Don’t Let THIS Happen to You When Reference Checking

I want to tell you a story. It’s a story I was told by one of my clients about a nightmare scenario that unfolded for them because they didn’t check references properly on a new sales hire.  If you’ve ever skipped or skimped on checking references, I think you might reconsider that once you’ve heard what happen to my client.

I was running a training session on how to get the most value of The McQuaig 3-Step Process and when I got into how the system helps with reference checking, my client volunteered a story about hiring a new senior sales representative. In this organization, as with many others, this is a very high profile role. In this particular case, the individual being hired would farm an existing territory of high-profile clients while also hunting for new business. Having the right person in a job like this can contribute to the company’s bottom line in a huge way. Having the wrong person, conversely, can be extraordinarily expensive.

As the interview process progressed, there was one candidate who stood out from the others. He was well-spoken, had an excellent presentation style and he was easy to get along with. On top of that, his resume told a story of a successful sales career with impressive financial accomplishments.

Another sales hiring manager once told me that, when interviewing candidates, he asks himself three questions: Do I like him/her? Do I trust him/her? Would I buy from him/her? Well, in this case all of those questions were answered with an enthusiastic YES!

An offer was made to this seemingly stellar candidate and, within two weeks, the individual had resigned from his old job and was ready to start in his new role. As an introduction to his client base, the vice president of Sales sent out an email to all clients advising them of the internal change and telling them that they would be contacted by their new rep in the coming weeks. They were excited to have this new addition to their team and they wanted to get him out in front of their customers!

Well, things didn’t go as planned. Within 24 hours of that introductory email being sent, the vice president of sales received four responses from important customer accounts stating that if this individual would be assigned to their accounts they planned to take their business elsewhere. This came as a complete shock, but the decision that needed to be made seemed obvious; the new star addition to the organization was let go within his first week.

What went wrong? The interview process was solid. The candidate had met with three different stakeholders in the organization on two separate occasions. He had completed the standard tried and true assessment tools that the organization relied on and he even had put together an impressive mock sales presentation. The one thing that was missing? No reference checks were completed.

It’s all too common for us to regard references as an administrative task that we complete only for the sake of compliance. It’s not unusual to seek out positive answers when we conduct them and sometimes to even disregard potential red flags. This can be very dangerous and it’s important to regard references as an essential data point in your interview process.

In the story I related above, the tangible costs were not enormous, but they could have been much higher. The cost to hire a new employee is estimated at about 46% of that individual’s first year salary – this figure captures ad costs, costs associated with the time that internal employees have invested in the process as well as costs associated with the “lost time” of the position being unfilled. In this case this cost likely would have been around the $35,000 mark. It could have been much higher had the mistake not been caught as early as it was. But there’s more to the story. What were the intangible costs of making this bad hire? How might this have affected the reputation that this organization held with their clients? And don’t forget about our candidate – he resigned from a position in order to accept this position. If references had been completed it’s highly likely that an offer would not have been made in the first place and this candidate would not be in this situation. When our candidates have a negative experience these days it can have an impact on our brand and the quality of candidates that we attract in the future. Social networking sites like Glassdoor make it very easy for individuals to share their experiences with a wide audience.

This story highlights the importance of conducting references. Remember that reference checks should not be conducted too early in the interview process because they’re time consuming, but you also don’t want to conduct them after you’ve already made a decision. The information that you gather from references should act as a data point in your decision making process. So how can we make sure we’re getting the most out of references? It’s really not that hard – just follow these basic tips!

1. Don’t settle: Talk to the RIGHT people

Your candidate will likely come to the interview with a list of people that he or she would like you to contact when you’re checking references. It’s very likely that these are the exact individuals that you want to speak with. If they’re not, don’t be afraid to ask for more references. You already ask strong behavioral-based questions in your interviews, and I hope you also ask strong probing questions. One of your probing questions whenever one of your candidates describes an achievement that impresses you should be “Who were you reporting to at that time?” If that individual is on your candidate’s list of references, great! If not follow up that question with: “Do you mind if I contact him/her”.

There are two purposes to doing this. First, in your interview, you’ll make it clear to your candidate that you’ll in fact be checking references and that you plan on confirming the information that they’re giving you. This will encourage a bit more transparency and honesty in the actual interview. I’m a fairly trusting person, so I’m not saying that all candidates lie, but some certainly will stretch the truth given the opportunity. The second reason you’re asking is so you can actually contact this person. When you speak with them you’ll plan on asking them about the specific accomplishment or scenario that the candidate just related to you.

2. Prepare: What to do before the reference check

Prior to conducting references, you want to make sure that you’ve informed your candidate that you will be contacting references. If you followed step 1 then your candidate already know this. Now make sure that for each reference being contacted you have reviewed the candidate’s resume and you understand the role that they played while with that company. With each reference you should review employment dates, job responsibilities as well as rehire status, but this is not where you’ll gain your most valuable information from the reference. That will come from a focus on:

• Open ended questions: Avoid questions that can be answered with a “yes” or “no” and instead ask questions that require more of an explanation. Ask question that will require the reference to expand on the information requested.
• Behavioral questions: All good interviewers know that they should ask behavior-based questions in the interview, but we often forget to do this when we check references. If you use the McQuaig Job Survey to benchmark your positions, there are some really great suggested reference questions contained in the report.
• Red flags identified in the interview: Identify any areas where you received conflicting information from your candidate in the interview or areas where you want to gain some clarity and prepare some questions surrounding these items.

We all know how dangerous it can be to wing an interview and the same is true for a checking references. Make sure that you prepare all of your questions prior to picking up the phone – and yes, you need to pick up the phone! Written references will rarely include negative information.

3. Conduct the Reference Check

We want to be respectful of the time of other people and we also want to make sure that we maximize the value that we get from each interaction. So start off the call with an introduction and an expectation of how long you’ll need. Reschedule if necessary. Also, you must do your best to resist attempts to pass you onto human resources as they’ll likely not be able to give you the valuable information that you want.

Spend a moment to build some rapport with the person on the other end of the line before getting into your planned questions. If the person feels some sort of connection with you they will be much freer in providing you with information.

Once your reference interview begins make sure you listen! Don’t fall into a confirmation bias trap where you only hear the things that are said that serve to confirm what you already think about your candidate. Do not interrupt or lead the person on the other end of the phone. Allow them to speak freely and don’t be afraid to ask follow up and probing questions if they don’t give you the detailed response you were looking for.

And finally take notes! Your goal here is to gather information. Reserve any judgment for final step.

4. Review the information you gathered and make a decision

If you followed the above suggestions then you likely came away from your call with quite a bit of information. Your decision to hire will not be based solely on the reference, but as one data point. You’ll also consider the candidate’s skills, experience, assessments completed, etc.

In regards to the reference, evaluate the quality of information that you gathered (especially if there’s an impression that the reference was not being entirely transparent with you). Don’t be afraid to conduct more than the one or two checks. If you see inconsistencies, continue to ask questions until you’re comfortable that the inconsistency is resolved. Finally, make sure that the information received is weighted equally for all candidates – what disqualifies one candidate should also be the basis for disqualifying another.

It’s time to stop treating references as a chore and to start treating them as a priority and a source of rich information. When conducted properly, they can save us a lot of time, effort and money and avoid nightmare scenarios like the story I started with.

What tips do you have for making references more effective?

Image courtesy of Flicker CC and ~BostonBill~