Offer Letter Template and 2024 Guide [+2 Free Downloads]
An offer letter is an important step in the recruitment process because it lets your top candidate know that you are not only offering them a position, but what their role, responsibilities and remuneration package will be. An offer letter template ensures you streamline the process and include all important information without accidently opening your organisation up to litigation.
Jump to the download button for your free simple job offer letter template, or free internship job offer letter template in the article.
Contents
What is a job offer letter?
Job offer letter format
The risks of a poorly executed job offer
Checklist: What to do before making the job offer
Free (simple) job offer letter template
How to write the best offer letter
Top tips to writing a great job offer letter
An internship offer letter template
Final steps of the job offer
What is a job offer letter?
A job offer letter is a formal document that:
- Officially extends an offer of employment to a candidate
- Provides crucial information, including start date, compensation, work hours, job title, and other important details
- Encourages employees to confirm their acceptance of the role
- Conveys your organization’s professionalism and respect for the new hire
- Gives you the opportunity to negotiate should the employee want to discuss vacation days or remuneration
- Provides a written record of the agreed-upon terms of the role.
It’s typically sent via email after background checks have been completed but before a formal employment contract is signed. If the candidate accepts the offer, they will sign and return it, however, it’s important to note that, while offer letters and contracts are often viewed as interchangeable, they are completely different documents:
- A job offer letter describes the job, what it entails, how it is remunerated and any benefits on offer.
- A contract outlines the full role and responsibilities of a position, provides a timeline of employment and includes any legal obligations of both parties.
- The job offer is extended (and accepted) in good faith, but it is still termed an “offer” and not a guarantee of employment. Therefore, at any point, the employee or employer can change their minds without legal repercussions if there is an ‘at will’ clause, which we describe further down in this article.
Job offer letter format
Generally, job offer letters include:
- The sender’s Information
- The recipient’s Information
- Salutation
- Introduction expressing enthusiasm and appreciation for the candidate’s interest in the position and their qualifications
- Position details
- The offered salary, payment frequency, and any additional compensation components
- Start date
- Reporting structure
- Employment type and work schedule
- Confidentiality and non-disclosure agreement (NDA):
- Next steps
- Contact Information
- Closing expressing enthusiasm and anticipation of the candidate’s acceptance
- Signature lines for the candidate’s signature and date
The risks of a poorly executed job offer
While there are many benefits to an offer letter, there can be risks as well, most notably because even though a job offer is not an employment contract, the contents become legally binding once the employee signs it.
If the language used in the letter leaves any room for doubt, an employee could take their employer to court – and win.
Here are a few examples:
- A job offer letter ensures a candidate that the position is secure, but a few months later forced budget cuts result in the employee being laid off. Without an ‘at-will’ statement, the candidate can seek legal recourse because their position was not secure.
- A job offer lists an annual salary only, implying that employment is guaranteed for a year. If the employer decides to terminate employment after six months, the employee could take legal action, requiring the employer to pay the full annual salary.
- A job offer lists the annual salary but does not specify how often the employee will be paid. The employee assumes they will be paid bi-weekly and when they get their first paycheck they are surprised that it is monthly and prorated and they cannot cover their expenses. They take the business to court stating the offer was poorly worded and the company is in breach and a judge agrees.
As you can see, it is important for offer letters to be clear and comprehensive. Pay attention to the language you use and ensure your legal department checks your template once it is written. If an employee can reasonably argue that the letter was poorly worded and misrepresented the role or the package on offer, a judge may well uphold the complaint, which could be costly to your organisation.
Checklist: What to do before making the job offer
1. Conduct a market analysis for the job offer
Conducting a market analysis typically includes researching salary and benefit trends for your industry and region, analysing competitor job offers and based on your research, creating a competitive compensation and benefits package.
This is an important step because having this information at hand not only allows HR professionals to create competitive packages, but it provides a benchmark for what is reasonable to offer and what negotiations you can make to come to an agreement that is satisfactory for both parties.
Ask yourself:
- What is the industry average for salaries relating to the position?
- What baseline benefits are on offer?
- What is reasonable and cost-effective to offer employees for your organisation based on industry averages?
- What is your room for negotiation?
- Can you offer additional benefits, such as flexibility, to attract employees?
- What are competitors offering for the same positions in terms of salaries and benefits?
- Are they finding ways to attract top talent that you were competing for?
- Based on competitor job offers, are there any gaps in your own offer?
- What is your candidate expecting?
- What are their future career and earning goals? How does this align with your industry?
- Do you know enough about your candidate?
HR tip
The biggest reason for a gap between the number of offers made and the number of offers accepted (also known as an offer acceptance rate) is compensation.It’s critical to ensure you are offering a competitive compensation and benefits package.
2. Set the compensation and benefits package
You cannot make an offer without knowing exactly what you are offering. As we’ve outlined, using unclear or vague language can open your organization up to legal and financial ramifications.
In addition, if you are using an offer letter to showcase professionalism, attract top talent and reduce your time to hire, the more details included in your letter the better.
a. Determine the base salary and potential bonuses
Based on your market and competitor analysis, determine what the role’s package is, including:
- Base salary
- What the candidate earns annually and monthly
- How frequently salaries are paid
- Available payment methods
- Bonus structures
- Paid leave, vacation, sick and personal time and how it is accrued
- Pay transparency and equity policies
b. Identify health and wellness benefits
Top candidates are looking for meaningful roles that offer career prospects as well as good work-life balance. Enticing top talent requires more than just a competitive salary:
- What health benefits can you offer?
- What wellness programs does your organisation run?
- What mental health benefits do you offer?
- Does your organisation encourage participation in healthy pursuits, including leave days to support sports or hobbies?
c. Offer retirement plans and other incentives
All compelling job offers highlight additional employee benefits. Your candidates will be looking for incentives (and if they are in the market, will be aware what other businesses are offering), so it’s a great idea to address these upfront in your offer letter. Think about:
- What candidates are looking for
- If you offer retirement plans
- If flexibility and hybrid work is offered
- Any healthcare benefits you can offer
- If there are cash incentives and bonuses outside of normal compensation and bonus structures.
3. Ensure compliance with legal requirements
Even though the offer letter is not an employment contract, it is a legal document that both parties agree to. It’s therefore critical to ensure it complies with local and national legal requirements.
- Familiarize yourself with state and federal employment laws
- Review the provisions of an employment contract so that these are not inadvertently added to offer letters. These elements include:
- duration of the job (unless for a temporary or fixed-period assignment)
- job duties and requirements
- grounds for termination or resignation.
- Work with your legal department to create a job offer letters that meet legal standards
- Obtain necessary approvals and signatures
- Include an ‘at will’ statement:
- This is critical to prevent any contractual obligations.
- If statements were made by the employer during the interview process, either orally or in writing for example in the offer letter), that imply an employment agreement, then the employer may have an obligation to uphold it as a contract.
- An ‘at will’ statement says that the offer letter can be rescinded or the employee or the company can terminate the employment at any point for any reason, releasing both parties from any implied obligations.
- Without an ‘at will’ statement in place, any vague language can also be enforced based on how the language can be perceived.
HR tip
Legal should be consulted for the entire offer letter, but the ‘at will’ statement’s wording is particularly important. Make sure you include legal so that the wording is accurate.
Free job offer letter templates
1. Free (simple) job offer letter template
2. Free internship offer letter template
Internships offer invaluable opportunities for students to acquire practical knowledge and expertise in the industries they are passionate about, and they can also add value to organizations that are interested in:
- Nurturing talent
- Bringing fresh ideas into the business
- Aligning younger team members with experienced teams
However, since internships typically have a finite duration, there are a few additional elements that need to be incorporated in the offer letter.
3. AIHR’s sample job offer letter template
AIHR’s offer of employment letter contains more visual aspects to help present the offer to candidates. An offer letter doesn’t have to be an overly dry document, Try bring in your company’s personality into your offer letter.
How to write the best offer letter
The offer letter template you create will be based on the role and your organization, however, there are key components all offer letters should include.
1. Personalized greeting
- Start with a personalized greeting and opening statement that speaks directly to the candidate and conveys your excitement that you are extending the offer.
- Address the candidate by name, use personal pronouns and show that you have taken their needs and what motivates them into account.
- Highlight their strengths and qualifications and why they are a great fit for the role and the business
- Highlight how the job offer has been tailored to the candidate’s preferences.
2. Job title and responsibilities
- Briefly describe the role and its responsibilities.
- Include the formal title of the position
- Anticipated start date
- Full- or part-time status
- The office location or hybrid work
- Manager or supervisor
3. Salary structure and employee benefits
- Salary, including how often salary payment runs occur
- Highlight the compensation and benefits package on offer
- Include retirement and health benefits
- Outline a bonus or commission structure
- Outline the paid leave structure
- Include any additional benefits that add value to the position but are not necessarily monetary.
HR tip
Be brief. Benefits will be expanded upon during the onboarding cycle. Use this section to sell the position, your company and the reasons why you are an employer of choice.
4. Important legal language and contingencies
This is the section that highlights any important legal language and contingencies.
- Are there non-disclosure and non-compete agreements required?
- Will the employee sign confidentiality and intellectual property agreements?
- Are there any immigration and visa requirements?
- Is the position contingent on certain conditions being satisfied? If selected candidates fail to complete the conditions, their offer or employment can be revoked or terminated. These conditions typically include:
- Drug or alcohol screening
- Criminal record checks
- Reference checking
- Verification of educational qualifications
- Medical examinations
Note: conditions should never include promises of future employment, statements about job security, or contractual agreements.
HR tip
Consider including a disclaimer at the end that explains that the letter is informational and not a legally binding contract or agreement to reduce any confusion.
5. Closing
In closing, you can include a deadline on when the candidate should respond by. This will give the letter a sense of urgency so that you can decrease your time to hire. If the candidate does not choose to sign, a deadline will save you and them time as well.
You can close your letter off by expressing excitement and welcoming the candidate to the team. Include contact information so that they can reach out with questions and a line for them to sign and date if they choose to accept.
Top tips to writing a great job offer letter
A job offer letter can be a formality or a great tool to give your candidate insight into the company’s culture and to get them excited about working with you.
The best letters are clear, concise and easy to understand, while still being professional and friendly.
- Be personal
- Avoid jargon and technical terms
- Simplify any complex terms and concepts
- Ensure legal approves the letter but do not include legal terms – this is not an employment contract
- Use active voice to keep your word count down and your writing direct
- Utilize simple sentence structures that are easy to follow
- Include sub headers and bullet points so that your letter is simple to read and your candidate can see what is on offer without working to find the information
- Make sure there is no ambiguity
Final steps of the job offer
Deliver the job offer
How you deliver the job offer is as important as how it is written and what it contains. Most job offers are sent via email, but there may be a better method more suited to the candidate in question, so consider the candidate’s communication preferences. It’s also a good idea to follow up with the candidate, especially if you have included an offer deadline.
Finally, avoid any communication mistakes or language that could damage your organization as an employer brand.
Handling negotiations and counteroffers
You may find that your letter sparks negotiations or counteroffers. This is not a problem – it may even be extremely positive for the long-term relationship you build with the candidate. It’s also far preferable to know what the candidate wants and why you potentially did not entice them to accept an offer, so encourage transparency and open communication.
The best way to achieve this is through:
- Being prepared for the candidate’s response
- Being flexible and willing to negotiate within reason and based on industry standards
- Being aware of legal limitations and consequences
Ask the candidate to send you questions, listen to what they say and treat the entire process as a two way conversation rather than just sending an offer and expecting a yes or no reply.
To sum up
A job offer letter can be the silver bullet that gets your top candidates over the line.
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