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Finding References
You should always ask someone to be a reference for you well in advance of needing them. The best times are as you are making the decision to leave you current employer, when you are delivered the news of your termination, or when a someone is leaving the company. Don't ask for a reference unless you are willing to be a reference for that individual.
Many companies now have policies against giving official references, so it is always best to approach individuals rather than rely on the company's Human Resources department to forward references requests.
The Best References
References usually fall into two categories: Personal or Professional. When you provide a potential employer with your references it's best to keep them professional - former managers, co-workers, subordinates, etc.
Who makes the best reference? A former manager who can talk about your strengths and weaknesses. A great combination would be one manager, one co-worker, and one subordinate. If you never managed anyone, use two co-workers or two managers instead. Try and include as many previous employers as possible. Provide a phone number and email address for each of your references if possible.
You should always notify your references that you have given their contact information to a potential employer, what job you have applied for, and what your duties will be in the new role. The more background they have prior to the reference, the better!