So you interviewed the most charming, qualified candidate who had that everything-I’ve-been-looking-for kind of vibe about them last week, only to find a somehow-even-more-amazing fit come Monday. The way that you break the news to Mr/Ms almost-perfect is important. In the hiring business, the credo “it’s nice to be nice” can be overlooked as commonly as a candidate who picks their nose all the way through an interview.
Both recruiters and those that are actually doing the hiring should bare in mind that while Mr/Ms almost-perfect is well, you know, they may be just the person you’re looking for in the future. It is of the utmost importance not to alienate candidates that come into contact with your company with poor communication.
This article from About.com’s human resource page details the ways in which you can break the bad news courteously and even has several sample rejection letters for you to peruse.