Reneging on a job offer can be a stressful decision, full of unknowns and what-ifs. There’s no perfect answer, but there are a few key considerations discussed below.
The short of it is that you should renege if it’s clearly the best option for yourself. Firms will have no qualms withdrawing offers from candidates should economic conditions change, so there is nothing wrong with protecting your own interests.
Reneging on a Job Offer: Why Conventional Wisdom is Wrong
If you do a quick Google search, you’ll see a number of articles telling you why reneging is a gross violation of your moral compass. This attitude is both dated and biased.
In modern employer / employee relationships, it’s become abundantly clear that employment arrangements are simply transactional in nature. The era of considerate, tight-knit firms that place employees and communities above returns and profits is long gone.
A firm will not hesitate to lay you off (Goldman’s annual culling), bait and switch you into a different geography (see Wells Fargo’s investment banking group placements), force you to accept an exploding offer on the spot (on-cycle private equity recruiting), withdraw an offer after you’ve resigned at your previous employer and signed a new lease (see Coinbase), or just generally work you to the bone.
As such, clearly the question of loyalty and morality in this decision is employer-self-serving and should be thrown out the window.
You’ll also notice quite a bit of content from university career development centers counseling against job offer reneging. Their attitude is not based on preservation of work-place ethics (as much as they would have you think it is), but rather trying to avoid student reneging that would impact university relationships with prospective employers.
The university does not have your best interests at heart and is trying to preserve relationships that get the highest number of students employed and boosts university employment metrics (whether or not the jobs suck).
Considerations of Job Offer Reneging
With that, there are a number of considerations to think through when thinking through the pros and cons of reneging on an offer.
- Is it Worth it? – Reneging is not a risk-free proposition. There is always the chance that the new employer finds out and revokes your offer. It’s not likely, but entirely possible. With that, you should only renege if the pros clearly outweigh the cons. If it’s a marginal bump in perceived firm prestige, probably not worth it. But, if it’s a move to a geography where your significant other lives or a huge career jump then it makes most sense.
- Are There Any Close Relationships? – Professional circles are small and there’s a chance the old firm is friendly with someone at the new firm. You won’t always know, but best to think twice if, for example, you leave the healthcare group of Goldman for Centerview and notice that three team-members graduated from the same class at Wharton and another three previously worked at J.P. Morgan together. Word does get around if you’re not discrete.
- University On-Campus Recruiting Relationship – If you’re a student at a university interviewing for summer internship roles, the employer is probably in contact with the university career development office. If you renege, there’s a chance that the university finds out and bars you from future use of OCR opportunities. It may still be a risk worth taking, but should be thought through.
- Future Jobs with the Employer – Reneging on a job offer may blacklist you from future jobs at the employer. This may not matter, but, for example, if you leave an AML / KYC offer from Morgan Stanley for an investment banking summer analyst role at Raymond James, you probably won’t be welcome to recruit for a full-time investment banking analyst position with Morgan Stanley.
- Networking or Alumni Relationships – One issue with reneging is that you’re likely to tarnish any alumni or networking relationships you made through the initial recruiting process. Your contact will not appreciate the renege, particularly if they strongly advocated for your offer. This doesn’t mean you absolutely shouldn’t renege if you have a relationship at play, but the stakes are higher than if you don’t have any close contacts.
Do’s and Don’ts of Reneging
If you’ve gotten through the considerations and still want to go for it, there are a few things you should do and shouldn’t do to ensure a smooth renege.
- Discretion – Do not tell anyone. When reneging on a job offer, the most important thing is to keep the information to yourself (not colleagues, friends, students, alumni, or anyone else). The firm you decline does not need to know why. Something generic such as ‘”personal circumstances changed and I’m unfortunately no longer able to accept the offer” is more than sufficient. Keep it vague. Do not tell the new firm that you reneged (some can react negatively).
- LinkedIn Discretion – Most definitely do not add Incoming Summer Analyst to your LinkedIn. Just wait until the end of your internship or a few months into the new job. I know it can be exciting to tell people, but you have special circumstances and need to take extra care.
- Be Kind and Courteous – The people recruiting you probably put in a lot of time, effort and money to get to the point of extending you an offer. Be as kind and courteous as possible when you let them know. Be sure to thank them for their time and acknowledge that this move places them in a less than ideal situation.
- Call Them on the Phone – Don’t renege over Email. This is one of those situations where you need to speak to someone live. Manners are still important even if you’re not going to work there.
- Stick to Your Decision – You may find that the reneged-on firm tries to pressure you into accepting the offer. Do not change your mind. Nothing good can come from flip-flopping on this decision, not matter how much they press you.
Closing Thoughts on Job Offer Reneging
In the transactional corporate world of today you simply need to be loyal to yourself above all else. Take the opportunity that’s best for you. Just make sure you do it carefully.
It’s really not that big a deal, particularly at the most junior levels. Most likely the reneged-on firm will forget you even existed and hire someone else from the significant pool of qualified candidates.