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Hiring for a Startup: The Importance of Referencing

Chris Wilkinson

Head of Talent @ Forward Partners

In our experience, the one area that is often neglected in a hiring process is referencing. This is especially the case for the early stage start-ups that we help here at Forward Partners. The necessity to move fast, not only to compete with other companies over a limited talent pool but also due to the critical need for an extra pair of hands makes it all too tempting for entrepreneurs to omit what is perhaps the most important part of a recruitment process.

Key takeaways

  • Understand that referencing is a key part of the interview process
  • Ensure that the quality of questioning in the referencing process is high
  • Ignore outliers - look for themes and disregard the overly positive or negative references
  • Reference throughout the process not just at the offer stage - use references to guide your interview process
  • Soft reference

Even if referencing is not omitted then it is often seen as a token gesture or viewed as a tick in the box, adding nothing to a forgone conclusion. This is not too surprising. By the time references are taken, the founder / hiring manager has typically spent a lot of time with that candidate and has likely satisfied themselves that the candidate is right for the role and so referencing can be viewed as an unnecessary or even undesirable complication. Even when referencing is done properly the person taking them, if inexperienced, can come up against a number of blockers, notably a referee’s reluctance to say anything negative or exposing through fear of legal or personal repercussions.  

Generally the best advice is to take referencing seriously and have someone experienced in recruitment carry out the task. Companies that don’t take referencing seriously are putting their company’s potential for success in jeopardy. Even the most professional and thorough interview process only tests a candidate's ability to perform well in an interview environment. You should use the interview process to identify potential red flags and / or skills gaps that you then go and reference, specifically with those who really know - their former colleagues. By not collecting the uncensored feedback from former colleagues you are depriving yourself of critical information, chiefly how this person actually performs in a live environment.  

Here at Forward Partners we have helped founders think about hiring from a strategic and operational perspective for over three years. As a result, we have identified a number of helpful tips when broaching the subject of referencing. We outline a few of these tips below and hope that you find them useful.

Quality of Questioning

  Taking a reference is only useful if you learn something new. Therefore it is critical to get the line of questioning right and for the individual taking the reference to be confident enough to push back, probe and direct the conversation to get what is needed. The reference should also be taken by someone that has been part of the interview process from the start. They need to have a clear picture of where the potential red flags are and crucially know what they don't know after interviewing the candidate. This part is critical because the line of questioning my need to change in real time depending on what comes out of the reference call. Only someone that knows the candidate and their background well will be able to navigate such a discussion.  

Often the most important information in a reference call won't be explicit. Many referees will skirt around the difficult topics and soften criticism for fear of repercussion. Pattern recognition is key here for the individual taking the reference. There is no real substitute for experience but if you don't have the luxury of experience then there are a couple of things you can do.  

Note - this is a very simple template for referencing. We would normally recommend a more thorough referencing process if possible.  

Keep it simple

Ask questions that are easy to answer in a few short sentences.

  • How did you work with xxxx? / What was the nature of your relationship?
  • What was your view on xxxx?
  • What was xxxx role? Did you hire xxxx?
  • As a ‘INSERT ROLE HERE’, how would you rate xxxx on a scale of 1 to 10? Why not 10?
  • Key Strengths?
  • What did xxxx excel in / improve on during that time?
  • What are development points for xxxx?
  • During that time, how much of xxxx role was focussed on ‘INSERT RELEVANT REMIT’?
  • What was your view on xxxx as a leader? How did they motivate/develop the team?
  • What culture does xxxx thrive in?
  • Would you work with xxxx again? Would you hire xxxx?

Try to be explicit

If you are unsure about what an answer means then ask them again and be very clear about what you want to hear. If the referee continues to avoid the question or keeps their answer deliberately vague then take a note and return to it later in the interview / referencing process. e.g. A “They were challenging to work with” = Q “Why were they challenging can you give me an anecdote?”  

Soft Reference

It is generally considered best practice to start soft (informal) referencing immediately after confirming interest from the candidate - even before if possible. The rationale for this is simple. Soft referencing guides your line of questioning in interviews and as you start to develop hypotheses during the process you can use soft referencing as a sounding board for advice / checking your hypothesis.  

Check your network for shared connections with the candidate. Use your judgment and work out if contacting them for a view will derail the process or cause problems. If you feel confident that it won't then reach out and get a soft reference. In taking a soft reference you have to be particularly sensitive to the candidate's position. You do not want be drawing attention to any conversation with you, especially with anyone in their current company. If possible, try and position a conversation as if you are yet to reach out to the candidate and say that you want a view before you get in touch. That way you don't compromise the candidate in the process. Also, phrase your questioning delicately. Give the referee some context to the role you are hiring for and then ask if they think it is worth you reaching out to the candidate. Either way you will want to understand the answer that they give. Gauge the appetite for candour and push for answers accordingly.

Mention formal referencing at the earliest opportunity / get names early on

Every recruitment process should be up front from the beginning that referencing is one of the key steps. Try and get an idea for who the candidate feels comfortable with you speaking to and then be clear that you won't be reaching out until they give you permission. Look at the people that they give you. Ideally you want a former peer, report and manager. If they are hesitant about any one of those then that could be a red flag - ask why. Equally, try not to form preconceptions and read into things too much. Referencing can be a delicate subject for a number of reasons.  

Outliers

Ignore them. Overwhelmingly positive or negative references suggest that the personal relationship trumps their professional view. You are looking for themes and patterns.  

Useful Links

Chris Wilkinson

Head of Talent @ Forward Partners

Chris has helped build the leadership teams for some of the world’s most innovative digital companies. Prior to Forward Partners he was a Senior Associate at the digital headhunting firm The Up Group and placed C'level executives at companies such as Skyscanner, JUST EAT, WorldRemit and Circle. Chris is passionate about disruptive businesses and is now hands-on with helping Forward Partners’ portfolio scale their businesses from a people perspective. In his spare time Chris enjoys playing jazz piano, writing sitcom scripts and drinking IPA.

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