Growing demand for talent in the information technology (IT) sector has led to a sharp rise in ‘offer shopping’ or ‘offer trading’ for roles across companies. The offer drop ratio has risen across sectors, but for IT, it has now gone up to 50-55% from 25% in two years.
The offer drop ratio is the number of people who accept the offer to the number of people who join. The practice has become so common that on average each candidate is holding five to six offers and then taking up the best one. This is also becoming a major pain point for the human resource (HR) departments, which are now finding it hard to forecast hiring.
‘Offer trading’ is rampant as candidates hold multiple offers and have parallel conversations with several employers at the same time to move the offer value incrementally. Xpheno, the Bengaluru-based specialist staffing firm has observed that a candidate picks an offer, serves the notice to the current employer and then uses the notice period to continue collecting more offers.
Prasadh MS, technology specialist at Xpheno, said: “Offer trading is now the game. Candidates use the offer on hand as the base to negotiate the next offer. The idea is to maximise the number of offers they can collect and hop over them to maximise the value. We also have cases where a counter-offer is negotiated with the current employer in the last week of the notice period and the candidate stays on.”
Offer drop ratio across six sectors — automotive, consulting, consumer business, healthcare, IT and pharmaceuticals has risen to nearly 35% in the financial year ended March 31, 2022, as against 27.06% in FY21, according to data shared by Spectrum Talent Management. Consulting, consumer goods businesses and IT companies are facing the maximum brunt of this trend with offer drop ratios of 38%, 29% and 53% respectively. In the last year, it has risen sharply.
Vidur Gupta, director and co-founder, Spectrum Talent Management, highlighted that apart from the high demand, longer notice periods and work from home are contributing to the rise in offer shopping. “The biggest challenge in India is that the notice period in organisations is up to three months, which gives the candidates a lot of time to accept an offer and then keep looking around for more opportunities. Also, earlier candidates would look around for opportunities within their city limits, but now with remote working a person has many more opportunities to choose from without moving cities which is leading to a rise in offer shopping,” Gupta said.
However, within IT too, the trend is more popular in vanilla skills like Java, which have a wider hiring scope across companies. The firms in more niche areas like telecom hardware or consulting firms are limited in number and therefore talent with skills suitable for these finds limited options.
Raj Tanwar, chief strategy officer & HR head at Advantage Club, a global employee benefits provider, said that offer shopping is a fall-out of Great Resignation and is becoming popular even amongst passive job-seekers. He finds the phenomenon similar to how consumers shop. Easy access to information in the public domain has changed how people search, evaluate, and try on a potential job before they accept it. The job seekers are looking for insights from those who know the team, work culture, flexibility, perks, benefits and other experiences. They check out photos and videos that provide a peek inside the walls of a potential employer.
“Today, a job seeker compares all aspects and not just salary before making a final decision for the offer, just like what consumers do while shopping. Employers are not looking for just any candidate; they are looking for the right candidate. And the right candidate comes to them with eyes wide open because they’ve done their research shopping for the right job,” Tanwar said.
While offer shopping is not new, the organisations trying to make up for the losses in the last two years through aggressive hiring and availability of candidates through virtual interactions are also leading to the rise in offer shopping. However, Parul Mathur, senior vice-president (HR & training), TradeIndia, believes the trend is short-lived.
“The fact that most organisations are settling for virtual interviews over traditional physical interviews is adding to the number of offers being made across industries. However, the trend is short-lived and might see a steep dip in the next half of the year as companies get down to strategy execution mode,” she said.
However, Gupta of Spectrum believes that it is still a job-seekers market and the trend is here to stay at least for the rest of the year.