Every year, some of my students receive the worst good news that can come during a job search. “We’d like to hire you,” the recruiter begins, “but we need a decision very quickly.” It’s usually less than a month, sometimes as short as a day, and the offer always expires before the students have a chance to finish their interviews.
Each time, I’ve resisted the urge to contact the offending recruiters and give them a piece of my mind. After years of teaching negotiations, I can stay silent no longer. Here’s an open letter to employers about why they should abolish exploding offers, along with suggestions on how to respond if they don’t.
I noticed that you’ve decided to give exploding offers to our students. As an organizational psychologist, I want to congratulate you on designing a surefire lose-lose strategy.
First, you’re hiring the wrong people. Exploding offers don’t lure in candidates who are the best fit; they attract people who are risk-averse. In experiments comparing the effects of short and long deadlines on job offers, negotiation experts Harris Sondak and Max Bazerman found that “exploding offers lower the quality of matching outcomes.” They measured whether recruiters landed their top-choice candidates and applicants ended up with their ideal firms, and exploding offers reduced efficiency by 8-13%. Similarly, economists Muriel Niederle and Al Roth demonstrated “inefficient early contracting when firms can make exploding offers.”
Even if you get lucky and sign the right candidates, you’re overlooking the fact that what goes around comes around. Exploding offers might give you a better shot at hiring star applicants, but they respond with lower commitment—which means less effort and loyalty. In a series of experiments at INSEAD, when MBA students received exploding offers, they reciprocated by penalizing the employer:
“Exploding offers were punished at a rate of five to six times that of extended offers,” the researchers explain. “Firms should not be myopic and focus only on whether they will successfully hire the applicant or not… If the relationship does not end well because it did not start well, then the firm will have to start all over—and that can be very costly.”
When you use an exploding offer to pressure candidates into signing, you can count on them to always have one foot out the door. As soon as a better opportunity comes their way, they’ll jump ship.
Since exploding offers make job candidates and employers worse off, I hope you’ll have the good sense to abandon them altogether. Here’s how the dialogue unfolds when students seek advice on how to respond.
via It’s Time to Eliminate Exploding Job Offers | LinkedIn.