What to Expect in an Offer Letter
Receiving an offer letter often marks the end of a long job hunting process. An offer letter seems to validate the stress of the search and the investment of your time and effort and make everything worth it.
For those who may be new to job searching, who haven't otherwise received an official offer letter before, or who have been "burned" by first-day surprises, it's good to know what offer letters do—and don't do.
The general purpose of the letter is to offer a position to a candidate and to spell out the details of the position. Offer letters are also used to identify a start date and provide information on compensation and benefits packages.
While some smaller companies rely on verbal job offers, larger companies almost exclusively use offer letters in order to mitigate any potential legal issues. By spelling out all conditions of employment, they prevent employees from taking legal action if they ultimately aren't hired or are fired because, for instance, they failed the background check.
While the formatting and details of offer letters vary quite a bit, the introduction section of the letter usually provides very basic information and identifications.
Expect to see something like the following at the beginning of your offer letter:
XYZ Corporation is pleased to offer John Smith the position of Account Executive in our New York City location.
The next section should provide critical details about the offered position, including salary, benefits, the person you will report to, and responsibilities/expectations. A typical letter looks like this example:
The starting salary for the Account Executive position is $40,000. In addition to this base salary, you will have the potential to earn additional income through the sales compensation program. The corresponding compensation plan is attached or can be obtained from the hiring manager, Jane Doe. As a full-time employee of XYZ Corporation, you will be eligible to receive health care benefits after 60 days of employment. We offer several options for health insurance, and further information about our available plans will be provided on your first day of employment.
As an Account Executive for XYZ Corporation, you will be responsible for an annual revenue quota of $500,000 as well as for updating pertinent customer information in our Customer Records Database.
Unless you live in Montana, the only U.S. state in which an employer must provide good cause for firing someone, the offer will contain an at-will statement that says the company can terminate your employment—and you can quit—at any time and for any reason.
Start Date and Conditions
You should fully expect that there will be conditions you must meet before becoming an employee. They often include a background check, drug screening, and possibly a medical clearance for certain types of jobs.
Be certain not to merely glance over this part of the offer letter. Make sure that the start date is what you expected.
If all looks and feels right after you've carefully reviewed the offer letter, your next task is to accept the position.
If something is amiss, the primary purpose of your reply will be to point out the area of concern you have regarding the company's letter. If, for example, the starting salary is lower than you expected, do not accept the offer until a new offer letter is sent to you. It may be hard to put your acceptance on hold until things are cleared up, but you'll be better off in the long run for doing so.