HR Headaches: Asking a New Hire to Resign From Their Job Before Sending Them a Contract

July 1, 2022・6 mins read
HR Headaches: Asking a New Hire to Resign From Their Job Before Sending Them a Contract

After extending an offer to a candidate, you’re obviously excited to get them started and kick off the onboarding process. You’re likely filling a much needed vacancy, but very rarely can you hire a person one day, and have them start the following day. In other words, there’s usually some time between sending your candidate the offer, and when they can actually start working for you, as there are some basic procedures both parties need to follow. This process typically includes presenting your candidate with an informal offer, having them accept, sending them a more formal contract/offer letter, and then negotiating the terms of said contract. Your candidate can then resign and give notice to their current company (if they’re already employed). This process can take weeks to even months. If your company has a longer process in place for getting contracts and offer letters approved and sent out, can you ask your candidate to resign from the current position before they receive a formal contract? Most candidates will not resign from their current job without a contract in hand, and with good reason. Below we explore why it’s best practice to ensure your candidate has a written and signed contract in hand before you can reasonably expect them to resign.

Can I ask my preferred candidate to resign before I’ve provided a contract?

The short answer is no, you should not expect a candidate to resign without a formal, signed contract. A signed contract provides security to your candidate that they have indeed landed the job, and can safely resign from their current position. As a company, would you begin working on a large project without a signed contract? Probably not, unless you’ve worked with them in the past, and they have a reliable track record of paying for work in full and on time. But with a new employee, there isn’t an established level of trust, so expecting them to resign from their secure current job is unrealistic and puts them in an uncomfortable position. A  candidate who is reluctant to give notice without a contract in hand is simply someone who is looking for security before making a significant decision about their career. That being said, if you extend a job offer via email (without a contract, but providing information around pay and the intention of providing a formal contract), it is considered legally binding in most cases. So the candidate has some semblance of security, but it still wouldn’t be fair to expect them to give notice without a more formal contract. This is because there are many reasons a job can be rescinded, including:

  • A failed background check
  • The company no longer has the budget to support the new role
  • Contract negotiations fall through
  • Canceled projects
  • Company restructuring, resulting in their position being obsolete

So imagine your candidate quits their current job, only for you to tell them the position no longer exists due restructuring, for example. Not only would this be incredibly stressful and disheartening for them, but it could land you in some serious legal trouble, like paying for any damages they’ve suffered (i.e. lost wages).

Best practice

In short, it’s simply best practice to send a formal contract before expecting a candidate to give notice, even if an informal email is binding in most cases. So expect to have a few weeks in your hiring process between letting your candidate know they got the job, and their start date.

Why might you want them to give notice before providing a contract?

Ideally, your company has a speedy process in place to provide a contract to candidates. Smaller companies will likely have a faster process, since there are fewer layers in “the hiring chain of command.” If you work for a larger organization, it could take weeks to get a contract in front of them. These types of delays mean it will take longer for your candidate to give their current company notice, and start in their new position. For this reason, you might feel the urge to assure your candidate the job is theirs, and they can safely provide notice. But as outlined above, most candidates would feel wary resigning without a formal contract in hand to protect their livelihood.

Speeding up contract timelines

So what can you do to ensure you can get new hires through the door quickly? In our offer letter and contract guide, we covered all the steps, and something else to explore is working internally to speed up contract timelines. This means having templates in place for various positions and seniority levels. Below are other factors to put in place for a speedier contact process:

  • Establish who needs to approve the job offer beforehand
  • Know the pay range for quicker negotiations
  • Schedule a meeting with the candidate to answer all questions a few days after sending the contract

As an HR professional, you’re keen to fill open vacancies, get any new hires ramped up, onboarded, and contributing to your team. That being said, it wouldn’t be fair to put your candidate in an uncomfortable position of asking them to resign from their current position without the safety of a contract in place. You want them at ease and excited to join your company! For that reason, working internally to speed up the contract process is in your best interest to grow your team.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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