NEWS

The Exploding Offer: How to Handle a Tricky Situation

Exploding offers are job offers with unrealistically tight decision timelines required by the prospective employer. If interviewees don’t accept the offer within the window, it disappears (explodes).

An exploding offer is the last thing you want to be faced with after a grueling interview process. Unfortunately, it’s an increasingly frequent part of modern recruiting.

What Exactly Makes an Offer Exploding?

Most job offers are extended with a timeline attached, but not all job offers are exploding. The commonly referenced cut-off is one week. Over one week can be considered reasonable, while under one week classifies the offer as exploding.

Frequently candidates will run into situations where they have 48 hours, one day, or even an on-the-spot decision to make. On-cycle private equity recruiting, for example, is notorious for some firms forcing you to accept an offer immediately after you complete your interview.

Key Considerations Before Responding to an Exploding Offer

There are a few critical considerations to think through prior to responding to an exploding offer.

  • How excited are you about the job? — It’s a simple question, but requires a self-honest answer. If this is your top choice, clearly it makes sense to accept the role and you can stop reading this article. If you’re lukewarm on the position, move on to the next point.
  • Are you interviewing with other firms? If so, what stage of the process are you in? — It’s worth comparing the prospective roles against one another to see which you’re most excited about. If you have a number of other top prospects, particularly if they are better than the offer, it may make sense to pass and continue recruiting. If you’re in this situation, you also have confirmation that you’re a competitive candidate. If not, it may make sense to accept.
  • What is your required timeline for a new position? — Along with your status in other processes, you must think about your personal recruiting timeline. If you’re about to graduate and this has been your only offer, you should probably accept it. If you’re happy in your current role and putting out feelers, wait for the perfect position. The reality is you’re probably somewhere in between, in which case you need to critically assess your desirability as a candidate, availability of more attractive roles, and timeline flexibility.

Response Strategies

With your initial thoughts in order, there are a few action items you can potentially take.

  • Change Interview Timing — This first point is more preemptive. If you’re in multiple interview processes, try to schedule them as close to one another as possible. If one is ahead, push out interview dates and attempt to speed up timing for the laggard. Ideally you end up in a situation with multiple offers within the window, or at least have a better feel for how things are trending across processes.
  • Leverage an Offer — If you receive an exploding offer, consider letting other firms you’re interviewing with know. It signals that you’re a desirable candidate and can speed up their timeline. Be sure to emphasize that whichever firm you’re speaking with at any given time is your #1 choice.
  • Start Scheming — You can feign excitement about the offer, but hold up the process with additional asks. Perhaps you need to speak to HR about urgent items with their health insurance package or your visa. Maybe your partner needs confirmation of a new job for themselves prior to you both accepting and making a geographic relocation. There are a number of very valid avenues to extract more time from an exploding offer, just tread carefully.
A businessman receives an exploding offer over the phone

Additional Considerations

It is always worth considering why an employer feels the need to implement an exploding offer, as well as what that may say about the employer’s culture.

If it’s industry standard, such as private equity firms fiercely competing for talent, it is more understandable. Otherwise, it may signal that the employer has had recruiting and retention issues.

If the exploding offer is just one aspect of generally unpleasant interactions through the recruiting process, it may be time to walk, even if the role sounds ideal on paper.

Take a situation where interviewers are disrespectful of your time, the package offers below market comp and benefits, LinkedIn shows a history of high turnover, and there appears to be no structure for training and advancement. An exploding offer would just accentuate a pattern of poor employee treatment across the board. Probably not a place worth working unless you absolutely must.

A stressed man on his way to a job interview.

Why do Employers Insist on Exploding Offers?

Employers see exploding offers as a tactic to compete against other firms on talent acquisition. They pile the pressure on the interviewee to prevent them exploring other options, hoping that they’ll lock up the candidate instead of losing out to a competitor.

Occasionally firms are desperate to fill an open role, but it’s generally far more likely they just don’t want to see a top candidate go elsewhere.

Unfortunately for firms who employ these tactics, they tend to become a double-edged sword. As often as they lock-in a candidate who would have slipped away, they risk losing out on prospects who are unable to come to terms with the exploding offer timeline.

Interestingly, the practice also fosters a negative reaction from employees who do accept. Research from the business school INSEAD showed that employees subject to exploding offers demonstrated “negative reciprocation.” In other words, they were less generous to employers in a series of behavioral lab experiments.

In the real world, this attitude is likely to manifest itself in poor culture, quick turnover, and an every-person-for-themselves school of thought across the firm.

Sam Hillier

Sam Hillier is a reporter at Transacted, covering private equity and investment banking. He previously spent time as an investment professional focused on direct buyouts, as well as an earlier strategic advisory stint.