for the hiring process, the time and effort spent on them is being wasted. Information from references (especially since good reference checks find data that doesn’t come up in interviews and resumes) should sometimes make the hiring committee change their mind. We’ve heard many stories from customers that hired a candidate that they wouldn’t otherwise have hired thanks to the reference data that our platform helped them gather and understand. And these hires went on to become top performers. This also happens in reverse; having better reference data can also surface potential issues with a candidate that would have otherwise slipped past the hiring team.  

Fixing "References have a positive bias"

Candidates aren’t going to give you references unless they know they’ll say nice things about them, so doesn’t that make them biased? Yes and no. We crunched the data on this, and found that references rate candidates as “The Best I’ve Seen” or “Exceptional” 71.5% of the time. That’s high, but not as high as you might expect – three out of ten times they’re saying less-than-stellar things about a candidate.

This is important. Employers need a realistic idea of candidates gaps as well as strengths. This helps them mentor and onboard that candidate more successfully. They can’t help the candidate improve if they don’t know there is a problem. 

There are also analytics techniques for catching and mitigating bias (like one reference that gives a candidate top marks in everything). It’s possible to automatically weigh reference feedback based on corroboration and relevant details about the reference, like how many years of experience they have, how long they worked with the candidate, and how long it was since they last worked with the candidate. 

Fixing "No standardization"

Using prebuilt surveys for reference checks (as explained above) also helps standardize the process. Building the survey forces the hiring and recruiting teams to decide what type of candidate they need for the role, and then each reference gets the same questions. This also means all the data the hiring team gets back will be in the same format. Doing this all with software also makes it easier for teams to specify how many references are required and what working types they should be (for example, two managers, one colleague). 

Reference checks are your secret weapon

Fixing these seven problems lets organizations continue to take advantage of the benefits of reference checks, even in a tight labor market where they have to move as quickly as possible. Over time, the behavioral data companies get from references is invaluable to understanding who the right talent for the company looks like - which can be applied to Talent Brand, Job Descriptions, and Structured Interviewing. And the benefits don’t stop there; in a slow hiring market, a top-notch reference process helps organizations ensure they’re finding the very best candidates for their role without getting paralyzed by all the options out there. 

Kerry Wang

Co-Founder & CEO

Kerry, our CEO and co-founder, merges Org Psychology and Computer Science expertise. Passionate about people, psychology, and tech, she enjoys weekend reading and reality TV.

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