Don't make them guess. When we reject them tell them what they can do to improve their chances next time at our, or at another firm. Survey the managers involved to see if they were satisfied with the process and the output. When you reject someone don't cut off all communication with them. Put them on your newsletter mailing list, offer them product discounts etc.
Conclusion Think of the employment department as a retail store.
Satisfied applicants may later become customers or they might someday be in a position to recommend our firm or product to others. Job applicants are much like restaurant visitors, they quietly remember their good experiences but they go out of their way to tell others about their bad experiences.