Make a Job Offer to Prospective Candidates

After interviewing candidates and calling references, you may be ready to make a job offer. In order to make an effective offer, you should have been gathering important information from the candidate throughout the interview process. With this information in hand, you can then effectively negotiate with the candidate so that you are able to offer a competitive salary and package of benefits. To make a job offer, pick up the phone and call the candidate.

Steps

Preparing an Offer

1. Ask about the candidate’s prior and expected income. You need to be sure that any candidate you interview might be in a position to accept your job. An important piece of information you need to gather is how much the candidate has made in previous jobs. You could put a question on a written application asking the candidate to list their salary for their past three jobs.
   • You should also consider the differences in cost of living between the sites of the old job and new job, and also impact of state income taxes in each area.
   • Most employees expect to make at least 10% more in their new job than in their old one. If you can’t possibly pay 10% more than a candidate’s prior salary, then you might want to exclude them from your list of candidates.
   • Also, some candidates might expect much more than a 10% raise to leave their current job. You should figure this out before extending a job offer.
   • Salary information is also critical for negotiating. Gather the information early in the interview process.
2. Determine the candidate’s expected relocation expenses. Professional employees might expect you to pay for relocation expenses, which could be part of your offer. Ask how much money the candidate thinks they will need to relocate.
   • When you negotiate, you might be able to offer relocation expenses in the place of an increase in salary. Because relocation expenses are a one-time expense, you can save money.
   • Candidates might be worried about selling their old home and buying a new one. Some candidates will not be willing to take a loss on old home or have to buy a similar home in new site without assistance. Decide your position before making an offer.
3. Ask about a desired start date. You need to know when the candidate could be available to start working for you. You can also ask this information on your initial job application.
4. Call to “pre-close” the candidate. Pre-closing is a technique where you talk to the candidate to try and figure out their likelihood of accepting the offer. You don’t make an offer. Instead, you talk about the details of the job and try to confirm if the candidate is interested.
   • You could say, “Hi, Jane, it’s Mike from Acme Construction. We haven’t made a decision yet. But I just wanted to run down through the details of the accounting job to see if we are on the same page and if you’re interested. We were thinking of starting the new accountant at $45,000 with full fringe benefits and a standard 40-hour workweek. Was this in the ballpark of what you were thinking?”
     • Be sure to recognize new federal laws affecting overtime payment for exempt employees. The law stipulates that workers making up to $47,476 per year must be paid extra for overtime work.
   • You can also ask if the candidate thinks their current company will make a counter-offer. Also try to feel out whether they will stay with their current company if a counter-offer is made.

Extending an Offer

1. Move quickly. If you have found the perfect candidate, then you don’t want to drag your feet. Ideally, you should contact the candidate on the same day that you interviewed them. If this isn’t possible, then contact them one or two days later.
   • Taking too long also shows that you aren’t excited about the candidate or potentially don’t really want to hire anyone. These are not good ideas to plant in the candidate’s mind.
2. Call the candidate. You shouldn’t write or email the candidate to make the initial offer. Instead, pick up the phone and call. Choose a time of day when you think the candidate won’t be busy, e.g., early evening. However, always ask when you call if it is a good time to talk.
   • It is never good form to call a candidate at his/her place of employment unless previously agreed to by the candidate.
   • By calling, you are able to gauge the candidate’s enthusiasm. If they don’t sound enthusiastic, then you can try to figure out why.
   • Another benefit of calling is your ability to answer any questions the candidate has.
3. Say how impressed you were with the candidate. It is important to be enthusiastic. Tell the candidate that they were your first choice, even if they weren’t (but only if you don't mind bending the truth).
   • Also be enthusiastic about your company at the same time. You should try to explain why the company would be a great fit for the candidate.
   • For example, you could say, “Karen, your experience definitely made you our first choice. As I told the other members of the team, you can make an immediate impact as we expand into our new territories. I remember you saying during the interview that you wanted to begin handling larger client accounts, and I certainly can see you taking the lead on our team as we expand.”
4. Make a salary offer. You should also run down through the salary and the benefits package that you want to offer the candidate. Remember to leave room for negotiation.
   • For example, your preferred salary range might be $40,000-50,000. Don’t offer $50,000 right off. Instead, start at the low end and then be prepared to negotiate up if the candidate wants more money.
5. Ask what the candidate thinks about the offer. Your call shouldn’t simply be a sales pitch. Instead, you should try to figure out if the candidate is interested in the job. Sometimes people interview for jobs without being fully committed to leaving their current job.
   • It may be entirely possible that the candidate will ask for more time before making a decision. However, you should still ask the candidate what they think about your offer.
   • Now is the time to provide information that will help the candidate make a decision. If the candidate has questions, answer them to the best of your ability.
6. Negotiate, if necessary. Once you extend an offer of employment, the power balance shifts in favor of the candidate. He or she might want to negotiate some of the terms of the offer. In particular, candidates want to negotiate salary.
   • Before extending an offer, you should have some idea about the range of salary you are willing to offer. However, if the employee wants a salary outside the range, you need to assess the situation. Ask yourself if there are other candidates who might be willing to work for a salary within the range. Also check to see if the salary the candidate wants is out of line with what others make at your company for equivalent jobs.
   • Always keep detailed notes as you negotiate with the employee. This will make it easier to negotiate over multiple phone calls. You can always look at your notes to refresh your recollection as to what you have already decided.
7. Get a firm commitment at some point. Some candidates might drag their feet and not give you a definite “yes” or “no.” In these situations, you need to force their hand. You should ask them point-blank if they are accepting the job. There is no reason you need to wait around forever.
   • Call up the candidate again and tell him or her that the other people you interviewed are asking if the job has been filled. This might spur the candidate to accept the job or pull out, especially if they think other people are waiting around for them to make a decision.
   • Realize that at some point you need to pull the plug and stop waiting. Give the candidate a firm deadline. If you don’t get a commitment to join the company, then you need to move onto your next candidate, who could be waiting patiently for a call.
8. Be gracious when a candidate declines. Some candidates might still decline the job after negotiation. You should be gracious. Nevertheless, there is important information you could get—for example, why the candidate ultimately declined your offer. After finding out the reason, make sure to document it.
   • For example, you could say, “Oh, I’m sorry to hear you won’t be joining us. Can I ask why? [Let the candidate respond.] O.K. Thank you for sharing that information with us. We enjoyed meeting you on April 12th. [Pause]. We hope you keep us in mind for the future. Thank you.”

Drafting an Offer Letter

1. Get a firm commitment to work for you. Once you have a firm commitment from the candidate, you can then put the details of the job in an “offer letter.” The letter should reflect the terms of employment after your negotiations with the candidate.
2. Think before drafting the letter. One benefit of using a letter is that you create a paper document explaining the terms of the employment. However, using a letter might create problems, especially if you accidentally create promises.
   • The offer letter becomes a legal contract and both parties will be bound to its terms.
   • For example, you might write that the salary is “$30,000 a year.” A reasonable person might interpret this language to imply that you are guaranteeing employment for a year.
   • You want to be careful about not changing the “at will” employment relationship. With “at will” employment, you can lay off the employee at any time for any legal reason. However, if you create a legal contract by guaranteeing employment for a certain length of time, then you can’t fire the person unless you have cause to do so.
3. Format the letter. You should set it up like a standard business letter. Include the candidate’s name and address at the top left. Also include the date. Make sure to leave enough room at the top to print the letter on your company’s letterhead.
4. Make the offer. You should open the letter with an offer of employment. Identify the position and state that you are excited about the person joining your company.
   • Sample language could read: “Acme Construction is pleased to offer you the position of Assistant Accountant. We are excited about the skills you bring to our company.”
5. Identify the job location and duties. In your second paragraph, you should explain where the job is located and who the candidate will report to. You might also want to briefly explain the job duties, or at least the first project the candidate will work on.
   • Sample language: “As we discussed in our interview, you will be working in our Austin, Texas office, where our back office accounting team is located. You will report directly to the Senior Accountant. After finishing our two-day orientation, you will begin auditing our books for the 2016 fiscal year. There will be other tasks, which the Senior Accountant will assign on an as-needed basis.”
6. Identify the salary by pay period. If you are offering $30,000 a year, payable once a month, then you should identify the salary as “$2,500 a month.” This kind of language helps avoid creating a one-year contract. If the job pays by the hour, then list the hourly rate of pay. For example: “Rate of pay: $9.50 an hour.”
   • In addition to salary, you can explain benefits. Enclose a pamphlet if necessary.
   • You could write, for example: “Your initial compensation package includes a monthly salary of $3,500, full medical and dental coverage through our company’s employee benefit plan, and fringe benefits as covered in the enclosed pamphlet.”
7. Explain that the job is “at will.” Unless you will have the employee sign an employment contract, you should explicitly state that the job is “at will.” Also explain what that term means since some people might not be familiar with it.
   • For example, you could write: “By accepting our offer of employment, you agree that your employment will be on an at-will basis. You also agree that neither you nor any representative for Acme Construction has entered into a contract regarding the terms or the duration of your employment. As an at-will employee, you are free to end your employment with Acme at any time, without cause or advance notice. Likewise, Acme retains the right to reassign you, change your compensation, or terminate your employment at any time, with or without cause or advance notice.”
8. Conclude the letter in an enthusiastic way. End on an upbeat note and state that you are confident the employee will make a substantial contribution to your company. Also let the employee know he or she can contact you with questions.
   • You could write: “We look forward to your arrival and are confident that you will play a key role in our accounting department. Please let me know if you have any questions, or if you need anything to make your arrival easier.”
9. Send the letter certified mail. Sign the letter and then make a copy for your records. You can send the original letter to the employee certified mail, return receipt requested. The receipt lets you know that the employee has received it.

References

See also

• Hire an Employee Relations Consultant
• Negotiate Pay
• Respond to a Job Offer
• Negotiate Locum Pay
• Evaluate Employee Benefits of a Potential Job
• Confirm a Job Offer from Another City
• Write an Acceptance Letter
• Advertise Job Openings
• Negotiate a Job Offer That Involves Relocation
• Turn Down a Job Offer After Acceptance

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