HR 101: How to Craft the Offer Letter

HR 101: How to Craft the Offer Letter

It may seem like a simple task to type up an offer letter for a job candidate. However, it’s not always a no-brainer when it comes to how to write an offer letter for employment. We’ve generated a basic guide for how to tackle this part of the hiring process.

The Basic Outline

An offer letter should outline all elements of the role. This list includes job title, description of job duties, supervisors, salary, benefits, time off and start date.

Specific Terms Of Employment

Some businesses opt to include a non-compete agreement in the job offer letter. This informs the employee about the dos and don’ts regarding any competing companies in that particular industry. Confidentiality agreements are also sometimes added to protect information within the company.

Sections

Start out the offer letter by addressing the candidate and including the date at the top. Welcome him or her to the team and express how the candidate was carefully selected for the position. Example: We are delighted to extend this offer of employment for the position of [Position] with [Company Name]. Please review this summary of terms and conditions for your anticipated employment with us.”

After that, create a section containing job title, job description and any managers or supervisors the candidate will report to.

Salary & Start Date

Next, it’s an appropriate place to delve into salary. Benefits and severance packages can then be outlined, and you can also choose to include business reimbursements during the employee’s time with the company.

Finally, include a section for the new employee’s start date. This is crucial to include when learning how to write an offer letter for employment, because the new hire may have to allot time for relocation. Like the salary and benefits section, this can be negotiable—in case the candidate needs to square away any loose ends from his or her previous job.

Sample Offer Letter (feel free to copy)

Dear __________________________________:

It is my pleasure to extend an offer of employment to you on behalf of (your company name). This offer is contingent upon your passing our mandatory drug screen, our receipt of your college transcripts, and any other contingencies you may wish to state.

Title: ________________________________________________________

Reporting Relationship: You will report to:

_____________________________________________________________

Job Description is attached.

Base Salary: Will be paid in bi-weekly installments of $_________, which is equivalent to $_______ on an annual basis, and subject to deductions for taxes and other withholdings as required by law or the policies of the company.

Bonus (or Commission) Potential: Effective upon satisfactory completion of the first 90 days of employment, and based upon the goals and objectives agreed to in the performance development planning process with your manager, you may be eligible for a bonus. The bonus plan for this year and beyond, should such a plan exist, will be based on the formula determined by the company for that year.

Non-Compete Agreement: Our standard non-compete agreement must be signed prior to your start date.

Benefits: The current, standard company health, life, disability and dental insurance coverage are generally supplied per company policy.
Eligibility for other benefits, including the 401(k) and tuition reimbursement, will generally take place per company policy. Employee contribution to payment for benefit plans is determined annually.
Stock Options: Spell out any options that may be available for purchase.

Vacation and Personal Time Off (PTO): Vacation is accrued at x.xx hours per pay period, which is equivalent to two weeks on an annual basis.
Personal emergency days are generally accrued per company policy.
Start Date: _________________________________________________

Car/Phone/Travel Expenses: Normal and reasonable expenses will be reimbursed on a monthly basis per company policy.

Your employment with (Company Name) is at-will and either party can terminate the relationship at any time with or without cause and with or without notice.

You acknowledge that this offer letter, (along with the final form of any referenced documents), represents the entire agreement between you and (Company Name) and that no verbal or written agreements, promises or representations that are not specifically stated in this offer, are or will be binding upon (Company Name).

If you are in agreement with the above outline, please sign below. This offer is in effect for five business days.

Signatures:

__________________________________________________________

(For the Company: Name)

__________________________________________________________

Date

__________________________________________________________

(Candidate’s Name)

__________________________________________________________

Date