Water cooler talk can be an interesting diversion if you do not apply too much critical thinking skills to the topic. Today, I am going to go ahead and work through a discussion that comes up every year at universities. Is it ethical for a graduating student to accept a job offer and then rescind the acceptance to take another job offer? For some this is a binary where you gave your word so like it or not you should take the first job. For others this is a market-based decision where you should keep shopping until the last-minute taking succeeding better offers as they come along. There is a bit more to this issue we can parse.
Caveat: I am not a labor attorney and all following discussion are my opinion and you should consult an attorney before signing any contract. This discussion also does not reflect a policy or rule of the university I work at. See the attribution tab above for more information.
First, when is a job offer not a job offer? When the words contingent, tentative, or any of the language suggests the offer is not binding on the offering entity. That would be most job offers made to graduating seniors from university. Usually, the contingency is based on funding, passing a drug screen, perhaps background check, or some other reasonable contingency. Still that means the offer is not a firm offer. When is the offer firm? When you have contract language that suggests severance of the offer is subject to a pay out by the hiring entity of one, two or even six months salary. By the way, many of those government jobs have reverse severance punitive damages. If the perspective employee severs the agreement, the language can result in the subject having to pay the government back.
Second, in most ethical theories there has to be harm or due care discussion. What is the reasonable harm to a corporation that an employee after negotiation rescinds an acceptance? At first it might seem that corporation size has some impact, but it does not no matter the size of the company the following plays out fairly well. The company may be out some amount of recruiting money as in the processing fee for that specific application. The real cost though is only the money to make the actual offer. All of the other costs are bore across the entire applicant pool. Companies have to spend money on job fairs and finding applicants not just the one applicant they make offers towards. So, there is a financial harm but it is negligible.
Let us reverse the look towards harm and evaluate from the possible employee perspective. Corporations pay very little towards the education of employees. Most of the educational requirements are outsourced to the university system and the costs to the future employee. At a university like Purdue, which is extremely affordable, that cost is around $40K for a four-year degree. I say affordable and if you place that next to Stanford at $40K a year it is very affordable. So, collectively corporations have put the cost of education onto the future employees who are going to make specific decisions on return on investment. Companies are based on the principle of maximizing return on investment is it ethical for companies to not expect their employees to do the same? Understand all of the financial risks of education are on the employee. Who is being unethical by holding a possible employee to a job offer that is less than they might make somewhere else? Where is the actual harm in this equation?
Third, companies are usually out to make a profit. I say usually because I am seeing more-and-more companies reflect well funded as if this was 1999 all over again. Whether that profit is service or product related has a direct bearing on the inherent risk of working for a company that a future employee has to decide upon. So, regardless of the totality of the compensation package there is inherent risk in taking a job that is considered. A large defense contractor with zero bench (bench is where you sit when the contract is over waiting for another contract) is a much higher risk than a product company. A product company may live and breathe based on a release cycle but a product company is beholden to customer’s whims not legislative mandates. The absolute riskiest situation is to be a product company working for a defense contractor. Future employees need to take into consideration the risk-reward-liability of working for particular industry segments.
I have seen on the news several stories about companies involved in manufacturing not being able to find employees. No matter how much they look, they cannot find the $12 an hour employee to work for them. In a news segment a 20-something said that MacDonald’s paid more and had more advancement opportunity than the company mentioned. Another similar graduating student said there was better opportunities elsewhere using the college education the company needed for much more money. The knowledge, skills, and abilities of the job the company at low wages is not marketable to the talent. This is not a labor shortage but is corporate mismanagement. The future employees are only making market based decisions the same way companies look for employees who have the skills but will take the least amount of money.
Fourth, companies have undue access to college students and nearly captive audiences for recruiting. Let me explain that a little further. The graduating senior class is a time constrained resource pool with little on the table than the future worth to a company. The resource power structure is flipped in some fields. In my field I see way more opportunities than students. In other fields, there are more students than opportunities. This creates a power dichotomy where corporations can hire on off cycles (spring graduates the following spring). Since the bulk of graduating seniors hit the street in early May there is a fairly diverse resource pool to pull from. I noticed long ago that government hires outside the graduation cycle which means students will seek employment elsewhere.
As an explanation, I have seen companies in resource constrained talent pools enter the university in the fall and winter to headhunt students for the spring. One corporation came to my class and made a big show, and made many promises to the students. They followed through on none of them. No donated equipment for research, no tours of their organization, zero interaction or returned emails after the big presentation. The recruiter was wondering why they got zero applicants from the student pool, and suggested that the students were weak-kneed jerks. I would have to say follow through or you are seen as a lying and suspect future employer. Unfortunately for this company, which is a vendor, these students will take that heartache to the corporate and government world and I am pretty sure hold it against the company as an indicator of credibility in future dealings.
Companies and the government like to deal from a position of power even in resource constrained job pools. My own story is a good indicator of that. When I was at Purdue University Calumet my former bosses said I had to get a PhD to be there in the future. They would not support this financially, with time, or even my schedule. In fact they would go on to put barriers in my path and administrative jumps toward the acquisition of a PhD. If I chose any university other than, Purdue I would have to pay the full cost of the education myself. If I chose Purdue, I would get about 50% (after fees paid for, but have to pay a lot in commuting costs at 200 miles a day four days a week).
There were big fireworks in my mentorship group when they said as a condition of continuing towards tenure I would be required to work substantively toward a PhD. All of this with the normal requirements of teaching, service, and scholarship. Purdue Calumet was operating as a current employer from a position of power. If I wanted to continue the job I was in I needed to get a PhD. So, I applied, attended and worked towards a PhD at Purdue University in West Lafayette in the “grow our own” program that existed for the regional campuses. To supplement the costs of driving back and forth I sought fellowships. Purdue Calumet was more than willing to crow about how I got a fellowship but they never listened to the second part of the deal. I told them numerous times that I had to pay back the federal government at least 1 year of service. I ended up not being able to take a leave of absence and quit Purdue Calumet to serve Uncle Sam.
In looking for jobs to pay off my service once again, I found myself on the flipped side of the coin. Now I was looking for a job where there were more people than slots. I got an offer from the NSA that was a contingent, non-negotiable, and a GS12 step 0. Less than I was making as a 9-month employee at Purdue Calumet. At the same time I was holding two GS15 contingent job offers in my pocket. I told NSA to … well I was not nice in my response to their human resources contractor. I accepted a GS15 job, and would find when I left that position, offered a GS14 job at NSA. I turned that job down too. Ethically I was required to accept a job offer, but it was never said that I could not accept the best job offer.
Finally, students have another set of ethics to hold to. An accepted job offer ties up a slot that a fellow student might have got and has a set of downstream effects. This really cannot be helped. A job offer usually does not hold a slot. It only says that if you sign within a particular time or simply accept then you will likely get a job. Signatures on job offers hold little value under current labor law. If that sounds kind of soft and caveated all to hell, that is because the contract language is all balanced toward the offering entity betterment.
The acceptance of a job offer is not a simple thing. I tell students to take job offers and sit on them for 72 hours; even if it is the place, you want to go to work for, the most. A few students have lost jobs due to this. It is a risk. Some students have gotten better offers in the meantime. Some students have reflected on the total compensation package with some time between the offer and decision and turned down offers from their original aspirational company. Companies do not like this. Students can talk about their job offers even if they were told not to. That means all the games those recruiters play can be discovered.
As a professor I make a deal with my students and I remind them of it often. My job is to make them super smart so they can go become filthy stinking rotten rich. When they become rich they are to return and buy me an endowed chair so that I can tell my boss to piss off when they ask me to do something. With an endowed chair you basically are a paid for asset and not subject to a lot of the resource rules of the University. Not all my students want to become rich. Some just want to serve the country or their country (not all are United States students).
So, I tell my students you can serve for meager wages, or you can build stuff in industry for larger wages. It is their choice. I get companies that email or call me and ask for my best “X” student. I do not really have a best student. I have a group of students who are good, some that are better, and a few that are superlative worthy. An email or phone call to me has no sway on those superlative laden students. My discipline is hampered by the service-oriented nature. I keep telling my students that a small shell script can replace all the service jobs in computer forensics but they keep ignoring me.
The other issue is that the university provides services to employers that limit student access to outside entities. Though students can go further afield than career offices they are not necessarily exposed to those opportunities. Therefore, the university becomes a risk agent in the career decision violating the trusted third party role. What is the ethical dilemma of a trusted third party, the professor, suggesting or offering students job opportunities? What is the ethics of a university creating an entire organization to put students names in front of companies? What is the ethical situation of university organizations restricting access to students based upon funding of that university organization?
Back at our water cooler, and I am thinking, the binary of ethical or not ethical is not quite so obvious. The most harm of poor job offers is born by the student, the relative power of the decisions is held by the corporations, and the primary risk agent is the university. The student has everything to lose and all of the other entities in the equation win no matter the result. When a company says a student rejected or pulled out of a job offer and they are never coming back I say good riddance. When a company asks how to get in front of the students, I make suggestions. Those that lie, cheat, or treat the students badly get much less access. I am the one that is making that decision. I take my trusted third party role very seriously and am uninterested in contrarian views from those riddled by the conundrums of access.