A recent post by Y Combinatorās Sam Altman, Exploding Offers Suck, detailed hisĀ distaste for accelerators and venture capitalists who pressureĀ entrepreneurs intoĀ critical decisions on investment offers before they have a chance toĀ shop. The article outlines Y Combinatorās policy of allowing offerĀ acceptanceĀ up until the beginning of the program.
AnĀ exploding offer isĀ as any offer that listsĀ a date forĀ the offer to expire, with the allotted time being minimal. Altmanās article is aboutĀ venture funding, but mostĀ in the industry gain exposure to this situation via job offers. This practice is fairly standardĀ for college internships, where acceptance isĀ required months beforeĀ start date. Exploding offers may be less common for experienced professionals, but are hardly rare.
Many companies useĀ templates for job offersĀ whereĀ deadlines areĀ arbitrary orĀ listed only to encourage quick responses, which gives a false appearance of an exploding offer. Other firms have strict policies on enforcement, although strong candidates in a sellerās market will cause exceptions.
Why exploding offers exist?
TheĀ employerās justificationĀ forĀ exploding job offers mayĀ focus on planning, multiple candidates, and finite needs.
If a company has three vacancies and three candidates, how likely is it that all three receive offers? What is the likelihood they allĀ accept. Companies develop Ā a pipeline of perhaps twenty candidates for those three jobs. If six are found qualified, the company has a dilemma. The numbers and odds become ominous forĀ firms evaluatingĀ thousands of college students for 100 internships.
The exploding offer is one methodĀ for companies to mitigate the riskĀ of accepted offers outnumberingĀ vacancies. They are also usedĀ to ensure that the second or third best candidate will still be available while the hirer awaitsĀ response from the first choice. FastĀ acceptance of exploding offersĀ may be viewed as aĀ measureĀ of a candidateās interest in the position and company, particularly at smaller and riskier firms.
Job seekers may feel that exploding offers serve toĀ limit theirĀ employment options, with a potential side effect being lowerĀ salaries due to reduced competition. These offers may also helpĀ level the playing field for non-elite companies, as risk-averse candidates may subscribe toĀ the bird in the hand theory.
SinceĀ they are not uncommon, itās important to consider a strategy for how to handle exploding offers, multiple offer scenarios, and how to preventĀ these problems altogether.
Avoid the situation entirely
The issue withĀ exploding and multiple offers is time constraint, andĀ job seekers need to be proactive about these scenarios. The bestĀ strategy is to maximize the possibility that all offers arrive at the same time. If all offers are received simultaneously there is no problem.
Those applying toĀ several firms shouldĀ anticipate the possibility that offers may arriveĀ over days or weeks. When researching companies of interest, investigate theirĀ standard interview process, the number ofĀ steps involved, and how long it takes. Current or former employees and recruiters representingĀ the company will have answers, and when in doubt the general rule is that larger companies tend to move slower. Initiate contact with the slower companies first, and apply to the fastest hirers once interviews startĀ with the first group.
Strategies to control timing ofĀ multiple offers
Unfortunately, job searches areĀ unpredictable and candidates feel they have little influence onĀ the speed or duration of a hiring process. StellarĀ candidates have much more control than they might expect, butĀ even average applicants can affect timelines.
If Company A has scheduled a third face-to-face meeting while Company B is just getting around to setting up a phone screen with HR, the candidate needs to slow the process with A while expediting B. What tactics canĀ hasten or extendĀ hiring processes in order to synchronize offers?
Speeding up
- Ask āĀ Asking about the anticipated duration of theĀ interview process and about any ways it can be expedited. This is a relatively benign request so long as itĀ is made respectfully and tactfully.
- Flexibility and availability ā Provide prompt interview availability details regularlyĀ evenĀ they arenātĀ requested, and (if possible) offer flexibility to meetĀ off-hours or on weekends.
- Pressure ā As somewhat ofĀ a last resort, some candidates may choose to disclose the existence of other offers and the need for a decision by the employer. This can backfire and should be approached delicately.
Slowing down
- Delay interviews ā This is the easiest and most effective method to employ, with the risk being that the position may be offered to someone else in the interim. When multiple rounds are likely, adding a couple days between rounds can extend the process significantly.
- Ask questions ā There are many details about a company that influence decisions to accept or reject offers, and the process of gathering that information takes time. At the offer stage, questions about benefits or policies can usually buy a day or two.
- Negotiate ā Negotiating an offer will require the company to get approvalsĀ and toĀ incorporate new terms into a letter.
- Request additional interviews or meetings ā Once an offer is made, candidates feel pressure toĀ accept or reject. Another option is to request additional dialogue and meetingsĀ to address any concerns and finalize decisions.
Specifics for exploding offers
The issue with exploding offersĀ is typically the need to respondĀ before other interviews are completed, so the goal is to buy time. Some candidates choose to accept the exploding offer as a backup in case a better offer isnāt made. This tactic isnāt optimal for either party, as the company may be without a replacement and the candidate has burned a bridge.
In an exploding offer situation, first discover if the offer is truly exploding.Ā As was mentioned earlier, many companies want a timely answer but donāt need one. The offer letter may give the appearance of being an exploding offer without actualĀ intent. One response to test the waters is āThe offer letter says I have xĀ days to decide. Is that deadline firmĀ or could itĀ be extended a day or twoĀ if I am not prepared to make a decision at that point?ā. The companyās answer will be telling.
If it is discovered that it is truly an exploding offer, resorting to the tactics listed above could help.Ā HR reps may be uncomfortable asking for a decision if they feel a candidateās legitimate questions are unanswered.Ā As the deadline approaches, negotiating terms and asking for more detailĀ will provide time. The request for another meeting will require scheduling, and the parties involved might not be available until after the deadline. As a last resort, simply asking for an extension is always an option.
| Reference: | Exploding Job Offers and Multiple Offer Synchronization from our JCG partner Dave Fecak at the Job Tips For Geeks blog. |
