5 JULY 2018

Everything You Need to Know About a Job Offer Letter

The global economy is booming. With that boom has come borderline record unemployment numbers in some of the world's most influential markets like the US (3.8%) and the UK (4.2%). Closer to home, we are also seeing a drop in unemployment rates  from 3.5% to 3.3% this year compared to the previous year.

While a strong economy is something that the global and local community always strives for, it does represent a unique challenge to employers. When people aren't looking for work, attracting top talent can be extraordinarily difficult.

So, if you're an employer preparing to write a prospective candidate a job offer letter, congratulations on finding an excellent fit for your organization!

Writing an offer letter is an important, formalized step in the hiring process. Doing it right can set you and your hopeful employee up for a productive relationship in the future.

To help you out, our team has put together some quick guidance on what you should include in your offer letter.

Basics

There are a few basic components present in every job offer letter, which describe the position getting offered. Those basic components are as follows:

The Position

In your job offer letter, the position getting offered to your candidate should be made clear.

Be sure to state the title of the position. For extra clarity, also include specific duties that the position encompasses (this information can typically get recycled from the original job posting).

Start Date

The date in which your employee would start should have been something that was discussed in the interview process. If you and your prospective employee already nailed down their start date, be sure to include that information in your offer letter.

If you don't have an agreed upon start date, to make sure there are no misunderstandings, reach out to your prospect. Confirm with them when they'd be available to begin work.

Compensation

Outlining compensation is one of the most integral parts of your offer letter. The last thing you'll want is a salary dispute immediately after bringing somebody on.

In your compensation section, be sure to outline the annual salary being offered. Include whether or not the position is overtime eligible. Also, mention bonus opportunities and the schedule in which compensation will be distributed.

It's vital that all additional compensation outside of an employee's base salary be clearly labeled as such. You do not want a situation where an employee confuses their bonus entitlements as being part of their guaranteed salary.

Organization Factors

Now that you've shared with your prospective employee the particulars of their position, you'll want to inform them of the general perks they'll get as an employee at your company. You also want to make clear the rights you reserve as their employer.

Benefits

Benefits are an integral part of the overall compensation package your employee will receive. Because of that, it's important that you make them clear so your candidate knows the full breadth of what's getting offered to them.

In your benefits section, be sure to outline the basics of any health, dental and vision coverage your company supplies. Then, briefly discuss your retirement plans.

After covering those core benefits, if applicable, briefly bullet out lesser-known benefits.

These may include things like educational reimbursement, discounts, donation matching and more.

If you find that your benefits programs are too much to outline in-depth in your job offer letter, consider sending your candidate separate pamphlets that describe each of your benefits programs which your prospective employee can read at their discretion.

Grounds for Rescinding

If you're drafting a job offer letter chances are you're sure you want to bring the candidate you're sending it to on. Still, many employers have grounds in which offer letters can get terminated even after extending them.

If you're one of those employers, you'll want to itemize your grounds for termination clearly at the bottom of your letter.

Typical reasons why offer letters get revoked after extending include the following:

  • Candidates failing medical tests
  • Candidates having a negative background check
  • Unexpected financial hardship befalling your organization

The more thorough you are in outlining your reasons for rescinding your offer letter, the less chance you'll have of facing legal trouble.

Reasons for Termination

In order to ensure that the table is set for a productive relationship between you and your perspective candidate, it is advisable to be straightforward with reasons as to why they can be terminated from their position after acceptance.

While there may be more reasons for termination than you can reasonably address in an offer letter, broad strokes may be appropriate.

For example, common reasons for termination you may wish to include are incompetence, issues with attendance, physical violence, insubordination, theft and harassment.

After outlining broad grounds for termination, you can follow up by including something to the effect of the following line to cover additional, unlisted grounds: "The above itemized grounds for termination are by no means comprehensive. Additional grounds may be imposed by this organization as is allowed by law."

Wrapping Up Things You Need to Know When Drafting a Job Offer Letter

Drafting a job offer letter means that your company is excited to bring on new talent. To make sure that your onboarding process is smooth, we recommend taking care when crafting your offer letter by keeping in mind the tips listed above.

Remember, the clearer you are in your letter, the more protection you give yourself. This will make friction with your new employee less likely.

Do you need help drafting a job offer letter? How about another legal document that's binding and protects your organization? If so, our team at Shakeup Online can help.

We give you the tools and guidance you need to be able to craft affordable documents that keep your organization running. Our documents are guaranteed in their compliance with local jurisdictions. We make access to quality legal documents possible for small and medium-size businesses in Malaysia.

Find out more about what our team can do for your business today or contact us for more information!

Try drafting your own job offer letter today by signing up for a Free Trial at ShakeUp!

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