What Are The Risks of Reference Checks?
Imagine for a moment that you’ve found an absolute rockstar of a candidate to fill a critical position. You’ve taken them through the process and feel great about their experience and fit with your company. As a standard final check before moving into the last stage of the hiring process, you decide to call up the professional references the candidate provided to confirm what you already believe about them.
You get through to a former employer from a few years back and explain the situation: You love everything you’ve seen from your experiences with this candidate and wanted to ask about their time with the former boss. The response isn’t one you’ve ever heard before and weren’t expecting at all:
“Wait, they’re back on the job market? I should give them a call.”
Not 24 hours later, this old boss has made an incredible job offer to your candidate, and they’ve accepted.
If this sounds far-fetched, you might be surprised to learn that this happens somewhat frequently. We were in discussions with other recruiters in our industry, and even among three of us with a combined 60 years of experience, this wasn’t something we’d ever heard about—until other industry peers started speaking up.
Who would have thought there were real risks associated with something so standard as performing routine reference checks? Here’s why that matters now more than ever—and why it might lead us to start rethinking reference checks all together.
Hiring Managers Can’t Afford to Take Unnecessary Risks in 2021
For what seems like the third month in a row now, the U.S. Bureau of Labor Statistics released a somewhat surprising job report for March 2021. The surprise? Unemployment isn’t as rampant an issue as so many of us have come to expect from the still-raging pandemic. The overall unemployment rate in the U.S. for February was still high at 10.1%, but among people with bachelor’s degrees or higher—typically the sort of professionals our clients are looking for to fill executive positions in the outdoor industry—it’s at a much tamer 3.8%.
By now, we know enough about the economic impact of COVID-19 to understand which industries were hit hardest by the lockdowns. Despite all the headlines about long unemployment lines and people desperate for work, not much has changed for hiring managers looking for their next executive hire.
All that to say that hiring managers can’t afford to be complacent right now; things haven’t gotten any easier. A year ago, performing thorough reference checks would have been more than appropriate. We all might have taken a little longer on our hiring process than in normal circumstances. That feeling is one we in the executive search industry need to drop—and fast.
Is It Worth It to Tell Employers You’ve Got a Great Candidate?
In the past, we’ve written about other late-game challenges like counter offers that can really gum up the works on what you thought might have been a done hiring deal. Our solution to combating last-minute counteroffers from a candidate’s current employer was the same basic solution we offer for any hiring challenge: Stick to a proven process. Make educating your candidates about the risks of accepting a counter offer along the way during your hiring process, and you can hedge against any that may show up.
But this scenario—one where references suddenly learn a valued ex-employee is actively seeking a new position and swoop in—is nothing like that. There’s not a whole lot a hiring manager can do to prevent a reference from sniping a good candidate. After all, there’s a history there. Both the reference and the candidate know each other well. They don’t have to do an extensive interview or waste time with a longer process; they can skip right to an offer and take the wind out of your sails.
If you’d asked me a year ago if I thought there were risks to doing a reference check, I wouldn’t have given it much serious thought. But we’re seeing all sorts of new and unprecedented behaviors from employers and candidates alike in this new world the coronavirus has built.
So put all that uncharted territory together with this anecdote about losing a candidate during the reference check stage and relatively low unemployment numbers among top executive candidates, and I can’t help but wonder if it’s time to re-evaluate the reference check’s place in a standard hiring process. Is it really worth letting a potential competitor for your hire know that you have a great candidate in the market—just to confirm something you already know about that candidate from your interviews?
It might not be.
Embrace Change to Stay Competitive
We’re living in a rapidly changing world in 2021. What has worked for hiring executives for so long might not work any longer—and that’s okay! What matters is hiring managers stay informed about changes in the broader employment market and how candidates are responding to it. At Highline Outdoor Group, we’re serious about process—but not about staying rigid for tradition’s sake. This only goes to underscore the importance of working with executive search professionals who understand the changing landscape and can help you navigate that—even if it means skipping the reliable reference check to play it safe.
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About the Author: Tony O’Neill is the Founder and President of Highline Outdoor Group — the purpose-driven executive search firm for forward- thinking outdoor industry and sporting goods companies and brands.