An offer letter is your last chance to sell candidates on a role. Here’s what one should include, as well as some examples you can test.
After interviewing dozens of candidates, maybe even more, you’ve finally figured it out. You know who you want to hire. Now, all you have to do is draft up an offer and send it over for them to sign. Easy, right?
Actually, writing an offer letter that candidates agree to might involve more than you may think. Even if you’ve already discussed the ins and outs of the role before reaching the decision phase, your offer letter is your one last chance to make the case for why a candidate should work for you.
Landing a new contract role can be thrilling but receiving a clearly written offer letter that outlines all the key details is critical. As an employer the contract employment offer letter you provide sets the tone for the working relationship and serves as an important reference document.
In this comprehensive guide, I’ll explain what to include in a contract employment offer letter and provide actionable tips and examples to help you create an appealing, professional offer letter.
Why Offer Letters Matter for Contract Employees
First, it’s important to understand why carefully crafting a contract employment offer letter is so crucial:
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Outlines the Role – It specifies the job title, start date, duties, contract length, and other key details about the role. This sets clear expectations from day one.
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Explains Compensation – The offer letter is where you provide all compensation information like the rate/salary, invoicing schedule, pay frequency, etc.
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Highlights Benefits – Even as a contract employee, benefits like paid time off may be included, and should be clearly explained in the offer letter.
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Provides Legal Protection – With a signed offer letter, there is written documentation of the contractual employment arrangement for both parties.
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Makes a Strong Impression – A well-crafted offer letter shows the employee that you’re a professional, organized company and they’ve made the right decision.
For contract roles, having all employment specifics detailed clearly in one place is crucial. The offer letter serves as the central reference document throughout the contract period.
Now let’s get into how to put together an effective contract employment offer letter,
7 Key Pieces to Include
The following 7 components are important to cover in a contract offer of employment:
1. Summary of Role
Succinctly summarize the key details of the contract role:
- Job title
- Department
- Start date
- Contract duration
- Overview of primary duties
This provides clarity on what’s being offered right up front.
2. Outline of Compensation
This section should cover:
- Hourly/daily/weekly rate or annual salary
- Payment schedule and frequency
- Method employee will use for submitting invoices/timesheets
- Explanation of reimbursement process for approved expenses
- Applicable taxes and deductions
Leave no questions about how and when the employee will be paid.
3. Standard Benefits
Explain benefits the contract employee will receive, which may include:
- Paid time off eligibility and accrual
- Health insurance options
- Retirement plan contributions
- Cell phone reimbursement
- Travel reimbursement
- Etc.
Be clear on which benefits apply to avoid confusion. If no benefits are offered, state this.
4. Employment Terms Clarification
Since it is a contract role, this section reiterates:
- Employment at-will status
- Contract employee status
- No guarantee of conversion to permanent role
This protects you legally when hiring contract employees.
5. Confidentiality and IP Provisions
Include provisions like:
- Requirement to sign confidentiality agreement
- Expectation to assign IP rights of work product to the company
- Restrictions on sharing company proprietary information
These protect company trade secrets and intellectual property. Have a lawyer review this section.
6. Response Expectations
Provide logistics on how to formally accept the offer:
- Expected response deadline
- Process for returning signed offer letter
- Next steps for onboarding after acceptance
This prompts the recipient to take action and respond in a timely manner.
7. Contact Information
Close the letter with:
- Your full name, title, phone number and email
- Main company phone number and website URL
This gives the candidate multiple ways to respond or ask follow-up questions after receiving the offer letter.
Helpful Formatting Tips
In addition to including each of the key components above, following these formatting best practices will make your offer letter look polished and professional:
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Use letterhead and logo – This makes the letter look official and highlights the branding of your company.
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Organize into paragraphs – Don’t lump everything into 1 or 2 long paragraphs. Divide information into readable sections.
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Be concise – Get straight to the point and don’t include unnecessary filler words.
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Use line spacing – Break up walls of text with spacing between paragraphs and sections.
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Highlight key details – Bold, underline or italicize important facts like salary, start date, etc.
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Check for errors – Carefully proofread for spelling, grammar, punctuation or formatting issues.
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Close with signature – Leave space for your signature and printed name/title underneath to make it extra official.
Following those tips will instantly level-up the polish and professionalism of your contract employment offer letters.
Handy Offer Letter Templates and Examples
To make it easy for you to create a solid contract employee offer letter, here are some great resources with templates and pre-written examples to reference:
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Indeed Offer Letter Samples – Contains a contract employee offer letter example and other templates.
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Betterteam Offer Letter Template – Free template tailored specifically for contract roles.
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Lucidpress Offer Letter Template – Customizable template with modern design.
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Documate Offer Letter Generator – Quickly creates a customized offer letter online.
Start with one of these templates, customize it to match your specifics, and you’ll have a draft ready in no time!
Helpful Tips for Offering the Role
Once you’ve crafted the perfect contract employment offer letter, follow these tips when extending the offer:
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Send promptly – Get the offer letter sent out as soon as possible after making a hiring decision to secure the candidate.
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Highlight urgency – If possible, politely emphasize that you need a quick decision on the role. This prompts faster responses.
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Provide a deadline – Include a specific deadline the offer is valid through to create a sense of urgency.
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Make it personal – Begin with a warm intro paragraph addressing the candidate directly to establish rapport.
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Use an appropriate medium – Send via email for speed, but follow up by mail if you need a formal signed letter.
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Be available to answer questions – Provide your contact info in the letter and be ready for follow-ups.
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Sell the role – In your intro paragraph or cover email, express excitement and sell the benefits of role.
With the right approach, you can turn a standard offer letter into a valuable tool for winning over candidates and kicking off relationships in the best possible way.
Accepting Signed Offers
Once the candidate has reviewed the offer and indicated acceptance (either verbally or by returning a signed copy), take these next steps:
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Confirm the start date and provide any pre-boarding paperwork.
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Clarify first-day logistics like office location, hours, dress code, etc.
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Set up equipment like laptop, phone, supplies, etc. in advance.
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Introduce them to the team and key contacts.
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Send a welcome email re-expressing your excitement.
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Provide links to insurance, retirement account, and other benefit enrollment portals.
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Set up payroll deduction of taxes, health insurance contributions, etc.
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Outline the training plan and ramp-up schedule.
Taking those proactive steps helps new contract hires feel at home from day one.
By now you should feel ready to create an awesome contract employment offer letter. Remember to include key details, follow formatting best practices, and sell the role when extending the offer.
With a rock-solid offer letter in hand, you can kick off contract employment stints smoothly and successfully. Just be sure to follow up with thorough onboarding once the offer is accepted.
Run It Past Legal
Offer letters aren’t necessarily legal documents, but if an employee agrees to the terms set out by an employer in an offer letter, it can be argued that the employer is legally bound to deliver on the conditions listed in that letter. If you fail to meet the obligations you promised in your offer letter, it may come back to bite you.
“Something that was legal a month ago, might not be anymore, and might be ruled against you in the future if you don’t change it,” said Joanna Woo, head of people at Calgary-based industrial process automation company CruxOCM.
Since both you and your future employee will be putting signatures on the offer, Woo said it’s crucial that HR leaders run their offer letters by a legal professional before sending them out to candidates.
“A lot of HR professionals don’t have that legal training or background. It’s always best to talk to an employment lawyer,” she said.
While your offer letter outlines all the terms and conditions of the role, it shouldn’t be the first time candidates learn of them. Remember, your offer letter should be a confirmation of what you’ve already discussed and nothing listed in it should come as a surprise.
“At CruxOCM, our offer acceptance rate is high because we are very transparent,” Woo said. “We talk about salary right from the beginning, as well as timelines, approximate start date, and the role’s responsibilities. None of that comes as a surprise; the offer letter is more of a formality for us at that point.”
Throughout the interviewing and candidate screening process, make an effort to be as transparent as possible about what they’ll be getting if they join your team, and what the role’s expectations will be. If you wait until writing your offer letter to share info about equity or benefits, you run the risk of not getting a candidate’s signature.
“If we can’t give the candidate what they want, we need to tell them up front,” Hastings said. “It’s not fair to sell them something they won’t actually get.”
Reaching the offer letter stage means you’re in the recruiting home stretch, but sending one out doesn’t mean you’ve crossed the finish line. Competition for talent is high, and your offer letter may not be the only one in a candidate’s mailbox.
“It’s a very hot market,” Hastings said. “Candidates are getting five or six offers, whereas before they were getting maybe one or two.”
Because of the tough hiring market, employers need to look at their offer letters as a tool to lock down top talent. Think beyond the traditional PDF or document, and use your offer letter to get an enthusiastic yes from candidates. Scott Ginsberg, senior content marketing manager at San Francisco-based compensation software company Pave, said that compelling visuals are one thing employers can include in their offer letters to get candidates excited about their potential role.
“You can win more candidates by helping them visualize the upside of their offer, most notably with a visual offer letter,” he said. “This can help you eliminate confusion around equity by visually communicating total rewards to employees, and deliver a transparent and compelling narrative around your organization.” Find out whos
The Informal Offer Deck
Your offer letter should include some way for employees to provide a signature, but the offer itself doesn’t necessarily have to look like a legal document. At Ada, Hastings’ team sends out a more informal slideshow deck that candidates can scroll through to learn about the role.
“We put the person’s name, their photo, and a big congratulatory message welcoming them to the team and saying we’re excited to have them,” she said. “Then we go through their job title, their salary, stock options, and start dates.”
Informal offer deck. | : Ada
Nowadays, there are tech tools designed to help HR leaders complete all kinds of tasks, and that include drafting and sending job offers. Rather than typing up a document with salary and equity data, Ginsberg’s team uses Pave’s own internal offer letter platform to let candidates explore their potential stock options and see how they may change over time in an interactive way. Take a look below.
Interactive offer| : Pave
At Ada, Hastings’s HR team is also testing out offer letter technology and launching their own interactive letters soon. They’re planning to use the platform Welcome to provide candidates with an immersive job offer experience, within which they can explore company culture as well as benefits and compensation offerings.
“We can add videos to this of our employees talking about what it’s like to work at Ada, whether they’re in product or engineering or elsewhere,” she said. “It gets them really excited.”
Interactive offer. | : Ada
Offer letters may seem like dry documents, but if done the right way, they can set an exciting tone for a future employees’ experience with you. After getting the nitty gritty details out of the way, remember to celebrate the offer.
“As a candidate, getting an offer is so exciting,” she said. “Beyond giving them a salary and title, remind them of the impact that they will have at the company and how important they will be.” Free Toolkit: Successfully Onboard Remote Employees
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How To Write A Job Offer Letter Step by Step Guide | Writing Practices
How do I write a contract employee offer letter?
Use this contract employee offer letter sample to offer candidates a fixed-term position at your company. For permanent employment positions, check our formal job offer letter format and informal offer letter templates. Dear [ Candidate_name ], Our hiring team was excited to meet and get to know you over the past few [ e.g. days/weeks ].
When should I use this contract employee offer letter sample?
Use this Contract employee offer letter sample when you’re offering a fixed-term or temp position. Customize this job offer template to your needs.
What is a formal job offer letter?
This formal job offer letter sample can be used when a company is offering a full-time position to the best candidate. The formal offer of employment includes a sample job offer email along with a formal job offer attachment that covers the most important terms of employment. The formal job offer template can be found here.
What is a standard job offer letter template?
Here’s a standard job offer letter template that you can customize according to your organization’s specifics: [Your Company’s Letterhead] [Date] Dear [Candidate’s Full Name], We are delighted to extend an offer of employment for the position of [Job Title] at [Your Company Name]. Your skills and background make you an ideal fit for our team.
