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  • Assess, Connect to Stave Off Job Offer Reneges

    June 10, 2019 | By NACE Staff

    Best Practices
    A young woman connects with a recruiter.

    TAGS: best practices, compensation, recruiting, spotlight, students

    Spotlight for Recruiting Professionals

    Several employers on the NACE Community have reported an uptick in student candidates reneging on offers for both internships and full-time jobs this year. There are many reasons that students renege on job offers, including a hot job market in which college graduates have more opportunities to choose from, the accelerated interview and offer decision timelines employers are using that add more time to the process, and more. What can you do to help your organization avoid reneges?  

    Sahil Punamia, founder of The Aspiring Professional, shares that students who are new to the employment marketplace are likely to seek out opportunities that meet their near-term interests and will often choose the offer that's best suited to their current needs and professional goals, regardless of the timelines established by employers or the potential negative repercussions of “burning bridges.”

    “That being said,” he continues, “reneging is never ideal and puts all parties involved—students, universities, and employers—in an uncomfortable position.”

    Punamia offers several recommendations to help employers combat an increase in renege rates, which, he says, is likely to persist so long as the employment marketplace remains strong:

    • Collect data on who reneges, for what reasons, and to which employers—Better understanding your competition and how students perceive your firm versus other companies will help sharpen your marketing/recruiting pitches when engaging with students. For instance, find out what makes your company a better place to work than others.
    • Benchmark yourself against companies that are looking for similar candidates—Dimensions might include base salary, total compensation, medical/dental/401(k) benefits, vacation time, flex working policies, scope of job, opportunity for advancement, brand name, culture, and location.
    • Include finer assessments in the hiring process to “red flag” any lukewarm candidates or students that are “high risk” for reneging—Collect data on historical occurrences to develop a mental model of a student archetype that is “at risk” for reneging. For example, students more likely to renege might repeatedly ask for higher compensation, ask to push offer acceptance timelines, and/or don't appear to be passionate or excited about signing. Your recruiters can then watch out for these red flags throughout the recruiting process.
    • Assess your compensation packages—Assess your current compensation packages to see if they are at-risk for being overshadowed by competitors as this might be a common reason why you're seeing candidates renege. If possible, bumping up compensation packages if a student receives a counter-offer may be worthwhile considering the sunk cost of having a candidate go through the entire recruiting process and dropping out.
    • Make the process less about the money and more about the people—If you can create forums for students to meet your full-time staff and form relationships with them, it will create stickiness for your organization during students’ decision-making process. I've often heard students say that they picked one organization that paid less over another simply because the students connected with the people and culture more. This is perhaps the easiest lever you can pull to lower your renege rate. In addition, getting senior staff engaged in the recruiting process with students can have a huge impact on decreasing renege rates.

    Punamia says the ability to act on the data really depends on the insight gleaned from candidates’ decisions. Here are two example scenarios he offered of what your data might reveal and how you might potentially deal with the findings:

    • Scenario 1—If a candidate accepted your offer and, later in the school year, reneges for a larger, more well-known employer that can offer a better salary, that student likely accepted your offer as a “safety cushion” before recruiting for what could very well be more competitive roles at larger companies. In this scenario, consider the timeline of your recruiting efforts versus those of competing organizations. Is your timeline a lot earlier than your those of competitors? If so, consider the students’ perspective of wanting to explore all their options and be assured that they’ve left no stone unturned in their employment aspirations. Some employers have shifted into earlier and earlier recruiting timelines on campus to recruit students before anyone else. However, unless these employers have strong brand cachet or can provide top-of-market compensation, they leave themselves open to reneging as it's unreasonable to think that students will commit to them months before other employers begin their recruiting processes. On the other end of the spectrum, one might consider recruiting on the “tail end” of the timelines for other firms so that students who did not sign with competing employers—though who could still be great candidates—will be less likely to “jump ship” for better opportunities. The obvious tradeoff in waiting for other firms to finish their recruiting efforts is that there’s a good chance top candidates will already be taken. However, if your company cannot offer the strong brand name or compensation that these high-caliber candidates desire, then it could be worthwhile to purposefully recruit students who missed out on opportunities from larger employers, but who are still eager to find a career.
    • Scenario 2—Consider that, in most cases, there is an abundance of time between when a student signs an employment offer and when he or she actually starts the job or internship. This timeline can be as little as one month to as much as nine months. In this timeframe, there are many factors that can influence a student's decision making or make him or her reconsider the initial commitment to your organization. In this scenario, keep your offerees engaged well after they've signed so that they remain excited to join your company and aren't distracted by the allure of other employers. Ways you can do this are to invite students to your offices for lunch and learn sessions or to meet with company executives, invite them to firm social outings so they can start assimilating with employees well before their start date, and perhaps most simply, just maintaining e-mail conversation with them on a regular basis to see how things are going for them at college as they wrap up the academic year. Consider taking that a step further by sending care packages in preparation for exams or company swag so they can start visualizing themselves as full-time employees. Lastly, perhaps assign an “onboarding buddy” to the offeree and provide a small budget for the offeree and onboarding buddy (who would be a full-time employee) to get a few lunches on a regular basis and keep up to date on students' thoughts about soon entering the work force.

    “Doing everything you can to build relationships between your organization and the offeree as early as possible will help you hedge against competing employers that might distract students with higher pay or flashier brand names,” Punamia says.  

    Do you have insight into the issue of student candidates reneging on job or internship offers? If so, please share your ideas in the NACE Community.