Why We Stopped Checking References For New Hires

3 min read

Checking references is a common step in the hiring process and part of the due diligence often performed before making someone a job offer. We've included it as a requirement since the early days of Float, but we never put much thought into whether or not it was helpful.

Yes, the interview process went well, but perhaps a reference check would reveal something we couldn't immediately see? Maybe the candidate has a history of lying and misattribution? If we spoke to a few people who know them well, could we unearth some skeletons and avoid making a costly mistake?

Reducing stress and saving time

On the surface, reference checks feel like a free round of insurance. But insurance is never really free, is it? It comes at a cost that's borne by both sides:

  • It creates stress for the candidate. Without a formal offer to fall back on, the candidate must navigate tricky waters with their current employer by contacting co-workers who may not even be aware of their intent to move on. They do so without any guarantee of a job offer at the end of the process.
  • It adds risk to the hiring process. Introducing new people to the final stages of a hiring process adds an unknown variable. Contacting references can be time consuming, as you must align on a time and a medium to share feedback (which can be difficult for a fully remote team like ours). Timing is everything when hiring, and any delays compound the risk of losing the candidate entirely.
  • The results may be biased. If a candidate believes they're close to an offer, they're likely to reach out to references they know will maintain a narrative we want to hear. They rightfully stack the deck in their favor.

When we analyzed the results of our last ten hires, none of the decisions we made were impacted by a reference check. So we've simply stopped doing them. Instead, we've started a different conversation.

Post-offer feedback calls

When we're ready to put forward an offer to a candidate, here's what we do:

1. We put forward the offer. No strings attached. No reference checks.

2. They accept the offer (we hope) and submit any follow-up questions.

3. We ask them to connect us with a current manager or co-worker before their proposed start date. We make it clear that this is not contingent on the offer.

4. Once the contract is signed, the person's new manager at Float reaches out to their contact to schedule a short Zoom call.

This manager-led meet focuses on learning more about the person we've just hired. We're not interested in playing detective—we want to find out what it's like to work with the person.

The Float manager guides the conversation to uncover development areas that are perhaps already underway or traits the new hire is looking to correct or improve. They're searching for information that will help the manager-employee relationship, focusing on coaching and establishing trust early on.

A more insightful conversation

We've implemented this process for our last three hires, and the results have been terrific. Needless to say, we won't be going back to the old ways. Not only has it reduced candidate stress and improved our time to hire, it's also delivered an additional benefit that I wasn't quite expecting: the quality of the conversation with the person's co-worker has dramatically improved.

They're aware that their co-worker is moving on and speak openly, even nostalgically, about their time together. They delve into the qualities they loved about the person and the projects they enjoyed working on together. They also candidly share detailed annoyances—the small things that they think the person can improve.

And what about those skeletons in the closet?

We continue to maintain strict security and privacy practices at Float, with criminal background checks performed by a third-party service ahead of a team member's start date. We've found the best way to truly understand what it's like to work with somebody, is to actually work with them. All hires start with an initial 8-week trial period to get a feel for what it's like working together (either side can give a day's notice if things aren't working out).

I encourage you to kill your reference checks and to start a new conversation. At worst, you'll save yourself time and reduce the level of risk in the hiring process. I'm confident that you'll learn a lot more than that, though, and you will position your new team member for success.


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