Requesting a list of references from job candidates is as standard as requiring a resume, but some startup founders are putting a unique spin on the traditional hiring routine.
At a recent event hosted by StartX, a nonprofit startup accelerator for Stanford University students, a panel of small-business owners expressed a range of approaches to reference checks, from talking to the candidate's peers to promising to call former employers after the first candidate screening call.
Laura Borel, chief executive and co-founder of Nutrivise, a mobile app that makes meal recommendations, has interviewed more than 100 candidates to scale her team from two to eight employees since 2011. Calling candidates' references is the final phase of Nutrivise's hiring process and an important step, said Borel. But she prefers to speak with the candidates' former colleagues rather than their managers because she believes they give greater insight into questions about teamwork, work ethic and follow-through. She tends to ask the colleagues: What is your least favorite part about working with the candidate? And, when does the candidate call a project finished?
Meanwhile, Tony Lai, chief executive and co-founder of LawGives, an aggregator of legal resources, uses an approach inspired by business book Topgrading: The Proven Hiring and Promoting Method That Turbocharges Company Performance (Penguin Group, 2012). During the initial screening phone call with candidates, Lai asks if they are comfortable with him calling any of their former employers at random. Gauging their reaction to his surprising reference-check test shapes his impression of the candidate, he noted. "If people are evasive, that just raises red flags," he said. "You don't want to get to the very end of the interview process and be surprised."
This approach helps to weed out second-rate candidates when looking for ways to get through a stack of 200 resumes, which is exactly the position Lai and his co-founder found themselves in when searching for a chief technology officer.
Tech entrepreneur J. Scott Zimmerman, on the other hand, isn't sure reference checks are all that helpful for startups. The chief executive and co-founder of Xola, an online booking and marketing system for travel that was founded in 2011, said he still goes through the motions of calling references but questions how useful it is.
"I proceed with caution about how I use that information to substantiate our decision to hire a candidate," said Zimmerman, whose company has five employees. If the applicant is coming from a corporate environment, their references might provide some helpful information, but not necessarily demonstrate their fit for a startup environment, he said.
As new managers build confidence in their hiring process and judgment, it's important they take information gleaned from candidate references with a grain of salt.
"Reference checks are useful only to the extent that you do them diligently," said Hayagreeva Rao, professor of organizational behavior and human resources at Stanford University's Graduate School of Business, in an interview. Because the references that candidates supply typically speak well of them, he suggests digging deeper than the initial reference pool.
For example, Rao advises asking references volunteered by the candidate to suggest another colleague who might also be able to speak about that potential hire. This approach allows the potential employer to move beyond vetted referrals and gain a more complete picture of the candidates' capabilities.