Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / Why Reference Checks Fail and What Actually Works
Transcript
- Lucas: So here's a stat I have not been able to shake. A 2025 survey from the Society for Human Resource Management found that eighty-seven percent of HR professionals still consider reference checks a critical part of the hiring process. Yet fewer than thirty percent say those checks ever changed their hiring decision. We are collectively spending thousands of hours on a ritual we openly admit does not work. Luna: That's a brutal gap. Why do we keep doing it if it's that ineffective? Lucas: Well, partly inertia. Partly legal fear — companies worry that dropping the reference check opens them up to negligent-hiring claims. But I think the real answer is simpler: most organizations never actually redesigned the reference call. They still ask the same three questions they used in 1995. 'Would you rehire this person?' 'What were their strengths?' 'What were their weaknesses.' And any half-prepared former manager knows exactly how to dodge those. Luna: Right, the weakness question especially. I've heard hiring managers say candidates' former bosses give them 'works too hard' or 'cares too much about quality.' It's meaningless. Lucas: Exactly. So what actually works? I want to walk through a case that I think illustrates the shift. There's a mid-size software company in Austin — about eight hundred employees — that got tired of hiring people who looked great on paper but flamed out within six months. They decided to overhaul their reference process entirely. Luna: What was the old process they were running? Lucas: Standard stuff. The recruiter would call two references, spend about ten minutes on the phone, check the box. After their revamp, they switched to a structured reference interview that forced the reference to give specific behavioral examples rather than general praise. They trained their recruiters on a new script, and they mandated that at least one reference must be a former direct supervisor — no peers, no subordinates, no friends from a different company. Luna: Wait — no peer references? That's interesting. I'd think a peer might give a more honest take since they're not responsible for the candidate's performance. Lucas: You'd think, but the data from their pilot told a different story. Peers tended to give glowing, generic feedback. Supervisors were more likely to recall real incidents — probably because they had to manage the person through tough situations. After twelve months, the company saw a thirty percent reduction in hires that didn't survive the first year. And the reference check time actually went down because the structured script was more efficient than the meandering old call. Luna: Thirty percent is huge. What was in that script that made the difference? Lucas: The key change was ditching the 'would you rehire' question entirely. Instead, they asked the reference to describe a specific project where the candidate faced a significant obstacle. Then they asked follow-ups: 'What exactly did they do?' 'What was the outcome?' 'How did the team react?' The idea is you're not letting the reference give you a summary judgment — you're extracting a mini case study. Luna: So you're basically doing a behavioral interview with the reference instead of with the candidate. Lucas: Exactly. And it works because it's harder to fake a detailed story about someone else's behavior than it is to give a vague endorsement. The SHRM survey I mentioned earlier actually found that references who were asked for a specific failure story gave information that predicted job performance twice as accurately as references who were just asked for general strengths. That's a huge lift for a five-minute question. Luna: I want to push back a little though. Isn't there a legal risk with asking for failure stories? What if the reference mentions a disability or something protected? Lucas: That's a valid concern, and it's why the training piece matters. The recruiters in this case were taught to redirect if the reference brought up health issues or anything protected — they'd say 'let's focus on work-related behaviors.' And they documented every call so there was a record of consistency. But the bigger risk, honestly, is the opposite: getting no useful information and making a bad hire based on a hunch. Luna: Fair. Let's talk about another approach I've been seeing: automated reference checking platforms. Companies like SkillSurvey and Xref have been around for a while, but I've noticed more mid-market firms adopting them in the last year. Do those actually work? Lucas: They can, but only if the survey is well-designed. The idea is you send a standardized questionnaire to multiple references — sometimes four or five — and the platform aggregates the scores. The advantage is you get more data points and a quantitative comparison. The risk is you lose the conversational follow-up that can uncover nuance. I've seen cases where the survey flags a candidate as low-risk, but a live call would have revealed they left a team on bad terms. Luna: So the best approach might be a hybrid: use the automated survey to screen, then do a targeted live call for the finalist. Lucas: That's what the Austin company ended up doing. They start with a digital reference form that captures basic verification — tenure, title, eligibility for rehire — then they do one structured live call for the top candidate. They found that the digital pre-screen saved them about twenty minutes per candidate, and the live call became more focused because they already knew the basics. Luna: What about the problem of references just not answering? I've heard recruiters say that getting ahold of a former manager can take three or four attempts, and by then the candidate has accepted another offer. Lucas: That's a real bottleneck, and it's one reason a lot of companies have moved to checking references after the offer is accepted, not before. The logic is you don't want to lose a great candidate because their former boss is slow to respond. You make the offer contingent on satisfactory reference checks, but you start the process immediately. Some companies even offer a small incentive — a twenty-dollar gift card — to encourage references to respond quickly. Luna: I've also seen companies experiment with skills verification as a substitute for references. Like, instead of calling a former employer, you ask the candidate to complete a task or a simulation. That seems more objective. Lucas: It is more objective for hard skills, absolutely. If you're hiring a data analyst, a SQL test tells you more than any reference ever could. But soft skills — things like collaboration, resilience, adaptability — those are harder to simulate. And those are often the reasons people fail in a new role. A skills test won't tell you if someone is a team player under pressure. A well-structured reference call might. Luna: So we need both. But let's be honest — most companies aren't doing either well. They're still asking the old questions and getting nothing useful. Lucas: Right. And I think part of the problem is that hiring managers don't realize how much the reference's incentives matter. The reference wants to help their former employee, or they want to avoid legal trouble, or they just want to get off the phone quickly. The only way to get past that is to ask questions that force them to engage with specifics. If you ask 'tell me about a time the candidate disagreed with a decision,' you're giving the reference permission to share something honest without feeling like they're badmouthing the person. Luna: I want to try that. I'll call one of my old bosses tomorrow and see what they say. Lucas: Let me know if they dodge. That's actually a signal too — if a reference can't think of a single disagreement story, either they're not paying attention or the candidate never pushed back, which is its own kind of red flag. Luna: So what's the one change you'd recommend to a hiring manager listening right now who wants to improve their reference checks starting tomorrow? Lucas: Drop the 'would you rehire' question. Replace it with: 'Can you walk me through a specific situation where the candidate had to convince someone who disagreed with them?' Then listen for detail. If the reference gives you a concrete example with names and outcomes, that's gold. If they give you a platitude, push once. If they still can't, you have your answer. Luna: Simple and actionable. I like it. And maybe we've just saved listeners from eighty-seven percent of their current reference calls being a waste of time. Lucas: That would be a pretty good outcome for ten minutes on a Tuesday.