13 Key Points You Need in a Job Offer Letter
“There’s always anxiety when you start a new job, you’re the one guy who doesn’t know where the ketchup is.” – Jon Stewart
Congratulations to you and your soon-to-be new employee. First, you sifted through hundreds of resumes. Then, you conducted dozens of interviews. Slowly, methodically, you began to trim your options to a select few until one rose above the rest. But, there is still one critical piece of the process left, and this last piece can make or break all the time and money you’ve invested in this process to this point: the Job Offer Letter.
We’ve seen “sure things” lost by a poorly composed or poorly timed offer letter. This should have a congratulatory tone welcoming them to the team. You should include the reasons why you chose this candidate and the future you foresee with them. Make sure you send the letter as soon after you make the decision to hire the person as possible. At DyNexus Group, one of our clients recently lost out on a candidate because they waited too long to extend an offer, even though they knew this was their best candidate. Another candidate was lost because the “offer letter” was a 22 page company handbook, not a letter welcoming them to the team. So we’re going to explore the 13 key points you need in a job offer letter.
Why Job Offers are Rejected
According to a study by Glassdoor.com, 17.3% of job offers are rejected. In the technology industry, that number is closer to 20%. All of the reasons given by candidates for rejecting the offer could have been eliminated in the interview process. For example, some candidates get a lower salary offer than they were expecting. For many, the ability to work remotely is essential. Others are more concerned with benefits and perks. You should make sure to address most, if not all, of these concerns in the interview process. Nothing in your job offer letter should be a surprise. At the same time, the candidate should have few, if any, questions about the position or the offer after reading the letter. So, to avoid that, let’s get into the 13 key points you need in a job offer letter.
13 Key Points You Need in a Job Offer Letter
1. Opening – This should be a celebration! You should use this opportunity to express your vision for the future with this candidate. Include the values you see them adding to your company and how you will empower them to use those qualities. Talk about their future growth with your company and how you see them achieving success.
2. Position / Title – What is their official job title? You should have already covered this before the interview process even started, but it’s important to have that in this letter.
3. Reporting to – Will they be reporting directly to you? Do they have a supervisor in their department?
4. Employment Start Date – This is something you should both have discussed in the latter stages of the interview process. Generally, if someone is available, they’ll want to start as soon as possible. If they are currently employed, they will typically want to give a minimum of two weeks’ notice to their current employer.
5. Full-Time / Part-Time Schedule – More than just noting if this is a full-time or part-time position, this should lay out the expected hours of operation. Some offices run a pretty typical 8am – 5pm clock. In today’s remote atmosphere, sometimes those hours aren’t as important as the work that gets done. Whatever the expectations are, they should be clearly laid out.
6. Exempt / Non-exempt Classification – You should confirm if this employee will be paid hourly (non-exempt and subject to overtime pay) or if they will be a salaried employee (exempt from overtime pay).
7. Brief Summary of Job – The key word here is summary. The candidate should already have a good understanding of what the job is and what they will be required to do. This should be a very brief summary of what their specific role will be and why it matters within the scope of the company.
8. Base Salary – Usually, you will have posted the job somewhere with a base salary range. If you are working with a recruiting agency, like DyNexus Group, the salary range will be disclosed and discussed with the candidate. Salary should have come up in the interview process so it shouldn’t be a shock to the candidate when they see it in the letter.
9. Bonus/Commissions – Oftentimes, the total compensation will be achieved through bonuses on top of a base salary. If this is part of their compensation plan, you’ll want to lay out what the bonuses are and how they are achieved. You may want to add an attachment outlining performance expectations and giving sample scenarios with bonus outcomes.
10. Benefits – You should include anything like insurance options; 401K plans; PTO, vacation, and sick leave; use of company / personal tools (i.e.laptop, cellphone, home office stipend, travel reimbursement). You may also include unique perks like health and wellness programs, gym memberships, etc. If necessary, you may want to attach a benefits summary, if you have one available.
11. At-Will Employment – Most states (outside of Montana) abide by at-will employment rules. That being said, it’s still important for you to include this statement. Basically, what it boils down to is any employer can terminate employment at any time for any reason or for no reason. Likewise, an employee is free to leave a job at any time for any or no reason. While this is fairly broad-sweeping and generic in terms, there are certain legal exceptions to the rules as laid out in an article by The HR Digest.
12. NDA / Non-Solicit Agreement – If your Company requires that an employee sign an NDA (Non-disclosure agreement) or Non-Solicit Agreement, you should include that as an attachment to the offer letter.
13. Contingencies – Sometimes you run into potential issues that may prompt you to rescind the job offer. Things such as a felony charge or failure to produce documentation of the employee’s right to work can be factors. If your Company’s policy is to perform standard background checks or reference checks or requires proof of right to work, you must notify the employee that their offer of employment is contingent upon the outcome of these factors.
You should be timely in making your offer. Odds are, you are not the only company this candidate is considering. If you delay in sending an offer letter, you can send the wrong message that you’re not very interested in them. Or, you could simply miss your window of opportunity if they accept another offer before even receiving yours.
Remember, your ultimate goals of the offer letter are twofold. First, you should make this a personal letter congratulating them. Express your enthusiasm to have them become a part of your team. Second, you should give them ALL the information they need to make their final decision in this letter. If you follow this guide to the 13 key points you need in a job offer letter, you should be able to pop that champagne in celebration successfully.