The majority of offers are extended and accepted without a great deal of complication; unfortunately there will be situations where you will need to rescind an offer. Just as a good hire can boost the bottom line so can a bad hire drain financial pools and wear down team morale. Avoid a potential last minute bad hire by rescinding an offer. Following are some reasons why you should rescind an offer.
• Background check failed
• Drug screen failed
• Physical failed
• Candidate falsified information on their application
• Candidate did not accept the offer within the agreed upon time
• Candidate indicates poor character towards the end of the offer process
• Candidate has unrealistic requests to make changes to the offer
• Candidate has a counter-offer from current employer that they want to accept
• Candidate fails to show up for first day of employment without explanation
*Notice none of the above reasons mentioned rescinding an offer due to receiving poor references. Leave reference checking out of the equation. Reference checking is not worth the defamation and legal risks for being sued. When reference checking most companies are wise to only verify employment dates, titles and confirm whether or not the candidate is eligible for rehire.
Reasons why you may not want to rescind the offer:
• You fear looking foolish to your superiors
• You feel bad for the candidate
• You need to make the hire
• You are never wrong
• It will take too long to find another candidate (
Reasons why you should not rescind an offer: Discrimination. A sample of what would be considered is your new hire starts their job and informs you they are Muslim and need to wear their hijab to work. You can not rescind the offer at this point unless you want to fear being sued for religious discrimination. Another example is during the job offer the candidate informs you that they are diabetic but they have it under control. You become concerned about how this might impact your health insurance rates and you want to rescind the offer. Don’t rescind that offer unless you want to fear being sued under the ADA (Americans with Disabilities Act). Another more common example might be where you make an offer to a female, who informs you during the offer process that she is pregnant. Don’t rescind that offer unless you want to fear being sued under the Pregnancy Discrimination Act.
Let’s dig a little deeper into why you should rescind an offer. One of the reasons for rescinding an offer is the candidate informs you that they received a counter-offer from their current employer. If the candidate indicates they are going to accept the counter-offer wish them well and send a follow up email confirming that your offer will be rescinded due to candidate informing you they are accepting a counter-offer from their current employer. Do not engage in a financial/benefits tug-of-war between the candidate’s current employer and your firm. Do not inquire as to what the counter-offer contained. Unfortunately it is a fact of life that the occasional candidate will interview solely for the purpose of getting an offer and using that offer to prompt their current employer to ante up and provide them with a counter-offer. Most candidates don’t realize that when they accept a counter-offer their employer is now wise to the fact that they are out shopping around and will put plans into place to find a replacement for the candidate. The counter-offer often is just a way to keep the candidate with the firm a little bit longer while the replacement is found.
Another reason to rescind an offer is the candidate has unrealistic requests to make changes to the offer. By the time an offer is extended verbally both parties should have a realistic expectation as to what the offer will come in at. More than one person will have interacted with the candidate and confirmed what their skills strengths are and this too will drive the offer figure determination. When a reasonable offer is extended followed by unreasonable requests presented by the candidate you may want to cut bait and let the candidate go. Case in point, there was a candidate that received an offer from the company I was working for one year prior to them applying to a role I was now responsible for filling. Her skills seemed to be a match for my role so I called the recruiter that worked with her for the prior offer. I learned that the candidate turned down our offer a year ago as she was seeking a greater income. The role I had available had a greater salary range than the previous role she applied for. After consideration we progressed this candidate through our normal interview process and decided to extend an offer to her. Our offer was generous allowing for a significant increase in her current base; overall it was a much better offer than what she received from the company a year prior. After extending the verbal offer the candidate requested a generous sign-on bonus as well as increase in vacation time off. I told the candidate that I would look into her request and call her back within the hour. I called the candidate again and this time I had to leave a voice message to communicate that we could offer her a sign-on bonus but were not able to allow for additional vacation time as that was standard company policy which was not a negotiable item. The candidate emailed me back indicating they received my voice message (red-flag as #1 They knew I was calling back with results from their request and didn’t answer the phone. #2 They chose to email a response vs calling and talking to me directly.) and asked to be allowed to work via home because the offer was lower than what they hoped for so therefore they had to factor in the cost of gas to get to the job site which was less than 30 miles away from their home address. They asked for commuter assistance in terms of reimbursement options and then they requested the offer be written up formally. The candidate knew our offer process required verbal acceptance followed by the offer written up formally for review and written acceptance. Combined with her prior offer battle and subsequent downturn it was clear the candidate would have no end in site with requests moreover they expressed the need to be in control of the company’s policies and processes. This was a time when the company rightfully rescinded the verbal offer.
Following is a case in point for rescinding an offer for poor character or better put, lack of maturity. After a verbal offer was extended to our candidate, instead of asking for a higher base or bonus the candidate emailed me the following: ‘One question for you – Could you tell me a bit more about how raises work at CompanyX? I’ve heard that raises are few and far between at CompanyX.’ In addition to this question, that was more of a slam on the company’s reputation than a request for an increase in base pay, the candidate took the time to express dissatisfaction with how long the interview process took. The candidate signed their email, ‘Cheers, Patty’ The email wasn’t a total surprise as there were small red flags throughout the interview process that indicated Patty may have a negative outlook. The hiring managers chose to overlook the red flags since a company leader referred Patty to them. I later learned that the company leader didn’t know Patty. The leader bumped into Patty at a social event where she asked if he could assist her in finding a new position with our company. The leader simply passed along her resume to the team that he thought might be interested in her. The negative tone along with the continual topic of raises caused management to sensibly rescind the verbal offer.
A word about feedback when rescinding an offer. Provide as little detail as possible. Give an inch of feedback and expect a mile of arguing and potential lawsuits.
Lastly, let’s take a look at some common reasons why you many not want to rescind the offer. You might be a big softie and feel bad for the candidate. Your misguided compassion could very well be at the expense of the candidate. Imagine the candidate in their new position for 3 months only to find they can not rise to the occasion and are fired. Not only are they fired but they are fired-up at you for hiring them into such a rotten situation. They pester you to find them a new position of employment or to just listen to their sad story. Another common scenario is that you really need the hire and/or it will take too long to find another candidate. The obvious ideal situation is to always have a back-up candidate or a solid pipeline of candidates to refer to. You should be constantly conducting phone screens to keep your pipeline flowing. The worst case scenario is that the candidate is hired with a few months of effort put into on-boarding, training, mentoring and getting involved deeper and deeper with critical projects only to discover their immaturity or character flaws are eroding the team spirit and client confidence. The company has invested heavily in the candidate when they discover they need to let the candidate go or risk further harm to the department. Months go on with coaching, write-ups, frustration abounds all while trying to find a replacement. Valuable budgets are consumed with both the bad hire and the search for a new employee. The angry employee is let go and takes to social media to vent their perceived poor impression of your fine company. On occasion I’ve encountered the person that feels they are never wrong therefore if their gut says they need to hire this person by golly they will. Just remember pride cometh before a fall, in this case a great big expensive, time-consuming fall.
Knowing when to rescind can save you a great deal of drama ever happening in the first place. Do the smart thing and rescind the offer if you see dangerous red flags or recognize company policy, such as passing a background check, isn’t met during the offer process.
A word about verbiage in the offer letter to make rescinding the offer as smooth a process as possible. Sample protective wording:
This offer is contingent upon the successful completion of your background investigation and pre-employment drug testing (which must be completed within 72 hours of your acceptance to this offer).
This letter is intended to outline your offer and does not constitute an employment contract between you and CompanyX. Your employment will be at-will and not guaranteed.
All offer letters should state that the relationship is ‘at will’. Unless you truly intend to create a binding employment contract, do not use the term “employment contract” in your offer letter.
Knowing when to rescind creates a win-win situation.