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So, you’ve completed all your interviews and found a candidate that’s a great fit for your small business. So, now comes the fun part and an important next step. How do you extend an offer that helps reel in your new hire and make sure everyone has the same expectations? Some employers prefer to make offers via a personal phone conversation, and as social media and web applications continue to evolve, these could be future avenues.
But until we get there, it’s important to follow up your outreach offer with an offer letter that clearly puts everything in writing. If you’re trying to figure out the best way to get the ball rolling, here’s everything you need to get started.
After diving into the particulars on putting together your offer letter, dig into our glossary of payroll terms or browse resources on the payroll process and keep learning.
What should an offer letter include?
It should summarize your offer and outline what the employee can expect when they join your team. While states like California require very specific language in any offer letter you send, it should be noted that these are not iron-clad employment contracts and candidates (and employers) can usually withdraw their acceptance.
First, be sure to include the most important details:
- Job title
- Job description
- Compensation — hourly or annually
- Date you want their employment to begin
- Pay schedule — weekly, biweekly, monthly, etc
- Name and job title of their supervisor
- Date that the offer expires
Which details of the employment relationship should an offer letter include?
Once you’ve included all the basic nuts and bolts of the job you’re offering down, the letter should also outline the following important aspects of your employment relationship:
Benefits
It’s a great idea (if not a requirement in some states) to let candidates know about their basic benefits information and eligibility. Benefits might include things like health, dental, vision, disability, or life insurance, paid time off, vacation time, sick leave, maternity/paternity leave, and retirement plans. While it’s not necessary to outline every detail of your insurance or 401(k) options, it’s helpful to let candidates see everything your company has to offer as they weigh different job offers. The number of vacation days or paid time off should be clearly outlined and, if this benefit is accrued over time, be sure to mention the accrual schedule as well.
Contingencies
If your offer is contingent on a new employee passing a pre-employment drug test or background check, make them aware of this in the letter, and mention how and when they’ll be tested. If you require specific licensure or certifications for the job, let the candidate know the timeline for getting certified or what they’ll need to do to prove they’re licensed.
At-will employment
If the candidate’s employment is at will, it’s a good idea to mention in the offer letter. Again, while most offer letters aren’t binding contracts, it’s a good idea to be clear about this policy from the outset.
Exempt status
When you mention compensation in your offer letter, it’s likely you’ll spell out whether your candidate would be paid hourly or annually, but also smart to detail what their employment status will be under the Fair Labor Standards Act. Will they be exempt (salaried employees who are not eligible for overtime wages) or non-exempt (hourly employees who are eligible for overtime)?
What are some ways to personalize the your offer letter greeting?
Last but not least, show job candidates your enthusiasm and excitement to have them join your team. You can do this by starting the letter with “I am pleased to offer you the position of… We think your skills and experience will be a valuable asset to our team.”, or “We are impressed with your background and would like to formally offer you the position of…”.
Or you can let both your enthusiasm and the culture of your company shine through with something like: “You rock — we really, really hope we get to work together!”
Offer letter templates
If you’re considering growing your team by more than a few employees, it’s also helpful to start thinking about repeatable processes to make your efforts more efficient. Create an HR folder with key documents and offer letter templates for future use. Consider signing up for applicant tracking software or a small business HR solution if you might need help staying organized or want the ability to use e-signing.
This way, the hiring process will be a breeze each time you’re ready to add someone new to the team — and you’re unlikely to drop anything along the way.
New employees can give your business the superpowers it needs to reach all your goals, so start off your employment relationship with a welcoming message that sets clear expectations and makes candidates excited to join your team. Writing a good offer letter is a great way to set the right tone.
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Lillian Mirakhor was a Senior Marketing Associate at OnPay. Since graduating from the University of Georgia, she’s worked with small businesses in the tech and SaaS industries helping them boost their marketing efforts.