Dr John Sullivan Talent Management Thought Leadership

Imagine your anger when, after a 3-month search, a finalist who said yes accepts a last-minute competing offer.

Ouch! But this type of nightmare shouldn’t be a surprise. Today, 47% of candidates report that after saying yes, they would remain open to a late arrival offer. You can blame this new reneging phenomenon on shifting values or the new generation. Sadly, you must realize that receiving “a yes” today from your top finalist may no longer mean the end of your recruiting effort. So, it’s important for both hiring managers and recruiters to remain fully aware of this extremely damaging but mostly preventable problem. 

Understanding Why “Reneging On Offers” Is So Damaging

When finalists renege on their offers, I label it as a nightmare problem. I have found that losing a finalist who initially said yes and then bailed on you is the most expensive and frustrating of all recruiting process dropouts.

The most significant cost to the company will be when your recruiting process ends up reducing the quality of the candidate you eventually hire. Especially if you must settle on a #2 candidate rated significantly lower than your top finalist. Also, realize that in some cases, you won’t even be able to hire your #2 candidate. The reneging caused an additional hiring delay, so many number twos will have already accepted another offer.

You may also lose other ranked candidates when they learn they weren’t the first choice and the top candidate backed out. So, when all of these quality-of-hire pain points are taken together. When you do eventually make a hire, you will, unfortunately, likely have to settle for a lower-rated, less capable, and lower-performing candidate. In my book, having to settle on a lower quality hire is enough reason to devote a significant amount of time and resources toward ending the problem.

There are also many operational costs that you will suffer after a finalist reneges. First, the loss of a top candidate only occurs at the very end of the recruiting process. This means you’ll need to repeat much of your recruiting process. The added delay in recruiting will mean that the position will be vacant much longer. And that extended vacancy will mean that each team member will have to do much more fill-in work. Being understaffed will also hurt the team’s overall productivity. One final cost might be that because the reneging is so shocking, your hiring manager might lose all of their already low enthusiasm for this and future hires.

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Actions For Limiting The Amount Of “Offer Reneging”

The remainder of this article focuses on the solutions to this nightmare problem. There are four categories of actions that can reduce the likelihood that a finalist will back out of their offer acceptance. Those categories include reducing the likelihood of them receiving late offers, actions that will make it harder for them to change their mind, actions that will prevent new recruiters from contacting your finalist, and actions that may prevent them from deciding to stay at their current company. The action steps you should consider taking are listed in bullet point format under each category.

Category 1 – Actions For Reducing “Late Arriving Offers”

This is the most powerful of all offer reneging prevention actions. Through my research and practice, I have found that the most common reason why finalists renege on their offer acceptance is that after accepting, they receive a late arrival offer from another company or their current boss. I call these deal breakers “late-arriving offers.” Fortunately, there are two effective ways a recruiter can proactively reduce the number of late-arriving offers your finalist might receive. 

• Expect your finalist to thank the other companies that have interviewed them – fortunately, it is still true that most companies that have interviewed a candidate will stop actively pursuing them once they know they have accepted an offer. One way to ensure that these other companies will know about their acceptance is to expect your finalist to immediately thank the companies that they have interviewed with for considering them. Because thanking them is a subtle way of letting the recruiters from pursuing companies know that your finalist has already accepted an offer. And that thank you note will likely be enough to get them to pause any effort to put together a competing offer. Incidentally, the thank you note will be even more effective if it explicitly asks the company to gracefully respect your finalist’s acceptance decision.

• Also, thank their references – proactively letting the finalist’s references know that they have accepted will also likely pause any job search by a competitor. This will likely occur because all recruiters will check finalist references before they make a formal offer. So when your company (or the finalist) proactively thanks each finalist’s references for their help. You will subtly make them aware that the candidate has formally accepted your offer. So when the reference is called by another company’s recruiter. The reference will likely decline to give one because they know it is no longer needed. And that will prevent other companies from generating late offers.

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Category 2 – Actions that will make it harder for the finalist to change their mind

Even if the candidate receives a late-arriving offer, there are multiple actions that a company can take to make it harder for your finalist to change their minds. Those actions include:

• Getting them to quickly sign your offer letter – fortunately, many candidates take the physical signing of an offer letter as a point of no return on their commitment. So, your company should develop a process that gets your finalist to immediately sign your formal offer letter. Also, realize that signing it in their new manager’s presence will further reinforce their commitment.
• Ask them to officially quit their current job – formally quitting their current job is often considered by a finalist as a no-return milestone. So tell your finalist that immediately after accepting. You expect them to formally quit their current job. And that you expect them to notify you the same day this happens.
• Expect them to update their profiles so everyone knows about the change – it may seem like a small thing. However, having your finalist update their online profiles so that they reflect the fact that they are about to start a new position will be another step in decreasing their likelihood of reneging. First, it’s harder to go back on an acceptance after all of their colleagues know about the change. Also, as they update each individual profile, it will remind them of their new commitment. Make sure that they focus on updating their LinkedIn and other similar social media profiles to reflect their new company and the starting date of their new job.
• Proactively make them aware that the team is counting on them – some new hires will be less likely to renege. After they know that everyone is counting on them. So, after they accept your offer, make your finalist fully aware that everyone is counting on them. The team and the manager have already put together a plan for welcoming them and getting them up to speed quickly.
• Post a “joining announcement” to let everyone know about the change – once friends and colleagues know that this candidate is joining a new company. This added peer pressure (not to appear as a turncoat) will help to prevent your finalist from reneging. So, consider announcing that they are joining your organization. On LinkedIn, on X, or any social media page that most of their friends and colleagues will see.
• Consider sending them “a startup package” – it can also reduce chances of reneging. Make your finalist aware that the company trusts and is willing to invest in their success. So, for professional jobs, show that trust by sending them a starter package, which should impress them by including their mobile phone, laptop, and message pads with their name on them. Finally, show them that you are fully invested in them when possible by giving them their manager’s contact information if they have any additional questions or concerns.

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Category 3 – Ending Their Job Search Will Reduce Inquiries From Additional Recruiters

Even a single contact from a recruiter from an exciting company may be enough to cause some finalists who have accepted to reconsider. It makes sense for a company to expect their finalist to immediately cease all job search activities that might attract new recruiters. Continuing a job search would only occur if a candidate who has accepted was still looking for another offer. So first, make your finalist fully aware of your job search’s expectations. And consider making a failure to end that search a justifiable reason for withdrawing the company’s offer. Several of the recommended actions related to ending their job search are listed below.

• Remove their “open to work” notice on LinkedIn – because so many recruiters rely heavily on LinkedIn. If you want to reduce new inquiries from recruiters. It makes sense to specifically ask your finalist to immediately remove their LinkedIn “open to work” notice.

• Ask the candidate to withdraw all of their current applications – if you want to reduce the probability of receiving an offer from one of the companies that your finalist applied to. Tell your finalists that you expect them to immediately formally withdraw each of the job applications that they have made within the last two months. Also, ask them to tell you when they have completed this task.

• Expect them to remove all of their recently posted resumes – in addition to withdrawing their formal applications. You can further decrease the likelihood that your finalist will receive new inquiries from unknown recruiters by expecting them to immediately take down all of their recently posted resumes that they placed on job boards or any online website.

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Category 4 – Actions that reduce the chances that your finalist will want to stay at their current company

One of the most common reasons why any type of offer is rejected is because the candidate decides to stay with their current company. Fortunately, there are two actions that your corporation can take. To help keep those who have accepted from changing their mind and returning to their current company.

• Proactively act to reduce the hire’s new-job anxieties – even when they don’t receive a late arriving offer. Some candidates still renege because they are desperately afraid that they won’t succeed in their new job because of their fear of failure or the imposter syndrome. Fortunately, you can help to reduce those “new job anxieties.” by immediately assigning them an empathetic peer mentor. One who has been educated on how to identify and resolve most of the fears that might cause your finalist to want to stay in their current job. And, by alleviating those fears, you will make it much harder to back out because of any fear that they won’t succeed.

• Sanction finalists not to use your offer to get a better deal – Every recruiter and hiring manager should be aware of one of the primary reasons why candidates pursue a job search and then renege on an accepted offer. It is because they didn’t really want to leave their current company. So, they began their job search for the primary purpose of using another offer as leverage for coercing their current company to give them a better deal. This questionable practice is known as whipsawing. Fortunately, you can minimize using it this way by alerting each finalist upfront that it is unethical to use your company as a lever whenever your company suspects that this whipsawing behavior is occurring. They will immediately drop the candidate from this position and any future job considerations at your company.

If you only do one thing – begin tracking the number of times at your company that a finalist for a key job backed out of an offer after initially accepting it. Then, conduct a telephone interview with a handful of these dropouts. And use those conversations to determine how many of their reasons for reneging were preventable.

Final Thoughts

I have found little in my decades of recruiting that there are few things that are more shocking than learning that a finalist who has accepted your offer has suddenly reneged on their promise. When colleagues learn about it, they almost always react verbally with some degree of disbelief. However, in the future, this shock will wane. A recent survey revealed that 50% of all candidates have accepted a job but backed out prior to starting. So, as more of your finalists lose their fear of reneging and the penalty that it might carry. I would expect more corporations to begin focusing on this nightmare problem. However, to date, I haven’t been able to find a single Fortune 500 company with a formal process for tracking the number of offer reneges and the underlying reasons why they occurred. That is a huge omission because I have found that through the use of post-exit interviews with those who reneged. If you wait six months and use a phone interview, those who have reneged on one of your offers will, without hesitation, reveal the real reason(s) why they changed their mind. And with that data, you should be able to determine what action steps will be necessary in order to reduce your number of reneges (your target should be at least a 20% reduction).

Notes for the reader

This is the latest post from Dr. Sullivan, who was labeled “the Michael Jordan of Hiring” by Fast Company Magazine. You can read his many other talent management articles on www.drjohnsullivan.com.

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