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I have gotten myself in a bad situation. I currently work a position I enjoy that doesn't pay so well, and my contract will be over in a few months (my boss said they will extend it). I was proactive in applying and I had an interview for a permanent job that pays more. Now the job is mine conditional upon references.
My two issues:
I don't really have any references I can use because my current boss would be upset if they knew.
A part of me doesn't want to leave the company. I have made friends there, and I have gained some good experience while working there.
Rent, car payment, food, entertainment, long term financial goals, etc... You got your answer.
Just tell the other employer you don't have the references but you will work hard for them.
Use a peer reference. And try and think of anyone outside the company you have dealt with such as a contractor, vendor or consultant. Most people are understanding of not being able to use your current boss. And keep in mind that you will need some of these folks a references in a couple of years anyway.
Since you like the current company so much you could always have a sit down with the boss & explain you really like his company but need to move to xyz for the $. He might try and match or he might agree to give the reference if approached correctly. Bosses tend to be much more understanding of this early in your career than later.
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