When online travel company EaseMyTrip finalised a candidate for a VP position, its Co-Founder Prashant Pitti nurtured the person for a month. However, when Pitti was looking forward to seeing the VP on the date of joining, he got a shocker message: Really sorry to inform you that I won’t be able to join EMT at this point.
Though the prospective VP was “motivated” to join EMT, he met a CEO of a D2C brand who was building something similar. Hence, the decision changed.
“I was surprised since this mostly happens at the junior level. But this kind of audacity among seniors to say that I'm not going to join on the same day, and then say that by God's grace, I got another opportunity, kicked off my nerves,” Pitti told Moneycontol.
The EMT Co-Founder asked the HR department to check how often this happens, where the employee accepted the offer letter, confirmed that he/she will join, but did not: it was an astonishing 42 percent of the time.
“Offer shopping” happens when a candidate who has more than one job offer in hand uses it to extract more compensation and perks at other companies, in some instances even from his or her current employer. This leads to a low offer-to-joining ratio at companies that are rejected by new hires.
It is not a new phenomenon. India Inc, especially the tech sector, has been facing it a lot. However, what is new is that this now has been followed by senior employees including VPs, and SVPs who eventually become CXOs.
Among startups, recruitment firm Zyoin saw 48 percent of candidates dropping offers for senior roles. This was 35 percent for mid-size and large product companies. “The trends we observe are 40-70 percent up from the pre-Covid times,” says Anuj Agrawal, Founder and CEO, Zyoin.
Finding reasons
Several staffing firms have witnessed a whopping increase in offer dropping among candidates for senior roles, some even ranging 30-60 percent.
According to Sumit Kumar, Chief Business Officer, TeamLease Education Foundation, there are two aspects to this. The first relates to the options available in the market, which get evaluated based on the role and are the prime attraction for a CXO.
“The second aspect is to look around to evaluate more options and then get retained,” he says. This is also an outcome of the talent supply. For instance, Kumar shared that TeamLease Education Foundation had a huge spike in demand for CTOs (Chief Technology Officers) during the pandemic.
On the other hand, Agrawal of Zyoin feels most senior candidates today belong to a generation who have been known to switch jobs often and have learned to drop out of offers from a younger age. “They do this not out of a will to cause harm to offer company but because it has helped them get better options financially.”
Listening to the other side
In November 2020, Raghav Saxena (name changed) said he was selected after three long rounds of interviews for a Tata subsidiary. However, he waited three months to receive an offer letter. To make the bad situation worse, Saxena received the offer which was 10 percent less than his current CTC.
“[It was] completely unacceptable, after having conveyed my compensation expectation even before the interviews started,” he said. “It appeared as if they wanted me to reject the offer, which I did but not just for the reason of compensation, but the attitude.”
Yoga Yoheswaran, a Chartered Accountant, believes many positions have a 1-3 month notice period. “It is too long and people can change their minds during the notice period,” he wrote in a post.
Companies should ask candidates to join immediately and compensate for their notice period, Yoheswaran said, adding, “Football clubs always do that. Why not private companies?”
Employers still looking for solutions
After EMT's Pitti posted his story on social media, hundreds of founders reached out to him. Some called. Many sympathised. But all were looking for solutions.
Concerning the suggestion of reducing the notice period, Pitti feels that it could reduce the last-minute drop-off a bit, but won't change things materially. “As the one who would want to shop around, would do it regardless.”
Moreover notice-period works both ways: Pitti said it also gives employees time to find a new job if there is a mismatch. “We are deliberating and looking for a one-stop solution.”
Some industry experts have radical solutions too. They echoed that a government-managed system which can track past candidate behaviour or may reverse the Glassdoor review system so employers can review candidates.
Taking a practical approach, Shyamal Parikh, Founder of tech firm SmartTask, put a clause in the offer letter - "failing to show up after signing the offer letter would trigger a penalty of x amount,” he wrote in a post.
Further, he tries to hire two candidates for one senior role, lowering the impact if one of them doesn't show up.
Offer shopping comes “natural”
For some, there is no fixed formula or solution for this problem. “The market will have to correct itself in terms of demand and supply, which may take some time,” says Vineet Arya, Founder of experts on-demand platform COHIRE.
Out of all staffing firms, Moneycontrol contacted, only Spectrum Talent Management observed that the rejection ratio is much lower in senior employees compared to junior level employees: only 15-20 percent.
At the crux of it, Vidur Gupta, Director at Spectrum Talent Management, says companies value good resources and they try to retain them at their current set-up. “If there is an increase in offer rejection ratio, that is the result of the number of openings in the market, which is large at the moment.”
Experts say comparing offers is typical from the standpoint of a candidate. An applicant would want to take their time, weigh the advantages and disadvantages of each employment offer, and then decide based on their specific situation.
“This is not surprising as people are getting more and more aware of their worth and how they can find better jobs that match their skill sets,” says Raj Das, Global Co-Founder and CEO of recruitment firm Hirect India.
“The candidates are also becoming savvier and they don’t just settle for any job offer that comes their way,” he adds.
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