How to rescind an offer letter - Glassdoor for Employers

How to rescind an offer letter

This post was originally authored by  Rob de Luca of Bamboo HR

If the excitement of extending a job offer has an equal and opposite reaction, it's the anxiety of discovering you need to rescind an offer letter. Historically, companies rarely pulled offers from the table, but it's become increasingly common. On Glassdoor bowls, a community networking platform, rescinded job offer comments have increased by 50% since last year.

"It's largely a reflection of what we're seeing in the broader job market," said Daniel Zhao, Glassdoor's Lead Economist. "This tends to be more white collar related roles, and it tends to be interns or new grads." 

While drafting an offer rescind letter isn't a pleasant task, you can mitigate some of that anxiety with preparation. By establishing best practices in case you have to rescind an offer, you keep your organization protected while respecting the well-being of your candidates.

What are common reasons why job offers get rescinded?

When a job offer is rescinded, it's usually because the employer discovered a problem-either with the company's business prospects, the offer itself, or the candidate.  When that happens, the company should reach out to the candidate as soon as possible, both in writing and over the phone, to explain the problem.

Internal reasons for rescinding a job offer

After completing the research and interviews to find the right candidate, it's embarrassing and frustrating to pull the offer.  "It puts your employer brand in a bad light, so you'd better be ready to smooth things over," says Cassie Whitlock, HR director at BambooHR.

Some reasons why an offer might be withdrawn include:

  • Market downturn
  • Exceeding your hiring budget
  • Offering a candidate an unauthorized salary
  • Double-filling a position
  • Hiring for a position that will be eliminated
  • Improper conduct during the interview process (nepotism, other biased hiring, etc.)
  • Failure to check references prior to the offer
  • Offer sent to the wrong candidate.

External reasons for rescinding a job offer

The other typical reason for an employer to rescind a job offer is when a candidate either fails to pass some form of pre-employment screening or is found to have been dishonest in their application. Some typical examples include:

  • Fabricating work history or educational background
  • Lying about skills, licenses, or qualifications
  • Prior convictions related to the industry or position
  • Offensive social media behavior
  • Failure to pass a drug screening test

But just because the candidate is at fault doesn't make it easy to rescind an offer. "It's about as hard as any sort of involuntary separation," says Whitlock, "and that goes for how you feel about it and how hard it can be if you don't have your logistical ducks in a row." 

How to rescind a job offer the right way

Rescinding a job offer isn't as simple as dashing off an email or leaving a voicemail. You're dealing with human beings and career-sized consequences, so it's important to handle things properly. Missteps could jeopardize your company's ability to hire  top talent in the future.

Informing the candidate

At the very least, you should call the candidate to let them know what's happening and why. If your organization made an error, this is the time to take ownership. After all, you might want to hire the same candidate down the road, so a sincere apology helps preserve the relationship and your employer brand

If you're rescinding the offer due to a screening issue, you need to handle things differently:

  • First, reassure the candidate that the call is confidential and remind them that they have the right to explain or refute any information you discovered.
  • Second, explain your concerns without judgment or accusations of dishonesty. There may be a simple explanation, and if the candidate is still eligible for this or another position in your organization, you want to keep things on good terms.
  • Finally, if it's something your organization provides, you might offer assistance in the form of placement services or a positive recommendation.

Send an Official Version

In the event you need to rescind a job offer, you should accompany a phone call with a notice in writing. While a properly worded offer letter should clearly state that it is not a contract, a formal notice acts as an official record and a deterrent against any legal action.

Rescinding a job offer letter: Sample messages

How do I write a letter of withdrawal for a job offer?

Similar to recruiting outreach messages, letters to rescind offers should include specific information about the position. 

For a retraction due to an internal error, a formal notice might look something like the following:

Dear [Candidate],

We regret to inform you that the offer you received from [Company Name] for the position of [position] was issued in error. This communication is to notify you that acceptance of the offer does not constitute a binding contract and that [Company Name] is under no obligation to provide you with employment or compensation of any kind. If you have not yet signed or returned the offer, there is no need to do so. If you have any further questions, please direct them to [name of HR representative], who may be reached at [phone number] or via email at [email address]. Thank you for your time and understanding.

[Name of HR Director]
[Position title]       

If you are rescinding the offer based on a pre-screening issue, that communication should include more information. A sample job offer rescinding letter might look something like this:

Dear [Candidate],

As stated in the offer letter you received from [Company name], offers of employment are contingent upon several factors, including but not limited to successfully passing a [background check/drug screening/other screening]. With your authorization, a [screening type] was performed. Based on the information we received, you did not meet the necessary criteria. [Company name] has therefore determined to rescind the offer of employment for the position of [position].

Please refer to the Disclosure and Authorization Form you signed for details about requesting additional information, how to dispute incomplete or inaccurate information, and rights that you have related to background checks and other screenings. 

[Name of HR Director]
[Position title]    

Internal Communication

Finally, the candidate isn't the only person who might feel the impact of a job offer being rescinded. Take time to talk to your recruiters and let them know how to properly follow up with  a former candidate. This not only helps them achieve some closure, but also prevents contradictions and misinformation that can damage the candidate experience. 

In the end, there's no way to get around the disappointment of having to rescind a job  offer. But by ensuring open internal communication, prioritizing the candidate experience, and emphasizing preparedness, you can minimize both the frequency and the discomfort of these events. 

In the end, there's no way to get around the disappointment of having to rescind an offer letter. But by ensuring open internal communication, prioritizing the candidate experience, and emphasizing preparedness, you can minimize both the frequency and the discomfort of this sometimes unavoidable event. 

How hiring managers at your organization communicate with candidates matters and will show up in company reviews. To get involved in the conversation on Glassdoor and start managing and promoting your employer brand reputation, unlock your Free Employer Profile today.

Rob de Luca is Editor-at-Large at BambooHR. Since joining the company in 2016, his research has spanned onboarding, employee engagement, career development, and many other human resources topics. Rob's work has been featured in HR Insights Magazine and Labor & Industrial Insights Magazine, and he holds a B.A. in English Literature from Colgate University.