For the last several years, the winds of change have been blowing through the job market. Moreover, the pandemic has put significant pressure on the labor market, pushing it away from one dominated by companies. The balance of power has shifted in favor of the candidates, who are now in comparatively short supply and high demand. They have the luxury to pick and choose between their roles, finding the company that best suits them to work for. Companies, meanwhile, need to struggle and compete with one another to hook the candidates they need to keep going.
This change has led to a rise in one of the most annoying, expensive, and time-consuming situations for a company to be put into.
- You put out a job ad and start pulling in applications.
- You filter through the applications and identify your top candidates.
- You conduct interviews and choose the best candidate from among your pool.
- You send this candidate a job offer and begin the process of hiring.
- The candidate accepts the job offer.
- Then, a few days or a week later – before they onboard – they decide to rescind their acceptance and take a different job with another company.
- You’re left without your candidate and need to move on.
How does this happen?
In the current job market, candidates – especially the top ones, who may be passive candidates already comfortably employed, or candidates supported by savings or a spouse who have the luxury to look – often interview with multiple companies at once. They put out numerous applications and do interviews with whoever gives them the time of day.
Since candidates are in short supply, this is likely to be most of them.
They then have the option to compare the companies they engage with. They can compare compensation offers, benefits packages, workplace culture, how well they got along with the interviewer, and more. They have their pick of job offers.
The candidate has no concern for the expense you racked up in the process of reviewing, interviewing, and preparing to hire them. And, honestly, it shouldn’t be their concern. It’s part of the cost of doing business.
This difference in perspective is what makes the whole situation such a contentious issue and why the hiring manager and the candidate have such differing opinions.
The hiring manager knows that the company has invested significant time and money into this candidate already and may even be put into a challenging position if the person they wanted to hire backs out when hiring needed to be done by a deadline.
The candidate doesn’t know or care about any of that. They want what’s best for themselves, and if another company gives them a bigger, better offer, why would they turn it down? They don’t even have to worry about burning bridges with you because the chances of them having to come back to you are relatively slim.
Many hiring managers like to convince themselves that candidates view this situation as unethical and exploitative but do it anyway out of greed. The truth is, candidates only want what’s best for themselves and their families. Companies are machines worth no affection or remorse, and indeed, that’s what companies have built up for themselves over the past decades. We’re reaping what we sow.
None of this changes the situation. All you need to do is know how to deal with it.
Two Different Situations
Generally, there are two different situations where the candidate decides to rescind their acceptance of a job offer. If you’re not looking closely, you might not notice the difference.
In one, the candidate tells you that they’ve received a better offer and are choosing it over yours. After that, they ghost you, and that’s that.
In the other situation, the candidate tells you they received a better offer and then tells you what it is. This is important because, in this situation, the candidate is interested in working for you but received a more compelling offer from a less compelling company. They’re giving you the opportunity to counter-offer, improve your offer, and rope them in.
It’s essential to recognize which situation you’re dealing with and whether or not you want to hire that candidate after they pull such a stunt. These candidates are just as likely to keep their feelers out and be willing to either jump ship later or use the threat of a better offer to fish for a raise. If they’re talented and beneficial to keep on hand, it can still be worth keeping them, but it can be expensive and stressful.
If the candidate got a better offer and is informing you they’re not going to work with you after all, there’s not much you can do about it. A counter-offer probably won’t keep them around.
Legality, Ethics, and Morals
Is it morally correct to take the better offer and leave the company floundering? Is it ethical? Is it even legal? These are questions the candidate might be asking themselves, and they’re questions you need to understand to know what your options may be.
First, let’s talk about legality.
In purely legal terms, most of us live in “at-will” employment states. “At-will” employment is a form of employment that favors the company, and when the labor market also favors the company, it’s hugely beneficial. The company can use the threat of termination as leverage in virtually every situation, using that power to keep employees in place despite less favorable conditions. Since jumping ship is difficult in a competitive labor market, the employee has little choice.
Unfortunately for companies, since the tides have turned, that same framework is used against you. Just as you could terminate an employee at any time, so too could the employee, and now you have no leverage to keep them around. Legally, nothing is stopping them from rescinding their acceptance of an offer, no matter how far along in the hiring process it is, even into onboarding.
In fact, probationary periods often give further leverage to the employee in this situation; they’re always at risk of being let go in the first six months anyway, so choosing to leave during onboarding for a better offer is no skin off their back.
There’s one single exception to this: contracts. IF, and only if, you have produced a legally-enforceable contract that says the candidate will not accept a different offer and will work for a specific contract period (usually at least six months, sometimes a year), then there’s more of a leg to stand on.
And no, an offer letter is not a legally binding contract. It can accompany a contract, but it is generally just a statement with a signature to acknowledge the terms of employment, with further paperwork to come down the line.
IF there was an actual contract, and IF you choose to pursue it, you could sue the candidate for breach of contract. If you do so, there are three possible outcomes.
- The candidate wins, your contract is labeled void, and you gain nothing while losing the time and money spent on the suit.
- The candidate loses, but you only gain damages, forcing the candidate to repay some portion of the expense they accrued in the loss of the hire and possibly legal expenses. But, you also take a dramatic hit to your reputation; who wants to apply to a company that sues candidates?
- The candidate loses and is told they must honor the contract and work for you. And, work for you, they will, with as much resentment, anger, and implicit sabotage as they possibly can. Chances are, they’ll do more harm than good.
So, even if the law was on your side – which it isn’t – there are no positive outcomes from pursuing it.
The morals and ethics of declining an accepted offer.
Is it moral or ethical for the candidate to rescind their acceptance of a job offer?
The truth is, it doesn’t matter. That’s because perspectives differ, and there’s no such thing as an objective morality when it comes to negotiations in a situation like this.
If anything, since the candidate is the one who risks their shelter, security, and health, their self-interest is of much greater concern than the interests of a company, which risks none of those things.
Regardless, morality and ethics don’t play a serious part in this situation unless you’re planning to try to emotionally blackmail a candidate into dropping a better offer to work for you. And, again, there are no positive outcomes from such a ploy since the employee you’ll end up with will be regretful and resentful at best.
What Should You Do Next?
With legal action off the table, as the hiring manager responsible for filling an open role, you have to figure out what to do next.
The first step is, as mentioned above, to verify whether or not the candidate is trying to push for a counter-offer. If they are, and you can offer it, you can still hook the candidate. This isn’t always going to be the case, but when it is, it can be a favorable outcome for both you and the candidate.
However, if the candidate is well and truly gone, you’re left in a lurch. Luckily, you have options available to you. Remember that candidate pool you built up? It’s time to turn to your second choice.
Incidentally, this is why it’s a bad idea to send rejections to your other candidates before your role is filled. Even the offer letter being signed isn’t always enough. Wait until the candidate is truly onboarded before informing other candidates that the position has been filled.
If the initial candidate doesn’t work out, you can reach out to one you previously rejected and send them an offer. Many candidates who were passed over for a position will still be at least somewhat interested. Some might reject you, either because they found another job in the meantime or because they don’t want to always feel like the “second choice” (even if they are).
While you’re at it, you might consider looking over your hiring process and your company to see if there are changes you can make to encourage candidates to not jump ship, despite a signed offer letter.
- Make your company culture more enticing, as a benefit that can outweigh a slightly higher salary at a worse company.
- Examine your pay and benefits package and ensure that it’s more competitive, so this kind of poaching is less frequent.
- Tweak your hiring process to be more emotionally and cognitively engaging, so your candidates have a more personalized experience, building a connection that is harder to drop.
You can also talk to the candidate who left and ask what factors played into their decision. Often, they had received a much better offer from another company, and if you can’t increase your offers to be competitive, there’s nothing you can do.
In some cases, the candidate ghosts because their circumstances change, such as a health or family situation that gets in the way. You may still be able to “hold” a position for them or keep them on the top of the list if they come knocking again. This outcome is rare, however.
In other cases, the candidate might be able to talk about specific issues they had, red flags raised, or problems they encountered. For example, a minority candidate might have been introduced to an interview panel of all white men and gotten a bad impression of your leadership or company diversity. They may have encountered an interviewer or future coworker in a casual setting and had a bad social experience. Or, maybe, your hiring process was uncommunicative or delayed and inconsistent, and they didn’t want to work for a company that disorganized.
In these cases, you can often take steps to minimize the issues and remove the barriers for future hires. You’re unlikely to recapture the lost candidate, but you can allow them to pave the way for other candidates after them.
Ghosting is an unfortunate fact of doing business; how you handle it helps determine if you’re a great place to work.
Andrew Greenberg’s roots in recruiting date back to 1996. He has experience both on the agency-side and corporate-side of the staffing business, with a focus in the financial services space at companies like Bloomberg and UBS. He also has core experience with information technology staffing, and has worked for major software companies such as SAP Business Objects and IBM/Informix Software. To get in touch with Andrew, you can reach him by email or by phone at (800) 797-6160.