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How to Rescind an Offer

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December 6, 2019Jobs

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Rescinding a job offer to a candidate isn’t just awkward: it can expose your company to legal liability if you’re found to have withdrawn your offer for discriminatory reasons. But sometimes, moving forward with your prospective new hire just isn’t an option.

Whether it’s because of a change in circumstances, or because of new information that’s turned up about the candidate, you may have no alternative except to take back the offer.

Still, withdrawing a job offer should never be done lightly. It’s essential to be thoughtful and professional about it to avoid damaging your company’s reputation. The candidate may have already made significant life changes based on your job offer.

With that in mind, there are reasons why you might decide to rescind a job offer -- as well as several situations in which it might be better not to. Then, we help you figure out how to recruit the right hire in the first place.

It’s Time to Restart the Hiring Process

So you’ve rescinded a job offer for a prospective candidate and are left to start the process over. Where do you go from there?

Review your hiring processes.

Depending on what went wrong with the candidate, you may need to revise your existing hiring practices. Ensure that your hiring staff is exercising good judgment and properly vetting candidates before bringing them to the hiring stage.

Take a look at how long it takes you to hire someone. If you’re taking too long, you might need to broaden your job search. If you’re rushing through the process, it’s possible imperfect candidates can slip through the cracks. That leads to either rescinded offers or poor performance after they’re hired.

Get outside expertise to aid you in recruiting.

While your own internal processes may be strong, it’s hard to argue against the strength and reliability of a strong external recruiting firm. Technology companies can often struggle with the complexities of recruiting, relying too much on software or algorithms to do the majority of the work.

When looking for recruiting companies, find firms that strike a balance between reliable software and platforms and a robust human component.

The best hires often come from strong networking-- when consulting outside services for your hiring needs, make sure they have strong hiring practices both on and offline.

There Are Valid Reasons to Rescind a Job Offer.

First of all, keep in mind that in most cases, a job offer is not a binding contract. Until a prospective new hire accepts it, you are free to modify or withdraw it at any time.

Still, it’s a good idea to be clear about any circumstances that might void the job offer or lead to a reassessment of the candidate.

For example, you could state that the job offer is dependent on the candidate completing a successful drug test or credit check and that it’s only valid for a limited amount of time.

If a prospective hire comes back with a counteroffer, then they are considered to have turned down the original offer, and you can decide whether or not to offer a new one.

So, why might you decide to rescind a job offer from a candidate? Here are five of the most common reasons to withdraw an offer:

The structure of your business has changed.

One of the most straightforward reasons for withdrawing a job offer is that your business has experienced a change in circumstances.

This could be from a sudden economic downturn in your region or your industry to budget cuts or a restructuring of the company.

The longer it takes for a candidate to accept your job offer, the more time there is for you to reconsider. Maybe you’ve decided not to fill the vacancy after all, or wait until a later date to find a new candidate for the position.

While this will still be disappointing news for your candidate to hear, they can at least be reassured that the decision wasn’t personal and that there may be opportunities for them to work with you in the future.

The candidate misrepresented their credentials

One of the more difficult reasons for rescinding a new job offer is that the candidate lied during their interview or misrepresented themselves on their application.

You might only find this out after you’ve already offered them the job or when you receive a callback from a reference or receive the results of their credit or background check.

This is why it’s crucial to verify the information before making an offer. While you might be in a hurry and think this process is just a formality, be sure to find out as much as you can about the candidate before putting anything in writing.

Start by doing an online search of their previous employer and university to make sure the information is genuine.

If the information only comes to light after the offer has been made, then you’ll have no choice but to withdraw the offer -- and you’ll be on sound legal ground to do so.

The candidate failed a drug test.

In another scenario, your prospective new hire fails a drug test after you’ve already made them a job offer. Depending on your industry, this may be grounds for rescinding an offer.

Some states, however, have protections for medical marijuana users, so it’s necessary to get good legal advice before rescinding an offer on these grounds.

If your job offer is dependent on the candidate passing a drug test, then make sure the candidate is aware of this requirement.

In most cases, it’s easier to withdraw a job offer for failing a drug test than it is to fire an employee for failing one. So, get the tests out of the way as soon as possible to avoid any unnecessary complications later.

The candidate doesn’t follow up (or show up).

Once you’ve made a job offer, it’s reasonable for you to expect a prospective employee to get back to you promptly. While they may need some time to consider the offer, there’s no excuse for dropping off all contact or sitting on the offer indefinitely.

Unless your new hire has already communicated with you that they’ll be away on a trip or otherwise unreachable, they should at least acknowledge that they’ve received your offer and let you know how long they’ll need to make a decision.

If the candidate doesn’t return your calls, misses the first day of training or orientation, or otherwise behaves unprofessionally, then it may be time to rethink your job offer.

Maybe they had a genuine emergency, or perhaps they just aren’t cut out for the job. You’ll need to use your best judgment here to decide whether to move ahead with the process.

The candidate has signed a non-compete agreement.

Finally, one more reason to rescind a job offer is that the prospective candidate turns out to have signed a non-compete agreement with another employer.

For whatever reason, they haven’t mentioned it in the interview, but it came to light after you already made a job offer.

They may have signed it years ago and don’t even remember it. Maybe your HR team discovered it while calling references or doing a background check.

In this case, they haven’t deliberately lied or misrepresented themselves, but moving forward with the hire could open you up to legal action from their former employer, and you’d be well within your rights to withdraw the job offer.

Related read: Everything You Need to Know About Recruiting Agencies 

There Are Times It’s Best NOT to Rescind a Job Offer

Above are five common situations in which you might want to rescind a job offer.

Now, we’ll look at two cases in which it would be a bad idea.

Withdrawing an offer for the wrong reasons can open you up to legal liability and reputational damage. You may want to reconsider before withdrawing an offer in any of the following scenarios.

Discriminatory reasons

First, it’s illegal to rescind an offer for discriminatory reasons, including discrimination based on a person’s race, gender, religion, or country of origin. You could be sued for rescinding an offer after finding out that a potential employee:

The candidate made major life changes

Another reason you might not want to rescind a job offer is that your candidate has quit their previous job or moved based on your offer of employment. They could sue you for loss of income or other damages if they believe that you misrepresented the situation and made a promise that you didn’t keep.

This is why it’s important to avoid using any language in your job offer that could be construed as a binding contract.

If your hiring process involved months of discussion in which your candidate agreed to move their family across the country, they might very well have their life upturned if you suddenly rescind the offer.

On the other hand, if they’ve impulsively quit their job and bought a new car based on a casual job offer, that’s not your responsibility.

You’ll need to assess the situation and decide whether it’s worth upsetting a candidate who was counting on this job offer.

Even if they don’t have grounds to sue you, the word might spread, and you may develop a reputation for being a flaky employer. Future candidates may be discouraged from pursuing jobs within your company.

How to Rescind the Offer Gracefully

If you decide to rescind an offer, it’s imperative to do it gracefully and professionally. Even if you’re angry or annoyed with a candidate, stay calm, and avoid personal insults.

Keep your explanation direct and to-the-point, and avoid going into detail about any internal discussions that went into the decision.

Depending on the situation, you might choose to break the news over the phone rather than in a letter, but you should still follow it up with a written notification.

Make sure you communicate that the decision has already been made and that this isn’t the time and place to revisit the issue. If the candidate believes the decision has been made in error, point them in the direction of your company policies, and let them know what course of action they have to dispute the results of their background check or drug test.

Above all, assure them that the withdrawal of the offer is confidential and will not be shared with third parties, except as required by law.

Examples of Employment Withdrawal Letters

Here are two examples of a letter withdrawing an offer of employment that explains the situation gracefully and tactfully:

Example 1: Candidate misrepresentation

Dear [Name]:

It is with regret that we must inform you of our intent to rescind the offer of employment sent you to you on [date] for the job of [position] at [Company X].

As noted in our letter of offer and per our discussion during your interview, our standard hiring process includes a background check and verification of prior education and employment.

During this process, we were unable to verify the BA degree from [University name] that you claimed on your application.

Also, your previous employer, [Company name], could only verify a record of part-time, temporary employment, not the full-time salaried role that was listed on your resume and described in the interview.

While we welcome any information that would clear up this discrepancy, the job offer sent to you on [date] is no longer valid at this time.

Sincerely,

[HR Manager]

Example 2: Internal budget cuts

Dear [Name]:

We’re writing to follow up upon our offer of employment, sent to you by email and phone call on [date].

Unfortunately, recent budget cuts have made it so that the advertised role for which you applied is no longer available to be filled.

Everyone on our team enjoyed getting to know you over the past few weeks. We want to stress that this is not a reflection of your skills or your suitability for this position.

In fact, we encourage you to reapply if future positions open up. We know this must be a disappointment and are genuinely sorry for any inconvenience this may cause.

Sincerely,

[HR Manager]

Hunt Club Can Help

Rescinding a job offer is one of the most challenging tasks for hiring teams. Not only is it stressful, but it sets you back in the hiring process, and you may have to start the interview process all over.

While employee referrals can often bear fruit, it’s hard to beat effective, dedicated recruiters who are an extension of your team for help finding the most qualified candidates for that much-vaunted position.

At Hunt Club, you’ll never have to rescind a job offer again because we help you find and hire the best candidates from the start. Our talent pool of 3 million candidates are all referred and pre-vetted by over 10,000 industry leaders and executives across all industries.

Want thousands of executives to refer your next company leader? That’s the power of Hunt Club?

Learn More

Veronica Feldmeier avatarVeronica Feldmeier