What is an offer letter?
After an initial verbal job offer is extended to your best candidate, the hiring manager is typically responsible for sending an offer letter and reviewing its details with the candidate. The offer letter acts as a formal offering of the job position by the employer to the applicant and includes summaries of the main terms, conditions of the offer, details about the role and company, as well as any other details to help the candidate decide whether to accept the job offer.
The offer letter can also serve as an entry point for negotiations. When contingencies are involved, this is known as a conditional job offer, meaning the offer is only valid if certain conditions, such as passing reference checks, are met.
If the candidate has accepted your offer, they will sign the letter and return it to you. However, it is important to note that a signed written offer letter does not necessarily mean that it is a legally binding agreement employment contract, though in some cases, depending on its terms, a written offer letter can be considered a legally binding contract.
The employment contract is typically a separate document containing detailed legalities that offer protection for both parties. If an offer is rescinded after being accepted, it could potentially lead to legal action. It’s worth having a legal professional review your offer letter before handing it over to a potential employee to ensure you are legally protected.
What is included in an offer letter?
A job offer letter provides an overview of the position and should include essential detail with enough information for the candidate to decide whether they would like to accept the offer. As there is no one-fits-all sample job offer letter, you can arrange the elements below to fit your company and the job roles you are looking to hire for.
- Company logo: Incorporate your company’s official letterhead with a high-resolution image of your company logo. A company logo can convey professionalism, authenticity and credibility, encouraging your potential employee to read on and to seriously consider your offer.
- Date and contact information: In the upper lefthand corner, include the date, the candidate’s first and last name, and their address:
- Day Month Year
- Candidate First and Last Name, Candidate’s Address City, State, Postcode
- Greeting/opening line: Start your offer letter by addressing your potential employee using ‘Dear’, followed by their first and last name. Congratulate them enthusiastically with a positive and upbeat opening line such as: ‘We are excited to offer you a position at [company name]!’ You can customise this opening line to be as formal or casual as you like to reflect your company’s culture.
- Job details: After the greeting, continue onto the specifics about the job position. Include the formal position title, the type of employment (full-time, part-time, casual, contract, etc.), the name of the employee’s manager or supervisor, a brief description of the role and its responsibilities, as well as any other important matters specific to the job. The job title should accurately represent the position and align with industry standards, helping the candidate understand their role within the company. The job description should outline the main job duties, responsibilities, expectations and work hours, giving the candidate a transparent view of what the position entails. This will help the candidate to know what to expect when they step into the role, while also providing clarity on any potential misunderstandings or overlooked items during the application process.
- Contingencies: If the job offer is dependent on the candidate fulfilling specific requirements or completing certain documents, it’s helpful to make this clear in the job offer letter. Contingencies may include background checks, reference checks, drug tests, a signed confidentiality agreement or proof of employment eligibility such as a visa. If a candidate fails to meet these specified conditions, such as providing reliable references, or fails background checks, you may withdraw the offer.
- Compensation: It’s helpful to clearly explain the remuneration package in your job offer letter. Specify details, such as how much the candidate will earn on an annual, monthly, fortnightly, weekly or hourly basis, how often payment will be made, and the method of payment. It’s also helpful to mention any other compensation benefits, such as equity, bonuses or commissions.
- Benefits: To encourage a candidate to accept your job offer, summarise the key employee benefits your company offers, starting with the most attractive ones. Avoid including too much information. You can provide a more comprehensive breakdown during the orientation process or in an employee handbook. Attractive employee benefits that may be worth mentioning in a job offer letter include:
- health insurance coverage
- superannuation contribution matching
- flexible work hours
- work from home options.
- Job offer expiration date: When wrapping up, decide whether you want to place an expiration date on the job offer. Providing a hard deadline can save you from losing other qualified candidates if the prospect declines your offer. If you decide to include a time limit, give the candidate enough time to consider before making a final decision. Generally, a week is sufficient.
- Closing: End the job offer letter by expressing excitement about welcoming the candidate to your company. Provide your contact information in case they have any questions, and seal the deal by including a line for signature and date if the candidate accepts the offer.
- Disclaimer: To avoid any confusion, include a brief disclaimer explaining that the job offer letter is informational and not legally binding. Consult your lawyers to draft an offer letter with language that avoids any contractual implications.
Job offer letter template
[Company Logo]
Day Month Year
Candidate First and Last Name, Candidate’s Address City, State, Postcode
Dear [candidate’s name],
We are pleased to offer you the [full-time, part-time, etc.] position of [job title] at [company name] with a start date of [start date], contingent upon [background checks, reference checks, etc.]. You will be reporting directly to [manager/supervisor name] at [workplace location]. We believe your skills and experience are an excellent match for our company.
In this role, you will be required to [briefly mention relevant job duties and responsibilities].
The annual starting salary for this position is [dollar amount] to be paid on a [monthly, fortnightly, weekly, etc.] basis by direct deposit, starting on [first pay period].
In addition to this starting salary, we are offering you [discuss stock options, bonuses, commission structures, etc.]. Bonuses may be linked to your performance.
Your employment is on a contractual basis for a period of [time period], subject to renewal. There is a [time period] termination notice required should you wish to leave your employment with [company name]. This letter is not a contract or guarantee of employment for a definite amount of time.
As an employee of [company name], you are also eligible for our employee benefits program, which includes health insurance, superannuation matching contributions and other benefits, which are described in more detail in the [employee handbook, orientation package, etc.].
Please confirm your acceptance of this offer by signing and returning this letter by [offer expiration date].
We are excited to have you join our team! If you have any questions, please feel free to get in touch with us at any time.
Sincerely,
[Your signature]
[Your first and last name] [Your job title]
[Date]
Candidate acceptance:
[Employee’s signature]
[Employee’s first and last name] [Employee’s job title]
[Date]
Creating a job offer letter template
Developing a job offer letter template is a crucial step in standardising your hiring process and ensuring consistency across all job offers. Your template should be tailored to your company’s unique needs and include all essential details, such as the job title, job description, starting salary, benefits, employment terms, and a clear call-to-action for the candidate to accept or decline the offer. Additional important elements to include are the company name, start date, work schedule, expected hours, and space for the candidate’s acceptance signature and date.
By incorporating these details, your offer letter template provides candidates with a comprehensive overview of the employment offer, making it easier for them to make an informed decision. A well-designed template saves time for hiring managers and enhances the candidate experience by presenting information in a clear and organised manner.
You can tailor the template to your company’s unique needs and include all essential details, such as the job title, job description, starting salary, benefits, employment terms and a clear call-to-action for the candidate to accept or decline the offer. Additional important elements to include are the start date, work schedule, expected hours and space for the candidate’s acceptance signature and date.
Negotiating the job offer
Negotiating a job offer is an important part of the hiring process, as it gives both the employer and the candidate an opportunity to discuss aspects such as salary, benefits or even the job title before making a final decision. It’s helpful to approach negotiations with flexibility and a clear understanding of your company’s compensation structure and policies.
A job offer letter template serves as a valuable starting point for these discussions, outlining the initial terms and conditions of employment in writing. By using the offer letter template as a foundation, both you and the candidate can engage in transparent and productive negotiations, ensuring that the final offer meets the needs of both parties. Open communication during this stage helps build trust and increases the likelihood that the candidate will accept the job offer, leading to a positive start to the employment relationship.
