Why Candidates Reject Offers (And How To Put a Stop It)

Jan 20, 2002

Managers and recruiters are too tolerant when a candidate rejects an offer. It’s typical for managers to blame the recruiter, the compensation department, the candidate, or to just be accepting of the fact that “things happen.” Rather than accepting the “inevitable,” it’s important to instead study each rejection scientifically in order to identify the real reasons why offers are rejected. Even though acceptance rates naturally go up as the economy goes down, it’s important for managers and recruiters to remain vigilant for average applicants (there is less change for top performers and key jobs), because the cost of a rejection in a key position can easily exceed $10,000. Great recruiters have offer acceptance rates of over 95%,and that’s no accident when the average rate is often below 70%. This article explores why offers are rejected and how to improve your acceptance rate. The Science of “The Offer” Most managers and recruiters look at the recruiting process as an art. That approach guarantees a low success rate?? because putting together and making a great offer is really a science. By doing your research and collecting data, you can dramatically improve the content of each offer you make. It takes more than improving the actual offer letter itself to get the highest acceptance rates. It takes looking at the whole interview and selection process as a customer relationship management (CRM) problem. Once you realize that this is really a sales issue, and that successfully making an offer and selling a customer are similar processes, you’ll see that you are merely trying to sell a customer (candidate), and trying to “close the deal” with a “yes.” Just like in sales, it requires a combined customer service and sales approach. Every other approach is just guesswork! Steps You Can Take To Find Out Why Your Firm’s Offers Are Rejected There are a number of approaches to investigating why offers are rejected. Remember, there is substantial evidence to show that what top performers look for in a job is significantly different than what average performers look for, so be sure to “segment” you data collection between the two. “Reason finding” tools and techniques include:

  1. Ask new hires what worked. On their first day of the job, ask new hires which specific elements of their offer a) were the most compelling, b) had no impact, and c) almost caused them to reject the offer. Use this data to redesign the content of your offers to better fit their needs and expectations.
  2. Capture offer letters. Ask new hires on their first day for copies of the offer letters that they have received from other companies. Give them a small reward for complying, and use these offers to see where your packages are strong or weak.
  3. Post-reject surveys. Most candidates, when they reject an offer, tell you “it was the money.” It’s a great excuse, because it generally absolves managers and recruiters of all blame. Unfortunately, it’s generally not factually true…it’s just an effective excuse. If you really want to find out why candidates reject your offers, ask them three or six months later why they turned you down. There are several market research firms that will do this for you, and the results, almost universally, show that it was not “the money.”
  4. Call the executive search firm. If the candidate is referred by an executive search person, an informal call to them after the rejection will often get you the “real reason.” (Occasionally, prior to the offer, they will also know the general expectations of the candidate.)

Remember, also identify why “future applicants” might reject offers:

  1. Focus groups. Conduct focus groups at trade shows or industry events to identify why most people reject offers. Remember to also look at the positive criteria, and ask candidates the question, “What are your job acceptance criteria?”
  2. Utilize the research of others. Identifying what excites employees in a job is not difficult. Research by the Gallup organization (read the book “First Break All the Rules”), McKinsey, and Watson Wyatt have all identified a series of on-the-job factors that excite both applicants and employees. Almost all of these “satisfaction factors” are controlled exclusively by the line manager. Seventy-five to eighty-five percent of the reasons that make offers and jobs compelling are controlled directly by the supervising manager. Common satisfaction factors include two-way communication, growth and learning, flexibility and control on what they work on, whom they work with, and when and where the work is done. As a result, it is important to make it clear to the candidate both within the offer letter and during the selection process how they will be managed if they accept.

What To Ask Them

  • Ask them to force rank what they want “more of/less of” from their current (or next) job.
  • Ask them to describe their dream job (in terms of location, co-workers, projects, boss, work environment, etc.). Consider asking them to draft “their own offer.”
  • Ask them to describe their job from hell (so you can avoid those factors). It’s important to ask them to weight the factors, because each does not play an equal role.

Next week, in Part 2: a list of the actual reasons why offers are rejected and how to improve your offers.

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