What Should be Included in an Offer Letter?

A job offer letter is a formal document sent by an employer to a job candidate selected for employment. Offer letters provide an opportunity to solidify expectations and clarify key details discussed during the interview process. The candidate may choose to accept the job offer—in which case they will sign and return the letter as a formal acceptance of the position. Or, if the offer doesn’t outline the compensation package that the applicant expected, he or she may decide to make a counter offer, or decline it.

Here we outline some important things to include, or at least consider including, in an offer letter.  

1. Job title & responsibilities

An offer letter should clearly state what the new employee’s job title will be, who they are reporting to and whether the job is full or part time.

Many companies don’t state job responsibilities in the offer letter, as they feel this has already been made clear in the job description.  If you do include job responsibilities, make sure you state that the offer letter doesn’t constitute a complete job description, and that the employee’s duties are subject to change.

2. Compensation, benefits and terms

This is what most candidates are interested in and the clearer this is, the better. It is important to include a statement that says compensation (and benefits) may be modified at the company’s discretion.

A lot of companies wait until the contract to spell out paid sick leave rules, healthcare plan details and eligibility, pension options, educational assistance, life insurance, short and long-term disability, flexible spending accounts, and accidental death and dismemberment coverage. But if you include this in the offer letter, it removes one less potential obstacle that could get in the way of signing. 

For employees who are working remotely, you may want your new employer address this in your offer letter—what is expected and allowed.

3. A confidentiality agreement & non-compete clause

Historically confidentiality agreements and noncompete clauses were part of employment contracts. But increasingly these are being included in offer letters, particularly for sensitive technology roles in which the candidate will immediately have access to proprietary or confidential data. The confidentiality, or NDA (non-disclosure agreement), will be a separate document for the new employee to sign, but it is important that they are either given this with their offer letter, or made aware of it.

4. Contingencies

It is a good idea to include a list of contingencies the offer is dependent upon. For example, a background check, reference check, and proof of the employee’s right to work in the country are common contingencies.

5. A deadline to reply

This is an important element for roles that need filling urgently, or roles where there are other desirable candidates.  Most candidates will respond within 3 days to an offer letter, but by including a deadline by which they must reply, it removes any uncertainty as to how long they have to think about it.

Offer letters reduce risk, provide clarity, and align employee-employer expectations. HR professionals should check with their legal team or head of HR before drafting a new offer letter, and consult with the hiring manager to confirm all important details.  Candidates should read their offer letters thoroughly and ask if anything is unclear.

About Oliver Parks

Oliver Parks Consulting offers search-based recruitment solutions to the technology sector, specialising in the ERP, CRM, CMS, ECM, BI and Open Source Technology spaces. The firm’s multilingual consultants operate in narrowly-defined niche market segments, enabling them to gain extensive knowledge of the people and companies operating in each technology.  Oliver Parks has a proven track-record with more than 100,000 candidates worldwide and more than 300 clients globally.