No, and I also spent almost 20 years in lending and hated those "no's" as well and never came up with any clever way to do it. It is of course easier when there is legitimate reasons and feedback to give, but the fact always remains that they're not getting the position.
Tim I can really think of no creative ways to do this and really feel the candidates do not want creative ways to be let down. In my experience the rejected candidate wants either a short but sweet (and honest) rejection or if you have details without exposing your company to any future problems an honest reason as to why they are out and how they may improve for future interviews.
Maybe spin it?
Tell the candidate that unfortunately the client will not be moving forward with him (if this is about letting them know they were rejected during the interview process?) - and explain WHY. You can 'spin' this as an education of sorts, so next time the candidate can perform better. No love story needed (agree w/Amber); just short, sweet and to the point.
A lot of recruiters do not do this, and I'm not sure why. There's a good chance, if you were willing to put this one in front of your client, you probably would consider them again for another gig down the line. Why not help them along, and in that case - you build a better relationship with them. Doesn't take much, and it can benefit you later.
I agree with Ron, I think short and to the point is how I would want that news reported to me. Constructive feedback is always helpful but find most times it is just a no or we are going with so and so.
I usually tell them that they came up against really strong competition. For some reason this is most effective. When you tell them why they failed, they tend to argue each point. Then I say I will continue to match them to relevant roles.
I agree with Bill, that usually seems to work for me however I like Maisha's response as well.
I would caution on going the 'creative' route, Tim, in that you run the risk of the candidate not understanding what you are saying. I'm bringing this up because when I first started in the industry I tried to sugar coat the 'no's' and had one candidate who kept calling and asking if we've heard anything further. I couldn't understand why they kept calling until I sat down and talked to someone else about it. My message was not received as intended and it was totally my responsibility.
From that point on, it's direct, but not hurtful. As long as I can provide something substantive and helpful, then I'll do it that way. If I have negative feedback from the manager that is mean spirited, I won't pass on that information (probably won't work with that client again, for that matter!).
Hope this helps, Tim!
I decline via email first. The subject line says: Feedback from XYZ re your interview.
My note simply says ,"They have decided to move forward with another candidate. We ended up the bridesmaid on this one, call me at your earliest convenience. There were no negatives just a difference in skill set. Let's discuss our next option, call me."
It seems to give a candidate a minute to get the bad news, gather their thoughts then we can talk without them going into responses that are argumentative while they are just trying to process bad news. The phone conversation that follows is easier for them because they have had a minute to think. Interestingly when they call , about half the time they fess up that they knew something in the interview might not have gone as well as it should or they kind of knew that it would be a long shot.
There are situations where i do not pass on candid feedback if it is something that the candidate cannot correct. I don't see or meet a lot of the candidates i work with so based on resume and phone they may be great but present in person like 20 miles of bad road. there is no way to be creative with explaining someone was turned down because they are so bloody ugly they would turn the staff to pillars of salt. For those who think that hiring is not based in part on personal appearance save the diatribe. Not everybody is a fashion model but there are folks who are just double dog ugly and don't do much to try and overcome it. In some situations it does not matter but in some it's a deal killer.