With a volatile market, exorbitant inflation, and rising costs on necessities from groceries to gas, employers are rethinking their hiring strategy, and some have even rescinded offers. Among them are Twitter, Redfin, and Turnberry.
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Many of these organizations are in the tech sector, which is experiencing challenges that are causing them to nix early career jobs, according to CNBC. In addition, startups and pre-IPO businesses are faced with uncertainty, which is leading them to be more cautious with hiring strategy and spending. Any organization with its finances tied to crypto, which is experiencing volatility, are also less reliable.
Whatever the reason, those who are losing job offers in this manner are taking to social media and talking to reporters. It’s a bad look for companies and their Human Resources departments. Indeed, this practice of yanking an offer out from under a job candidate has a number of consequences for HR:
Job Candidates Lose Trust
Job candidates who agree to take a job with an organization likely turned down other offers or at least stopped pursuing them. As a result, they are putting their faith into the employer and taking the company at its word. They are putting their livelihood and the future of their finances – whether they can afford housing, food, healthcare, and all the rest – in the hands of this employer. So, all over social media and in the headlines, job candidates are describing downright betrayals. No HR leader wants to see the name of their organization linked to this kind of story.
Employee Enagement Plummets
While employees may still have their jobs, they do not work in a vacuum. When they hear that people, who had been hired, lose their jobs before their start date, they also lose trust and faith in the organization and its ability to succeed. Certainly, this will influence employee engagement and experience. It could even lead to attrition. This can further complicate matters if the organization is no longer hiring.
Sends the Message of Incompetence
Rescinding a job offer days before an employee is expected to start, after someone has signed a contract, makes it seem like the company is incapable of basic budgeting, strategy, and planning. Human Resources has made great strides and has been serving, in many instances, as the hero of the pandemic. In fact, some have argued that HR turned around its reputation for being merely administrative at best and a minion of the C-suite at worst. Those days are over, but the rescinded job offers put all those strides at risk. Frankly, it just makes it seem like HR and the employer cannot do their jobs right.
Businesses have the ability to rescind job offers even after people signed contracts, but it does open them up to the possibility of legal liability. To begin, promissory estoppel allows scorned job candidates to pursue damages:
“Within contract law, promissory estoppel refers to the doctrine that a party may recover on the basis of a promise made when the party’s reliance on that promise was reasonable, and the party attempting to recover detrimentally relied on the promise,” according to Cornell Law.
The National Law Review explains that the legality may differ from one U.S. state to another. That matter is further complicated if the would-be-employee has moved or quit another job for this one, which is often the case. Any HR leader who is considering rescinding offers should speak with an employment lawyer first.
Bad for Employer Brand
Rescinding job offers will only damage a company’s employer brand. In the age of social media, when people share every bit of their lives – especially when they have been burned – this action will get shared again and again. As companies look to the future, they do not want to be considered a bad employer or one that goes back on its word. Period.