Rejecting a job offer? Get ready to pay penalty!!! Would this work!!!

Rejecting an offer!!!  Recently happened to go through an interesting article on The Economic Times titled “Rejecting a job offer? Get ready to pay penalty. Well, let’s try to decode this. Being in recruitment industry, I am fortunate and equally unfortunate to have faced this situation. Candidates have accepted offers, and dropped at the last moment. The reason why I mentioned that I was fortunate to have faced this was that it helped us to learn and then move ahead. And unfortunate as at times the project had to suffer delays because of last moment dropouts.

Well, coming back to the topic, the ET article talked about penalizing candidates who do not join the company after accepting the offer. Would this work!! What will be the impact of this clause during hiring stage!! Let’s take this example; the hiring industry in India has Notice Period ranging from 30, 45, 60 and 90 days. So if a recruiter is hiring a resource with 90 days of NP (Normally 90days would be considered a risk, but again it depends from situation to situation). In my previous post had covered the issue of “Would you hire candidates with 60/ 90 days notice period!! The issue that the ET article talked about is kind of a reality and a common phenomenon, but not regarding the penalty aspect. May be there are a few exceptions. But would this work!!!


Would you sign an offer letter stating that you if you back-out you need to pay X Amount!!

Would a candidate think twice before appearing for an interview knowing that once selected, he/she needs to sign such an agreement!!

Well, one good thing about this so called clause is that the candidates will have to be 100% confident, and then chances of them joining will be higher. And not to forget the project would not suffer loss in revenue if it’s a billable resource and also if it’s a Sr Management position. But personally I think that this will work for certain key positions in companies. This cannot sustain in all kind of levels of hiring. Companies need to ensure that they pick and choose those key positions which will have a severe financial impact if the candidate drops-out.

Candidates on the other hand need to ask themselves and be confident during accepting an offer. Accepting an offer is a commitment in a way, but may be companies have faced the heat due to frequent drop-outs, hence some of them have resorted to include such clauses in the offer letter.

All new experiments do face issues and have lots of criticism, but it seems to have worked for a few companies. So do you think that such clauses can work in India across levels and industries!! OR do you think that this is just one odd case where it worked. Eagerly looking forward to your views on this.


Rambling Recruiter

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About ramblingrecruiter

A student of Social Media, Social Hiring, Employer Branding and Employee Branding.

Posted on August 25, 2013, in Rambling Recruiter and tagged , , , . Bookmark the permalink. 3 Comments.

  1. I think it will not work….. because more n more unemployable graduates are poor……this is not fair…..!!!

  2. Might offer some protection in case of critical and key positions… but if it can work as solution to “last minute drop-out” cases, seems doubtful.. Let’s wait n watch if industry can adopt it in coming times.

  3. Interesting read! This option can be included for key positions like mentioned by you but again being in INDIA, this might work only for MNCS.

    However , it would be very exciting to see results once implemented.

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