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March 10, 2009

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Boom! When your job offer is rigged to explode:

Not all job offers are created equal. Some are "exploding" - that is, set to expire after a certain length of time, ranging anywhere from 24 hours to three months. Other companies will reduce a signing bonus for candidates who fail to sign up within a certain time period - And that's expensive indecision!

For instance, one management consultant tells Vault.com that his firm made him the following proposition - sign within two weeks of receiving the job offer, and receive a $7000 signing bonus. For every day past the deadline, that bonus would go down by $1000. One week after the job offer, the signing bonus would disappear entirely. Three weeks after the job offer, the offer of employment itself would expire. (The ploy worked - this consultant accepted his offer before the first 24-hour deadline was up.)

Are exploding offers for real? If a company really wants you, are they willing to lose you just because you want an extra week to decide? The answer, according to our research: it depends. One insider reports: "I let my investment banking offer explode after three days. When I later decided I wanted the offer after all, I was told to check back with the firm in March, after it had completed its hiring!" Another MBA insider says he "knows several people who received exploding offers, but successfully negotiated with the firm for more time to decide." In this sense, an exploding offer may be just an elaborate game of chicken. Other companies resort to more drastic measures to entice candidates to accept their exploding offers. A management consultant and recent college graduate tells Vault the tale of how he dithered when given an exploding offer by a leading consulting firm. One of the senior partners called him in, and pulled out his wallet, extracting 5 one-thousand-dollar bills. "You can have your signing bonus in cash, right now, if you join," the candidate was told. He demurred and took a job at another firm.~Because of the nature of summer internship recruiting, summer positions often have very short-term exploding offers. For example, at Wharton and Harvard, where first-year MBA students interview for summer positions at most top firms in a single weekend, some firms, like DLJ and Credit Suisse First Boston, cram in their final rounds before competing firms can have theirs, and then give offers designed to explode before their competitors' final round takes place. One MBA reports getting a call from Credit Suisse First Boston on a Saturday and being told to "come out to dinner and accept our offer tonight." The MBA was to undergo Goldman's final round on Monday. "If I didn't go," he says, "the recruiter made it clear that I had until midnight Sunday to accept the offer, otherwise it would be rescinded." Avoiding the phone call won't work - "they'll just leave the message on your answering machine." Because summer interviews transpire in such a short period, "it's really not possible to call up other firms and try to wedge in your interviews before an offer explodes," though one MBA says: "I turned down an exploding offer in order to go to another firm's final round, which was the following day. I made sure I mentioned that fact in the interview, and I'm sure it helped me get the offer."

Why do firms give exploding offers? Company reps Vault talked to say it's because they like to plan their hiring needs quickly and need to determine how many more people to recruit, although one recruitment veteran terms "a load of crap." "These firms can usually make offers to as many good people as they find," says one recruiter at a firm which does not give exploding offers. "The firm is just trying to pressure people into taking its offers without exploring all their other options." Are candidates cowed by the pressure? "Some are, if they're just nervous by nature, or if they think they might not get another chance."

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Filed Under: Workplace Issues

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