Losing a Candidate
Years ago I was hiring a junior accountant to manage our accounts payable. This was a full-time, salaried role, and a good opportunity for an accountant looking to break into tech. The tech industry has this problem of only wanting to hire people from tech, creating a bit of an incestuous environment where mediocre people bounce from company to company, getting by on their ability to recall specific metrics that are common in SaaS. Knowing LTV and CAC is great, but smart people can learn these pretty quickly.
Generally speaking, I'm wary of anyone who is looking for a lateral move in the same industry. It usually means that they aren't very good. The only time I've seen people make lateral moves to do functionally the same role in the same industry is when their company gets acquired or goes under: in both cases, people usually need something quickly, hence the lateral. In other cases? I'm more skeptical.
Lateral moves into new industries or into different functions are fine -- there's still growth happening there and a real incentive for a candidate to want to make that move -- but a copy/paste of R&R in a new company that is incredibly similar to their current role is usually a red flag for me. They seldom pan out and move on within two years, repeating the process, maybe eventually getting "senior" in their title.
Thankfully, I had a good hiring manager who didn't care about this. The role would benefit from industry expertise, but she was smart enough to know that in most cases, industry expertise can be learned pretty quickly. This was an accountant, after all. They needed to be good at accounting. The rest was secondary.
Finding a good accountant at that level was a bit tricky. When I was recruiting accountants, there was generally a huge gulf in the market between the the high-powered CPA types that did audit at a "Big 4" type firm and "book keepers" who focused on the day-to-day accounting operations, typically at smaller companies. Usually the former were too expensive and didn't have the right experience for a role focused on collections and book balancing, while the latter ranged wildly in quality and expectations. It was a fun, but challenging space to navigate for this type of job. Ideally, we'd find someone smart who was not making a lot of money who would benefit from a shift to a more lucrative industry.
Eventually, we were able to interview a few candidates. This was one of those jobs where not having someone in role was really dragging down the rest of the team. Accounts payable still needed to be done, but it shouldn't be done by the controller, of all people. (by the way, the controller is up there with the consolidator as top job titles by name)
After a few months of unsuccessful screenings and interview loops not clicking, we found a solid candidate. His background was outside of technology, having worked in corporate retail. Functionally, there was a lot of alignment and we'd be able to pay him more and teach him new things given how our industry operated. This was looking like a slam dunk. As a bonus, he had a very cool first name that would've gotten the team jazzed as well. I won't say it since it will out me, but it's the name of a well-known Disney character that is seldom heard outside that context. We knew what to put on their intro slide in the next company all-hands. If there's anything that gets a chuckle in a big meeting, it's a good gif.
The hiring manager was aligned and excited. But then, came the dreaded pause: "Let's do a reference check."
Reference checks are always something of a formality. Historically, it wasn't uncommon to see people include "references available upon request" or people send over the phone numbers and emails of their old bosses to vouch for them.
I never got anything valuable out of a reference check, since usually candidates who are good enough to pass an interview are smart enough to pick references who will speak highly of them and instill confidence in the hiring team. It was very much a formality and I rarely gleaned any insight.
As a recruiter doing this, I also didn't want to find anything bad: as a recruiter, I'm incentivized to make hires. Doing a reference check meant creating another decision point where we may lose the candidate, after we already decided to hire them. Why would I do this to myself? Hiring managers did these sometimes, and if we had to do it, I preferred to have them do it because it aligned incentives better. They ultimately dealt with the consequences of the hire, my role was to help them find the right person and convince them to take the job if we liked them.
I called the three references provided and put together the written offer. I had a verbal yes from the candidate and told them that the written would come once I spoke to their references and finalized the background check, as was process.
The next day, a tragedy via text message:
"So my old boss didn't know I was looking for a job, and he called me up after talking to you. He's offering me to come back with a bigger salary and a manager title, so I'm going to withdraw. Thanks again for your time."
I was so pissed.
My Issues
This wasn't the first time that happened to me, but the way it happened and the pain of the search made it sting.
I had the role closed and was eager to move onto focusing on the backlog of roles that was piling up. I scored an own goal because it was "the process" and "something we do before making offers".
Again, what do we even get out of doing a reference check? If you're interviewing well, you should know enough to make a hiring decision. If you need to get feedback from someone who the person has worked with before to validate that they're as good as you think they are, you either don't think the person is actually a good fit (in which case you should reject them), or you lack confidence to make a decision, and need someone to validate you.
As a candidate, I hated bothering old bosses to speak on my behalf when applying to roles. While they were happy to do it, it was an undue burden on their busy schedules to tell others how great I was. Speaking to other references that were self-selected also led to nothing insightful. I've seen some companies send references a questionnaire, asking for short answers to questions like "how would you rate this person to work with?" and other such mundane, check-the-box type questions that won't give you any meaningful data.
I've been a reference for people before, and I always give glowing reviews. Someone trusted me enough to speak on their behalf, I'm going to ensure they show up well in that conversation.
Only once in my recruiting career, after making hundreds of hires, did the hiring manager reject someone after doing a reference check: and it was because they were already not sure they were the right person, but another engineer referred them so they didn't want to unilaterally reject them for fear of upsetting them. The reference check was a good excuse to reject the candidate while keeping their hands clean of it. "Sorry, they had a bad reference" is an easy excuse to pull.
References do provide an easy out to make decisions that can be politically difficult at an organization. If the candidate is bad, it's easy to show you're shocked because they had "glowing references" or "had a great resume". There's an unspoken undercurrent of risk avoidance in hiring, and reference checks help enable this. I may write about my thoughts on this more in another post.
The Back-Channel
Other times, hiring managers want to do back-channel references. This is when the company interviewing a candidate goes behind their back to talk to someone they know to get the scoop on the candidate.
I take issue with this because it can cause risk to the candidate: interviewing is done privately. Candidates don't typically announce they're interviewing unless they're currently jobless (which comes with another set of biases I don't have time to get into here), and so there is an expectation of privacy between the candidate and the company during the process. Candidates provide references to give hiring managers a pre-vetted list of people who know they're searching and that are good to talk to the company.
I've had hiring managers insist on doing the back channel references to get feedback on a candidate. This is particularly problematic in smaller industries. Word can spread and it can put candidates at risk of retaliation if their employer finds out they're interviewing at a competitor or even thinking about leaving. I've gotten angry messages from leaders after hiring someone from their company. People will be mad if they know their employees are being poached or leaving for other environments. Hiring is a great expense, and the movement of talent from company to company can rack up a real cost to an organization over time. This is why it's important to have an environment that attracts good people and encourages them to stay.
The back-channel erodes trust and similar to doing the traditional, provided reference check, it may not tell you anything you don't already know. You'll maybe get a more unvarnished, unflattering opinion based on who the person conducting the reference knows, which could unfairly tank the candidate's chances of getting the job.
I have mixed feelings on this. On one hand, I am incredibly pro-candidate and want what is best for them. If the candidate shows up well in the interview and the company is effective in their evaluation, they should be able to get the job without needing a rubber stamp from someone who knows them. On the flip side, in environments where hiring teams are inept or interviewees are cunning sweet talkers, the back-channel can be a last line of defense against a company making a dire mistake. This is most critical for more senior hires who shape the working environment and direction of an organization.
I struggle with this because I can be both "the candidate" as a job seeker and individual, but I can also be "the company" as someone who would need to work with this person, owns shares, and benefits from the company performing well. It's in my interest for the company to hire well, but it's also in my interest that I'd get hired, too.
We once interviewed a candidate for an executive role. Word on the street was that we were going to hire this person. I wasn't part of the process, but recognized their name and knew they worked at the same company as a former colleague, who spoke about their experience negatively. I told the hiring manager this. The hiring manager spoke to the former colleague. The candidate was rejected. No offer was ever formally made, but I can't help but feel that me making this connection tanked their chances after the candidate presumably interviewed well.
Do I feel bad about this? Sometimes, yes.
Would I do it again in the same position? It's hard to say.
I probably should not have known this search was even happening. I only knew because I was part of the team that had access to this sensitive information. Given that it was an executive, going to the hiring manager (who was an executive I had worked with closely before) felt appropriate.
If it were up to me, we'd have a good enough interview process to weed out anyone bad before we even get to the point of considering a reference check. Having to pull the plug so late in the process means the process is defective, whether that's because we have weak interviewers or aren't running the process in a way that lets us gather the right data to make a decision. Part of me felt like it was my duty to protect the company from making a bad hire. Another part of me felt like I should mind my own business, abiding by the "golden rule": Treat others as you would like others to treat you.
How would I feel if this happened to me? Well, I'd like to think that I am competent enough in my job to not get a negative review from roughly anyone I worked with, at least anyone whose opinion a hiring manager should take seriously. I'm sure there are some people who may have a less than stellar opinion of me, but if a hiring manager took someone random at their word versus their own gut from meeting me, I probably wouldn't want to work with them anyway. However, I recognize this is a privileged position to take. Some people don't have this luxury and finding work and earning a salary can make a world of difference to their livelihoods.
In a way, the looming threat of the back-channel reference check is a good incentive to not treat colleagues poorly and to do a good job. It's good for accountability, if nothing else. We're all somebody's Big Brother.
The world is small and the word is spread quickly. If I know that someone hiring me could happen to be friendly with anyone on my LinkedIn, I'd probably feel inclined not to burn bridges. I mean, I don't want to do this anyway, but actions having consequences and being held accountable is important. If I believe in anything, it's karma. Being a good colleague isn't hard, and I always try to do my job well, and at minimum, be a pleasant person to work with.
Although I could probably mitigate the negative effects of a back-channel reference, I think it's still a bad process.
A Happy Ending
I eventually was able to fill the role. Of course, the team quickly rallied around a candidate who came from a similar type of tech company who did a similar type of job and wanted to come work for us for $5k more on their salary per year. They joined and ramped quickly, but plateaued, leaving to go to the next adjacent company in eighteen months.
The cycle continues.
I did eventually also get the team to move away from reference checks. The need to hire quickly outweighed the "are you EXTRA sure?" step of doing a reference check. But also, we got better at hiring and were able to make better judgment calls over time. We wanted to move faster to meet our goals and didn't want to lose days doing reference checks and risk losing more candidates. We started doing more rigorous interview training. The rise of DEI and unconscious bias training helped put these dated practices to rest. I've seen this less and less, and when I've applied for roles, I am hardly ever asked to provide references anymore.
Maybe I'm being back-channeled instead? I haven't found out, at least.
While I suspect back-channels will continue to be popular in industry, especially for senior, executive roles, I'm glad to see the process fall out of favor. For execs, I see the value in this, especially in earlier stage companies where there is a much greater risk if the candidate is actually terrible. Senior people should get glowing reviews from others, even though I think going around someone's back for feedback is a bit dubious and undermines the interview process.
For junior level accountants? You really shouldn't need to get an outside perspective.
For an executive who you're giving a boatload of money to and will shape direction of your company? I can understand doing due diligence, even if I disagree with the need to do so.
Time kills deals and wasting time adding steps to the interview process will lead to more candidates lost, whether that's because you were too slow or because checking references may as well be advertising to people who liked the candidate.
The first candidate was great and we figured this out through interviewing them well. Their old boss jumping at the chance to rehire them was good social proof, too, but it wasn't really the way I hoped to learn they were that great at their job.
Good hiring teams should be able to get the data they need without outside influence or introducing bias into their evaluation. This should create a better hiring environment, especially for candidates, who put themselves at risk when interviewing at all. It also forces companies to be more rigorous in their own evaluation: sometimes candidates, for whatever reason, do poorly in an environment.
While sometimes this is a reflection on them, other times it can be due to factors outside of their control. I've known people who got sold the wrong job and performed poorly, churning out of the business quickly. Other times people go through rough personal stretches that can impact performance and color a third party's perspective of their abilities.
Candidates shouldn't have to carry that baggage from job to job.
It's hard enough out there for people who get laid off and the stigma that carries. Having someone give you bad references in perpetuity sounds like an unreasonable punishment.
Instead of a back-channel (or even a traditional reference check), I'd much rather bring in a third party I trust to meet with the candidate and validate my areas of concern. Usually the desire to do a reference check stems from being unsure about who you're bringing on board and feeling like you're missing critical data. Getting someone with the right expertise to help interview the candidate is a better way to get some info.
For example, it isn't uncommon for startup founders to ask their board to interview candidates in functions they aren't familiar with. I've helped a few of my friend's firms interview people in areas I have stronger functional expertise in. This is much more transparent and ethical way to get the data you need to make a decision. I'd much rather get feedback from someone I know and trust versus trusting the opinion of some random person who knows the candidate. Who back-channels the back-channel? How do we know their word is good? We can keep going forever with this.
Eventually, we need to own the decision and be okay making mistakes if a hire doesn't work out.
Having a strong interview process will help mitigate this. Building a culture where you can challenge the crowd and raise concerns about a candidate before they come on board, without requiring a random reference check to informally mediate, is healthy and will lead to better hiring decisions.
Let me know what you think about reference checks. Do you do them? How do you feel about them? Email me: coniferblog@proton.me