How to Check References Before You Hire

Most small business owners treat reference checks as a box to check. You call the number, someone says "yes they worked here," and you move on. That approach misses the entire point.

A reference check done right is the last chance to catch a bad hire before the bad hire costs you thousands of dollars, two months of frustration, and the process of starting over. It takes about 15 minutes. Those 15 minutes can save you from a serious mistake.

Why most people skip it

Running a small business means running short on time every day. By the time you have gotten through posting the job, screening applicants, and interviewing a few finalists, calling three references feels like one more thing to do before you can finally get back to work. So a lot of owners skip it entirely, or they call once, leave a voicemail, and count that as done.

The number that should change your mind: according to SHRM, 96 percent of HR professionals say they conduct reference checks, yet fewer than 25 percent of those checks actually produce useful information beyond confirming employment dates. That gap is not because references are useless. It is because most people are asking the wrong questions.

What a reference check is actually for

The interview tells you how someone presents themselves. The reference check tells you how someone actually behaved on the job. Those two things can be very different.

You are not trying to confirm what is already on the resume. You are trying to understand how this person shows up when things get hard, how they treat coworkers, whether they are reliable, and whether their last employer would bring them back.

One of the main reasons the cost of a bad hire is so high is that owners make decisions based on how someone comes across in a 20-minute interview. The reference check is your reality check before you commit.

When to do it in the process

Do reference checks after you have completed your interviews and identified your top one or two candidates. Not before. Not on everyone who applied.

If you run references on every applicant, you will spend hours chasing phone calls for people you were never going to hire. Pick your finalists first, then run references on those two or three people before making the offer.

The exception is if you are hiring for a role that involves cash handling, working with vulnerable people, or access to your home or property. In those situations, you may also want a formal background check alongside the reference call.

Who to ask for

Tell candidates at the end of the final interview that you will be checking references before you make a decision. Ask them to provide two or three professional references, ideally former direct supervisors.

Former supervisors are the only references worth your time. Coworkers will almost always say something nice. A former manager will tell you how this person actually performed under pressure.

If a candidate can only provide personal references like friends or family, and no former supervisors, treat that as a yellow flag. Ask them directly: "Is there anyone from a previous job who could speak to your work, even a short-term or part-time position?" If they genuinely cannot provide a single professional reference, pay attention to that.

For younger workers entering the workforce for the first time, a reference from a coach, teacher, or mentor is acceptable. The point is to talk to someone who saw them operate under expectations and accountability.

The questions that actually get you answers

Most reference calls fail because the questions lead directly to generic positive answers. "Was Maria a hard worker?" gets you "Yes, very." That tells you nothing you did not already expect to hear.

The best reference questions are open-ended and behavioral. Here are the ones that consistently produce something useful:

"Can you describe what [candidate] did in their role when they worked for you?" You want specificity. If the reference stumbles on basic job duties, that signals they either did not know this person well or were not paying close attention.

"What would you say are their strongest qualities as an employee?" This is an opener. Let them talk. You are listening for things that match what you need for your role.

"Can you tell me about a time they had to deal with a difficult customer or a stressful shift?" For restaurant, retail, or service roles, this is essential. The answer will tell you more about this person than almost any other question you can ask.

"How did they respond to feedback or correction from you as a manager?" This matters a lot if you will be managing this person directly. You want to know if they accept direction or get defensive.

"If you had an open position at your company right now, would you hire this person again?" This is the single most important question you will ask. Pause after you ask it. Do not fill the silence. Wait for the full answer. A quick "absolutely" means something different than a slow, hesitant "yeah, I think so."

"Is there anything you think I should know as someone considering hiring them?" This gives the reference a chance to volunteer something they would not bring up on their own. It is a long shot, but every once in a while you get something that matters.

What you are listening for

The content of the answers matters. So does everything around it.

Listen for hesitation. When a reference pauses before answering basic questions about someone they supposedly managed closely, that pause means something. They are choosing their words carefully for a reason.

Listen for generic language. "She was a great team player and very dedicated" could describe anyone. A reference who actually knows this person will say something specific: "She was the one who stayed late every Friday without being asked" or "He had a way of calming down upset customers that I genuinely admired."

Listen for what they do not say. If you ask about strengths and get a decent answer, then ask about an area for growth and hear a long pause or a pivot back to something positive, that is worth noting. Nobody is perfect. A reference who cannot name a single area where the candidate could improve is either not being honest or does not know the person.

Pay attention to tone as well. A former manager who genuinely liked this employee will usually sound a little warm when talking about them. A manager who is giving you the minimum required information will sound exactly like that.

What former employers can and cannot say

A lot of small business owners assume former employers will only confirm dates and job title because that is all they are legally allowed to say. That is not quite accurate.

There is no federal law that limits reference responses to employment verification only. The concern about defamation lawsuits has led many larger companies to adopt internal policies restricting what their HR departments will share. But managers at small and mid-size businesses often speak more candidly, especially if they respected the employee and want to see them land somewhere good.

When you call, introduce yourself, explain that the candidate listed them as a reference, and ask if they have a few minutes. Most will talk. If someone says they can only verify dates and title, you can simply ask: "Is there anything at all you are able to share about their experience?" You will learn something from whether they even try.

A quick note on legality when you are on the other side

If someone calls you for a reference on a former employee, the same rules apply. Stick to facts you can verify. Avoid anything that could be seen as discriminatory. And if you cannot honestly say something positive about a former employee, a clean confirmation of employment is always acceptable.

When a reference is unavailable

Expect some difficulty reaching people. Managers change jobs. Phone numbers get old. Small businesses close. Plan for the reference process to take three to four days before you need to make a decision.

If you cannot reach a reference after two attempts, ask the candidate for an alternate contact. If references are consistently unavailable or the candidate seems reluctant to provide solid contacts, that pattern is worth noticing.

The goal is not to complete every call on your list. It is to have at least one genuine conversation with someone who managed this person directly. That one call is usually enough to confirm or complicate what you learned in the interview.

Tying it into your full hiring process

Reference checks are not a standalone step. They sit at the end of a process that starts with a solid job listing, moves through a phone screen, leads to an in-person interview, and ends here before you make an offer.

If you are building your first real hiring process from scratch, the guide to hiring employees for a small business covers each step from posting through onboarding. Restaurant owners should look at the specific guide to hiring restaurant staff, which covers the particular challenges of filling kitchen and front-of-house roles in a competitive Orange County market.

For the interview itself, we have a list of interview questions for hourly workers that are designed to surface real information, not just practiced answers.

This is also where a tool like My Friendly Staff helps with the earlier parts of the process. By the time you get to reference checks, the AI phone screening has already filtered your applicant pool down to your top candidates. You are running references on two or three people who have already demonstrated they are worth your time, not ten applicants where half were never realistic options.

Making the call

A reference call does not need to be long. Fifteen minutes is enough if you are asking focused questions and actually listening.

Start with a brief intro: who you are, what position you are hiring for, and that the candidate listed them as a reference. Ask your open-ended questions one at a time. Let silences breathe. Write down what you hear, not just the positive summary but the specific words and any hesitation.

After the call, ask yourself: did I hear anything that changed my view of this candidate? Is there anything I want to follow up on before making an offer?

If the reference backed up everything you saw in the interview, move forward with confidence. If something felt off, figure out whether it is a real concern before you extend an offer you might regret.

The bottom line

Most bad hires are not surprises in hindsight. There were clues. The reference check is one of the last moments before you commit where those clues are available, and someone else is willing to share them with you.

The whole process, from writing the job listing to asking the right interview questions to calling references, is the difference between hiring someone who sticks and starting over in two months. Ten to fifteen minutes on a reference call is some of the best time you can spend before making a hiring decision.