With recession looming, many tech companies have taken to cost-cutting strategies to keep the lights on. One of them?
Revoking thousands of offers.
According to Axios:
“This is a trend picking up speed, as more leaders are seeing rescission as a feasible strategy… [for] a lot of people who never thought this was an option, it has now become an option.”
While it can help cash-strapped companies navigate a challenging market, it may prove costly to future recruiting and retention efforts (i.e. sacrificing the future for the present). Instead, companies should develop better initial hiring and pay strategies to avoid the need for such drastic measures in the first place.
How We Got Here
First, there was a global pandemic.
Then it was followed by “The Great Resignation.” And now? The world’s finally starting to get back to normal. But with normalization comes adjustment. And for tech companies that aggressively hired over the past year, the weight of adjustment is heavy.
Because now, there’s a recession hanging over our heads, inflation, and sky-high gas and food prices. Besides individuals, many companies are feeling the pinch too.
And they see rescission as a type of correction.
"I’ve never rescinded an offer before, and I hope I never have to do it again," said Jeff Mahacek, Redfin’s VP of Product Design.
L.J. Brock, Chief People Officer at Coinbase said:
“We made the difficult decision to rescind the offers of a number of candidates who were set to join Coinbase. While it’s necessary to slow our headcount growth in light of the macro environment, we deeply regret the impact this has for the affected candidates.”
Even Twitter joined suit.
Which leaves us asking… how will this affect companies long-term?
As expected, making six or seven-figure offers to applicants, then revoking them… leaves a bad taste in the mouth of job-seekers.
"Decisions like this to halt hirings and rescind offers can have a real chilling effect much farther down the line," said Joe Moglia, Chairman of FG New America Acquisition Corp. This sort of thing conveys a message of potential disorganization or mismanagement and can scare off a lot of really smart and talented people, especially in an industry where folks don't lack job options."
And he’s not alone.
Software engineer Thomas Powell says "Rescinding accepted offers really feels like a good way to never be able to hire again." And Andrew Murfett, Editor at LinkedIn News writes that “Pulled job offers shock new hires.”
The long-term future effect is a bad look for the company at best, and a deterrence from qualified and desirable candidates ever applying again at worst.
At the end of the day, revoking offers is a challenging solution to an even more challenging problem. We get it. This economy is wild and no one is an expert here. But we’re also convinced that there is a better way. And while better offer data and better processes won’t fully alleviate the macroeconomic woes we’re experiencing… they can lead to less suffering for everyone.
A Better Way
Imagine having relevant, instantly available, to-the-minute accurate offer data at your fingertips as you prepare offers and sift through applicants.
The data isn’t harvested by a third party, it’s not an exercise in armchair analytics, and it’s not a hack or a gimmick. It’s pure unadulterated truth. Because it’s pulled from your company and based on the current job market, economy, and competitive ecosystem.
Can you imagine having deadly accurate market data for every offer you make?
It’d mean making the best choices, over and over again for the long-term health of your company.
It’d mean bringing the best candidates on with comp packages that are fair, competitive, and transparent.
And the best part – it’d mean no more revoking offers (or even considering it).
This is about one thing: using pay transparency to grow and scale during difficult times.
It’s the only way to move forward with confidence in 2022 and beyond. It’s how you beat your competitors in the War for Talent. And it’s the most accurate and equitable way to grow a company, even during a down economy.
Because at the end of the day, that’s what we all want – forward momentum.
And it’s exactly why we built Compa. If you’d like, you can click here to request a demo (we’d love to show you what’s under the hood).