Calling references too soon is hurting you and your clients!
I stopped calling references on senior candidates before the offer is signed because it has cost me placements before, and it cost me another one!
One of my favorite clients had a strategic position reporting directly to the CEO, with real responsibility, real opportunity, and starting compensation over $200K.
I worked this difficult search for several months, and we finally came down to one final candidate that everyone was excited about.
At the end, he asked for a bit more compensation to offset higher benefits costs. I went back to my client and got him exactly what he asked for. He got the updated offer the next day, and I expected him to sign and finally fill the role. Yeah, good times, right?….No, not good times.
Instead, he told me he was pulling himself from consideration. Wait, what?!
When we spoke later, I learned that a company with a key stakeholder he has known for many years in the channel had come in just a couple of days earlier with an offer that was too good to refuse.
My client’s outside advisor insisted on calling references before signing, so we did, the same week the offer was being negotiated.
One of them said, “So he’s really looking, huh? That’s very interesting.” He also told me how great a Partner firm he had joined about a year earlier, and that it was growing fast and had its own strategic opening. He said he would share my information with their ownership so we could recruit for it.
A week after the candidate withdrew, I followed up on that opening, and it had been filled. Hmnnn, that’s interesting
Today, the candidate updated his LinkedIn profile, and wouldn’t you know it, he now works for that same company. How about that?
In a niche as tight as the NetSuite and Microsoft Dynamics channel, a reference call signals something. A casual yes months earlier, like “I’m talking to one firm, I don’t know where it’s going to go, would you be a reference for me?”, is very different from a call saying the candidate is days from accepting an offer.
In a channel where everybody knows everybody, that news moves fast, and a competing offer can arrive at the exact moment they are most tempted.
References also rarely tell you anything new, because nobody gives you a bad one. Candidates choose people who will speak well of them, and in our channel I usually already know most of the people on the list, which tells me more than the call does.
I still collect references on every finalist, but I don’t call them until the deal is done. I ask my clients to make the offer contingent on satisfactory reference checks, so if they want to call, we do it after the candidate signs, and they can pull the offer if a real concern arises.
The vetting that protects a client happens much earlier, through thorough interviews and a deep look at the track record. That work doesn’t alert anyone in the market that a great person is about to move.