Why Do IT Candidates Back Out After Accepting Offers, and How Can We Manage This?

The Challenge of Candidate Attrition in the IT Industry

The IT industry is known for its abundant opportunities, attractive salaries, and high attrition rates. One trend that has persisted for nearly the last 10 years, since I began my career in 2005 as a recruiter, is that candidates often do not join even after accepting an offer. Frequently, candidates inform us of their unwillingness to join on the day of joining or just one day prior. They often receive a better offer from another company and decide to join them instead.

Impact on Recruitment Efforts

Companies that extend offers to candidates who have already accepted another offer may not realize the significant effort the initial company has invested in recruitment and selection. How can this issue be controlled?

Candidate Decision-Making in Job Offers

What do you expect? Why would candidates not choose the best offer? During tough times, companies often lay off employees without a second thought, right? So why shouldn't employees look for what is better for them?

In case you really want your selected candidates to join, either offer them what they want or adjust your expectations when choosing candidates. Lower your specifications and select candidates accordingly.

Just as you are searching for the best candidates, these candidates are also looking for the best offers. Competition is a two-way street; do not forget this. While trying to be competitive yourself, you cannot blame others for not being competitive. You choose the best candidates, they choose the best companies. Hope it makes sense to you.

Just a suggestion for this, not sure whether it works, so share your feedback. As rightly said by Raj Kumar sir above, candidates have the right to choose the best offer. Is it possible for the recruiters to study and understand the following:

Why do they join other employers?

Employer brand? Do we hold brands like Tata, Wipro, CTS, and so on? There are candidates who join these brands because it's their dream and known to all. They can proudly say, "I am working in Tata," and they are proud of it. What will you offer that the brands don't offer to candidates? Better package, better environment, career growth, best policies. How will you convince the candidates? Firstly, is it not possible to measure the behavior of candidates to some extent?

Compensation

At least from an Indian perspective, compensation plays a vital role. Most IT employees have huge dreams of a high standard lifestyle, and for that, most of them are burdened with loans, so they look for a better package. Also, the news that another colleague joined X company with a 100% hike makes things worse. So, most of them run for money. Not everyone falls under this category, but people of what age group do this? Over time, there are candidates who prefer and focus on career growth rather than just running for money. How will you identify this pattern?

Other real personal reasons

We can't do much about it.

Bit personal engagement with candidates

Is it not okay to call the candidates who are about to join at least on a weekly basis and make one informal call to check how the candidate feels? Not directly, but slowly check (trust that we made the best offer and are looking forward to you joining on so and so and hope you are not looking elsewhere). Just to check the confidence of the candidate.

So, as HR folks, we do have some challenges, and we should always work on identifying the pain areas and what maximum we can do to improve it. Even a small percentage increase is also great.

Regards,
Thiyagu

Thank you very much, Thiyagu, for your valuable inputs.

@Raj - It seems you are showing how companies should behave and make candidates happy. I intended for inputs... you said lower down your spec and etc... This is a professional forum, and you should maintain the same professionalism.

Thanks,
Milind

Managing Candidate Dropouts: Strategies for Recruiters

There will always be candidates who seem very sincere but finally decide not to join without informing. Unfortunately, this is a reality. You need to protect yourself—firstly, keep in touch with the candidates regularly. Just a casual call once in a while to check how things are. In case he/she does not respond, you know there is something wrong.

Backup Strategies for Recruitment

The second thing you need to do is keep backups, especially for junior and mid-level candidates. Keep the interview process ongoing and have some candidates available as a backup so that if some candidate looks doubtful (as mentioned in point 1), you don't have to go back to the beginning to start the whole sourcing process.

Handling Notice Periods

Thirdly, avoid candidates (unless the person is really good) who have a 3-month notice period—in my experience, they mostly don't join. Also, consider the option of buying out the notice period so that the maximum joining time they take is 30 days.

Hope this helps!

Have standbys. If the first on the list does not join, check with the next. If companies can fire employees at will, candidates can also pick and choose employers. Justified or not, but it is the reality to be faced, and as HR, you must have plans ready to tackle employee shortages.

Challenges in IT Recruitment

It is a hardcore reality and the biggest nightmare, at least in small and medium firms in the IT industry. There were experiments earlier by big and small IT firms, but we cannot project those as a full solution.

- A company started a 3-year training and integrated diploma program for graduates in the early 90s.
- A pioneer in cloud technology selected hundreds of +2 students and taught a very specific technology stack during induction.
- A company offered all-time high referral incentives for employees to bring in good talent.

Observations from Interviewing Candidates

However, with my limited experience in interviewing junior and middle-level candidates in IT, here are my observations:

1. The end-to-end hiring process requires more fine-tuning and careful planning. A Product Manager cannot expect 3 BAs and 2 UX professionals to join the team in 4 weeks when the company cannot afford a dedicated technical recruitment team.
2. Hiring should not be controlled by one individual in the panel. The hiring objective should be shared across the process.
3. Do not initiate hiring without a fixed job profile. It is quite unlikely to see a job analysis in many small and medium IT companies, where some may hire to please certain individuals.
4. In one of my friend's companies, a candidate showed up in shorts for a pre-sales job for ERP Manufacturing for MENA. Despite the recruiter noting the candidate's attitude and attire during the interview, the panel still hired him. Ultimately, the candidate did not join, citing company decisions to send him onsite. It is crucial to follow a common process and not be swayed by biases or gut feelings alone.
5. Who is responsible for the candidate not joining? HR is accountable for the hiring policy. They must ensure there are no loopholes in the process. If HR is absent, and the CEO or another top manager manages hiring, they are responsible for any issues that arise.
6. If the selected candidate is the right fit, they will join without any follow-up. Otherwise, the candidate may provide numerous reasons not to join. This is a common experience in the IT industry.
7. The only sustainable solution is to offer the job to the right candidate. Analyze recruitment processes, involve experienced interviewers, focus on candidate attitudes, and evaluate communication skills comprehensively. Consider recording interviews, studying candidates' social media profiles and interests, and utilizing psychometric assessments. There is no one-size-fits-all solution; it requires continuous experimentation, analysis, and improvement to find the right approach.

I totally agree with comment 5 of this post (name is missing). Recently, I faced a similar situation. The candidate's notice period was 2 months. We agreed on this and decided on his Date of Joining (DOJ). During this period, I used to call him, and the department manager was also in touch with the candidate. During the calls, the candidate sounded very positive. However, on the DOJ, something unexpected happened; he didn’t join the organization.

As HR professionals, we take all necessary precautions, but one thing I have experienced is that if a candidate doesn't want to join, he will never join, and it is better to let that candidate go. I would say these are simply unfortunate or unlucky situations that we HR professionals face.

With reference to the query and rejoinder from Anonymous, one should face reality. If you have high specifications, then the offer should match. On one hand, you are looking for high achievers, and on the other hand, you are not willing to lower your specifications. You must accept the fact that such candidates know their worth. They will choose the best offer in the market, and why should they willingly agree to lower their CTC? Think over this. You are being driven by emotion, which, again, is not professional.

You have the facts and data. Decide what you want and what you can do. Despite there being a scarcity of jobs, if your selected candidates are not joining, does it speak about them, or more about you and your offer? Do not just wish to hear what you are looking for; do a reality check.

I just thought to add my personal experience. A year ago, I had two offers from companies. One was from a reputed brand in the market, and the other was not as well-established. I decided to join the brand company with a higher package.

The behavior of the representative from the second company was very caring, asking questions about settling into the job and family matters, which persuaded me to join the second company. Sometimes representatives assume that offering a better package than a brand company guarantees the candidate will choose them, but that is not always the case. A professional also needs to feel that their contribution is valued within the company's system. If this can be conveyed early in the recruitment process, I believe the candidate will be more likely to stay.

There are many experiences that we may have heard of but never acted upon. Engagement after selection and before joining is a crucial period.

Thank you.

The Challenge of Candidate Backouts in Recruitment

It is correct that the acceptance of the offer letter does not create a legal compulsion on the candidate to join the organization. As a recruiter myself, I can understand the frustration when my shortlisted candidate does not join on the joining date.

- Candidate accepts my offer letter
- We stop conducting interviews
- After 3 weeks, the candidate stops answering calls or informs us that he has joined another company.

We have been using AJO Platform (www.AcceptJobOffer.com) to give offer letters to our candidates. The candidate accepts our offer letter on AJO. In case of backouts, we do post negative feedback on the candidate's profile. This is really helping since the serious candidates are informing us earlier if they are not joining us. We are not getting last-minute nasty surprises.

Shift from Product-Driven to Customer-Driven Market

The way the market pendulum has shifted to being customer-driven from product-driven has also been followed in the services sector. The IT sector is the worst affected by this shift. Even if you are able to evaluate an individual with all the skills you have in your pocket (psychometric, personal calls/follow-ups, etc.) and you match the right expectations for him/her, they still do not join just because some company offered more than you did.

New Trends in Candidate Demands

The new trend that candidates are coming up with is that they have started asking for a hike over and above the offer they are supposed to get in the future. This hike is typically 30-40%. Learning the market shift...

There has already been a good amount of discussion and perspectives on the subject. It is a fact that employers use their discretion to make a choice of a candidate and offer, as well as the candidate also uses his/her discretion to choose the company that he/she wants to work with. There are some candidates who are very professional and state upfront that they have a choice or choices and do not take up an offer. There could be a few who do not act with a high level of professionalism but take a view after accepting an offer and, worse, don't inform that they will not join. Candidates in the market also speak of some professional organizations and also of non-professional approaches by some organizations. That's the reality. Now, given this reality, what needs to be done?

My view:

1. Our selection process will need to be robust enough for us to judge the probability that the candidate will join. Where it is in doubt, either don't offer or, if you offer, double up the checks and follow-ups to ensure that joining is on track. In cases of doubt, it will be better to have a backup candidate so that we are not caught by surprise at the last minute.

2. Your employer brand matters. How will joining you impact the candidate's own brand, and how could the rejection of your offer be a loss for the candidate? This should be communicated in a positive manner (never as a threat) to the candidate.

3. Network with hiring professionals from your industry. Share factual information on people who act unprofessionally. This information should be dealt with very professionally. It should be such that you should be able to support it with evidence in case a candidate chooses to challenge your allegation that he/she acted unprofessionally.