Here Come the Exploding Offers
Less than a week ago I wrote that there have been exploding offers this year and will be more but there won't be as many as there were in the 2001-03 recession. An exploding offer is a job offer which an employer makes to a candidate, which the candidate accepts, and which the employer later rescinds usually because of changing economic conditions.
Today's Wall Street Journal includes an article about how a year ago law firms were falling all over each other to recruit and retain entry level lawyers for their summer associate programs (sort of like internship programs) and as first year associates (entry level lawyers). Now some of those same law firms are cutting back:
- Some law firms like New York-based, 800 attorney Pillsbury Winthrop Shaw Pittman LLP shrunk the duration of their summer associate program from 12 to 10 weeks. That effectively cuts the pay of their summer associates / interns by almost 17 percent.
- Other law firms are delaying the start date of some of their first year associates. In addition to Pillsbury cutting its summer associate program, it is also delaying the start date of its first year associates.
- Chicago-based, 700 lawyer Sonnenschein Nath & Rosenthal LLP is taking an even harsher approach. It admits to exploding the offers for two summer associates and two first year associates who had accepted offers to work at its Charlotte, North Carolina office.
I get why these employers believe that they should not pay money to employees whose work is not needed. But what I hope that all employers get is that their long-term viability depends upon these interns and entry level hires for college recruiting is strategic and without college hires entering the employment ranks, an organization is doomed to a lack of managerial and executive talent within a decade. If the organization manages to survive it will need the success of some very highly paid headhunters to acquire the talent that the organization could have brought on board at much less expensive rates through its college recruiting program.
Hey Steven,
I've always heard the term "exploding offer" in reference to a different tactic by employers.
My understanding was that an "exploding offer" is when a company makes an offer to a student with a date which they must sign by, otherwise the offer is rescinded or "explodes." This is most common with students who are offered jobs after a Summer internship and are a solid 9-12 months away from starting the job if they accept the offer.
Willy
You're absolutely right, Willy, that "exploding offer" is a common reference to an offer with a deadline attached to it. But I saw numerous examples in the last recession to "exploding offers" also referring to those which are extended by the employer, accepted by the candidate, and then rescinded by the employer.
Regardless of what we call them, exploding offers are in the long run bad for everyone. They rob the student of a job that they worked hard to get, lost through no fault of their own, and likely cost them the opportunity to accept another offer. And they rob the employer of the long-term services of that student who likely would have become part of the employer's next generation of leaders.
I thought "exploding offers" described job offers that had a time limit on them for acceptance (2 weeks, 30 days, etc.) I would say "intent" of the offer is the difference between "exploding" and "rescinded." Using that, I would say the intent of an exploding offer is to accelerate the candidate's decision so the employer can move on to other candidates if they get a no. On the other hand, "rescinded" offers were made with positive intent, it's just that the economy (or the company) took a turn for the worse and now their intent has changed -- they want to minimize payroll expansion (but did not feel that way when they made the initial offer).
Jim