Rescinding offers
Your compensation strategy of last resort.
This summer the news cycle has been filled with stories about rescinding offers. I get the challenge: you have to get resourceful in a down cycle.
So here you are, considering rescinding offers. Is it worth it?
The biggest (only?) pro I see is using rescinding offers as an alternative to layoffs.
It’s much faster
It’s cheaper in terms of direct cost
It impacts people with no tenure
It’s rarely worth the short-term gains.
Layoffs, while painful, can be well-reasoned and well-executed.
They can target underperforming business units or below-the-line projects. Impacted employees can get severance and other resources to find a new job. Colleagues can provide an active support network.
With rescinding offers, none of these things are true. The randomness and lack of planning make it feel like management is failing.
It reminds me of a trick I observed when consulting with other companies. Finance would raise the revenue performance target partway through the year, allowing them to pay bonuses below 100% attainment. It was a subtle way to cut costs, but the best talent always caught on and was the first to leave — regardless of conditions in the current job market.
Rescinding offers repels top talent.
Before you make the call, ask yourself:
Will your employees support your decision?
Will your talent brand absorb the break in trust?
If you can, consider other tools in your toolkit. Rescinding offers should be a compensation strategy of last resort.
People understand belt-tightening, but it’s hard to forgive breaking trust.
Disagree? Share your thoughts in the comments below.
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