Rescinding Offer Letters

“I gave a candidate an offer letter but they haven’t yet accepted and I want to move on to another candidate. How do I make the switch?”

Your HR Survival Tip

A written offer letter is often desirable because it can protect your company by ensuring your offer is not misunderstood. In some situations, such as when you want to run a background check, California requires a written offer letter to be provided first. In that case, you add a contingency clause.

An offer letter may be viewed as a contract between your company and the candidate. This is why you want to be comfortable with the offer and confident this candidate is the right person for the job. Many candidates will provide notice to a current employer once they have the offer in hand and, after that, it’s very hard for the candidate to reverse the resignation and still have a good working relationship with that employer.

Once your offer has been sent to the candidate, there are only a couple of ways to easily rescind the offer with no real risk:

  • Your offer should have a response deadline. We prefer three calendar days because that’s plenty of time if the candidate is truly interested in the job. They had time to learn about your company throughout the interview process prior to receiving the offer. If the candidate is unsure or waiting for an offer from the other company that interviewed them, you want to be able to move on as quickly as possible to your next candidate. Or you can offer an extension if the deadline passes and the candidate has provided reasonable justification for needing more time. We have clients whose offer letters state the candidate should not give notice or assume the offer is final until they get confirmation from the company.

  • One of the contingencies in the offer didn’t turn out as you hoped. If you run background checks, remember California is very particular about how and what information on that report can be used to rescind your offer. Consider using other or additional types of contingencies, such as reference checks, employment confirmation (per what they listed on the application), or confirmation of degrees or certifications.

If your reason for rescinding the offer is based on you having second thoughts about the candidate, the timing could make a big difference. As mentioned, once that candidate informs their current employer, you now may be the cause for the candidate having no job at all. The candidate could claim you broke the “contract.” Doing your due diligence in the interview process should help avoid second thoughts after the offer has been sent.

There will be times when you’re excited about the candidate when you make the offer but the candidate’s behavior then starts giving you second thoughts. Behaviors that worry us a bit include a lack of excitement from the candidate about the offer, failure to communicate what and why they need to think about it, or their method and timing of communications to you. Often, but not always, you may have missed these clues during the interviewing process. Adding more questions during the interview about what the candidate wants, whether they are considering other offers at this time, what issues might delay their acceptance of any offer, their timing for starting a new job, etc. may help avoid any awkwardness once the offer is made.

Overall, it’s best to avoid putting yourself in a situation where rescinding an offer is necessary or desirable. Right now candidates are calling the shots so don’t be surprised if a candidate accepts your offer, then informs you they are accepting a different offer. We can’t do anything about it when the candidate changes their mind but you could be held responsible for any negative results when you rescind an offer. Take just a little more time upfront to be confident about your choice when making an offer.

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