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What Is Reneging?
You spend hundreds of hours recruiting, scanning applications, and interviewing to find a great candidate for your company. You send them an offer, and they accept. You inform all the other candidates that they did not receive the offer and begin preparing the hiring, onboarding, and first day for this new hire—only to find out your new hire is no longer going to be showing up for work. This is reneging, and it happens with almost a third of new hires. (It may or may not include a related phenomenon: ghosting.)
By definition, reneging is a failure to carry out a promise. Candidates who give an oral or written agreement to accept a position for a company and then turn around and decline it are said to have reneged on the job offer. The “professional” way for a candidate to renege is to call or email to inform you of their change of mind (hopefully days or months in advance), but in some cases, they simply do not show up for the first day. This practice occurs in all levels of employees, but it is more common among entry-level or internship positions. Students are the most common candidates to renege.
How Does Reneging Affect HR?
At the point a candidate has accepted an offer, they are no longer considered “a possibility;” they are considered almost full-blown employees. When a candidate decides to renege an offer, it sends the company’s HR department scrambling.
- Resources. As you know, we invest many hours and dollars on job candidates. You can’t get any of that back, and in fact, you now have to do it all over again, using even more of those resources.
- Employee brand. Having candidates renege on an offer typically says more about the candidate than the employer. However, it can affect future candidates’ perceptions of the company if word from the reneging candidate spreads. If potential candidates hear that a candidate passed up an opportunity to work at your company, their perception of your employee brand may change. It may make recruiting more challenging.
- Morale. A lot of hard work goes into picking the right candidate for the job, and hopefully you end up picking an employee you feel proud of hiring and working with. When a candidate reneges, all of your hard work not only seems to have been wasted, but you may feel you have judged the candidate incorrectly. You thought they were reliable. Will you be able to judge if the next candidate is reliable? Morale of the HR or recruiting team can be decreased by this act.
Reasons Candidates Renege on an Offer
You’ve offered them the job they applied for, so why would they want to unaccept? The Great Resignation is just another reminder that we are living in an employee-driven world. More and more, when an employee feels that an offer is not right, they feel empowered to walk out.
The Candidate Receives a “Better” Offer
Unfortunately, you may not be the candidate’s target company. Maybe the candidate was waiting to hear back from other companies, and they got an offer from a company they desired even more. The candidate may also receive an offer that provides them with benefits that better match their needs. In a 2019 Robert Half survey to discover why candidates renege, 44% said they reneged because of a better offer.
The Candidate Continues to Search
Especially at universities, there is a lot of pressure around recruiting season. The candidate might feel pressure to continue searching, especially if they received their offer early on in the season. Their search may lead to other offers they are more interested in.
The Candidate Discovers Something About Your Organization
As a candidate prepares for the position, they may come across some information they were unaware of regarding values, history, projects, or maybe even a person. In Half’s research, 19% of reneging respondents said that they heard something bad about the offering company.
The Candidate Receives a Counter-Offer From Their Company
If the candidate currently has a job and their current employer hears about their offer, that company may present a counter-offer to try and keep the candidate. Half’s survey found that 27% of employees reneged for this reason.
Life Just Happens
Candidates may run across personal or familial incidents that prevent them from continuing with this employment agreement. The candidate may be needed elsewhere locationally, financially, or time-wise. Unfortunately, there isn’t really anything that can be done to prevent this one (10% of respondents said there were “other” reasons).
How to Respond to a Candidate Reneging an Offer
It is only natural to be frustrated when someone reneges. After taking a few deep breaths and regaining composure, take the following steps (where applicable) to respond to the candidate and keep the company moving forward.
Step 1: Respond To The Candidate
The first step is to respond to the candidate professionally. Even if they left you at the door on the first day, be kind and courteous to the candidate. It would be easy to respond in this situation with anger or frustration; however, how you react to a candidate reneging on an offer will leave an impression of the company on the candidate or future candidates. You are a representative of your company, and you should respond in the manner you would want to be responded to (traditionally known as the golden rule).
Step 2: Ask Why They Are Leaving
If the candidate does not give you a reason, ask for one. You may have lost resources and an employee, but at least learn from this experience. Understanding why they are leaving the position will help you prevent similar situations in the future and provide a better candidate experience.
If their reason involves salary or pay, consult with the manager and decide if they would like to counter the offer.
Step 3: Survey Those Who Have Followed Through With Their Offer
If this is something you are seeing frequently, collect more data from employees who have stuck around through their first week. What was it that made them stay at the company or show up on their first day?
Step 4: Re-Consider and Re-Visit the Process
How can you learn from this experience so it doesn’t happen again? Consider the tips below about preventing a candidate from reneging, but also learn from this specific experience. If the candidate explained why they left, make sure to address this reason in your future processes.
Review your job postings regularly and make sure they align with company values, culture, and actual job duties.
Step 5: Reach Out to the Next Candidate
If the candidate still declines a counteroffer (if given one), then it is time to turn to your secondary candidates. Phrasing that you could use in this situation may include:
“This position has recently been re-opened. You were a leading candidate, and our team would appreciate it if you would consider this position. If you are interested, please respond with a time for us to call by the end of the week.”
How to Prevent Candidates From Reneging on an Offer
Is there anything we can do to try to prevent getting into this sticky situation? Here are a couple of suggestions.
Step 1: Help Them Get to Know You
The stronger the personal relationship that has been created with the candidate, the harder it is for them to abandon it. Some candidates fear what the job is going to look like or fear a negative relationship with a coworker or supervisor. Establishing a strong positive relationship reassures these fears.
Step 2: Understand Their “Why”
Understanding why the candidate wants to join your company will help you evaluate if they are the best cultural fit in the first place. Strong motivation can also hint at their reliability of sticking with an offer.
Step 3: Establish a Post-Offer Journey
Clearly establish expectations when it comes to how and when you will communicate. Creating a plan for what interaction will happen after the offer is accepted will help a candidate feel the care the company has for them and the commitment they are making. Avoid going radio-silent between acceptance and their first day.
Step 4: Give More Time
Lastly, a candidate may simply need a little bit more time between the offer and the decision. You have your own timeline that you need to follow. However, if a candidate expresses concerns about feeling rushed, consider giving them the extra time they may have (or may not have) asked for.
Allowing them to take an extra week to decide about your offer may increase the likelihood that they decline the offer, but it would also decrease the likelihood that they renege once you have started the hiring process.
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Claire is excited to expand her knowledge about HR in association with HR Mavericks. Claire is entering her Senior year of the Human Resource Management program at Brigham Young University. Claire is currently interning with Boeing in Global, Equity, Diversity, and Inclusion and People Analytics.
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