How to reject candidates after an interview?

What's the best way to say no to candidates who clearly aren't a good fit for the company?

It's as awkward for me to do as firing someone. I would like to do it in a way that doesn't reflect bad on our startup.

In order to be transparent and save candidates time, I told one person at the end of the interview that they likely won't be a good fit. This person ended up writing a lengthy bad review on Glassdoor.com which looks bad when potential candidates look us up.

It's understandable why the person wrote a bad review -- being told on the spot that they're not a good fit could hurt anyone's ego.

The best way I've seen it done is 1-2 days after the candidate interviewed. With a short email that mentions:

• It was a pleasure meeting them.
• There were many great candidates for this position and it was a really tough decision to make.
• We ended up choosing another candidate but would love to stay in touch.

It's good practice to let someone know in a timely manner that they won't be getting the job. But right after they completed the interview might be too timely :)

I give my clients email templates:

No thank you (after resume review)

No thank you (after phone interview or assessment test)

No thank you (after face-to-face interview)

with the instructions that they should be sent out 3 days after the last recruiting activity. Include something positive about them/their credentials, as well as the items mentioned in the above answer by Bruce S.

Candidate experience is critical, especially for startups. You want them to walk away feeling that they had a good experience, even if they didn't get the job. The goal is that they reapply in the future and/or tell their friends what a cool place your company is.