Offer letter checklist: What to include and how to optimize your offer process

July 5, 2018

 

iCIMS Staff

12 min read

Even late in the recruiting process, lack of efficiency results in compliance risks, lack of professionalism, and increased time to hire. A poor offer experience leads to candidates withdrawing from the application process or accepting a competitor’s offer. 

Losing candidates in the offer stage means it takes longer to fill roles. Unfilled positions hinder an organization’s ability to hit business goals.

Large, multi-division and global organizations have complex nuances to manage in the offer process. These nuances make it even more essential to identify pain points and risks. Here are just a few examples of what could cause complexity in an offer process: 

• High-volume hiring 
• Exempt vs. non-exempt employees 
• Hiring out of state 
• Multi-layered approval process 
• Clause management 
• Salary vs. hourly employees 

To help you avoid risk and improve your offer letter process, we’re breaking down everything you need to know, starting with the importance of creating professional offer letters.  

(Learn more about offer management software here.)  

The importance of a professional offer letter 

Before we get into what to include in an offer letter, we first need to understand why it’s important.

Suppose your competitor’s candidates receive offer letters that don’t quite look professional, contain mistakes, formatting issues, or lack branding. In that case, they may reconsider their decision to join the company.  

Remember: A candidate can still back out at this stage.

You spend a lot of resources looking for the right candidate, interviewing them, and negotiating terms. A CEB survey of 900 recruiters and 6,000 hiring managers found that the average time to fill for employers increased by 50% from 2010. They found that the average vacancy costs $500 per position per day, a loss of $22,000 per position over the average period of 44 calendar days. 

Along with the investment of time, recruiting expenses are increasing substantially too. “The biggest talent spending area around the world today is recruiting,” said Josh Bersin, founder of Bersin by Deloitte. “While companies spend around $1,200 a year per employee on employee training (making it an approximately $140 billion market), recruiting spend is about three times larger.” 

Now that we know why professionalism is essential to your strategy and execution. Let’s dig into what an offer letter contains.  

What to include in an offer letter 

Formal offer letters provide an opportunity to solidify expectations and explain critical details of the position, salary, and benefits offered. Essential terms of employment to include in an offer letter are job details, compensation, and benefits. You’ll also want to ensure you’re pulling accurate data into fields such as:  

• Position/title 
• Name/position of supervisor 
• Full-time/part-time schedule 
• Exempt/non-exempt classification 
• Duties/responsibilities
• Start date
• Benefits
• Salary and pay schedule
• Location/remote 
• Compliance with employer policies/handbook 

A quick tip: Ensure that your letters have consistent fonts, proper spacing between paragraphs, the correct logo, and an eSignature. 

Necessary information, like that noted above, is essential to creating an accurate offer letter. But so are blanket statements that will make the legal department your new cheerleader.  

Here are two you’re going to want to look into:  

1. A statement of at-will employment 

Make sure you have a statement of “at-will employment.” While it may sound daunting, all this statement says is that the company or the employee can terminate the relationship at any time.  

Not only should you state this in your offer letters, but you should avoid any language that implies a fixed period of employment. 

Quick tips:  

• Avoid language that implies a fixed term of employment or implies that an offer letter is an employment contract
• Include language expressly stating the relationship is at will

2.  Applicable contingencies you need to know  

To provide clarity and align employee-employer expectations, include information regarding whether employment is contingent upon certain conditions such as: 

• Criminal background/credit check 
• Passing a drug test 
• Government contract award 
• Having/obtaining/maintaining a security clearance 
• Signing a non-compete or non-disclosure agreement 

It’s essential to do your research on any applicable employment laws for your state and industry, as this might affect the language you include in your offer letter. For example, California and New York require an additional wage notice to non-exempt employees. 

Here is a competitive offer letter template from our Definitive guide to an optimized offer letter experience:  

The process to create and manage the offer template is equally as important as the letter itself. Lack of version control, rules, and lack of visibility unnecessarily complicate the process. In the next section, I’ll break down how manual or disjointed processes lead to compliance risks.  

A manual or disjointed offer process leads to mistakes and compliance risks 

Today, many companies handle their offer letter process using multiple systems and tools or manage everything manually, which is often time-consuming and challenging for recruiters.

A manual or disjointed process can also easily lead to errors like using a template but forgetting to update necessary details like the candidate’s name and salary.

Beyond the inefficiencies lies compliance risks. Compliance risks are an even more significant concern for large organizations that hire nationally or globally. They often have hundreds of different offer letter templates and clauses for new hires. Without a streamlined process, they risk sending the wrong template or clause to the wrong candidate. 

It isn’t easy to lock down without a centralized process that can see varying information levels. A truly centralized process typically involves 3-5 tools between recruitment software, email, Microsoft Word, and sometimes Excel. Without the right system in place, it’s challenging to manage the user permissions for individuals within the company, leaving your candidates’ data vulnerable.  

Speaking of data, consider the following to keep everything safe:  

• Reduce compliance risks with better automation, template management, and clause management
• Establish better management of permissions and access for user groups and individuals

Your candidates will appreciate the streamlined, accurate offer letter and process that gets them in the door faster. When you think about it, it’s all about extending the candidate experience.  

Extend the overall candidate experience with offer letters that win 

Suppose your company’s current offer letter process needs work. You’re going to want to revamp the whole experience, starting with your candidates’.   

Today, it’s more imperative than ever to make the entire hiring process as positive and easy an experience as possible.

Seal the deal and improve speed to hire through a streamlined offer letter process.

After all the work you’ve put into sourcing and building a positive relationship with a candidate, you don’t want to lose them at the offer stage. You should feel confident in delivering an accurate and professional offer letter to seal the deal with your best candidates.   

Recruiters who use manual processes face frustrations when offer letters contain errors, are sent to the wrong candidates, embody different formats, and require physical signatures. Maintaining a professional employment brand through an offer letter process will enhance your recruiting efforts and enable you to hire best-fit talent quickly. Determining your company’s speed to hire can help improve your hiring process, ensuring that applicants have a great candidate experience.   

How to calculate speed to hire 

Speed to hire measures the time it takes for a company‘s best candidate to transition from an applicant to a new hire. Essentially, speed to hire tracks how quickly a company spots its best candidate and moves them along the job pipeline, leading them to accept the final job offer.

To calculate speed to hire, subtract the day that an applicant enters the pipeline from the day the candidate accepts the job offer.  

The offer letter‘s role in speed to hire 

Lacking efficiency during the offer letter process makes recruiting much more complex, challenging, and time-consuming. After you complete the verbal offer, a manual offer letter process usually begins with outdated templates. It relies on printers and scanners to officiate offers. These methods typically result in errors and elongate the recruiting process altogether.

Slow offer letters extend the length of the entire recruiting process.

After all the work you’ve put into sourcing and building a positive relationship with a candidate, you don’t want to lose them at the offer stage. The spread of negative reviews about a company‘s lengthy recruiting process travels quickly and deters others from applying to any job position.  

The offer letter process is an essential part of a company‘s candidate experience and could negatively impact its ability to hire the best applicants if not speedy. Professional letter formats comprise consistent, repeatable templates and are a company’s last chance to distinguish itself from competitors during the final stage of the recruiting process. 

Want to learn more about the offer letter process? Check out The Definitive Guide to An Optimized Offer Letter Experience.

Reviewed for accuracy on March 10, 2021, by Alex Oliver.