Why references are no better than paid endorsements

  • Josh Frydenberg: It is up to you to embrace the opportunities

    “I encourage and urge you to embrace this opportunity…to ensure your very important industry continues to prosper and survive”

  • The four principles to helping brokers succeed

    Loan Market chairman Sam White praised broker engagement at its Hobart conference


    • 2018 Commercial Lenders Roundtable
    • Top 10 Brokerages 2018
    • 2018 Brokers on Aggregators

    by Kara Atkinson

    It is exciting when you finally reach the pointy end of a recruitment process. You have found The One. A virtuoso head and shoulders above the rest. You instruct HR to finalise reference checks and make the offer – your job is done – you can already see them starting in your business. This is the exact time to pump the brakes – the worst thing you can do is have your HR or contingent recruiter conduct a couple of standard checks.

    A three year study by Leadership IQ showed that 46% of hires were mis-hires. That translates to a coin flip. Furthermore, the University of Massachusetts says that 81% of people lie during interviews and, the ones that do, tell on average of 2.3 lies per 15 minutes.

    When you hand the reference check process over to another person, objectivity is impossible. No matter how impressive your external recruiter is, or how rigorous your interview process, a bad candidate can still slip through the cracks. And on a critical hire, think of the damage a bad hire can do to the position and to you.

    If you’re working with a contingency recruiter, they have a cognitive bias – they don’t get paid unless their candidate gets hired. This is where that feeling comes from, that your contingency recruiter is representing the candidate, even though you’re the one footing the bill. The exception to the rule, of choosing not to outsource reference checks, is in utilising HR Senior Leadership or using a seasoned engaged recruiter.

    Contemporary reference checks have lost their value and are now nothing more than a ‘check the box’ exercise. The reality is that references are no better than a list of paid endorsements. The referees have been prepared and will put the candidate in the best possible light and, predictably, will let you know that his/her biggest weakness is ‘over dedication to work’. This is not to say you shouldn’t call but take everything they say with a grain of salt.

    A red flag is evident if the candidate list is missing direct managers. Don’t let the candidate tell you they have lost contact – in today’s world of LinkedIn – that is a feeble excuse. Your ultimate play is to run a search on LinkedIn; call their previous direct employer and ask – you will get a more honest response.

    You may ask if this is unethical – well, would asking a mutual acquaintance their opinion on a candidate be unethical? Not at all. The reality is, with LinkedIn and constant connectivity, our professional world is shrinking. The confidential nature of this exercise must be stressed – you certainly can’t put the candidate at risk with current employers. Always be mindful.

    Ideally, focus on recent direct managers, over the past 5-10 years. Only Managers can tell you about the impact the candidate had. Ask direct questions – not the standard reference checks – relate specifically to the competency and KPI of the role.

    Ask questions most interviewers don’t ask – the ones that are hard to answer. Did Tracy report directly to you? Tell me about the role she was in? We require these competencies; how would Tracy rate on those? Did she resign or was she asked to leave? What was her biggest quantifiable accomplishment? Her biggest failure; her biggest challenge. Compare this information to the interview and cross-check candidate answers.

    Tracy mentioned this accomplishment – what was her role in that project? How do you describe her leadership style? We are really impressed with her – how do you suggest I manage her? On a scale of 1-10 how strong is your referral? Less than 10 – why not a 10? Keep asking why, why, why.

    Do not make the hiring decision until references are done with rigour. It doesn’t matter how much they have blown you away in the interview. The best interviewees don’t make the best employees. If you dodge one bullet in 20, it will be well worth the extra mile.

    And the more senior the position, the more thorough the referencing has to be – as the level increases, so do the stakes. Leadership hires will have an impact on the trajectory of your business and it is exponentially more costly to remove the hire and start again, than it is to get it right in the first place.

    Kara Atkinson is an expert in recruitment with over 18 years in the industry. Kara created her own recruitment business 10 years ago, fuelled by the opportunity to help people continue to build and transform themselves through their career. Kara specialises in Sales & Marketing Executive Roles, recruiting across all industries and business sizes. To find out more visit

    Related stories:

    • Finding the right fit for your business
    • Who to hire first: Mortgage broker or loan processor?
    • How to create a recruitment strategy that works
    • You want to get more work done? Take longer lunches

    Original Article