Candidate referencing is critical, but most employers only require references after the candidate has been through the interview gauntlet. During the standard process, the successful candidate offers up some referees from their past — typically pre-selected for a positive outcome — but in small, highly specialized, regulated and competitive markets like the commodity value chains, this process can pose problems.
Participants can be notoriously tight-lipped regarding employees and colleagues, and performance is highly confidential — no one wants PnL histories being broadcasted. Exits are often covered by non-disclosures, internally and externally, and the market can be infamously tribal. Individuals will often promote the hiring of previous colleagues or reject others simply by association, rumor or conjecture.
HC, as a search firm, is typically engaged on roles where the caliber of the individual hired will directly correlate to the performance of that business. Therefore, our clients want to hire the best possible person that they can within their given constraints (market conditions, budget etc.). Hence the need to trust that we are providing a vetted, unbiased and fully referenced shortlist representing the best of the candidate population, before the first interview.
The candidate assessments should cover skillset, relative performance, behavioral and organizational fit. This is an extensive, expensive and challenging process that differs from a typical recruitment process using LinkedIn adverts and the like.
Candidate skillset is the basics, and recruiters of any level should be able to provide this. Behavioral fit is also becoming easier to assess and present using a number of available tools (we developed HC Align) supplemented by the recruiters’ expertise. However, and I hope HR executives around the world would support us on this, it is relative performance and organizational fit where a search consultant truly provides value. And this requires referencing.
Relative performance, as we think about it, is contextualizing and ranking the candidates’ performances relative to their employer and market conditions not as a standalone function. For example, it’s hardly fair (or relevant) to compare the performance of the lead trader at a large asset-backed platform against that of a trader at a startup fund. Relative performance can only be given by current and former colleagues – allied with proprietary market intelligence, experience and knowledge – and usually takes multiple viewpoints to build up a reasonably accurate picture. Likewise, providing insight on organizational fit (essentially the individual’s affinity to a company’s value set) and interaction style is very challenging. Again, it takes triangulation through questioning individuals who know the candidate and have seen them in action close up.
We have all hired people who we quickly found lacked in performance or did not fit our organization.
No one has a perfect record; any shortlisted candidate will have pros and cons, and there is also no such thing as perfect knowledge when working with a myriad of opinions. But consider for a moment how valuable it would be to have all that information from the outset to make a truly informed decision.
Information on relative performance and organizational fit is highly confidential and is fraught with potential liability for the person providing it. To be effective in referencing, the recruiter needs to build a community of connections built of mutual trust and respect to access that information and handle it judiciously. It also helps if they see you as an industry peer.
Finally, it takes trust from our clients. Trust that our recommendation matters.