Why do so few employers check references?

This isn’t going to be a post in which I pose a deceptively simple question in the title, and then blow your mind with a concise, insightful, yet counter-intuitive answer (ha!), like I’ve attempted with interview questions, career choices, or long hours. I am genuinely stupefied, mortified, and mystified, as is Jackie Chiles.

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Personally, I have not given a job offer without calling references. I have, however, been offered a job without having my references called. And, much more often, I have been asked to stand as a reference and not received a call from the candidate’s employer–even when “my” candidate received an offer. That pattern leads me to believe that very few employers are like me and follow through with reference checks.

But a sample size of one is weak, so I did some quick research. I found a good piece from SHRM describing how to perform background and reference checks, that references a CareerBuilder survey from 2014 revealing that in many industries more than half of applicants falsify their employment history or qualifications, among other statistics about the problems unearthed during checks.

That CareerBuilder survey got a lot of mileage on other sites describing HOW and WHY to check, but even top-of-the-funnel marketing guff from recruitment automation vendors like SkillSurvey (in Fortune) and Checkster (on their blog) didn’t provide any more primary or secondary research about HOW OFTEN employers actually follow through with checking references.

So I am sticking with my original conclusion that employers are not checking references often enough, and exposing themselves to huge financial and productivity risks. While you’re at it, why pick up a pack of cigarettes and leave your seat belt unbuckled during the commute home?

The authors below have done a fantastic job explaining how to perform effective reference checks, while reinforcing why you must be either indecisive or bad at hiring if you don’t:

If you can answer or refute my original question, “why do so few employers check references?” with some convincing data, please do! Otherwise, I hope the resources above enable you to join the proud and effective minority of employers who do.

How these two things happen speak volumes about company culture

17You can gain deep insights about an organization’s culture by understanding:

  • how decisions are made
  • how recognition, aka “kudos,” is awarded

Consider asking those two questions about a company the next time you are interviewing for a new position, in addition to the other best job interview questions.

The answers to these questions reflect the leadership style and organizational dynamic established by the leader. As a recovering consultant, I could not resist the impulse to reduce this concept to a two-by-two matrix:

Learn about a company culture by understanding how decisions are made and how recognition is awarded
Learn about a company culture by understanding how decisions are made and how recognition is awarded

 

In the lower left corner, we have a culture of lobbying and arm twisting where for decisions and recognition the forum is private and the basis is mostly on influence. This culture is often found in teams with weak leadership, where the boss is routinely peppered with closed-door “advice,” either thinly or thickly disguised as an agenda of personal advancement. Team direction changes frequently and indescribably, relying on informal channels of communication to disseminate the new direction. Expect high attrition from staff who value transparency and meritocracy.

In the upper left corner, we have a culture dominated by the “squeaky wheel” where for decisions and recognition the forum is public and the basis is mostly on influence. Tantrums, meeting hijack, and open conflict are reinforced as means to an end by the steady advance of a vocal minority in the organization. While also a product of weak leadership, the only improvement over the lower-left lobbying culture is that the rules of the game are publicly known. Anyone unwilling to compromise personal integrity for career advancement will not last long in this culture.

In the lower right corner, we have a stable, humble culture of relative introverts where for decisions and recognition the forum is private and the basis is mostly on merit. This culture likely reflects the self-image and natural personality of its leader. I’ve chosen a cupcake as the image to reflect this culture because it is a satisfying individual treat. While it might be relatively boring, this culture will also likely be more successful than those on the left side of the matrix, as individuals who cannot compete on merit alone and those who crave public recognition will exit.

In the top right corner, we have the most transparent, extroverted, results-oriented type of culture in this matrix, where for decisions and recognition the forum is public and the basis is mostly on merit. The multi-tiered party cake represents the culture in which the success of an individual greats benefits for the group. Decision making and recognition are public and merit, meaning that the “rules of the game” are clearly demonstrated and objective. While this culture requires a strong leader who is not afraid to hire “A players”, it will likely have higher performance and lower turnover than the other squares in this matrix.

In this summary, I have done my best to withhold judgement and simply provide a framework for readers to identify a company culture so that they can best chose the one that fits their own needs. If you have other “cultural diagnostic” questions to share, please leave a comment!

Use these metrics to rev your talent engine: Delivery and transition phases

Continuing the series on the four stages of the talent cycle, once the hard work has been done to bring new talent into your organization, it’s time for them to deliver value before transitioning to a new role. These metrics will help ensure a mutually beneficial and productive working relationship between employees and employers.


For the delivery phase of the talent cycle, the two most important aspects to manage are performance and engagement. Although the latest trend is to reject the bell curve (i.e., normal distribution) for a power function, any organization with a team size larger than 2 has to address performance management in both absolute and relative terms. Ensure that your performance management system–which could range from a piece of paper to an enterprise application–can help you answer the following questions in dialogue between leaders and employees:

  • Absolute performance: how is each employee performing relative to his/her potential? What is he/she doing well, and should do more? What is he/she struggling to do, and what support can the company provide? What are the employee’s career goals, and how is his/her current position aligned with them?
  • Relative performance: does the employee “raise the gene pool” of the organization? is the employee negatively impacting the quality and enjoyment of other employee’s work experience? What capabilities can the employee role model for the rest of the team?

Performance reviews (I recommend every 6 months rather than annually, to keep the feedback fresh) naturally lead to transitions. Some employees will be ready for more responsibility and promotion, others no longer fit the organization and need to rotate out. Succession planning and attrition will be the subject of an upcoming post.

Engagement is the most broadly applicable metric, providing insight across all phases of the talent cycle. The most straightforward and pragmatic way to gauge engagement is with a 2 question survey:

  1. How likely are you to recommend working at this company to a friend or colleague? Answer on a scale of 1-10, with 10 being most likely.
  2. What one thing would need to change for you to give a higher rating? Open text response.

Gallup’s method to capturing engagement data is another statistically validated, relatively brief (12 questions) survey.

As the modern economy shifts more towards services and technology, managing the talent cycle is an increasingly important skill for leaders to master in order to maintain a competitive advantage. While it will always be a subjective, personal experience, the intent of setting out these metrics across the talent cycle is to help reduce the complexity of the process by introducing some standardization and objectivity.

Use these metrics to rev your Talent Engine: Intake stage

Now that we’ve defined the four stages of the talent cycle as Intake, Development, Delivery, and Transition, it’s time to define the key metrics that will help you manage the first phase. Without getting lost in the philosophical nuances between Drucker’s Management by Objectives and Deming’s systems view, let me try to instill some passion for metrics that spark change with two fortune cookie management quotes:

hiring-funnelSo what are the outcomes you are trying to achieve from the Intake phase of the talent cycle? Anomalies in these metrics will point you to the parts of the system that must change in order to achieve different results.

  • Time to fill open requisition
  • Percent vacancies (open positions divided by total positions)
  • Activity rate and yield for each step in the funnel (see diagram)
  • Yield by channel (i.e., sourcing, agency, referral, inbound application), job function, hiring manager
  • Percent of early exits (involuntary and voluntary terminations before 90 days of employment)
  • Satisfaction: hiring manager, candidate, new hire, recruiter
  • Percent of opt outs (i.e., number of candidates who withdraw at each step in the funnel divided by number of candidates who started that step)
  • Average candidate quality (based on assessments by hiring managers based on required qualifications for each role)

if your applicant tracking system doesn’t generate a dashboard of metrics similar to these, you may have to build your own. Start with a white board and upgrade to Excel or an easily configured database (like Quickbase) once you know what you want to measure, when, and how.

Next up: key metrics for the Development phase of the talent cycle.

What metrics have you used to measure talent intake? which of these are useless? Leave a comment!
image: http://www.sourcecon.com

The New Guy Can’t Type: How to Handle a Hiring Blunder

A college friend of mine and his wife visited for lunch last week. He mentioned keeping my blog open and unread on his browser for days (I was flattered, regardless). “Ryan,” he said,

I would love to read about strategy and innovation. But I just hired a guy as a customer service rep and he can’t type more than 30 words a minute! How do I deal with that?!

Successful leaders can’t close the door to the corner office and fiddle with their competitive market share optimization strategies all day. Leadership includes identifying and resolving the challenges that hold the team back right now. Unexpectedly welcoming a dud into your team creates risks with your customers, frustrates your other high-performing staff, and saps your own productivity. And yes, that sound you hear in the background is your lawyer dog-earing the pages of the latest  Hemmacher Schlemmer catalog in expectant glee of an early termination going ugly.

Here are five tips to navigate the situation and prevent another misfit from slipping through your hiring process:

  1. Document, document, document: ensure your expectations, and your employee’s acceptance of them, are documented clearly in writing (email will do).
  2. Ensure the employee understands the specific performance gap, accepts responsibility for changing, and the consequences (both positive and negative.) Some leaders are reluctant to cause any additional stress that could further degrade performance (see diagram),
    Don't allow fear of pushing struggling employees further to the right on this curve prevent you from communicating a performance gap. Maybe they are on the far left?

    however, the gap must be common knowledge. As I wrote in my three-part coaching model, a manager can provide a vision of success and skills to get there, but the motivation must come from the employee.

  3. Talk to your other employees as soon as you recognize the risk. In an objective, discrete, and respectful manner, make sure the other employees in the area “know that you know” and are doing something about it. In addition to protecting your (eternally fragile) credibility, this message then allows the other employees an opportunity to coach the struggling new hire.
  4. Don’t be afraid to move on: it’s business. Often a business’ most scarce commodity, leadership discretionary time, unwittingly flows towards struggling employees. Once you’ve made a clear, genuine, and respectful effort to correct performance without any tangible change, it is likely time to part ways.
  5. Capture the feedback to improve your hiring process. Whether your business has 5 employees or 5,000 the people responsible for hiring take pride in getting the best people they can. Do you need more behavioral interview questions? An extra practical/case study with an open written response section? A few quick multiple choice questions to screen out psychopaths? No hiring process is perfect, but each one can be “tuned” by positive and negative experiences.
(note: this post does not offer and should not be mistaken for legal advice. You are responsible for understanding applicable labor laws and practices. Please seek professional help if you need it! The Department of Labor offers the basics online)
image: mindtools.com