Candidates reneging on job offers or during the onboarding process can be a frustrating experience for any recruiter. In a talent-driven job market, it’s common for candidates to have more than one job offer to consider. It becomes a race against time to see which organization can offer the best career experience, compensation, and circumstances that secure the right employees.
What is candidate reneging costing businesses?
For organizations on the losing end, this is a drain on recruitment efforts and incurs heavy costs. The Society for Human Resource Management (SHRM) estimates
hiring costs to average $4,700 per candidate.
Combined with the effort to onboard a new hire, these costs can triple. Small to medium organizations are impacted the worst because they may not be able to rebound as quickly as a larger organization with a big recruitment budget and team. It also damages workplace morale when existing employees have to take on the duties of a potential hire.
While many recruiters believe candidate reneging is unprofessional, it’s perfectly legal for candidates to back out of job offers at any point in the onboarding process. Most states have ‘at-will’ employment, which typically protects companies that terminate employees. From the candidate’s perspective, it also gives them the right to walk away from an employer at any time.
Reneging on job offers is on the rise
In recent years, candidates reneging has increased at alarming rates. Why is this becoming more acceptable for job seekers? An independent study conducted by specialist recruiter Robert Half revealed,
“91% [new hires] are willing to quit within the first month and 93% during the probation period if the job doesn’t match their expectations”.
Candidates are keen to look for signs that a new job is able to live up to the job description and what’s been discussed during the interview process. Any deviation from this can cause a candidate or new hire to bolt.
Candidates are aware of their own value, and they are laser-focused on their career and life goals. Many have changed their priorities due to the pandemic, which has forever altered the way people engage with potential employers. They are more careful about accepting job offers and rate companies based on interviewing and onboarding experiences. Candidates can easily learn about any organization’s recruitment and onboarding process due to websites like Glassdoor, Indeed, and others. So, instead of compromising, candidates are more likely to walk away from an employer that doesn’t offer what they want from the start.
Jamie Kohn, director of Gartner’s HR practice, shared in a press release,
“Not only are candidates keeping their options open, but they are more likely to back out of offers after accepting.”
Kohn also said,” the Gartner June 2022 workplace survey of over 3,600 job seekers found,
“44% of respondents had backed out after accepting an offer, compared to 36% in 2019.” Nearly half (46%) of the candidates who had backed out of a job offer did so because they had found a better offer.
Risk factors for candidates reneging on job offers or onboarding
What can employers do to help prevent early-career reneges? While each candidate has unique circumstances, there are some risk factors to watch for. When interviewing, find out where the candidate is regarding career goals.
Casual job seekers and those who are receiving multiple offers tend to back out of job offers or leave for something they believe is better. They have more choices, and they know their skills are valuable.
Communication is another factor when evaluating candidates who may be at risk for reneging on a job offer or during onboarding. Does the candidate tend to remain silent instead of engaging with their new employer? Lack of follow-up after a job offer is a bad sign, and so is not asking many questions during onboarding.
Ways to prevent new hire and candidate reneging
There are some ways to cut down on losing new hires.
When evaluating and interviewing candidates, it’s important to establish a relationship that includes honesty. Learn what they are seeking and why. Be truthful about what the company can offer.
Be accurate with job advertisements. LinkedIn regularly checks in with job seekers and found that a candidate may bail out of a job offer because a job advertisement is missing important information, such as compensation and actual duties.
Keep candidates engaged at every stage of the hiring process. Don’t let too much time pass between your recruitment team and candidates. Remember, other companies are contacting them too.
Give everyone the same positive recruitment and onboarding experience. Have a structured process for attracting, interviewing, assessing, and making job offers. Carry this structure through to their onboarding experience.
While you may be unable to stop every candidate from reneging, focusing on keeping them engaged and connected to your company can increase their loyalty and longevity. So before you embark on your journey to retain prospective candidates, start with a FREE job posting to get the ball rolling.