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Too Slow or Too Low: Why Offers Are Being Rejected

by Jul 24, 2014, 12:36 am ET

Why offers rejected - MRI 2014It’s a job seekers market, but hiring managers haven’t yet fully adjusted to the change, with 40 percent of them taking almost a month to make an offer, only to find out in many cases that their candidate is turning them down.

Better than 8 in 10 of the MRINetwork recruiters participating in the semi-annual MRINetwork Recruiter Sentiment Study said today’s employment market is candidate-driven, a 25-point jump from the 2012 study. That means the professional, executive, and managerial candidates who are the majority of those recruited by MRI franchise offices can be more demanding when it comes to the nature of the work they want, the companies they’re willing to work for, and the compensation and benefits they’ll accept.

In the MRI survey last fall, recruiters said 42 percent of their candidates who got an offer turned it down. In the current survey, recruiters reported that in almost a third (31 percent) of the turndowns, the reason is another offer. In yet another sign of the changing nature of the market, 26 percent said the candidates are rejecting offers because the comp and benefits aren’t what they expected. And current employers are fighting to hang on to top talent; 16 percent of the candidates accept counteroffers.Who's driving the market MRI 2014

According to the survey, one recruiter, commenting on the hiring situation, said, “Candidates have more options than they have had in years. Yet clients still want to give low-ball offers.” Another noted, “Some clients are still not adjusting to this market change, and as a result are dragging the process along and losing good candidates.”

A few surveys back, recruiters were far more balanced in who they thought was driving the market. In the 2011 survey 54 percent of the respondents saw a candidate-driven labor market vs. 46 percent who saw it the other way.

Now, with the economy adding jobs at a pace unseen since before the recession, and an unemployment rate for the college-educated at 3.3 percent, there’s little doubt about the nature of the market. What’s more, the evidence is that the hiring environment is only going to continue to get more challenging for many types of professional and mid- to senior-level positions.

A recent CareerBuilder forecast predicted that nearly half of all companies would be adding headcount during the second half of this year. The Conference Board’s Employment Trends Index likewise points to strong hiring. Now, 47 percent of MRI’s recruiters in the survey say newly created positions are the primary reason for the job orders they have coming in.

Second to that are vacancies caused by resignations, prompting MRI to conclude, “Employment continues to accelerate and candidates are more willing to change jobs as a result of growing confidence in the job market. Employee fears regarding changing employers during the recession have subsided.”

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • PAUL FOREL

    I would sincerely like to know why nearly half of MRI’s referrals are rejected when standard practice is to pre-close candidates prior to an Offer. Since a prepared search consultant knows both the client side of the Offer in advance and the candidate’s current and desired compensation in advance, how is it that Offers are being made without the waters being tested prior to the Offer? Surely a competent search consultant would know in advance if an Offer is going to fly.

  • http://www.EngineeringReferral.com Douglas Friedman

    My company recently helped one of our clients with a large survey of engineers who had turned down their offers in the past 24 months. I think it is safe to say that the employer would be considered an “employer of choice” by almost anyone (large and rapidly growing in a desirable location). Anyway, offer timing was the number one reason for job rejection (in other words, slow turn around time on offers). Now, in fairness, this company has an excellent acceptance rate and pays very competitively. So their overall results in terms of offer rejection would make most companies envious. But it did illustrate what experienced recruiters already know. Getting an offer out there as soon as possible has a big impact on acceptance rates. In many cases, decisions are made quickly after a final interview but “process” delays the actual written offer letter. Good candidates will have multiple opportunities. And once another offer is accepted, many candidates will feel an ethical obligation to follow through (as well as a financial obligation if relocation is involved). Speeding up the offer process, for many companies, is the easiest “low hanging fruit” to go after. Not every company can pay more or offer better benefits. But the playing field is level when it comes to offer turn around time. It’s just a question of having the will to improve the process. Proactive companies will constantly look to eliminate unnecessary steps and eliminate roadblocks and will win several more good hires a year away from their competitors.

    Doug Friedman
    EngineeringReferral.com
    LinkedIn Profile

  • http://www.verticalelevation.com/ Carol Schultz

    This tells me all I need to know about low quality recruiters: In the MRI survey last fall, recruiters said 42 percent of their candidates who got an offer turned it down.

    This should never happen if a recruiter knows what they’re doing.

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    This problem could be solved if the pervasive taboo surrounding the issue of talking about pay would be dealt with once and for all. Then, by all means and definitely, the process of getting an offer out should be shortened. HR departments need to deal with this. At my last job it the CFO who initially delayed all offers, because they all went through him, and he wanted to be updated, and was often being asked to sign offers for positions he didn’t even know were open. We got him more involved in HR and recruiting, and put together an offer package that summed up the info for him, including who approved the position, the timeline, the candidate’s info, etc. Worked like a charm.

  • NT 1983

    Is it because what people (i.e. candidates) say they will do, and what they actually can be two separate things?
    Also this article’s point is that with every day that passes, the candidate is likely receiving more and better options – even if the consultant is trial closing daily to test this and a candidate drops out before offer, they are still lost.

  • Keith D. Halperin

    While i agree with the premise: “Don’t take too long with your offers!”, the study is an example of selection bias: 3PR candidates offered positions are likely to be a small and unusually select group (agencies wouldn’t be working with them if they didn’t think they could place them), so it isn’t right to generalize from these to the general job-seeking population.

    -kh

  • Middle of the Road

    This has been an ongoing issue in the pharma industry for years, at least 25 that I personally know of. I have a company that has twice made offers six months after an interview. They are one of the top two companies in the industry. I no longer apply for positions, and many others feel the same way. They are slowly sinking in sales and profitability. I had three interviews prior to coming to my current position. My current job had an offer on the table within 24 hours. The two competitors came back two weeks and six weeks later. If you do not value me enough to make an offer after I travel four hours each way, take 12 hours of PTO, and wait a month for travel to be reimbursed, then you need to look for less qualified people. If you want a technical high level performer, then make a decision and move within a week. The position should be approved before it goes to the recruiter and your interview team should be required to be around or not be part of the decision process.

  • PAUL FOREL

    Dane,

    I think you read too much into my comment.

    I usually send my candidates to three interviews so they have a choice just as I send three candidates to clients so they have a choice.

    I’ve never had a candidate decline an offer nor have I ever experienced a delay between last interview and date of Offer.

    For me, if I had a client who was dragging their feet I would simply move on and focus on the other two clients who had interviewed my candidate.

  • PAUL FOREL

    Hello, NT…

    I can only speak from my own experience….

    There is definitely a factor of ‘what they say and what they will really do’ and although I’ve had a glitch or two in the past, I’ve never had a candidate decline an Offer nor have I ever had a client who took an unreasonable amount of time to make the Offer.

    The other factor possibly in my favor is that I generally only refer candidates whom I’ve recruited but were not -at that time- also looking at other Offers/going on interviews.

    This is largely because my candidates are of the ‘passive candidate’ crowd and do not come from job boards, etc. So they are not concurrently being represented by competing recruiters.

    Also, when my search is retained, I am on top of the client/situation so there is no unreasonable delay between interview and Offer.

    I still think this ‘delay’ phenomenon is partly because the search consultant/recruiter has poor control of the client and/or the client is not putting the search in the priority it deserves.

    So client control is just as important as candidate control.

  • BPD

    Exactly

  • BPD

    This article clearly shows recruiters are doing a very poor job.
    Rejected offers is a sign the recruiter is not doing their job properly.

  • BPD

    it’s about time the market swayed toward employees

  • http://www.medievalrecruiter.com/ Medieval Recruiter

    That is indeed the way it should be. The way it is, unfortunately, is most companies barely value their employees, much less potential employees. They are overhead, and interviewing and hiring are bothers, not priorities, for most people.

    Again, that’s not the way it should be, just the way it is.

  • PAUL FOREL

    Hello, NT. Everything that can happen in our business will happen. The odd’s are in favor of this, given so many people in our business.

  • PAUL FOREL

    I’m wondering here if I replied to this already…I would have said, Dane, that industry has long anticipated this conversation by training new search consultants to always be sending candidates on interviews with at least three different companies/opportunities.

    If a client is dragging its feet you can, for example, play for time while you are having your candidate on alternate company interviews.

    Yes, Dane, it can happen so for those of who were appropriately trained, we are p-r-e-p-a-r-e-d.

    Oh, I almost forgot- generally, when any of my candidates are in motion, they let me know if they are concurrently contacted by another 3PR. In this case, it is necessary to take all the next steps required to manage that activity, also. Dane, you either have the experience to know what some of those steps are or you don’t.

    In any event, ideally, a competent search consultant will tell you that “…it’s covered…”

  • Brent Bates

    Honestly, I don’t believe that it’s a job seekers market right now at all! We do have a record high number of jobs posted/available on the market, HOWEVER, time to fill by employers is record high, which means employers are “fishing” and being extremely picky. For in-demand submarkets though, of course, job seekers are getting multiple offers, for example in IT, skilled trades, nursing, etc.

  • Brent Bates

    Yeah, particularly since their survey an average spread across many employers with varying hiring processes.