Although not mandatory, a job offer letter is a crucial component of the hiring process. This formal letter captures essential details about the job offer, provides an overview of the company, and highlights the position’s responsibilities and expectations.
Effective offer letter templates helps standardize the hiring process, makes things faster and easier for the hiring manager, and even saves your business from legal trouble.
If you’re wondering how to create an offer letter and what to include in one, this post is for you. I’ll walk you through everything you need to know to craft great job offer letters.
What Is a Job Offer Letter Template?
A job offer letter is an official document sent to a candidate to formally offer them a job. This letter typically follows a verbal job offer on the phone or via email. Then, the candidate signs a copy of the letter to accept the job offer.
Similarly, a job offer letter template is a sample text that hiring managers can customize to individual candidates. The template makes the task more straightforward since the hiring manager doesn’t have to write individual offer letters from scratch every time. Offer letter templates can also help to build consistency in the hiring process.
The Basics of Job Offer Letter Templates
While there is no standard format for offer letters, effective templates tend to share some common elements. The most critical factors to include in your offer letter templates include:
Company Logo and Contact Information
Remember, an offer letter is not the same as an employment agreement or employment contract. The offer letter merely expresses your desire to hire the candidate. Therefore, the prospective employee can still decline your offer.
A high-resolution official letterhead with your company logo paints your business in a professional light. Top candidates may already have other offers to consider. So, the little details are essential in building confidence and ensuring that candidates take you seriously.
Additionally, include your full business name in the offer letter. Not everyone can associate your company logo with your specific business. Ideally, the company name should be at the top of the logo.
Lastly, be sure to include your contact information if the candidate has questions or needs more information. A phone number and email are adequate. Similarly, include the candidate’s first and last name, address, and the date of the offer. You may also have your company mission statement or slogan in the footer section of the document.
A good job offer template should include specific job details. You can create sections that the recruiter or hiring manager will fill in as needed. Some of the fields to include in your offer letter template include:
- The formal job title or designation, including the department
- A short description of the job they are being offered
- The start date
- The position’s work schedule and hours
- The employee classification, such as part-time, full-time, or contractor
- The pay structure, such as commission, hourly, or salary
- Office location (if applicable)
- Office dress code (if applicable)
You may have already gone over some or most of this information with the candidate. But it’s still important to include it in your offer letter. A detailed offer letter will let the candidate know what to expect from the position.
Include a section in the offer letter template that details the candidate’s compensation. This information may include how much the employee will earn per hour, month, or year. Additionally, have information on when the employee will be paid, how often, and the mode of payment. This is also a great place to outline other compensation such as stock options, equity, bonuses, or commission structures.
Paid Leave Information
If you offer paid leave, be sure to include a paragraph that outlines the details. These details may include vacation time, paid time off, holidays, personal time, and sick time off. You’ll share your paid time off (PTO) policy document during the onboarding process. So, it may not be necessary to go into the granular details about accruing time off and other particulars.
A good offer letter also includes a summary of applicable benefits. It’s also a good idea to include eligibility requirements. Common benefits may consist of 401(k) plans, health care insurance, short and long-term disability, flexible spending accounts, and life insurance. You can also include remote work options or flexible schedules in this section where applicable.
Keep in mind that this section is merely an overview of the benefits you offer. The candidate will receive more detailed benefits information in their employee handbook or during orientation. The idea is to keep the offer letter concise while still conveying the essential information regarding the position.
Deadline for Response
While not mandatory, it is not uncommon for employers to have an expiry date on open positions. Many times, top candidates have other job offers they are considering. So, it’s helpful to have a deadline for a response to the offer letter.
Most organizations give prospective employees at least one week to consider their job offers. This way, there is still sufficient time to reach out to other prospects if the preferred candidate turns down the offer.
3 Tools to Improve Your Offer Letters
Drafting your offer letter templates is even easier with supporting tools. The best part is you only need to create your templates once. Then, you can continually edit and improve the templates as you streamline your hiring process. Here are a few tools to enhance your offer letters and templates.
Offer Management Software
Offer management software helps you to streamline the hiring process. The software supports the entire process, from drafting effective offer letters to hiring your ideal candidates.
Freshteam is one such software. The tool lets you upload your offer letter templates. Then, you can add custom fields to the templates. From there, it only takes a couple of clicks to generate the letters and send them out to your ideal candidates.
Freshteam also lets you assign team members to approve offer letters before they go out.
The best part about Freshteam is it’s more than an offer management software. In fact, this is a full-suite HR software. You’ll enjoy many more features to help you with your recruiting and onboarding process, including:
- Applicant tracking
- Employee onboarding
- Employee offboarding
- Time off management
- Employee information system
- HR reports
Freshteam pricing starts at $59 per month plus $1 per employee. A free forever plan also offers basic HR features such as applicant tracking kanban boards, organization charts, employee referral, employee directory, and team collaboration. The free plan supports up to 50 employees. Freshteam also offers a 21-day free trial of all its plans.
Electronic Signing Tool
An electronic signature makes it easier for the candidate to accept the job offer. There is no need to download, sign, and then upload the offer letter. Products such as Adobe allow users to sign documents electronically.
However, Freshteam integrates with DocuSign and SignEasy. You won’t need to get a separate e-signing tool if you have a Freshteam account. Your candidates will be able to sign their offer letters easily and quickly to fast-track the hiring process.
Offer Letter Samples
Freshteam allows you to upload and customize offer letters. But you may need a little more help when drafting your first offer letter. Fortunately, there are tons of free offer letter samples online. A simple search engine query should reveal plenty of templates to choose from. You can use these free templates as inspiration for crafting your offer letters.
7 Tricks for Writing Effective Job Offer Letters
A few more things go into effective offer letters besides the core elements we discussed earlier. These additional tips and best practices can help you draft effective and air-tight job offer letters and templates.
1. Send the Offer Letter As Soon As Possible
The period between finding the right candidate and signing the employment contract can be an uncertain and stressful period for prospective employees. So, it is courteous to communicate your intention to hire them as soon as possible. Make a verbal offer before sending a formal letter.
Getting a verbal commitment will help to speed up the hiring process. Additionally, there will be fewer questions or concerns about whether the candidate will accept the job offer. Be sure to express your enthusiasm to hire the candidate during the verbal offer and subsequent job offer letter.
Most employers send offer letters via email. However, you could also send the letter via traditional mail. Finally, sending your offer letter quickly means a lower chance of the candidate accepting another job.
2. Remember To Include an At-Will Statement
All states, except for Montana, are at-will employment states. This means that the employer has a right to terminate employment at any time, for any reason, and without warning. This is true as long as the termination is legal. Additionally, the at-will statement reiterates the employee’s right to terminate the employment contract at any time.
An at-will statement in your job offer reiterates this fact. The idea is to avoid creating legal misconceptions in your offer letter. This statement ensures that you retain your at-will employment status. For example, the offer letter may not be misconstrued as a promise of long-term employment.
In short, an at-will statement helps you avoid getting into a contractual agreement that you might need to fulfill even if things don’t work out with the new hire.
3. Avoid Contract Language
Your offer letter must be distinct from an employment contract. In most cases, an offer letter is not legally binding. But things can get complicated if you use contract language in your offer letter.
For this reason, it is crucial to create a standard offer letter template for all your new hires. That way, each new employee receives the same basic information in their letter. Additionally, a standard template makes it difficult for anyone to misconstrue the offer letter for a legally binding contract.
There are also specific words you should try to avoid. Words such as “guaranteed,” “job security,” or “in the future” can make it difficult to rescind your job offer or terminate the employee without paying damages. Similarly, avoid making promises about bonuses, promotions, or pay raises that may suggest the prospect of long-term employment.
4. Include Your Terms of Employment
You should have a section of your offer letter indicating your conditions of employment. This gives the candidate a chance to understand and meet all the conditions of employment before signing the contract.
Standard conditions for employment include:
- Completing (and passing) a drug test
- Submitting to a background check
- Complying with immigration law
- Signing a confidentiality agreement
- Signing a non-compete agreement
- Completing Form 1-9
You can also take this opportunity to find out if the candidate is bound to any restrictive covenants with former employers. For example, find out if the employee is tied to a non-compete agreement that may affect how they perform their duties at your company or if they are required to give longer than two weeks’ notice.
5. Outline the Hiring Process Clearly
The offer letter isn’t just a formality. It is an integral part of the hiring process. There may be additional steps the employee needs to take before starting work. Outline these steps clearly in the offer letter.
Also include the contact details for the person the employee will be reporting to. Make it as easy as possible for the employee to complete the hiring process and start working.
6. Consult an HR Representative or Lawyer
Be sure to run your offer letter by the HR department. This advice also applies if you are an HR professional. It never hurts to get a second opinion. HR professionals are familiar with the state and federal employment laws and can point out flaws in your offer letter. For example, you may be offering a monthly pay schedule when your state or city laws mandate you pay employees at least bi-weekly.
Similarly, a lawyer can pick up on language that may be considered contractual or legally binding. For example, some organizations avoid mentioning annual pay in their offer letter. Instead, they reference hourly or weekly pay. This way, the offer letter cannot be interpreted as guaranteeing payment for at least one year. Again, speak to a lawyer about this and other concerns in your offer letter.
7. Get the Employee’s Signature
Don’t forget to provide space for candidates to sign your offer letter. A verbal commitment is not enough. Be sure to ask the employee to sign the job offer letter and return it to you before proceeding to the next stage in the hiring process.
Lastly, include a clause indicating that the employee understands and accepts the terms of your offer letter. This confirmation can help you avoid potential legal disputes, especially concerning the at-will employment clause.
What To Do Next
Depending on the position, some candidates may wish to negotiate before signing the offer letter. Some negotiation points may include compensation, guaranteed severance pay, paid time off, or a flexible work schedule. This is especially true for top candidates leaving their current job to join your organization. You may choose to negotiate with the employee and make concessions where reasonable or possible.
Once the details are ironed out, the next step is to welcome the employee to their new position. This is a critical time since it sets the pace for the employee experience. Start by sending a welcome letter to show your enthusiasm for the new hire. Also, assign a mentor or partner to help the employee transition to the new role.
Be sure to check out our post on The Beginner’s Guide to Employee Onboarding for the complete rundown of what to do after an employee signs the offer letter.