We interviewed a lot of hiring managers/etc. while we were working on a previous business in the hiring space. As part of that, we asked them this very question.
The fear of litigation was by far the biggest reason we heard, but there were some other popular reasons (mostly relating around conflict avoidance):
* Notably, giving feedback feels like an opening for the candidate to submit a rebuttal instead of ending the conversation (e.g. "You didn't do well on X" "Well here's a list of reasons why I didn't do well, and here's me demonstrating I actually understand X").
* It was just a personality conflict that few people would admit to in writing (e.g. "You're kind of an asshole, I don't want to work with you" isn't something you tell a candidate).
* There just isn't much actionable feedback to give. "Nobody felt excited to potentially work with you" isn't really actionable feedback, and sharing that just feels kinda mean for no reason.
* Someone better came along to fill the role and nobody wants to tell a candidate "We found someone better than you".
The fear of litigation was by far the biggest reason we heard, but there were some other popular reasons (mostly relating around conflict avoidance):
* Notably, giving feedback feels like an opening for the candidate to submit a rebuttal instead of ending the conversation (e.g. "You didn't do well on X" "Well here's a list of reasons why I didn't do well, and here's me demonstrating I actually understand X").
* It was just a personality conflict that few people would admit to in writing (e.g. "You're kind of an asshole, I don't want to work with you" isn't something you tell a candidate).
* There just isn't much actionable feedback to give. "Nobody felt excited to potentially work with you" isn't really actionable feedback, and sharing that just feels kinda mean for no reason.
* Someone better came along to fill the role and nobody wants to tell a candidate "We found someone better than you".