Is there a solution for last-minute dropouts?

A tweet by Prashant Pitti, co-founder, EaseMyTrip.Com, has grabbed eyeballs on social media. It has triggered off a debate over hiring malpractices.

Pitti’s tweet referred to an incident where a candidate who had been selected for a senior role declines the job offer at the last minute. What makes this even more unacceptable is that the candidate was to be onboarded at a VP level and would have eventually gone on to a CXO role in the future!

Without mentioning the name of the candidate, Pitti shares a screenshot of a WhattsApp message where the said candidate expresses his/her inability to join because of having received a better offer from elsewhere! And what makes this even more bizarre is that the text has been sent on the very date that the candidate was supposed to join!

“Declining to join at the last moment is morally and ethically wrong, but the hard truth is, employees are not legally bound by any contract”

Kinjal Choudhary, CHRO, Cadila Pharmaceuticals

Considering that it takes months to assess, select and onboard an individual, such a last-minute change of mind can be quite frustrating and enraging for any employer. Months of effort and time goes down the drain in such a case of last-minute droput.

In addition, the employer is then required to look for another candidate, which delays hiring plans by another three to six months.

Following this jolt, Pitti decided to find out how frequent such episodes are at the organisation level. He discovered that at EaseMyTrip alone, last-minute dropout rate, on an average, stands at 42 per cent.

None of the HR leaders HRKatha spoke to support the act of this senior resource. They unanimously declare it was wrong on his/her part.

Pitti mentions in his tweet that there is no difference in the percentage of employee dropouts when junior-level and senior-level positions are compared.

However, HR experts do admit that such incidents at such a senior level are rare but not unheard of. “Last-minute dropouts are not new. They happen everywhere, and I myself have been witness to such cases in the past,” reveals Anil Mohanty, head of people, Medikabazaar.

Everyone is aware of the cost attached to a last-minute dropout. However, “the impact of a last-minute dropout is much higher at the senior leadership level since the bench strength at entry- or mid-level is much higher,” points out Anurag Verma, VP-HR, Uniphore.

After all, as Verma rightly says, “The company will suffer if that position stays vacant without a leader for a longer duration”.

As per industry experts, candidate drop-out rates stand between 40-50 per cent. In some functions and roles, this has come down to 20 per cent as opportunities have reduced, since a likely recession is around the corner and most companies are slowing down hiring.

“Last-minute dropouts are not new. They happen everywhere, and I myself have been witness to such cases in the past”

Anil Mohanty, head of people, Medikabazaar

What can be done about this?

“Such incidents are morally and ethically wrong, but the hard truth is, employees are not legally bound by any contract,” admits Kinjal Choudhary, CHRO, Cadila Pharmaceuticals. This means, no court of law can help.

“Such situations are not in our control,” states Mohanty.

Choudhary further mentions that unless and until there is a transaction between the two parties, no employee is legally bound to join the organisation. However, Choudhary admits to having seen certain firms giving advance salary or bonuses at the time of joining. In such cases, if the employee drops out at the last moment, a legal action can be taken based on the transaction that has taken place.

Mohanty suggests staying engaged with the employee during the onboarding process as the only way to have a finger on the pulse and recognise any signal.

At Uniphore, Verma always prefers to keep a backup candidate for each hire. “Since attrition in our industry is on a higher side, we tend to keep more than two candidates on stand by for a role,” says Verma.

“The impact of a last-minute dropout is much higher at the senior leadership level since the bench strength at entry- or mid-level is much higher”

Anurag Verma, VP-HR, Uniphore

Some HR leaders blame longer notice periods for dropouts where the employee gets a window to shop more offers.

While Verma is aware of many companies that blacklist such employees, he expresses a strong need for a collective movement by all employers in this regard.

This will enable employers to at least pose a threat to such candidates who will then fear being exposed in the industry, if they indulge in such an act. “The employers may choose not to reveal their names as it will have a negative impact on their careers, but at least it can act as a deterrent,” mentions Verma.

Now, Pitti poses another question. Can employees do the same with the employers? What if an employee is told by the employer on his very first day at work that the organisation has found a better candidate? Would that be right?

This is certainly not the right thing to do feel HR leaders. After all, it is a “matter of someone’s livelihood,” as Verma points out saying that the said employee’s entire family may be dependent on him/her for survival.

If a company loses an employee, the worst that can happen is that the business plans may get delayed. However, if employees lose their livelihood, it is a much bigger loss for them.