This article is written to provide you with an understanding of what an offer of employment (offer letter) is, including a brief summary of the template structure and written content.
An offer of employment (offer letter) is a legal contract between an employee and the company which outlines the terms and conditions directly related to a position. When creating your offer letter template, it would be beneficial to know and understand the different employee classification types, as eligibility will vary depending of employee classification when receiving certain company programs (total rewards).
To ensure its easy to understand, we are going to use general terminology when discussing the different employee classification types as the naming conventions (although meaning the same thing) may vary between organizations. We recommend reading the article from our Payroll series that talks about Employee Classifications for further information on the different types used, which are:
- Permanent Employees
- Term Employees
- Temporary Employees
- Casual Employees
It would be beneficial to understand the different classification types, as each offer letter template you have for your company will contain pertinent information relating to a position’s total wards and what it is eligible to participant in. Which we will discuss later in this series.
When it comes to your templates, we recommend keeping it between 1-3 pages long in a structured templated format. This makes it easier to follow and read, keeping in mind that the length is dependent on the position’s classification type program eligibilities.
We recommend sticking to your company’s branding initiatives as much as possible, while keeping your template clutter-free. Position your organizations logo in the header (pick a side) and capture the main contact information and motto in the footer. We would like to mention that the offer letter template is another tool that your business can use to market its brand and professional image, so why not add in these smaller details to your letterhead?
When writing your content, it would be considered best practice to include Headers to create sections that outline the various components that directly relate to a position’s total rewards such as Position, Compensation, Work Schedule, Vacation, Bonuses, Travel, Benefits, Company Incentives, Acknowledgement, etc. When using headers, we suggest keeping the font black and bolded, so the candidate can easily determine when a different component to their total rewards is going to be discussed.
When it comes to the written content, leading practice is to keep the details to an executive summary, which are quick to read and provide the necessary details that directly relate to the position’s total rewards such as employment type, position title, start/end dates, vacation, work schedule, company paid benefit and incentive programs, etc.
You can always further explain the company’s total rewards programs by developing guidelines which stipulate how your organization handles and administers them. This ensures that you keep your offer letter template short and easy to read, so you do not have to explain them in your offer letter templates.
Another way to keep your offer letter easy to understand, we suggest refraining from using technical or legal jargon that can cause confusion or by explaining government policies that can set a negative tone to the offer letter such as termination clauses.
You can always further explain and define these government policies in a separate agreement such as an Employee Agreement or Code of Conduct which outlines the various legal terms and conditions which are not directly related to a position’s total rewards.
Now that you understand what an offer of employment (offer letter) is and how the template format can be structured, stay tuned for Part 2 of this series when we discuss what information is captured in a Permanent Employees Offer of Employment. Throughout this series we will also be including the offer of employment templates, which you can use in your business.