Offer Acceptance Rate

What the offer acceptance rate is

The offer acceptance rate (معدل قبول العروض) is the share of the offers that candidates accepted out of the offers an organisation made in the same period. It answers a question that arises once the interviews are over and the selection decisions are taken: of the people the organisation chose, how many said yes?

The rate measures what became of an offer, not what the offer contained. The role, pay, joining terms and reply deadline set out in a job offer are a separate subject, whereas the rate shows how many offers of that kind ended in acceptance. Recruiters turn to it to see whether what the organisation puts forward suits the people it selects, and to look for the reason when it does not.

What goes into the denominator of the offer acceptance rate

The formula is simple: the number of accepted offers divided by the number of offers made, multiplied by 100. The whole difference lies in the meaning of “made”. At the end of any period some offers are still undecided, and others were withdrawn by the organisation because the vacancy was cancelled or another candidate arrived. So the denominator rests on one of the following bases, stated openly:

• All offers made. It is the base that needs least explanation, but it is unfair to the organisation, because it counts offers that are still inside their reply period.
• Offers that have been settled. Offers not yet answered are left out, and the accepted, the declined and the withdrawn remain.
• Settled offers excluding those the organisation withdrew. It is the narrowest base, and it measures specifically whether the candidate accepted or declined.

Any of the three is valid as long as it is stated and held constant across periods. An organisation that changes the base between one quarter and the next compares two figures that are not alike and mistakes them for one figure that moved.

Example: forty offers in one quarter

Imagine a hypothetical organisation that made 40 offers in a quarter. 31 candidates accepted, 6 declined, the organisation withdrew 2 because two vacancies were cancelled, and one offer was still within its reply period. The rate changes with the denominator:

• All offers made: 31 ÷ 40 × 100 = 77.5%.
• Leaving out the offer not yet settled: 31 ÷ 39 × 100 = 79.5%.
• Leaving out the withdrawn offers as well: 31 ÷ 37 × 100 = 83.8%.

The percentages are rounded to one decimal place. The gap between the first and the last is about six percentage points in a single quarter in which nothing changed in what the candidates did. The figure that goes up to management depends on the denominator, and a figure whose denominator is not stated should not be accepted.

Classifying the outcomes of offers

Offers do not all end in a yes or a no, and classifying them precisely keeps what the figure measures from mixing with what it does not:

• Accepted. The candidate said yes within the deadline.
• Declined. The candidate said no, or the deadline passed without a reply. The second case is recorded as an implied decline, not as an oversight.
• Withdrawn by the organisation. The position was cancelled, or another candidate was chosen before the first one replied.
• Accepted, then withdrawn. The candidate accepted and then withdrew before starting work. The offer is counted at the moment of acceptance and recorded on a separate line, for a reason covered in the section on what happens between acceptance and the first day.
• Pending. The deadline has not yet passed. The offer enters the period only through the stated denominator rule.

How the offer acceptance rate differs from time to hire and the recruitment funnel

Two other indicators meet the acceptance rate at the point of acceptance, yet they measure different things. Time to hire is a duration in days, taken as ending when the candidate accepts the offer, so it shows how long a candidate waited, not whether the candidate accepted. The recruitment funnel lays out the stages from application to acceptance of the offer and the share that passes between each pair of stages. The acceptance rate is the pass rate of the funnel’s last stage, taken on its own, and a funnel can be sound at every earlier stage and still lose people at the end.

The difference has diagnostic value. If time to hire grows while acceptance falls, candidates may have waited and then gone to another organisation. That is a hypothesis to test by asking those who declined, not a fact to assume.

Why a candidate declines an offer

The rate does not answer the question of why. Every decline has a reason that the candidate knows best. Possible reasons include:

• Pay and terms. The offer did not match what the candidate expected or what had been offered elsewhere.
• Waiting. Weeks passed between the last interview and the offer, and the candidate accepted another offer.
• A role that differs from what was understood. The offer revealed demands the candidate had not been told about. A realistic job preview tries to prevent this by showing the unwelcome parts of a job before acceptance.
• The impression of the process. Candidate experience extends to the final reply, and people who met a cold response may turn down a good offer.
• Retention by the current employer. When a candidate announces a resignation, the current employer may make a counteroffer, and the candidate backs out after having accepted.

Not every fall in acceptance is a problem. An honest preview may lead some candidates to withdraw before the offer, or to decline it, because they learned what the job involves. The rate may fall while what comes after it, the retention of those who accepted, rises. The figure is examined alongside what happens to those who accepted in their first months, and is not judged alone.

A list of reasons becomes knowledge, not guesswork, once it is recorded. Our reading is that the reason for each decline should be written in the candidate’s words at the first contact after the reply, because contact close to the reply is easier and more accurate. If the candidate does not answer, the entry reads “not determined”, not an assumed reason.

What a declined offer costs the vacancy

A decline is not only a lost offer. It also leaves a vacancy open. Suppose that each decline in the example lengthened the search by three weeks before another candidate reached the offer stage. The loss would be 6 × 3 = 18 weeks of open vacancy time, spread over six vacancies. The calculation is hypothetical, and its duration should not be carried over to another organisation, but its method can be: multiply the number of declines by the weeks that reaching a replacement in a similar role can take.

For this reason a role whose candidates are scarce calls for more care over acceptance. If no second candidate is waiting in the pipeline, a decline restarts the search from the beginning, so the offer needs care in its wording and in following it up.

How acceptance is counted when the candidate negotiates

Candidates can ask for an offer to be changed before they accept. All the rounds count as one offer to one candidate for one role, so an amendment does not become a new offer that raises the denominator. What is recorded is the final state of the offer. If 7 of the 31 candidates in the example accepted after the offer was amended, their share of the acceptances is 7 ÷ 31 × 100 = 22.6%.

This share is an independent indicator. It may show that the first offer did not match what candidates accept, but it does not establish that alone, because negotiation may simply be the custom in that market. It is examined together with the channel and the role, and with what was changed: the pay, the start date or the role.

Collecting and splitting offer data

A dependable source is an applicant tracking system, because it follows each candidate through the stages of hiring from application to decision, so that the offer becomes a stage with a status and a date. Each offer needs fixed fields: the date it was made, the last date for a reply, the date of the reply, the outcome, the reason if the candidate gave one, the role and the channel the candidate came through. If the reply date is not recorded, nobody can tell how long candidates wait before they decide.

The figure is split by role and by the channel the candidate came through. Splitting by channel differs from source of hire, which distributes the people who were actually hired, whereas this split distributes the offers by the sources of the candidates. Those sources are the employment channels, the ways candidates reach the organisation. One channel may bring a large number of candidates who decline, and another a small number who accept.

When the offer acceptance rate cannot support a judgement

The rate swings sharply when the numbers are small. A role with three offers, of which two were accepted, stands at 2 ÷ 3 × 100 = 66.7%. If another candidate declines the next offer, it becomes 2 ÷ 4 × 100 = 50%, a drop of about 17 points caused by one person. A judgement should not be built on a role or a channel with numbers this small, and the count is examined next to the percentage.

What happens between acceptance and the first day

Accepting an offer is not the end of the road. A candidate may pull out after accepting and before starting work, in which case the vacancy stays open although the offer was counted as accepted. For this reason, once an offer is accepted, a process of employee onboarding should accompany the new hire up to the first day of work, and contact with the candidate is kept up until the start date.

We suggest that the acceptance rate be counted at the moment of acceptance and that “accepted but did not start” be recorded on a separate line, so that the figure for the decision does not mix with the figure for the commitment. Each quarter then shows whether the weakness lies in persuading candidates to accept the offer or in keeping them until they start.

Is there a benchmark offer acceptance rate?

In the sources we reviewed, we found no source that we would adopt for a benchmark acceptance rate suited to every organisation, and no threshold below which the rate counts as weak. The figure depends on the role, the reply deadline, the state of the candidate market and the promises made earlier in the process. What serves for comparison is the organisation’s rate for the previous quarter, with the same denominator rule, and then a comparison between its similar roles. A figure from another organisation is not interpreted until its denominator rule has been stated.

This is an explanation of the concept, not legal advice.