Today’s employers operate in a highly competitive hiring environment. One notion that might spring to mind is making what’s sometimes referred to as an “exploding offer.”
Under this approach, the employer makes a job offer to a candidate but attaches a strict time limit to the employment proposal. The time limit could be as long as five business days or as short as 24 hours. The strategy made a little more sense years ago — well before ‘the Great Resignation’ — when employers held more of the upper hand in the hiring power dynamic.
These days, making an exploding offer might seem like a bold move from a ‘do the opposite’ perspective. Maybe you catch the best job candidates off-guard and win a few of them over with a high-pressure sales pitch. However, the approach has largely fizzled out … and for good reason.
More Down Than Up
If an exploding offer seems counterintuitive in a tight job market, it’s because your intuition is probably correct. The practice tends to have more downsides than upsides. For starters, it gets the employment relationship off on an awkward footing at best. You’re giving candidates their first deadline before they’ve even started work! That’s more of a recipe for resentment than appreciation.
In addition, exploding offers leave applicants wondering what’s next. They might think, “So, to get the job, I had to accept within this limited time frame. Will that be the case for promotions, too? Will the employer’s productivity expectations be similarly high pressured?” Nurturing such uncertainty runs counter to the idea that the hiring and onboarding processes should be geared toward building trust, enthusiasm, and engagement.
Last, there’s the potential for reputational damage. Every organization has an ‘employer brand’ that represents its reputation in the job market. If word gets around that you’re making exploding offers — and it most likely will given the power of social media — your employer brand could suffer and hiring could get even harder.
One Possible Twist
There is a twist on the exploding offer concept that could work for some organizations under the right circumstances. It involves signing bonuses. That is, you might offer a ‘gradually exploding’ signing bonus that declines by a certain amount each day.
For example, you could offer a bonus of $2,500, which drops by $500 a day. So, if you extend a job offer on Monday, and the candidate doesn’t accept until Thursday, the bonus drops to $1,000. This type of signing bonus usually entails cash upfront in a lump sum. So, the candidate can sign with a competitor that’s offering, say, a $5,000 bonus spread over a year or join your organization and have the $2,500 in pocket immediately.
Again, an exploding offer of any kind is risky business these days. Using the approach for signing bonuses could prove effective in certain hiring pools if you have the cash flow available, but you’ll need to consider the idea carefully. Contact our firm for help assessing your hiring costs and making sound strategic decisions.