How to carry out a candidate reference check

June 21, 2021
Camille Hogg
How to carry out a candidate reference check

‍Netflix CEO Reed Hastings really set out his stall when he described why candidate reference checks, not interview performance, were a key focus of his hiring process back in 2015.

After the company’s internal culture deck went viral, Hastings found his growing company in the spotlight as an example of how to do hiring the right way. But it was all part of a tactical move to help people understand how Netflix approached talent.

“We wanted to make sure that everyone that applied really got [our culture]. Because we knew it wasn’t for everyone. Now that I’ve hired enough people, my radar is much better. I do a lot of references — I’m basically of the view that people can buffalo you in four to six hours. The interview is like a narrowing round, and then you really work those references.”

For Hastings, reference checks were not just a formality at the end of his hiring process. Instead, they were central to it. But what’s the best way to carry out a candidate reference check  — and who should you ask to get the most balanced view of your candidate?

If you missed our first post in this series, start here to find out what reference checks are, and how they can benefit your business. In the second article in this series, we’re going to guide you through the reference checking process, including how to conduct a reference check, who to ask for references, and the best ways to gather the insights you need to make the right hires.

‍How do you conduct a reference check?

Employment references can be collected in a few different ways:
- Manually (email, phone or video calls)
- Out-sourced services (third-party reference checks)
- Automated (platforms like HiPeople)

Manual reference checks, such as written or phone references, are two traditional ways to find out more about a potential hire. Written references, such as email, are conducted asynchronously, but can be time-consuming to collect. Meanwhile, phone or video calls — Hastings’ preferred method in 2015 — can be more efficient, but rely on direct contact. This can throw up a few problems when you’re trying to schedule in some time with a busy senior colleague.

Many organisations outsource their reference checking to a third-party provider, which can free up valuable talent team time. However, using a third-party provider can be expensive, and relies on other organisations to decide what fits best for the role and culture-fit. More often than not, third-party providers will only confirm a candidate’s employment history, such as their previous job titles and time spent in roles.

The final method is automated reference checks. And maybe we’re a little biased here, but we think they’re the most efficient and impactful method. Platforms like HiPeople collect verified, high-quality insights on the people you want to hire from the people who know them best: former managers, peers, or reports.

Automated reference checking platforms can speed up the end-to-end reference collection process by automating the manual parts, such as contacting referees, scheduling and conducting a call, documenting and analysing the results etc. This can free up valuable time. On average, HiPeople customers reduce their time spent conducting reference checks by 96%—while also collecting twice as many candidate references as before.

Reference checking platforms then analyse this feedback, and provide benchmarked candidate reports—highlighting skills, strengths and areas for improvement. This allows Talent Acquisition teams teams to make data-informed hiring and onboarding decisions, and set up their new hires for success. The effects can be quite noticeable — HiPeople users report significant improvements in employee retention, with new candidates 40% more likely to remain with their organisation past their first year.

‍Who should give an employment reference?

‍To get a full picture of your potential candidate’s personality, their working style, areas of improvement or skills, you’ll need to tap into a few different sources when contacting referees.

There are many different types of referees that can help you find out more about your candidate:

- HR team
- Manager
- Peer
- Direct report
- Customer
- Personal
- Academic
- Mentor

The HR reference check is the most basic and least detailed form of professional reference. Typically an HR source will verify employment status, such as job title and time in role. These are likely to be reliable and unbiased, but you won’t gather too much insight into how your candidate works.

Other professional referees include managers, peers and direct reports. These are particularly helpful for unearthing what a candidate is like to work with, their professional strengths and weaknesses, and their skill set. Depending on the relationship, they will also tell you a bit about a potential employee’s personality.

Customer references can be another helpful way to understand how a potential employee interacts with those in their field on a professional level — particularly when you’re hiring for roles in sales.

Personal referees, or character references, are another option. These are usually friends or personal connections, but can also include professional mentors. They can be helpful to find out more about a candidate’s character. However, they can carry some inherent bias. Similarly, academic references, such as teachers or professors who have taught the candidate in an educational capacity, can help shed light on working style and personality.

For new candidates to the workforce or those without much professional experience, personal or academic references can be an important way of verifying skills, ways of working, and organisational fit.

We recommend covering as many bases as you can, with the most important being references from direct professional connections, such as managers, peers and direct reports. When you gather insight from lots of different sources, it means you can quickly identify key information, such as whether or not your candidate is the best fit for the role and required skill set, or how they will fit in your organisation.

‍What questions should you ask different referees?

‍The questions you ask each referee can change depending on the nature of their relationship to the client. For example, while you’re likely to ask your candidate’s manager about their key skills, you probably wouldn’t ask their personal referee the same question.

Here are some examples of questions you can ask referees:
- What makes the candidate a good fit for this role?
- What are the candidate’s biggest strengths and areas for improvement?
- How does the candidate interact with others?
- What type of working environment does the candidate thrive in?
- What is the candidate most passionate about?

If you’re looking for example reference questions, stay tuned. We’ll cover this in a bit more detail in our next post.

Who should conduct a reference check?

‍Finding the right referees is one half of the process — but who from your team should conduct the reference check and collate the data?

We know that as humans, we can come with a little baggage on the bias front. And in a growing company, where the focus is usually on hiring the best candidates at pace, it may seem like a race of fastest fingers first to offer a candidate the role before they choose someone else.

But this is where bias often creeps in. Hiring managers who need to grow their teams quickly may overlook red flags, while talent acquisition teams, faced with steep hiring targets, will do the same. The desire to work with people with shared professional experience or personal worldview may also impact this bias.

The truth is, nobody will be 100% objective when conducting a reference. The more you can limit bias in the way the questions are asked, and the way the results are interpreted, the better.

In an ideal world, more than one person should be present when conducting a reference call, and multiple people should review the feedback together. The former is unrealistic, so we recommend the hiring manager takes the lead. And the latter? The hiring manager, a recruiter, and a senior manager should be discussing the results together.

However, there’s a better way.

Automated platforms like HiPeople (that’s us!) can reduce bias on this internal side of reference checking, because they remove the human part of the process. Instead of having a hiring manager ask a referee questions about a candidate, HiPeople automates it for you. This has a positive effect on both the data quality, and quantity: HiPeople users collect up to 3x the amount of references per candidate, reducing the impact of bias during the hiring process.

And when the insights come in, they’re presented in the open — meaning everyone from talent acquisition teams to hiring managers and senior management can review the results. This improvement in hiring oversight also limits the opportunity for personal bias to influence your hiring decisions.

When in the hiring process should you conduct a reference check?

‍Reference checks are the best way of ensuring candidate-organisation fit. But when you conduct them can make a real impact on how you use your insights.

Some employers choose to request references during the interview stage or before making a formal offer to a candidate. If things are too close to call between a few applicants, checking their references before making an offer can help you decide who you choose.

Other employers get a reference check underway immediately after making an offer. One in three employees are likely to quit a role within their first three months, so using reference checks at this phase of the recruitment process, to understand how a candidate likes to work, can be a great way to support their on-boarding and ensure their long-term success at your company.

You can even use a mix of the two approaches. This is how HiPeople customer Prisma handles their reference checking process...

"Let’s say we’re 70% on a candidate, and we need to be at 80% to make a decision. It’s ok for me to wait on a reference, and we can see if it corroborates or contradicts our concerns.

In the instances where we need to move fast — and we already know the skill set of the candidate is too valuable to miss out on — we’ll request references after we’ve made the offer. We’ll say to the candidate, you’ve already got the job, we just want to learn more about you so we know how best to support you.”

- Martin van Rensburg, People Operations at Prisma

Whenever you choose to check references, this is your chance to gather crucial feedback that gives you deeper insight into your new joiner: their personality, workplace needs, areas of improvement, and strengths and weaknesses.

We recommend that you start checking candidate references early on in the hiring process. Gathering these insights early means you’re able to use the data throughout the hiring journey to inform your decision-making.

How many employment references should you ask for?

‍Knowing how many references you need to ask for can be tricky. Too few or the wrong kinds, and you won’t get a balanced picture of your candidate — but too many and you could risk holding up the process.

As a general rule of thumb, it’s good practice to request between four to six references, although this may vary by sector or level of seniority. We think this is the best way to build a balanced view of your candidate on a professional and personal level.

How to collect candidate references more efficiently

‍In the next post in this series, we’ll dive in deeper on the questions you need to ask — and the ones you need to avoid — when collecting references. Stay tuned by following us on Facebook and LinkedIn to find out when they launch. If you can’t wait until then, book a chat with one of our amazing team members and find out more about how you can make more informed hiring decisions with us.