An offer letter communicates an employer’s offer of employment and basic terms to a prospective employee. It should include the title, general description of the role, and its respective compensation package.
It does not need to be a complicated letter. In fact, it should be written using easy to read language, so the prospective employee easily understands its contents and is ready to accept an offer with few or no questions.
The letter should begin with an invitation to join the company and should note the title of the position being offered and the projected start date.
Next, it should list in an abbreviated version, or note an attachment, the responsibilities and duties of the position so that the individual comprehends the role and acknowledges their link to the title.
From there, it should include compensation being offered and frequency of payment for the first year of employment.
It should include all of the benefits of a new employee, things like health insurance, disability insurance, life insurance, profit sharing, 401K, holiday/vacation/sick/personal time, and any other employee benefit programs offered to employees. This should detail premiums, especially portions owed by the employee, enrollment dates/waiting periods, and notes that an addendum or benefit detail is part of the offer letter package.
Furthermore, it should communicate how business-related expenses or out-of-pocket expenses would be handled and how an employee would be reimbursed if such expenses are incurred by the employee.
If relocation is part of accepting and starting the role, the letter should define any relocation expenses that the new employer is willing to cover, like house-hunting trips, temporary living expenses, and household moving expenses.
The letter should mention the timing of any performance and/or anniversary reviews as well.
In closing, the letter should communicate that the offer is contingent on any and all background and reference checks being completed and returned with satisfactory results.
The letter should close with a signature from the hiring manager or human resource representative and should provide a signature line for the employee to execute with their signature.
With this, the employer and potential new employee have a letter of understanding so that both sides have reasonable expectations and a document to refer to when questions arise about the role.