By Eric Larson

During the early 1970s recession, my father was cleaning his college fraternity house a few weeks after graduation when the phone rang.

The caller was a fraternity brother from a previous class. The man knew about a job in his company, and wondered if any brothers from the most recent class might want to apply.

“I know of one,” was my dad’s response.

The old saying goes that, “It’s not what you know, it’s who you know.” Though we like to think we live in a pure meritocracy, we all know that reality doesn’t always match the ideal.

Just think how most companies hire their employees. It’s extremely rare that an employee’s knowledge will be thoroughly tested prior to hiring. It’s more likely that hiring managers will look at where that employee worked previously, where the employee went to school, and/or what his or her references have to say about the candidate’s past performance. (The closest we come to focusing on skills is when certifications are recognized and rewarded.)

Who can you trust?

We may think we’re measuring competence, but we tend to look for signals of reassurance based on the types of groups with which that candidate has been associated. We think of some schools as better than others, for example, even if we don’t have a lot of data backing that up. Sadly, some people have demonstrated that minority candidates get more call-backs from employers if they change their names to something more ethnicity-neutral.

What we’re really looking for is something difficult to quantify: trust. How can we trust that this person is who they say they are? How can we trust that they will show up for work on time? How can we trust that they have a high level of skill in the things we need them to do?

The trust issue

We tend to feel better about a resume when it comes from someone we already trust. “I trust Jody, and Jody trusts Alex — ergo, I can trust Alex.” Call it the Transitive Property of Employability. This is one reason some workplaces can look pretty homogenous: Birds of a feather recommend each other.

In the early days of the industrial revolution, nepotism — the practice of favoring a friend or family member in the hiring process — was completely accepted and expected. Sometimes it meant that the CEO’s incompetent nephew stepped from high school to a VP position (the word “nepotism” actually comes from the Latin for “nephew”).

But nepotism wasn’t always bad for business. If Brian is a really good worker who cares about the company, and Brian decides to hire his brother Max, then it stands to reason that Max is more likely than not to be a good worker, too. Brian wouldn’t want a bad worker on his team, right? And because Brian and Max are related, some of those good worker traits may very well run in the family. Very few start-up companies are created by people who found each other in the want ads.

How I hired employees

There is nothing wrong about hiring those we trust. But trusting our own judgment isn’t easy. That’s why when I hired full-time employees I typically wanted to work with someone on a contract or part-time basis first in order to test their skills. Trying before you buy is best-case, so long as someone is willing to work in that kind of temporary arrangement.

But what happens when a candidate is dead-set on a full-time position—and you know that another company will hire that person if you don't? They say not to make business decisions out of fear, but when the customer needs the work done and good workers are scarce, you are tempted to go against that maxim.

Testing candidates

Here are a few meritorious approaches to developing real trust in what that person can do — without just relying on who they know:

1. As part of their interview process, create a simulation project for them or let them participate for a day (or two or three) in a real project. Pay them for their time. If the proof is in the pudding, you have to get the baker in the kitchen!

2. Have the candidate write a narrative about a past project. Be very specific about the kind of project you’d like them to relate. Then contact some of the key players to make sure the story is true.

3. For entry-level hires, develop a relationship with a professor or trainer who really gets to know a student and a students’ work. Let that person know you’d rather receive no referrals in a given semester than one or more bad referrals. 

4. When interviewing references, discuss past work as much as you talk about the person. Chances are that the references are going to say nice things about their former colleague, so emphasize that you want to know about the candidate’s past deliverables. If you can’t get those types of stories from the given references, ask the candidate for names of those who can.

Bottom line: Trust is important, but make sure you’re also assessing the skills your company needs.