By: Helen Patterson, B.A., LL.B.
You’ve finally found that perfect candidate and you are so excited you fire off an email with details before you speak to your HR department or you only get approval from your one-up manager. Oops – maybe that’s not a good idea. There is recent attention being paid to the candidate experience, from the initial application on-line through to interviews and negotiation of the job offer and terms of employment. Despite the wealth of free information available on-line, some organizations continue to mess this up. A clearly defined process, excellent execution and a few added touches will make this experience amazing. The devil is in the detail, so don’t rush as it will likely come back to burn you.
Key Offer Letter Content
Once you’ve identified the candidate that you want to offer the position to, you should determine if there is a standard format or offer letter template that your company uses. Most organizations will develop pro-forma templates that include the key offer letter terms that are required. A best practice is to set out the main fundamental terms and conditions of employment in a written document. In some cases, for a small business, this might simply be a one or two page offer letter. At a minimum you should include the employee’s position, starting date, base salary (annual or hourly rate), bonus entitlement, any key benefits, confirm hours of work, location and anything else that is a must-have. It can get a little trickier if you want to include a termination clause as while it might be recommended to include this, it might not sit well with the candidate.
If your company is creating templates, I’d recommend that you have a seasoned HR professional or employment lawyer review them before you start using them. While I would keep the tone positive and direct, it should also be reflective of your company culture – you can have a letter that will protect your company without it sounding too legalistic. The employee offer letter does not have to include a detailed description of the position, but should reference other documents that might need to be signed and form part of the package, such as non-competes, Codes of Conduct or other similar items.
Don’t forget to provide a timeline for the return of the signed offer, and if the terms have been renegotiated ensure that all documentation leading up to the discussions are maintained, and notes kept of any verbal discussions. It’s a good idea to have a checklist to ensure you haven’t forgotten anything critical.
Employment Agreement Terms
Sometimes an organization, particularly larger ones, will also develop a standard employment agreement that accompanies the offer letter. This second document isn’t always required if the offer letter covers all fundamental terms. Where it might be good practice to add this or combine the offer letter and employment agreement is if you require additional more complex terms – termination clauses, anti-competition terms are often found in this type of document. Even though you can have an agreement with a verbal offer and acceptance, bottom line is that putting it in writing is by far the best way to go to avoid any future disagreement.
One thing that some employers forget to include in an offer letter is conditional terms. For example, is the offer conditional upon reference checks? Or do you need to verify other things such as credentials or special requirements, like a broker or real estate license? Surprisingly, there are candidates who falsify resumes and qualifications, according to a CareerBuilder survey, 58% of employers have caught lies on resumes. You want to be able to withdraw an offer in these cases and so protecting your company by putting in conditional terms such as this are strongly encouraged. Often companies will put in a clause recommending that the candidate not resign current employment until the conditional terms have been met and reference or other checks have been cleared.
Social media is now impacting the recruitment process. An applicant and short-list candidate can check out your company on Twitter, LinkedIn and Glassdoor, before they’ve set foot in your offices. For an employer, there have been cases where an employee wasn’t hired - although an ideal candidate - due to disparaging comments made on Facebook or Twitter. It’s a two-way street and protection for the employer, reputational and financial, is something to keep in mind. Does the offer letter address these conditional terms and whether the offer can be withdrawn?
Another debatable item, and one that sometimes causes concern, is failing to include a probationary period in the letter. If you want to ensure that the employee is as awesome as you believed then a trial period is a good idea, but this is one of the more tricky areas of employment law. You don’t want to be inducing an employee away from a job they’ve held for 20 years and then terminate them after three months unless you have an extremely good reason! Many organizations are extending the probationary periods that they include in the offer letter and employment agreement.
First Impressions Matter! Are you setting the tone? And preventing future liability? Do this right the first time and your new employee will be happy and your company will benefit in the long run.
Helen has a unique background combining careers in employment law and human resources and brings this expertise to her role in HR and Compliance Insights and Product Compliance at ADP Canada.