References and other third-party observations are useful and necessary components of the hiring process. But getting a candid reference from an employer is tougher than ever these days. Because employers know that saying too much or too little can have legal consequences, they are increasingly wary of being specific about past employees and their work histories. While companies have been sued for not disclosing enough information about former workers, others have paid enormous settlements because they provided negative references – whether true or false.

Because of these difficulties, rushing through the reference checking process – or bypassing it altogether – in order to make a quick hire may be tempting to small businesses, especially those in danger of losing candidates to another firm. Even so, getting reliable information from a former supervisor is an important step to take before bringing someone on board.

Here are some tips on approaching this often difficult process, which are applicable to hiring managers or other line managers who may be spearheading the hiring process in their organization:

• Let the candidate know you check references. Be clear with candidates at the outset that your company will be checking their references. Checking references is perfectly legal as long as the information being verified is job-related and does not violate discrimination laws. Informing applicants that you're checking references usually helps ensure that the answers they give you during the interview are truthful, especially when you start the interview by saying, "If we're interested in you, and you're interested in us, we'll be checking your references."
• Don't delegate it. If the employee will report directly to you, you should check the references. No matter how thorough a delegate or deputy may be, the hiring manager will have corollary questions that may not occur to others. Also, calling someone at your same level may establish greater camaraderie that will prompt a more honest and detailed reference. If that weren't enough, checking references yourself is a great way to gain insight from a former supervisor on how to best manage the individual.
• Use responses from the interview. Asking candidates during the job interview what their former employers are likely to say about them can provide you with a good starting point if you can actually get the former employer to talk openly. You can start out by saying something such as, "Joe tells me that you think he was an awesome employee" and have the employer take it from there. You may not get a totally frank answer, but you can get valuable comments and insights. After all, the candidate must assume that you're going to check out his answers.