Reference check team members before hiring, every single time

February 26, 2024

August 25, 2022

After precruiting, interviewing, and completing work projects with candidates, you’ll have a finalist candidate who you think will be a good fit for your team. Each step of the Talent Acquisition (TA) process leads into the next, with candidate references being the final step of the hiring process. 

Recruitiment process: Precruiting, interviewing, working with candidates, referencing candidates

* The 14 questions to answer before recruiting startup executives

** Building a recruitment roadmap to find the right candidate for your startup

*** How to build a “Work With Us” career page to attract top talent

**** How to get better at interviewing so that build a team to help you win

***** Try working with people before you hire them…and pay them for it!

Interviewing is hard, and is not an exact science. As Harvard Business School’s Claudio Fernández Aráoz says in his book It’s Not the How or the What but the Who, “the best professional interviewers' evaluations are 70% accurate. But most people are right about 30% of the time.”

Interviewing can be a false proxy for how someone will perform if you hire them, which is why even the best interview processes can leave you uncertain about who to hire. Interview processes are time-intensive, and it’s demoralizing to you and your team when you realize that you’ve hired the wrong person 1 or 2 months into the job. In Latin America, making a wrong hire can be especially expensive when you have to pay out multiple months of severance regardless of how long the team member has been with you.

Follow our interview guide to get closer to the ~70% success rate of hiring. Use paid work projects or working sessions to see firsthand the quality of the candidate’s work and get more certainty about the candidate. Then, do references before hiring someone full-time. You can never be 100% sure that someone will work out, but you can take as much guesswork out of the process as possible by referencing before hiring.

TL;DR: Candidate references are the final step to hiring great candidates with confidence 

  • Do a formal background check to make sure you aren’t hiring a criminal, using a company like Truora.
  • Use reference calls to add important data points and paint a clearer picture of the candidate
  • Talk to different references, including the candidate’s former managers, peers, and direct reports 
  • Start with 3-5 candidate provided references for senior hires, and at least 1 candidate provided reference for junior hires
  • Soft reference the candidate with your team, close network, and investors who know the candidate
  • If you need more references, talk to the candidate directly. Assume that the candidate will find out about all backdoor references
  • Listen to what a reference says, but also what they don’t say during reference calls. US references tend to be more cautious due to legal risks, while Latin American references tend to be more direct
  • Run a structured reference call to get the answers you need about the candidate and finish a best-in-class hiring process

Do a formal background check

If you haven’t done a formal background check on the candidate yet, do it today. Hiring someone who isn’t a fit for your startup is frustrating, but hiring a criminal is embarrassing and potentially damaging to your company. Startups like Truora, Checkr, and Goodhire make background checks fast and easy. 

Use references to add data points to your hiring process

You hire with confidence when you have conviction that the candidate will do good work in the role you are hiring them for. The best way to build conviction is to have more data points that support your gut instinct and what you experienced during the interview process. Upfront Ventures’ Mark Suster has written about investing in lines, not dots, saying:

“The first time I meet you, you are a single data point. A dot. I have no reference point from which to judge whether you were higher on the y-axis 3 months ago or lower. Because I have no observation points from the past, I have no sense for where you will be in the future. Thus, it is very hard to make a commitment to fund you.”

You should hire, or invest in people, the same way. Interviewing well and working with the candidate will give you two important data points. But it’s impossible to know exactly who the candidate was in the past or will be in the future from a couple of data points. 

Leaders often hire people they have worked with before because they know what it’s really like to work with that person. They have more data points with that person. References give you more data points on a candidate, allowing you to “build a line” and better predict how the candidate will work with you.

Startups need to hire candidates who are lines, not dots

The best references surround the candidates’ experience

You have liked the candidate so far during the hiring process, but you haven’t worked with them for an extended period. Use reference calls to check for consistency between your interview impressions and feedback from people who have worked with the candidate before. If feedback aligns, you can trust your assessment of the candidate. Be careful, however, to not only ask softball questions during reference calls that support the answers you want to hear. Doing so takes all the value out of reference calls.

The best reference processes surround the candidates' work history. Surrounding the candidate’s work history means you should talk to people who have:

Worked with the candidate at different jobs or roles. 

  • Try not to use references from only one company.

Had different working relationships with the candidate.

  • Don’t only talk to the candidate’s former bosses, talk also to their former peers, direct reports, and even clients. Former bosses are great at assessing productivity, performance, and ambition, peers give a good perspective on the candidate’s influence, and direct reports are the best judges of leadership.

You don’t need to talk to every person who has ever worked with the candidate but talk to enough people to get a real sense of how they work. 

There are three types of references:

  1. Candidate-provided references: The references the candidate gives you directly
  2. Soft references: Informal references with people you know well, usually on your team, in your close network, or with an investor, who you know who has worked with the candidate. 
  3. Backdoor references: Full reference checks with people who you know who have worked with the candidate but weren’t provided by the candidate. 

Candidate provided references

Ask senior candidates for 3-5 formal references of people whom they have worked directly with in the past and at least 1 reference when hiring junior, high-slope people. Talk to each of the references that the candidate gives you. 

Don’t worry that the references are given to you by the candidate. While the references that the candidate gives you will usually give you a positive reference, it’s your job to read between the lines and get the answers you need out of the call.

If the candidate leaves out an important reference, ask why and let them know you plan to contact that reference.

Soft references

Alongside the formal reference process, check with your team, your close network, and investors to see if they have any helpful perspectives on the candidate. Soft references are much less formal. 

Tell the soft reference the role you’re considering hiring the candidate for and ask if they have any insights into the candidate or how they would perform in that role. I recommend starting soft references before you work with candidates and doing formal reference checks as the final step in the hiring process.

Backdoor references: be transparent with the candidate

Backdoor references are reference checks with people in your network who have worked with the candidate, but weren’t on the list of references provided by the candidate. If the candidate doesn’t provide you with an important reference like an ex-boss or similar, you can ask them why they omitted that reference and tell them you plan on contacting them. 

If you plan on doing multiple backdoor references, tell the candidate broadly that you will be doing several references as a step in the hiring process so they aren’t blindsided.

Assume that the candidate will find out about every reference call you have because they usually will. You don’t have to tell them I’m going to contact X person, but tell them you’ll be reaching out to people in your network as part of the process. Ask questions that give you all the answers you need, while retaining trust with the candidate. 

** Important note: Never reference check people who are currently working with the person, unless the candidate has explicitly told you to contact them. You could burn a candidate who hasn’t told their company they might be leaving, which in turn will likely burn the candidate for you.

How to run candidate-provided reference calls

General tips 

Always schedule calls for candidate reference checks. While emails can work for referencing a product or company, when referencing candidates, references are far more likely to be honest about a candidate when you talk to them on the phone. As Fred Wilson says, “Most people don’t want to put negative things in writing, but will do so on the phone, particularly with someone they trust.”

Reference calls should take 15-20 minutes. Show up prepared, and be clear and respectful of the time of the person who is taking the reference call. Always:

  • Show up on time
  • Avoid rescheduling last-minute
  • Do your research on the reference
  • Have a conversation, don’t read off a checklist of questions
  • Follow up on any questions or concerns that come up during the conversation
  • Leave moments of silence for the reference to think
  • Take notes and upload them into whatever software you use
  • Have all your reference calls as close together as possible

And most importantly, make sure to ask the right questions so you get the answers you need. As Claudio Fernández Aráoz says  “The only way to get close to the whole, unvarnished truth is to have probing conversations with a variety of people who have worked closely with the candidates you’re considering.” Make sure you’re asking important questions and probing where you need to, not just checking the box. 

References in the US typically watch their words closely during reference calls and don’t give super direct references because of potential legal liability from lawsuits from candidates claiming retaliation, or giving misleading information. It’s important to listen to what a reference says, but also what they don’t say. For example, someone who is giving a good reference will say stuff like “that person is great, I would hire them.” But someone who wouldn’t hire them might say something like “they were not a fit for the role in our business, but if the right role came up I might hire them again.” That’s a very different answer, but if you’re not listening, you might think it's a good reference. US references will be more circumspect.

If referencing someone in the US, it is illegal to ask any questions related to their age, marital status, political affiliations, or salary history. Avoid asking anything personal that isn’t directly related to the role you’re hiring for.

In Latin America, references tend to give you more direct feedback on candidates.  

Suggested format for reference calls

While you shouldn’t read off a checklist of questions, you should have some structure to your reference calls. I recommend the following 7-step format:

Step 1: Introduction: thank the reference for the time, and assure them that this conversation is confidential. 

  1. Start by thanking the person for taking the reference call, introducing yourself, what your company does, what your role is at your company, and what role you are considering hiring the candidate for. Ensure the reference that this conversation is confidential.

Step 2: Learn the relationship between the reference and the candidate and what their experience was like working with the candidate. 

  1. Say something like: 
  1. “(insert candidate’s name) is far along in the process for the role of (insert role). We’ve liked them during the interview process, but want to make sure we’re getting the full picture and not missing anything.
  2. (The candidate) told me you were their peer/ direct report/ manager. Is that right? Can you tell me more about the work you did with the candidate?
  3. The most important thing for the role we’re hiring them for is (insert the most important objective for the role). Be as specific as possible and avoid jargon when you explain the role. Make sure the context is clear.
  4. “Given what we are looking for, have you seen the candidate perform under similar circumstances? What was your experience working with them?”

Step 3: Role-specific questions: Check if the candidate can do the job you’re hiring them for.

Step 4: “How the person works” questions: Test what top solo VC Elad Gil calls a candidate's “Get Shit Done ability.” Gil asks some of the following questions to get an idea of if the person could be part of a performance culture. Ask a few of these questions to get more data points on what the candidate is like to work with: 

  1. “What percentile of getting stuff done is this person?” 
  1. 50% is average, 90% means they get more stuff done than 90% of their peers.
  1. “How proactive is (insert candidate name) versus their peers?  What percentile is this for your company? For all people of (similar position to the candidate) you have worked with?
  2. “How hard does (candidate’s name) work?”
  3. “How frequently does (candidate’s name) go above and beyond what they are asked for?”

Step 5: Closing questions: End the conversation by asking the reference directly.

  1. “Would you hire them again?”
  2. “Is there anyone else that worked closely with (the candidate) that I should talk to?

Step 6: Leave space for the reference to add anything else you missed: 

  1. Ask the reference if they want to add something that you didn't ask them directly

Step 7: Thank them: always thank them before ending the call.

There are different questions you can ask the reference depending on the role you are hiring for. Check out other resources like First Round’s 25 questions to ask in Reference Calls for other questions to ask.

Types of responses to reference calls

The feedback you receive on reference calls usually falls into four categories: 

The reference speaks highly of the candidate and recommends you hire them. They address your questions, confirming the candidate meets your hiring standards

  • What to do with this reference: What you felt during the interview process is being confirmed, this is great!

The reference’s feedback is overall positive, with some things to note. You have more clarity on how much of your hiring criteria the candidate meets

  • What to do with this reference: Make sure to understand what the “things to note” are. These notes could be dealbreakers, leading you to not hire, or non-dealbreakers, but still important to take into account during the new hire’s onboarding.

You realize the person could be a decent, but not a game-changer hire

  • What to do with this reference: Don’t hire this person. It’s almost impossible to build a great company with an average team.  

The reference does not recommend hiring the candidate.

  • What to do with this reference: Phew! You avoided the expensive and painful process of hiring someone that you were going to have to fire and re-hire for their role.

Take all of the reference calls you do into account. If most of the feedback falls into category 1 or 2 above, your job is to now close the candidate and hire them. If most of the feedback falls into category 2 or 3, reflect on the feedback and weigh the pros and cons. If you have specific questions, you can ask the candidate directly, or do additional reference checks. Never hire someone who you think will be decent, but not a game-changing hire. Don’t settle for hiring average team members, even if the role is urgent. Always aim to hire A players

What to do after referencing candidates

Candidate references are the last step in the hiring process. Depending on the references, you should have enough data points to decide whether to hire the candidate or not. Write all of the references down and store them in either your Application Tracking Software (ATS), or wherever you keep candidate interview notes. 

Making a decision

There’s always going to be some uncertainty in hiring. Following our hiring guide and precruiting, interviewing, completing work projects with candidates, and referencing them is the best way to gain conviction about who to hire. Now it’s time to make the decision. As the founder, you’re the final decision-maker for all key hires. Decide who to hire, and do your best to help the new hire be successful in the role once you hire them. 

Reference checks are the final step in a best-in-class hiring process

Startups of any size should implement reference checks. If you’ve followed the steps of precruiting, interviewed well, and worked with the candidate, then referencing the candidate is the last step in gaining conviction about a candidate. Most startups don’t ask for or talk to references before hiring, so taking an extra hour of your time to do reference calls will make you recruit better than most, and avoid painful and expensive hiring mistakes.

We help portfolio companies with reference calls for important hires, but you can start doing reference checks for all of the hires you make on your own. Hiring isn’t a science that you’ll ever get 100% correct, but if you build out each step in the recruiting process, you’ll make important hiring decisions with fuller information, and start to build out your best-in-class talent flywheel.