Key Considerations When Using an Offer Letter Template
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You've done some serious recruiting and landed on a wonderful candidate. Now, it's time to get this talented individual fully on board. First, you'll need to provide an offer letter. This should include not only the exciting news about the job offer, but also specifics about the position, the pay, and the incoming employee's responsibilities.
As tempting as it can be to embrace a new hire with open arms, caution is warranted. Without establishing ground rules upfront, you run the risk of disputes later on. In this guide, we'll show you how to avoid such problems by making the most of an offer template. Get ready to learn:
- Basic Elements Every Offer Letter Should Include
- Optional Add-Ons Worth Considering
- Mistakes to Avoid When Using an Offer Letter Template
Basic Elements Every Offer Letter Should Include
While huge differences can distinguish offer letters between various employers, most tend to include these basic elements:
- Job title. What is the name of the position the new hire will be working? Who will serve as this individual's supervisor? The position can be mentioned in both the letter's opening paragraph and later on, when providing specific details about the job in question.
- Compensation. This section highlights the new hire's starting salary. It may also contain basic information about the organization's payroll schedule. Be sure to mention that the salary has the potential to change over time.
- Benefits. Let new hires know which benefits they can expect above and beyond the identified starting salary. Depending on the job, these may include paid time off, retirement benefits, profit sharing, or health insurance.
Optional Add-Ons Worth Considering
Once you've established the essentials, you can dive into specifics so that your new employee knows exactly what to expect. The following add-ons might not be included in every offer letter, but they can make a world of difference when used in the appropriate context.
- Probation period. At the time of hiring, it can be difficult to determine whether a potential employee will be the right fit. Building a probation period into the offer letter allows for an element of trial and error. Be sure to mention how long the probation period will last, as well as the ability to terminate employment during this time.
- At-will statement. If a job is at-will, the employee-employer relationship can be ended at nearly any time and for a variety of reasons. Employees should be alerted to this reality on an upfront basis. Feel free to mention if there is no specific employment duration attached to the offer letter.
- Bonuses and other incentives. Whether included as part of the payment section or as a separate clause, details on the potential for bonuses can be referenced. The letter's language should make it clear that bonuses are not automatically provided, nor should they be expected — simply that new hires may be eligible based on both objective and subjective criteria.
Mistakes to Avoid When Using an Offer Letter Template
A variety of inadvertent errors can limit the protection that offer letters might otherwise provide for both employers and new hires. The following mistakes are especially important to avoid:
- Using other methods to notify employees of their employment. The offer letter should form the first contact with the new hire after the job is awarded. Do not reach out on social media or with a congratulatory phone call.
- Not using an offer letter template. Without guidance from a template, it can be easy to use vague or overly casual language. Templates can easily be customized with the specific terms of the job in question. Feel free to add or remove clauses or paragraphs as needed.
Final Steps: Getting the Offer Letter Signed
Attention to detail is crucial not only as you create or customize an offer letter, but also, as you get it signed. With Nitro Sign, you can feel confident that the offer letter is completely secure. Start your free trial to discover the peace of mind that this solution provides.