Dodging a Bullet: How One Startup Avoided Hiring a Nightmare Employee

Check out this great guest post today from Adam Spector,  Founder & CEO of  Virtrue, in it he talks about the difficulties of hiring at startups : 

Bad employees and coworkers will happen to you. Count on it.  Over time, and with enough hiring cycles, someone will slip past the guarded gates.  The hiring process is an imperfect one at best:  we make decisions based on just a handful of signals (“she graduated from Stanford”) and due diligence tests (“he nailed the interview”). We spend only around 10 hours with someone before extending an offer of employment and in doing so commit to spend more waking hours with them than with our own family and friends.

Would you get married to someone you’d only met for 10 hours? Hiring involves an incredible amount of unspoken trust.

While imperfect, the hiring process actually works pretty well because most people are fundamentally “good” – they’re not out to deceive and what you see is what you get. When the hiring process fails, however, it can get ugly. Really ugly. The spectrum of nightmare employees runs from the incompetent, to the socially toxic, to the downright criminal.  Nightmare employees will drag teams down and impact bottom lines.

If you’re a small, bootstrapped startup the wrong hire can literally kill you.

That’s why we want to share a hiring story we heard recently from a friend in the startup community. What lessons can we learn from his “near-miss” hiring experience, and how can we apply them going forward? In his words:

“We were deep in the interview process for a key engineering position.  We had invested countless hours on a couple candidates at this point, but one in particular seemed especially promising. Very talented engineer who came off strong in interviews and he was working for a great company.  So we moved to close him and took him out for meals, drinks – the works.

We called his references and they checked out so we started to prepare an offer.  He hadn’t provided any references for his current job, however, because he hadn’t worked there long enough to have ex-employees he could claim as references. That’s certainly something we’d heard before from candidates and it makes intuitive sense, but for some reason it didn’t feel quite right this time around. Call it a gut instinct.

I tracked down his CEO at a local event, and in a very discreet, round-about way, got him talking about the engineer. He dropped this on me:

“Yeah, we fired him. Six months ago.”

“(Gulp)…Whoa. For what?”

“Fraud.”

Needless to say, we immediately terminated our courtship of this engineer. It really scares me to think about how close we came to hiring a complete nuclear bomb.”

What are the takeaways here? 

1. Don’t be afraid to use backchannels for references

Job candidates will only list positive references (obviously).  Standard references checks then are really just a measurement of whether you can name three people who think highly of you.  Most people can.  When it comes to really evaluating what other people think of a candidate, don’t be afraid to plumb the depths of your social network in search of an outside opinion. Just make sure to do it discreetly so you don’t jeopardize the candidate’s current employment.

2. Always strive to quantify and validate competency 

Some people talk a great game in interviews, but can’t deliver the goods. When it comes to quantifying and validating skills and competencies, engineering is relatively straightforward compared to other disciplines like sales and marketing. With good interviewers and tests you can get a pretty good sense of whether an engineer is worth their salt.  For less objective disciplines that lack discrete bodies of knowledge and readily measurable skills, get creative and think outside the box. Ask outside friends qualified in their field to test them if you don’t possess strong expertise in house to evaluate their skill set. 

3. Consider criminal background checks 

A criminal background check probably wouldn’t have caught the fraudulent engineer in this story (since his misdeeds were probably not reported), but where there’s smoke, there might be a previous fire that is a matter of public record. Criminal background checks are not especially common for startup hires, but at larger companies they are often required across the board for all new hires. These checks are definitely something to consider, especially if the position you’re hiring for is especially sensitive (e.g. CFO) or mission critical to the success of the company (e.g. CEO). Weighed against the long-term risks, it’s a relatively cheap upfront investment in protecting your company. 

4. Consider workplace and education checks 

Remember former Yahoo CEO Scott Thompson? Remember why he is now the company’s former CEO? It’s because he lied on his resume and claimed a computer science degree he never earned. This deception went unchecked for years. One of the great things about work and education checks are that they are proxy integrity checks – candidates who would lie about these details on their resumes are probably the ones prone to fraud and similarly destructive behavior in the workplace.  Traditional checks are comparative in cost and time to criminal background checks, but you should also check out companies like Virtrue who are developing faster, cheaper alternatives to these traditional checks.

5. Trust your gut

 A candidate who completes the interview process will leave an impression on you that can’t be readily quantified, because it’s ultimately an emotional judgment of them as a person that you derive from various bits of “objective” data you’ve gathered over the course of the interview. Even if the data checks out, trust your gut if you still don’t feel right about the candidate. Dig deeper.  An extra half hour of due diligence on a candidate you’re about to hire is a no-brainer when weighed against the long-term consequences of hiring a nightmare employee.

Adam Spector, Founder & CEO, Virtrue

Adam is responsible for everything the rest of the team does not want to do but if they are smiling, then he is too. Prior to Virtrue, Adam worked at the e-discovery company, Clearwell Systems and, post acquisition, at Symantec. Before heading West, he worked at Neustar, a trusted, neutral provider of real-time information. Adam started AdoptACoral.org and is now a board member of the Coral Restoration Foundation. Adam holds a JD & MBA from the University of Miami and a dual-major B.S. from Vanderbilt University. Learn more at www.virtrue.us