What to Look for in an Offer Letter (Besides Money)
If you recently graduated from college or are preparing to take on your first paid position, you may have never seen a job offer letter before, and it’s important to know what those documents mean. A letter is a job offer, yes, but the terms and conditions it contains are not necessarily set in stone and can often be negotiated. Here’s what to look for in your offer letter.
What is a job offer letter?
A letter with a proposal – a formal offer of work, which includes specific information about the work, including the start date, the annual salary and benefits. Offer letters are often written in such a way as to protect the employer, and may include language about voluntary employment or that you may be fired for “any reason.” You will want to read the proposal letter carefully and decide whether you accept the work as presented or negotiate better terms.
For most employees, signing an offer letter is the last step in the application process, but you may also be asked to sign an employment contract that details privacy, compensation, job responsibilities, and termination policies. The offer letter must include the following vacancy information:
Your offer letter should prove your base salary.
If you discussed salary during the interview and it is not reflected in the final offer letter, politely and firmly ask for clarification (errors are possible). You can also try to negotiate an initial salary offer. Negotiations can be awkward, however: since a job offer can easily be canceled, you don’t want to unnecessarily try your luck, but you also want a fair market value for your labor.
Check out these tips for negotiating a starting salary and decide if it makes sense for you. And don’t forget to consider other benefits beyond your direct payment, such as healthcare, flexibility, and paid leave.
Your proposal letter must include a start date and time.
At a minimum, the proposal letter should also give you the exact start date and time. Again, this is negotiable as you may need additional time to notify your current employer or relocate, or you may have to face previous obligations that you cannot otherwise cancel. (You will also want to mark other real estate dates during the first few months of your job.) Be smart here: postponing your start date by several weeks without much explanation can send the wrong signal to a potential employer about your seriousness.
Make sure your job responsibilities are the same
Before you sign a job offer letter, you need to know what you are actually signing up for. This shouldn’t be too much of a surprise, so be sure to clarify any responsibilities in your proposal letter that were not discussed during the interview process.
Whether your bonuses are guaranteed or discretionary
The offer letter must state whether the bonus being offered, if you have one, is guaranteed or discretionary . If it’s discretionary, you want to know exactly how it is awarded: is the bonus based on personal or team performance? How clear and achievable are the bonus benchmarks? You want to understand how often employees in similar roles receive their bonuses.
What are the general benefits of working?
Companies can offer universal benefits such as 401 (k), insurance coverage, flexible expense accounts, student loans, and work-from-home options. If you have worked out any additional benefits during the negotiation (subsidized phone bill, extra day off, etc.), make sure they are listed in the offer letter. You need written notes in case they are later forgotten.
What are nondisclosure agreements?
NDAs or NDAs are often found in letters of offer. Basically, this is a promise not to discuss confidential company information, especially information that might be used by competitors. It is more difficult to negotiate with them, because this will most likely require the approval of your employer’s lawyers. However, the Workplace Fairness Employee Advocacy Group proposes to beware of any overly broad nondisclosure agreements that “seem less about protecting company confidential information than about forcing employees to remain silent about everything about the company.” To learn more about NDAs, check out their blog posts on the topic .
What is a non-competition clause?
According to the Balance Sheet , a non-compete agreement usually states that an employee cannot work for a competing firm for six months to two years after the end of their employment. Like the NDA, this clause is intended to protect trade secrets and strategic plans from being disclosed to competitors. If a company requires more than a standard nondisclosure agreement of six months to two years, does not specify a timeline at all, or has other clauses that seem overly punitive, consider seeking legal advice prior to signing.