Quick guide on reference checking early hires

Early stage hires are key. Reference checks can make sure you hire high performers.

I was recently asked to provide a reference on a pivotal hire for a seed stage startup. I was more than happy to chat and it was a nice change of role as I’m usually on the other side of the table conducting the references (in my case, on founders that I consider for funding). However, while chatting with the founder, I realized how reference checking is a topic that has limited information online. While there’s numerous blog posts and resources on conducting interviews, reference checks get glossed over.

While ideally early hires come from a founders existing network, not all early hires may come from that route. When the founder doesn’t initially know a prospective hire well, reference checks are useful when making a decision on whether or not to hire. At a basic level, reference checks are a way to substantiate that a hire has the characteristics desired for the specified role and uncover any red flags. They are most often used in the final stage of the recruiting process when you are thinking of making an offer. Reference checks are a tool you can carry throughout the life cycle of hiring for a company. At a certain point, reference checks may not be scalable — but for critical roles, reference checks are extremely useful in vetting a candidate and should not be bypassed.

These references can fall into two categories. The first is an on balance sheet reference. This accounting derived term means the reference has been provided by the prospective candidate. The second category is an off balance sheet reference check. This reference is not provided by the candidate.

Off balance sheet reference checks, as you might imagine, are less likely to be biased, and a better way to get a balanced view of the candidate. Off balance sheet reference checks are not always possible, but given how networked our society is today, it’s likely that you know someone who knows the candidate, or that someone knows someone that they can introduce you to that has worked with the candidate.

A good target to achieve is two to five references per a candidate, with a mixture of on the balance sheet and off the balance sheet references.

The following is a framework to follow for a successful reference check:

1. Set context/ confidentiality with the references. References will feel more comfortable and open if they know that you aren’t going to go directly back to the candidate with details. That being said, I’ve had some reference check individuals be very comfortable and suggest that they can share all feedback with the candidate. Make sure the reference knows why you are calling them and what role you are considering the candidate for. Additionally begin by getting your own clarity on how that reference interacted with the candidate. Were they a manager, subordinate, or peer? How long did they work with the candidate? You want to make sure this person can provide a valid reference on the candidates capabilities.
2. Prepare in advance. What assumptions of the candidate are you looking to prove out? Understand what characteristics that person needs to have in order to be successful in the role and outline questions in advance to test for those traits. Make sure these questions ask for anecdotes (see example below) rather than a yes/no answer and these questions aren’t “leading” where you presume the answer in the question. (I’ve added common questions startups can use to the end of this post, in case they are helpful.)

3. Be time sensitive. People are busy and they are doing a favor for you when doing the reference. Only ask relevant questions. Calls should take ~15 mins (and sometimes as little as 5).

4. Interpret the answers wisely. Successful people have opinions and having an opinion can create enemies. You can usually tell right away if the reference has a personal beaf with the candidate vs. an unemotional evaluation. Additionally, no one is perfect. Use your judgement and view reference checks holistically. Interestingly, I’ve seen founders conduct useful post mortems on candidates they hired that didn’t work out. Many times they’ve found they had uncovered the issues that led to that individual not being a fit during the reference check process.

Useful reference questions:

1. When you think of Jane, what traits come to mind? Can you explain how she’s exhibited these traits while working together?
2. Can you share a time where Jane worked on a project that failed. Why did it fail? How did she respond?
3. Would you want to work for Jane or with Jane again? Why?
4. Was Jane promoted while you worked with her? If so why? If not, why?
5. What type of team members complement Jane’s weaknesses? (sometimes reference checks are hesitant to share any weaknesses, this is a question I’ve used that to illicit a response)
6. What percentile in terms of people you’ve worked with, does Jane fall into? (ex: 50%, 25%, 10%, 5%, 1%?)
7. What type of environment does Jane thrive in? What type of environments has she been unhappy or unproductive in?
8. What’s the most impressive or impactful thing that Jane did for the company?
9. Can you explain how Jane used data to reach a decision?

Thoughts, feedback, personal anecdotes? Feel free to reach me at veronicaosinski. I also love hearing from ambitious founders tackling markets that deserve a shake up :)