Job offers

5 Reasons Canceling Job Openings Hurts HR

With a volatile market, sky-high inflation and rising costs for basic necessities from groceries to gas, employers are rethinking their hiring strategy and some have even canceled offers. Among them are Twitter, Redfin and Turnberry.

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According to CNBC, many of these organizations are in the tech sector, which is struggling that is forcing them to cut early-career jobs. Additionally, startups and pre-IPO companies face uncertainty, leading them to be more cautious with their hiring and spending strategy. Any organization whose finances are tied to crypto, which experiences volatility, is also less reliable.

Whatever the reason, those who lose job offers in this way are taking to social media and talking to reporters. This is a bad image for companies and their human resources departments. Indeed, this practice of extracting an offer from a job candidate has many consequences for HR:

Job applicants lose confidence

Candidates who agree to take a job with an organization have likely turned down other offers or at least stopped pursuing them. As a result, they trust the employer and take the company at its word. They put their livelihood and the future of their finances – that they can afford housing, food, health care and everything else – in the hands of this employer. So, all over social media and in the headlines, job applicants are describing real betrayals. No HR manager wants to see their organization’s name tied to this kind of story.

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Employee engagement plummets

Although employees may still have their jobs, they are not working in a vacuum. When they hear that people who had been hired are losing their jobs before their start date, they also lose trust and confidence in the organization and its ability to succeed. This will definitely influence employee engagement and experience. It could even lead to attrition. This can further complicate matters if the organization is no longer hiring.

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Send the message of incompetence

Canceling a job offer a few days before an employee is supposed to start, after someone has signed a contract, gives the impression that the company is unable to establish a budget, strategy and planning of base. Human resources have made great strides and have served, in many cases, as the heroes of the pandemic. In fact, some have argued that HR has upended its reputation of being at best merely administrative and at worst a servant of the C-suite. Those days are over, but rescinded job postings are putting all of those advancements at risk. Frankly, this gives the impression that HR and the employer cannot do their job properly.

Legal ramifications

Companies have the ability to rescind job offers even after people have signed contracts, but this opens them up to the possibility of legal liability. For starters, promissory estoppel allows scorned candidates to claim damages:

“In 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 is is prejudicially relied on the promise,” according to Cornell Law.

The National Law Review explains that the legality may differ from one US state to another. This question is further complicated if the potential employee has moved or left another job for this one, which is often the case. Any HR manager who is considering rescinding offers should first consult with an employment lawyer.

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Bad for employer branding

Canceling job offers will only hurt a company’s employer brand. In the age of social media, when people share every moment of their lives – especially when they’ve been burned – that action will be shared again and again. As companies look to the future, they don’t want to be seen as a bad employer or an employer who goes back on their word. Period.

What do you think of the cancellation of offers by HR services? How to avoid this kind of forced error? Let us know on LinkedIn or Twitter.

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