The complete offer letter process
A hiring manager’s guide to mastering the art of the offer letter: from verbal commitments to negotiations. Good hiring doesn’t end with finding the right person. It ends when the right person starts working for you!Download Offer Letter Templates
Congrats, you’ve found the perfect person for your job opening. It’s an exciting moment, that often comes at the tailend of many hours of recruiting, interviewing, and head hunting. But before you can truly celebrate, you need to successfully navigate the offer letter process, and ensure that promising candidate officially sings your offer letter.
The offer letter process is delicate and should not be rushed.
Losing candidates at the offer stage is a recruiter’s worst nightmare, and a business owner’s bad day. Moreover, rushing the process could result in legal ramifications, litigation, lost talent, or bad employees.
So what do you do? In this online guide, we walk employers and recruiting teams through key moments in the offer letter lifecycle. We offer suggestions, benchmarks, and objective advice on how to craft a masterful and streamlined offer letter process.
Through downloadable templates, examples, and links to outside sources, we hope this becomes your bookmarked resource for the offer letter process.
Before you write the letter
Before you write and send an offer letter, talk to your candidate verbally. Professional recruiters say “communication is the key” to gracefully navigating the period of time between finding your perfect candidate, and inking the deal. Approaching your candidate on a personal level results in more genuine and effective offer letters, which will, in turn, result in fewer negotiations or offer letter rejections down the road.
You want your employer-employee relationship to be a long-lasting and positive one, but that starts well before your employees are on the payroll.
To get to know your candidate, set up a time to talk to your candidate on the phone for a casual conversation. Express your excitement about their candidacy and the role, and ask them these questions:
- What is your preferred start date and salary range for the position (including bonuses, benefits, and company perks. Know what your company’s point of view is, and communicate that, too)
- What are you thinking in terms of compensation? (Discuss job budget, their most recent compensation (including bonuses, commissions, and benefits) and how this role could differ from the most recent employer).
- What is your motivation for wanting this position?
- What’s your ideal work-life balance look like?
- Tell me a little more about your work history?
You’ll learn what’s important to candidates and how to offer them competitive benefits packages.
This is important in recruiting, but also in personalizing the benefits package for each hire. “It’s not necessarily about who offers the best benefits in every category, but focusing on what’s important to candidates and employees and checking off those boxes,” says Lauren Perales, an HR advisor.
People will give you hints as to what will give you a competitive advantage while recruiting them. It’s important and strategic to listen to them because there is a broad spectrum of benefits you could provide to your employees, while some options are more costly and others are less expensive and are easy to implement.
Keep in mind, as much as you are vetting prospective hires, they are vetting you. Remember to be personable, friendly, and authentic.
Meanwhile, at the same time that you’re gathering more information on your candidate, complete any role-specific due diligence requirements you’re in charge of as a hiring manager. This could be:
- Complete required background checks
- Request the candidate complete applicable drug screens
- Obtain a motor vehicle record (MVR) if the role requires
- Call references and talk to the candidate’s previous managers
Failure to complete due diligence, could result in legal nightmares for your company, or you could lose your job.
The Verbal Offer
At some point, you’ll feel sure this is the candidate to whom you want to extend your offer. But before you send a bona fide letter, we strongly recommend you get verbal acceptance. Getting a verbal commitment prior to sending a letter has been shown to expedite the offer letter timeline substantially.
by Newton Software
Set up a time to talk to your candidate on the phone, at which point you can excitedly extend an offer. Start with the good news:
“We’re extremely excited, and think we can extend a formal offer to you soon. I want to double check that the following terms that will be included in your offer letter work for you….”
and then dive into the details of what’s included in their offer. Be clear and frank, it won’t help either party to elaborate or sugarcoat the terms preemptively:
This is what we have so far:
- Job Title
- Benefits and commissions
- Unique benefits, specific concerns
Ensure the details of the offer work, and wrap up with asking them when they’re ready to start. This question often raises yet unvoiced concerns, and also helps to gauge the candidate’s mindset and estimate the likelihood of acceptance.
So to recap, before you send your offer letter:
- Understand your candidate’s wants and needs.
- Do your due diligence as a hiring manager.
- Receive a verbal commitment.
Each of these steps takes time, but it’s better to be over-prepared than forced to rescind an offer down the road. Taking the time to hire the right person now will save you time and mistakes later on.
Ask questions, seek understanding, talk to your candidate ahead of time, and the art of the offer letter will be yours.
Writing the offer letter
Okay, you’ve vetted your candidate, talked through the offer, and—ideally—secured a verbal commitment. Now, it’s time to write and send the official contract: the offer letter.
The offer letter is the written agreement that officiates, and legally binds, the details of your candidate’s employment. Offer letters can be used for full time employees or part time employees. There are even internship offer letters. All of which are written and generally sent via email.
What do you include in an offer letter & offer letter examples
Your offer letter should capture the personality of your company, express a genuine interest in your candidate, and include the legal terms of employment.
Here is an example of an offer letter, with details about each category:
Sample Offer Letter Components
Subject: Full-Time Employment Details with [Company Name]?
[City, Street, Zip]
[Hiring Manager Name]
[City, Street, Zip]
Dear [Recipient Name],
On behalf of [Company Name], I am pleased to offer you employment with [Company Name] as a [job title] starting on [proposed start date]. Please carefully review this document for important details about your compensation, benefits, and terms of your anticipated employment with [Company Name].?
During your employment, you will be paid a salaried rate of [insert salary amount here]. Your compensation will be paid in regular installments in accordance with the Company’s regular payroll process, and subject to applicable tax and other withholdings [if applicable, note here if your company pays on a bi-weekly, weekly or monthly schedule]. As an exempt employee, you will not be eligible for any overtime pay. This position is a full-time position.?
As part of your compensation, we’re also offering [describe bonus details, commission structure, stock options and compensation committee rules here].?
As an employee of [Company Name] you will also be eligible for. ?
Your position with [Company Name] is “at will,” and thus you or the Company may terminate our employment relationship at any time, with or without cause or advance notice. [The Company] reserves the right, in its sole discretion, to change your compensation and/or employee benefits at any time on a prospective basis.?
Please confirm your agreement with these terms and accept this offer by signing this agreement on or before [offer deadline date].
We look forward to working together! Please don’t hesitate to reach out to [insert HR point of contact] in the meantime.
[Hiring Manager Name]
[Title / Date]
I hereby agree to and accept employment with the Company on the terms and conditions set forth in this offer letter.
If you aren’t keen on writing your offer letters longhand, here’s one place you can short-cut. Download templates for editable access to full-time employee offer letters, part time employee offer letters, intern offer letters, and independent contractor letters.
Full-time offer letter, salaried employees
- exemption clauses
- salary pay periods
Part-time offer letter, hourly employees
- non-exemption clauses
- hourly pay periods
Intern employee offer letter, paid
- non-exemption clauses
- hourly pay
- internship duration
Independent contractor job contract letter
- reference to scope of work (SOW)
- hourly rate
- payment terms
Negotiating the terms
You’ve chatted with your candidate, you’ve even got a verbal commitment to the offer, but behold, you receive a counter offer in your email the very next day.
You’re in a situation in which you’re going to need to negotiate.
Negotiating the offer is an important part of the hiring process, and you should be prepared for any candidate to submit a counter offer. But how do you handle the negotiations?
First, know what you are negotiating, is it salary, vacation, the expectations of the job?
Understand what the counter offer is aiming to do, and connect with your team to see if the requirements of the counter offer are permissible given your internal budget, expectations, needs, or team structure.
In our opinion, it’s easier to yes to people requests, but it’s harder to remain firm. Inasmuch, we’ve put together some helpful phrases to use if and when you can’t meet the requirements of a counter offer.
How to politely decline a counter offer
1. Thank them, and continue to be excited about their new role
“We are very excited to hear from you, John Doe, and look forward to your acceptance of the position.”
2. Acknowledge their request
“We heard your request for an $10,000 increase in base salary.”
3. Clearly, and truthfully, communicate the reason why their request is not possible.
“At our company, employees who are similarly situated to this role receive a predetermined band of salary based on job experience and qualifications.”
“Unfortunately, we are extending the most we can afford for this role at this time.”
“We aim to compensate fairly and justly within market standards, and can not increase our offer.”
4. Re-state your offer
“After reviewing your application, we have determined that the original salary of $75,000 is still what we can offer.”
5. Re-state your enthusiasm and hope for the candidate to accept.
“We sincerely hope that this salary works for you, and look forward to working together.”
For some people, negotiations are a fun part of any contractual agreement. If you keep an open mind, honest disposition, and clear communication, you’ll leave your candidate with a positive experience and a sense of respect, even if the new terms can’t be met.
Handling the unexpected
There’s nothing Mother Nature likes to disrupt as much as a well-made plan. Lot’s of things can go wrong during the offer letter process, despite how much communication, time, and genuine excitement you’ve invested. Here are some common woes and situations you might consider:
Zenefits makes it easy for HR managers to create, edit, or resend offer letters quickly. Check out this 38-second video to see how it works:
The road to “Day 1”
Raise your glass—it’s finally time for that celebration—you’ve just hired an employee. Trust us, we know—this is not an easy task. For some, this means an immediate return to the grindstone to fill the next role. Or perhaps your hiring spree is over, for now, and it’s time to prep for your new hire’s first day.
It’s time to move from negotiations to orientations, as you embark on the employee onboarding process.
For tips and checklists, we encourage you to checkout out the definitive online guide to employee onboarding best practices in another Zenefits online resource. This guide provides:
- Before Day 1 checklists
- First day on the job checklists
- 30-day check-in checklists
There’s a lot your new employee can do before their first day on the job. It’s time to get crankin’.
Need extra help?
We hope this online resource gives you a sense of the timeline, expectations, and full lifecycle of the offer letter process. If you’re still looking to uplevel your mastery, we’ve provided a few extra resources for you to sharpen your skills:
- What Goes In a Job Offer Letter
- How do I use Zenefits to send the default offer letter template and agreements
- How to create and edit custom offer letters and agreement templates in Zenefits