Job rejection: a silver lining?

Rejection
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Isabel Fernandez-Mateo
Associate Professor of Strategy
London Business School
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Rejection, while a fact of life, can be a bitter pill to swallow, particularly if delivered without genuine and specific feedback.

Handled well though, it can actually be the best medicine for candidates and search firms alike, increasing the probability of better future opportunities for both.

"Lack of a clear rationale"

The most common gripe among candidates is the lack of a clear rationale for why they were rejected, according to data gathered from a global executive search firm across a four year period.

And rightly so, because this is the silver lining – the acquisition of valuable information which can be used by the candidate and the head hunter, to secure a better match next time.

Recruitment professionals need to ensure that the feedback is – and is perceived to be – honest.

Poorly handled rejections can take two forms.

Either the candidate or head hunter receives no rationale for the rejection, and or, they believe the recruiting firm did not offer a genuine account of the candidate’s standing in the process.

This generally happens when either the search firm or the candidate perceives that the other was not being fully genuine about the likelihood of closing the deal.

In contrast, when candidates are rejected properly, the exchange is seen as professional and informative.

Recruitment professionals need to ensure that the feedback is – and is perceived to be – honest.

The absence of this exchange and a clear narrative is a common cause of relationship breakdown between senior executives and search firms, who need open communication and candid feedback on why candidates were rejected so they can improve their matching.

Rejections are learning opportunities enabling headhunters to understand which positions are more suitable and attractive for a given candidate.

It appears that the search firm adjusts the type and salary of the jobs for which candidates are considered after a rejection.

They also consider the candidate for other job functions. This is presumably because the rejections generate information that allows them to revise potential job matches for the candidates.

A candidate’s rejection of a firm is similarly and importantly informative.

And studies in a variety of settings report that, for a given firm, as many as 25% of job applications are from former applicants.

This situation is also common in entrepreneurship; start-ups seeking funding from venture capitalists are routinely rejected (or decline a proffered investment), but nonetheless the parties consider each other again in the future.

This description may apply to nearly 15% of proposals submitted to venture capital firms.

Rejections are learning opportunities enabling headhunters to understand which positions are more suitable and attractive for a given candidate.

Similar dynamics can be observed in inter-organisational relationships; including acquisition attempts and strategic partnerships therefore it helps identify a better match later on.

Interestingly a candidate who previously rejected an opportunity is subsequently considered for jobs that pay approximately 4.6% more per year. Additionally the search firm considers previously rejected candidates for a different job function.

Importance of handling rejection well

Recruitment professionals need to ensure that rejection is handled well.

Badly-handled rejections can trigger a negative effect such as fear or anger and result in rejected candidates declining future opportunities with those who rejected them in the past.

Rejection-induced fear lies in an estimation of the probability of being rejected again later.

Whether or not this estimation is accurate, candidates’ desire to protect themselves from social harm could lead them to avoid or reject those who rejected them.

Anger on the other hand shapes market relationships through negative reciprocity for instance the tendency to punish unkind or unfair actions.     

But past rejections need not have a uniformly negative effect on future interactions.

Rejection-induced fear lies in an estimation of the probability of being rejected again later.

In some contexts, parties may even enter a search process without expecting to complete a transaction, but with a reasonable expectation of reaping benefits from the search as they learn about each other, establish their respective market values, or develop an experiential base that could be helpful in the future.

The process of considering a transaction with another party can be an integral part of relationship development.

Although everybody understands that people engage in searches for all sorts of reasons, one usually presumes there is a reasonable chance that the other party will at least be up front about why they might not, in the end, follow through.

Rejection is a fact of life

Whenever two potential partners consider interacting with each other, it is possible that one will decline further engagement.

Moreover, both parties are often aware that such refusal may have consequences for future interactions.

There is no shortage of practical advice for recruitment professionals on how best to handle rejection to minimise its negative effects on a relationship.

But the important thing is to remember that, while they can trigger a negative effect, rejections are actively useful for acquiring information about the counterparty.

Seeing the value in the informational exchange, increases the probability of future transactions. Rejection is therefore an important driver in the evolution of market relationships.

Based on Isabel Fernandez-Mateo, Associate Professor of Strategy, London Business School and Marko Coh, Consultant, Maxim Consulting’s research ‘Past Rejections and the Evolution of Market Relationships’ published in Organization Science. 

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