The Great Reneging: Everything You Need to Know About Early Talent Reneging Offers

Recruiting early career candidates is challenging enough, and dealing with talent reneging offers makes it even more challenging. After spending countless hours visiting colleges and universities, reviewing applications, and engaging candidates throughout the hiring process, the last thing a recruiter wants to hear is that the person who accepted an offer months ago has suddenly decided to decline. It can be a huge blow that not only costs time and money, but also recruiter morale.

However, this experience doesn’t have to be entirely negative. Although it’s a challenging situation, people reneging offers isn’t necessarily a catastrophic one. There are ways to use reneges as a learning experience that can help improve the recruitment process, while preventing reneges in the future. Continue reading for a deep dive into early career talent reneging offers, and find out strategies for avoiding reneges, as well as how to best respond when one does occur.

What Is Reneging?

In general terms, reneging refers to making a promise and then backing out of it. In hiring terms, reneging is the practice of accepting a job offer, whether verbally or in writing, only to turn around and not follow through with employment.

The State of Reneging

Unfortunately, reneging is far from uncommon. According to a survey conducted by Robert Half, 28 percent of candidates admit to reneging on a job offer. The most common reasons they gave for reneging were receiving a better offer elsewhere (44 percent), getting an attractive counteroffer from a current employer (27 percent), and hearing something negative about a company that made them reconsider working there (19 percent).

Another factor that came into play among those who were reneging offers was the location of the company. Robert Half found that candidates were most likely to renege on companies located in San Diego, San Francisco, Chicago, Houston, Austin, and Miami.

The Cost of Candidates Reneging

We all know recruiting is expensive. If you're trying to reach talent attending colleges and universities, statistics from the Education Resources Information Center show that you’ll spend between $536 and $2,114 for each position you're trying to fill, depending on if you look for talent at public or private schools. If you're looking for early career professionals who aren't currently attending college, the Society for Human Resource Management reports that on average, you're likely to spend $4,129 per hire.

These figures make it clear why preventing reneging is crucial to the bottom line of your recruitment budget. But the real cost of candidates reneging offers does not end with the dollar amount. The following are some other costs of reneges you should also keep in mind.

The morale cost

After putting in time and effort to find the right hire for any position, dealing with talent reneging offers can feel like a real blow that invalidates recruiters’ hard work. This can have a devastating effect on morale, and can lead to recruiters becoming disengaged with their work. And if an organization doesn’t make strides toward preventing reneging, the sense of defeat will only increase, and the morale will continue to dip.

The productivity cost

Morale and productivity go hand-in-hand, so as candidates renege on their offers, recruiters will not feel the same enthusiasm about finding early career talent as they used to—and this may be reflected in their job performance. Although in some cases, recruiters can quickly fill a position by offering it to the next candidate in line, other times they have to start over from square one, thus increasing the time to hire and significantly slowing down productivity.

The early career hiring cost

If you're experiencing a high percentage of early career talent reneging offers, it may become more challenging to convince the leadership of your organization that this area of hiring should be prioritized. Without that leadership buy-in, your ability to hire early career talent can grind to a halt. In addition, it's important to remember that bad news travels fast—and not just among people in your organization. If students are reneging offers from your company regularly, they’re most likely going to tell their peers about it, which may make it even more challenging to attract great early career talent. 

Why Early in Career Talent Reneges: The Top 5 Reasons

Part of combating reneging by early career talent is to understand the reasons why these potential hires back out of job offers. The following are some common reasons why early in career talent reneges.

Talent received a better offer 

One of the most common reasons for early career talent reneging offers is because they received something better elsewhere—whether better to them means a higher salary, better benefits, or a more interesting position. This scenario can manifest itself in a few different ways. For example, during recruiting season, students often feel obligated to continue searching for a position even after they've already accepted one. As a result, they may get an offer from another company that they feel is a better fit for them. Also, those who are already employed may receive a counteroffer from the company they work for and decide it’s just too good to refuse.  

Negative employer brand discovered 

Your renege rate may be the direct result of a less than stellar employer brand. If the people you hire hear negative information about how your company treats employees after they accepted an offer, they will back out and pursue opportunities with organizations that have a more positive employer brand.

Personal issues came up 

Sometimes even when new hires have the best intentions of becoming part of your organization, life may get in the way. Personal issues related to family problems, medical challenges, or education concerns can preclude interns or entry-level hires from following through on their commitment to the job they accepted.

The acceptance deadline was too fast 

When companies require that new hires respond to an offer too quickly, it can lead to hasty decisions they come to regret later. This may cause people to rethink their decision and feel like they were pressured into making it. Regret can become especially strong if there’s a long time in between a company’s acceptance deadline and the position start date.

The start date was too far away 

Getting acceptances right away may seem like a great idea. After all, you don't have to continue looking for candidates and can move on to other things. However, this can be a double-edged sword that leads to reneges. The longer the amount of time between the hire date and the start date, the more opportunities people will have to get another offer, find out something negative about your organization, or simply just change their mind.

When Do Reneges Happen?

Reneges can occur at any time between the acceptance of a job offer and the start date, but since internships generally begin eight months after a student accepts an offer, these hires have much more time to think about whether or not they want to work for a company and ultimately change their mind. However, reneges among this talent are most likely to happen two weeks after acceptance, two weeks before the internship is scheduled to start, and the weeks following the holidays.

How to Prevent Gen Z from Rescinding and Decrease Your Renege Rate

When hiring Gen Z talent, working to ensure that you decrease your renege rate should be every bit of a priority as it is for you to find the talent in the first place. The following are some strategies for preventing reneges.

Engage with talent

Just as you should engage with talent throughout the hiring process, it’s best to continue this engagement after candidates have accepted an offer. If you go radio silent before start dates, especially if there’s a long gap between acceptance and their first day, new hires will feel neglected and may develop a wandering eye to see what else is out there. Some ways you can increase your engagement with this talent include:

• Creating a communication calendar: Since all of your responsibilities may make it easy for engagement with new hires to fall by the wayside, it’s best to have a strong plan in place to keep you on track. Schedule several communications with talent, which can include onboarding information and news about what's going on with the company. In addition, since Gen Zers crave personal communication from the people they work with, it’s a good idea to check in with talent individually to see how they’re doing. With Untapped’s ​​Talent Communities, you can harness the power of community to authentically engage with talent, save time, and amplify your employer brand and open roles. 

• Integrating hires into the team early: The stronger the connection a new hire has with your company, the less likely they are to renege. It's never too early to integrate new hires into your workplace, so find ways for them to interact with the people they'll be working alongside. This will allow your early career talent to begin building important relationships while learning more about your organization.

• Getting the CEO involved: Getting to meet the CEO can give early career talent a glimpse into what leadership is like at your organization. Although you may not be able to schedule an actual meeting with the new hires and your CEO, a recorded message from the CEO welcoming them and outlining what they can expect in terms of culture, values, and mission can go a long way toward boosting engagement. 

Pay attention to red flags 

Candidates who are more likely to renege on a job offer usually leave clues behind. Track the characteristics of those who renege to get a picture of red flags you need to look out for during the hiring process. This will allow you to spot potential reneges quickly, so you don't waste time and energy on them.

• Understand renege reasons: In order to avoid reneging, recruiters need to find out what candidates were thinking when they did it. If you're not given a reason when people renege, be sure to ask for an honest assessment. This can give you vital information on how candidates feel about things like pay, benefits, and the intangibles that make an offer attractive. In addition, you can use this data to understand what other companies are offering that you don't, so you can better compete for early career talent while working on preventing reneging. 

• Allow more decision time: Expecting a candidate to accept an offer right now can lead to a renege later. Give candidates some flexibility to decide if your offer is truly right for them—especially if they’ve asked for more time to think about it. Although the extra time may lead to candidates declining the offer, it's better than dealing with a renege later.

• Improve candidate experience: When people have a negative candidate experience, they'll think twice about actually working for your company. During the period between acceptance and start date, talent may reflect on what happened during the hiring process and how they were treated—which can definitely work against you if the candidate experience is bad.

• Look at the competition: Asking why people renege can open the door to useful information about what the competition is doing differently. But your research should not end there. Find out what other companies are offering early career talent so you can assess how you measure up. This will help to create a plan for delivering what Gen Z workers want most, and eliminating the things they don’t care about or don’t want.

How to Respond to a Candidate Reneging an Offer

The way you respond to a renege is just as important as the offer itself. It's a difficult situation to be in, however, remember that how you respond is a part of the candidate experience and can affect your employer brand. The following are some best practices for responding to early career candidates reneging offers.

Respond with grace 

After investing time recruiting and getting an acceptance from someone you're excited about bringing on board, it at best can be disappointing when they renege. At worst, it can be infuriating. But no matter how you feel about it, you should respond in the same way: with grace. Don't let your frustration cloud your judgment and cause you to react in a way that is less than professional. Just tell the candidate that you appreciate them considering your company and wish them well.

Ask questions 

A candidate may volunteer information on why they're reneging, but they may not. If you're not given an explanation, be sure to ask questions and encourage honest answers. This will give you the information you need to make improvements in your hiring process, as well as what you offer early career talent.

Collect data

Just as with other parts of the hiring process you want to improve, collect data on the reneges to get to the bottom of what's going on. The more information you gather about the reasons people renege, as well as the characteristics of those who did it, the better positioned you will be for preventing reneging in the future.

Reconsider the hiring process 

Armed with the data you’ve collected, look at your process to see if there are places in the hiring funnel that can be improved. This should be treated as any other learning experience, so figure out where your company falls short and make changes to ensure that early career talent is less likely to renege on offers in the future.

Reach out to secondary candidates

If you had a strong secondary contender for a position, reach out to let them know the job has reopened and you want to hire them. Also, although it may seem counterintuitive, hang on to the contact information of the person who reneged—especially if it was because of a personal issue that arose. You never know when a job will open that the person who reneged is the perfect fit for, and they may be able to accept your offer at that time.

How Untapped Can Help: Talent Communities

If early talent reneging offers is a problem at your organization, Untapped is here to help. Our Talent Communities allow you authentically connect with talent, interact with groups of talent in seconds flat, and keep your brand top of mind all year round—which can help make new hires feel more engaged with your company and reduce the chances of them reneging.

Early career talent reneging offers is a difficult situation, whether it's for an internship or full-time entry-level position. The more you understand reneges, the more you can take steps toward preventing reneging and ensure you're able to get the talent you want and keep it.