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How to Conduct an Employment Reference Check

5 min read
employee reference check

Hiring the right employees is crucial for the success of any small business. To ensure that you make the best hiring decisions, conducting an employment reference check is a vital step in the hiring process. Reference checks provide valuable insights into a candidate’s past performance and character. In this guide, we’ll explore the types of reference checks, how to conduct them, when to conduct them, and the legal considerations involved.


Types of Reference Checks
What’s the Difference between a Reference Check and a Background Check?
How to Conduct Employee Reference Checks
Types of Questions to Avoid During Reference Checks
Reference Checks for Small Business Hiring
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Types of Employment Reference Checks

Before delving into the nuts and bolts of reference checks, it’s essential to understand the two main types: personal and professional reference checks.

Personal Reference Checks

Personal references are individuals who can speak about the candidate’s character, work ethic, and interpersonal skills. They might include friends, neighbors, or anyone who has personal knowledge of the candidate’s abilities and character. While these references may not provide information about a candidate’s professional qualifications, they can shed light on their personality traits and how they interact with others.

Related: How to Create a Candidate Persona

Professional Reference Checks

Professional employment references are typically former supervisors, colleagues, or mentors who have worked with the candidate in a professional capacity. These employment references can provide valuable insights into the candidate’s work performance, skills, and accomplishments. Professional reference checks are often considered the most critical aspect of the hiring process.

Related: Checklist for a Succesful Hiring Process

What’s the Difference between an Employment Reference Check and a Background Check?

Although both of these procedures can be viewed as part of the hiring process, a reference check and a background check are not the same thing.

Reference Check: A reference check involves contacting provided references (like former employers or colleagues) to assess a candidate’s character and work performance.

Background Check: A background check verifies factual information about a candidate, such as criminal records, credit history, and employment history, to uncover potential risks or discrepancies.

In essence, reference checks involve personal opinions, while background checks focus on factual data. Employers often use both for a comprehensive view of candidates.

How to Conduct Employee Reference Checks

Now that we understand the types of reference checks, let’s explore the steps to conduct them effectively.

Get Permission from the Candidate

Before contacting any references, ensure you have the candidate’s explicit consent. Candidates may want to notify their references in advance, so they are prepared for your call. This step not only demonstrates respect for the candidate’s privacy but also sets a professional tone for the reference check process.

Prepare Questions for the Employment Reference Check

To gain meaningful insights, prepare a list of questions tailored to the specific needs of your business and the position you’re hiring for. Common reference check questions include inquiries about the candidate’s strengths, weaknesses, reliability, and ability to work in a team. These questions should be job-related and focused on the candidate’s qualifications.

Make Calls

When conducting reference checks, it’s essential to have a conversation with the references rather than relying solely on written responses. Engage in open-ended conversations to gather detailed information about the candidate. Take notes during the call to document the reference’s feedback accurately.

When to Conduct an Employment Reference Check

Reference checks are typically performed in the final stages of the hiring process, after initial interviews and assessments. Conducting them at this stage helps you verify the information provided by the candidate and make a more informed decision.

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How Many Employment References to Check

The number of references to check can vary depending on your business’s requirements and the role in question. It’s common to check at least two or three professional references for each candidate. However, you may choose to check more if necessary, especially for critical positions.

Legal Issues Surrounding Employee Reference Checks

While reference checks are a valuable tool in the hiring process, it’s essential to be aware of legal considerations to avoid potential pitfalls.

Types of Questions to Avoid During Employment Reference Checks

When conducting reference checks, steer clear of questions that could lead to discrimination or violate privacy laws. These include:


Avoid asking questions related to a candidate’s age or birthdate. Focus on their qualifications and experience instead.

Sexual Orientation

Questions about a candidate’s sexual orientation are inappropriate and can lead to discrimination claims.

Family Life (e.g., Marital Status or Number of Children)

Avoid questions about a candidate’s marital status or family life, as these can be seen as discriminatory.

Religious Affiliation

Religious beliefs are private and should not be discussed during reference checks.


Do not inquire about a candidate’s disabilities or health conditions. Focus on their ability to perform the job with or without reasonable accommodations.


Any questions related to a candidate’s race or ethnicity are strictly off-limits.

In short, doing reference checks is crucial for small and medium-sized (as well as large) businesses during hiring. If you use these guidelines and stay aware of legal rules, you’ll make better hiring choices that help your business succeed. Just remember, it’s best to use reference checks along with other evaluation methods to get a complete view of your potential hires.

Employment Reference Checks for Small Business Hiring

Reference checks can be valuable for small businesses, just as they are for larger organizations. Here are some reasons why small businesses should consider conducting reference checks:

Quality of Hire

Reference checks can help small businesses verify the information provided by job applicants. This verification ensures that the candidate’s qualifications, skills, and work history align with what was presented in their resume and during interviews.

Character Assessment

Small businesses often have a close-knit work environment where teamwork and interpersonal dynamics are crucial. Reference checks can provide insights into a candidate’s character, work ethic, and how they interact with colleagues, helping to ensure they are a good fit for the company culture.

Performance Evaluation

By speaking with previous employers or supervisors, small businesses can gain a better understanding of a candidate’s past job performance. This insight can be essential in making informed hiring decisions.

Mitigating Potential Risks

Conducting reference checks can help identify potential red flags, such as a history of absenteeism, disciplinary issues, or conflicts with coworkers. This information can help small businesses avoid hiring candidates who may pose a risk to the organization.

Legal Compliance

Ensuring that reference checks are conducted fairly and consistently helps small businesses stay in compliance with employment laws and regulations. It demonstrates that hiring decisions are based on objective criteria and job-related factors.

Validation of Skills

In certain industries or positions, such as those requiring specific certifications or licenses, reference checks can be particularly important. They can confirm that the candidate possesses the required qualifications.

Confidence in Hiring Decisions

Reference checks provide an additional layer of confidence in the hiring process. They can help small businesses feel more assured that they are making well-informed decisions about who to bring onboard.

Related: 8 Essential Onboarding Documents for New Hires

It’s important to know that how thorough reference checks are can change based on the job and the resources a small business has. For critical roles with a lot of responsibility, you might need to do more detailed checks. But for less high-level or entry-level positions, the checks can be less strict. In the end, no matter the size of the business, reference checks are still essential for smart hiring and reducing hiring risks.

Related: HR Manager Approved Reference Letter Free Sample

Factorial offers a comprehensive suite of HR solutions, including an ATS that streamlines the recruitment process by automating candidate sourcing, tracking, and communication. With its Document Management feature, Factorial provides a secure and organized repository for storing and managing important HR documents, ensuring compliance and easy access. Additionally, Factorial’s Onboarding feature simplifies the onboarding process, allowing companies to efficiently welcome and integrate new hires, with features such as task assignment, document collection, and training module integration, all designed to enhance the employee onboarding experience.

Request a free demo today to learn more at your earliest convenience, no strings attached!

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Did you like this article? Benjamin McBrayer has been a Content Writer for 5 years. He specializes in HR strategy and workplace trends. Check out Factorial's blog for more of his posts on time management in the office, productivity, and HR news.

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