Mastering the Job Offer
Topic:

Mastering the Job Offer: Tips for What to Know, Do and Avoid

December 4, 2023
Mastering the Job Offer

You just had the ideal interview with the perfect candidate. Before you start planning "welcome to the team" parties and printing out a fresh copy of the employee handbook, you'll need to draft and deliver a job offer. We'll look at all the elements of a great job offer and walk you through the process of making one.

In this guide, we'll cover the following:

  • What, exactly, is an offer letter?
  • Creating effective job offers
  • Rescinding job offers: reasons and risks
  • Handling mistakes in job offer letters

You're hired! Now what, exactly, is an offer letter?

Offers of employment can be made vocally (often referred to as "verbally") or in writing. An offer letter is any written notice informing a candidate that they have been selected for employment. It’s a formal letter from the potential employer that typically includes the terms and other details of employment.

Job offer letters from an employer to an employee vary drastically depending on:

  • Specific industry.
  • The business's stage of growth.
  • The level of the prospective employee.
  • Whether the offer includes equity, bonuses, commissions, etc.

Creating effective job offers

Before you start, make sure you have a strong understanding of exactly what the position entails, both day-to-day and over time. It's important to give the offer letter the attention it deserves, both from a compliance standpoint and as a first step in onboarding new employees.

What to include in a job offer letter

It all comes down to what is and isn’t relevant to your business and its hiring process. But a few common elements and key details to consider covering include:

  • Conditions. A job offer letter can be conditional, meaning employment will depend on the selected new hire passing certain tests, such as background or drug checks.
  • Salary. Of course, the amount of money your potential employee will be making and pay periods are two things commonly found in offer letters.
  • Benefits. If any combination of health, dental and vision insurance are part of the compensation package, spell them out. Mention any other benefits, like unpaid or paid time off, sick days, vacation time, etc.
  • Equity. Specify whether or not an employee is offered equity and when those shares become that person’s possession. Dispersal of equity is often spread out over several years.
  • Duties. Be sure to clearly define what job responsibilities will be expected of the employee in their new role.
  • Work hours. Explicitly state whether the job is a part-time or full-time position and what hours are expected. Be sure it's clear whether the position is in-office, work-from-home or hybrid.

Is a letter of job offer a binding contract?

Whether or not a job offer is a binding contract depends on a few things, namely the jurisdiction and terms. Technically, they’re all binding contracts, but it’s the terms of the contract that dictate just how binding it is. Most job offer letters will include a formal start date but say nothing about the term of employment, as in a termination date. Instead, a clause may describe the employment as an “at-will” contract, which means that either party can terminate it as long as the terms of termination are met.

Is a verbal job offer binding?

The binding nature of a verbal job offer can vary depending on the jurisdiction and the situation's specifics. Generally, a verbal job offer can be legally binding if it meets certain criteria, such as clear terms of employment and acceptance by the candidate. However, proving the details of a verbal agreement can be challenging.

In many cases, employers follow a verbal offer with a written one. The written version typically outlines the job's terms more formally and clearly. This helps prevent misunderstandings and provides a solid record of the agreement for both parties.

It's advisable for both employers and candidates to rely on written job offers for clarity and the protection of their rights.

Sample job offer letter

Are you new to the concept of job offer letters or simply interested in a refresher? Start by reviewing job offer templates and examples that other businesses have used. Ultimately, your offer letter should be individualized based on your business and your needs.

This sample formal job offer letter template offers a good sense of what an offer letter should look like in general:

[Date]

[Employer name]

[Employer address]

Title: Job Offer from [employer name]

Dear [candidate’s name],

We’re delighted to extend this offer of employment for the position of [job title] with [company name]. Please review the terms and conditions for your anticipated employment with us.

Your starting date and location will be [date] at [exact location]. The starting salary is [dollar amount] per year and is paid on a weekly basis. Direct deposit is available.

[Brief description of benefits] will be provided through our company’s employee benefit plan and will be effective on [date].

[Company name] offers a paid time-off plan which includes [brief description of PTO offered]. Eligibility for the company retirement plan begins [number of days] after your start date.

If you accept this offer, you will report to [manager name].

Please review the attached terms and conditions of your employment should you accept our job offer. We would like to have your response by [date]. Meanwhile, please feel free to contact me or [manager name] via email or phone at [contact details] if you have any questions.

We look forward to having you on our team.

Regards,

[Your name]

[Title]

[Signature]

While a job offer email is the 21st-century way to go, you can also mail a paper copy. Either way, keep a print copy of the formal document on file for reference.

How long should a company give a candidate to consider a job offer?

Allowing candidates a full calendar week from the time of the offer to consider it is reasonable, though this can vary depending on the circumstances. Seven days will afford the recipient time to reflect on the position, discuss the offer with family members (if necessary) and make an informed decision.

Still, there are plenty of reasons why this standard might not apply to you and your situation. Be sure to communicate your timeline needs to the candidate when you make the offer. Also consider the candidate's needs. The greater the responsibility, the more time he or she might require.

Keep in mind that there's no guarantee that the candidate will accept the offer. In the United States, some 17.3% of job offers (1 in 6) are rejected, according to Glassdoor data. Give them time, and have a backup plan of action prepared if they decline.

Rescinding job offers: reasons and risks

A job offer, once accepted by a candidate, typically creates a binding agreement between the employer and the employee, setting the terms of employment as outlined in the offer. However, in "at-will" employment, prevalent in many jurisdictions, either the employer or the employee can terminate the employment relationship at any time and for any reason, barring illegal discrimination or violation of the contract.

What are the reasons for rescinding a job offer?

There’s a variety of reasons why employers might rescind a job offer.

It's not uncommon when an applicant has lied about important details regarding their qualifications or experience. For example, suppose a prospective employee fails a criminal background check, misrepresents their background or fails a drug test. In that case, the candidate usually will have no legal ground to stand on if their offer gets rescinded. Even so, HR teams should urge employers to wait until after getting results from the background check before extending a job offer.

If a job offer is rescinded, it may be because the employer found a more qualified candidate for the position. One candidate may have been a very good match, but after meeting or speaking further with another applicant, employers may change their mind about who is ultimately the best job fit.

Don’t burn bridges with the candidate you rejected. The best way to rescind a job offer is with honesty. Let the candidate know that someone else was better suited for the job and explain why.

What are the reasons not to rescind a job offer?

If you rescind a job offer after finding something in the applicant’s background, the applicant may have a discrimination claim.

You can’t rescind an offer for discriminatory reasons, such as race, religion, gender, age or national origin. Furthermore, job applicants may be able to obtain legal protection if they feel they have experienced discrimination.

Other legal implications can involve reimbursement of the candidate’s expenses while waiting for the position. These could include lost wages or bonuses from former employers, moving expenses and even damages by losing seniority if they're rehired by their former employer.

Whatever the reason for revoking the job offer, you must be careful how you do it. Make sure the employee has no reason to suspect it's based on discrimination.

What are the steps to take when you must rescind a job offer?

You can dissolve the employment relationship in most states as long as the reason for rescinding the job offer doesn’t break any hiring or employment laws and isn’t related to whistleblowing. You can take these steps when rescinding a job offer:

  • Contact HR. They may also help you find a replacement for the position.
  • Notify the candidate. You should inform them that the job has been rescinded and explain why. Help them avoid wasting time in applying for other jobs that may be available to them.
  • Let them respond. When you rescind a job offer, you should allow the candidate to respond. Let them explain their side of the story and provide information that could change your mind.
  • Give them a chance to correct errors. For example, maybe the candidate made a mistake on their application or during the interview process. Allow them to correct any errors so you can be sure you are making the best decision for your company.
  • Offer to assist them in finding a new job. If you rescind the position due to something out of your control, offer to help in the job hunt.
  • Review your hiring processes. Look for ways to improve it and avoid situations like this in the future.

Handling mistakes in job offer letters

We’re all human, and mistakes happen. But what if you make a mistake in your job offer letter?

First, open up the lines of communication with the employee, whether or not they have already accepted the job. Remember that post-offer letter changes would seem like sneaky behavior on your part, so you’ll want to be clear that you made a genuine mistake.

Regardless of what’s said in the job offer letter, the most important paperwork is the employment contract. If everything in that document is accurate, you should be good to go. Just make sure you have some well-documented correspondence with your new hire about the mistake in the offer letter and a clear demonstration that everyone understands the expectations set out in the terms of the employment contract moving forward.

If there’s an error in the employment contract, that’s when things can get complicated depending on whether or not both parties agree that it was a mistake. It gets messy if one party, particularly the employee, believes the error was a genuine part of the contract. That’s usually when lawyers and the court get involved. But a simple mistake on a job offer letter is unlikely to land you there if you act quickly and responsibly.

Learn from your mistake and consider giving your future offer letters an extra proofread to make sure they're error-free and save yourself the stress next time around.

Your partner in successful hiring

Wish you had an expert to partner with you through the hiring process? This is where TriNet's comprehensive services shine. As a leading provider of full-service human resources solutions, TriNet specializes in streamlining the hiring process for companies. From crafting clear and compliant job offers to managing the intricate details of onboarding and beyond, TriNet offers tailored support every step of the way.

Moreover, TriNet's expertise extends to ensuring compliance with ever-evolving employment laws and regulations. With TriNet's support, the journey from job offer to successful hire is thorough, compliant and aligned with organizational goals. Talk with a representative today to learn how your business can benefit from TriNet's vast PEO expertise and experience.

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